Gerber Scientific's efforts to accelerate revenue growth have long focused on new product development and innovation. In fiscal 2006, the effects of our New Product Development initiative were evident company-wide with the release of several "key" new products, including the Solara UV2 wide format inkjet printer, XLs50 fabric spreader, XLc7000 multi-ply cutter, CMX50 finer/polisher and DTL generator with cut-to-polish option.

In fiscal 2007, the Company will build upon many of the recently introduced products and will be offering many new features and enhancements. In addition, several new products will be introduced this year.

While Gerber has had a presence in China since the early 1980s, our focus in this critical part of the world has increased significantly over the past few years. Today, approximately 200 employees are based in Greater China, including direct sales and service personnel, supply chain employees, engineering support, and administrative.

Gerber's strategy in China is two pronged:

The Gerber Business System (GBS) is a set of tools and methods that enable sustainable improved business results. The key objectives of this initiative are as follows:

• Elimination of waste throughout the company
• Reduced complexity
• Rapid response to customers' needs
• Enable growth with minimal cost investment

We do not view these activities as a one time project, but rather as a fundamental change in the way we plan to run our business in the future.

With 100,000+ customers, service is a key value differentiator for Gerber Scientific. Accordingly, the Premier Customer Service initiative is the logical complement to Gerber's focus on growth.

Customer Service is managed as a shared activity, supporting all three business segments, and includes expanded call centers in the U.S., China, Europe, and Australia, as well as strategically located logistics centers to better serve our customers.

By doing this, we expect to improve and enhance our customers' experience with our company. We also plan to leverage these strengths to grow revenue and increase profitability.