For Immediate Release

Contact:  John Krawczynski

September 12, 2007

(860) 644-1551

   

GERBER SCIENTIFIC, INC. ANNOUNCES FISCAL 2007 THIRD QUARTER RESULTS

SOUTH WINDSOR, CT -- Gerber Scientific, Inc. (NYSE: GRB) today reported net income of $2.2 million for the third quarter of fiscal 2007, or $0.10 per diluted share, on revenue of $137.1 million, compared with a net loss of $0.1 million, or essentially break even on a diluted share basis, on revenue of $124.6 million for the third quarter of fiscal 2006. Foreign currency translation had the effect of increasing revenue by approximately $6.1 million in the third quarter of fiscal 2007, as compared with the third quarter of fiscal 2006.

For the nine months ended January 31, 2007, the Company reported net income of $7.9 million, or $0.34 per diluted share, on revenue of $419.7 million, compared with a net loss of $1.3 million, or $0.06 per diluted share, on revenue of $387.3 million for the nine months ended January 31, 2006. Foreign currency translation had the effect of increasing revenue by approximately $12.0 million for the nine months ended January 31, 2007, as compared with the nine months ended January 31, 2006. The Company's net loss for the nine months ended January 31, 2006 included a $2.5 million charge associated with the early extinguishment of the Company's former credit facility and a $2.3 million tax charge associated with the reversal of a deferred tax asset in the United Kingdom. These items negatively impacted the prior year-to-date diluted earnings per share by $0.18.

Marc T. Giles, President and Chief Executive Officer, commented: "Results for the third quarter reflected our continued focus on growth with revenue up 10.0 percent versus a year ago. In addition to favorable currency translation, this growth was largely a result of our initiatives in new products and in China and other Asian markets. Though our gross margin percentage declined from the prior year primarily related to business unit and product mix, our earnings per share for the third quarter grew to $0.10 per diluted share driven by higher revenue and internal focus on cost control."

For additional information please see our Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, 2007, which will be filed with the Securities and Exchange Commission.

About Gerber Scientific, Inc.

Gerber Scientific, Inc. (http://www.gerberscientific.com) is a leading international supplier of sophisticated automated manufacturing systems for the sign making and specialty graphics, apparel and flexible materials and ophthalmic lens processing industries. Headquartered in South Windsor, Connecticut, the Company operates through four businesses: Gerber Scientific Products, Spandex Ltd., Gerber Technology and Gerber Coburn.

Cautionary Note Concerning Factors That May Affect Future Results

Statements contained in this news release regarding the Company's expected financial condition, results of operations, cash flows and product launches are forward-looking statements that involve risks and uncertainties. For information identifying other important economic, political, regulatory, legal, technological, competitive and other uncertainties, readers are referred to the Company's filings with the Securities and Exchange Commission, including but not limited to, the information included in Gerber Scientific's Annual Report on Form 10-K for the fiscal year ended April 30, 2006 under the headings "Business," "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations - Cautionary Note Concerning Factors That May Influence Future Results," as well as information included in subsequently filed quarterly reports on Form 10-Q and current reports on Form 8-K, which outline certain important risks regarding the Company's forward-looking statements. These risks include, but are not limited to, delays in the Company's new product development and commercialization, intense competition in markets for each of the Company's operating segments, rapid technological advances, availability and cost of raw materials, volatility in foreign currency exchange rates and fluctuations in interest rates. The Company expressly disclaims any obligation to update any of these forward-looking statements, except as required by law. Actual future results or events may differ materially from these forward-looking statements.

GERBER SCIENTIFIC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

 

In thousands, except per share data

Quarter Ended
January 31,

 

Nine Months Ended
January 31,

 

2007

2006

2007

2006

Revenue:

       

     Product sales

$120,941 

$109,324 

$370,776 

$341,117 

     Service sales

   16,183 

   15,288 

   48,885 

   46,220 

137,124 

124,612 

419,661 

387,337 

Costs and Expenses:

       

     Cost of products sold

86,881 

78,233 

264,401 

242,303 

     Cost of services sold

10,242 

9,120 

29,922 

28,069 

     Selling, general and administrative expenses

29,863 

28,427 

92,216 

87,310 

     Research and development

6,050 

5,959 

18,193 

18,789 

     Restructuring charges

          --- 

          --- 

         --- 

     (231)

 

 133,036 

 121,739 

404,732 

376,240 

         

Operating income

4,088 

2,873 

14,929 

11,097 

         

Other income (expense), net

(145)

(754)

(25)

(1,437)

Loss on early extinguishment of debt

--- 

--- 

--- 

(2,483)

Interest expense

      (965)

      (862)

   (2,713)

   (3,818)

Income before income taxes

2,978 

1,257 

12,191 

3,359 

Income tax expense

        748 

     1,349 

     4,248 

     4,658 

Net income (loss)

$   2,230 

$      (92)

$   7,943 

$  (1,299)

         

Earnings (Loss) per share of common stock:

     Basic

$0.10 

$0.00 

$0.35 

$(0.06)

     Diluted

$0.10 

$0.00 

$0.34 

$(0.06)

         

Weighted average shares outstanding:

       

     Basic

23,012 

22,466 

22,828 

22,371 

     Diluted

23,398 

22,466 

23,258 

22,371 


 

GERBER SCIENTIFIC, INC. AND SUBSIDIARIES
CONSOLIDATED SUMMARY BALANCE SHEETS
(Unaudited)


In thousands

January 31,
2007

 

April 30,
2006

Assets

     

Current Assets:

     

     Cash and cash equivalents

$    4,911

 

$  14,145

     Accounts receivable, net

92,620

 

92,422

     Inventories

63,630

 

53,794

     Prepaid expenses and other current assets

    16,044

 

    16,718

             Total current assets

  177,205

 

  177,079

       

Property, plant and equipment, net

36,692

 

38,366

Goodwill

54,060

 

51,554

Deferred income taxes

32,009

 

27,696

Other assets

    15,754

 

    15,785

             Total assets

$315,720

 

$310,480

       

Liabilities and Shareholders' Equity

     

Current Liabilities:

     

     Current portion of long-term debt

$    1,280

 

$       284

     Accounts payable

42,292

 

53,886

     Accrued and other liabilities

   55,165

 

    57,248

             Total current liabilities

   98,737

 

  111,418

       

Long-term debt

36,661

 

36,836

Other long-term liabilities

37,691

 

36,610

       

Shareholders' equity

  142,631

 

  125,616

             Total liabilities and shareholders' equity

$315,720

 

$310,480