Commenting on the quarter, Marc T. Giles, president and chief executive officer, said, "I was pleased with the Company's performance this quarter. Without the restructuring charges recorded in the quarter, first quarter operating income increased over last year despite the overall revenue decrease, which reflects the continuing success of our cost control and productivity improvement efforts. We saw growth in our gross margin - both year-over-year and sequentially by quarter. We anticipate continuing margin improvement as we benefit from the operating leverage associated with our cost reduction initiatives.

Order rates continued to be strong in our Gerber Technology business and we achieved year-over-year revenue growth in both our Gerber Technology and Gerber Coburn businesses. Strong competition continued to suppress equipment sales in our Sign Making and Specialty Graphics segment, which we are addressing through both internal development and strategic OEM relationships. Sales of aftermarket products in this segment are providing stability.

We remain on track with our turnaround plan and we commenced the relocation of our Gerber Coburn operations in Muskogee, Oklahoma in June 2004, which was previously announced. This action caused us to record a restructuring charge relating primarily to severance amounting to $1.4 million. We anticipate additional charges of up to $5.0 million for the remainder of this fiscal year in connection with this relocation and the restructuring of our Spandex business.

The $26.8 million repayment of our debt during fiscal 2004 resulted in lower interest expense of $1.0 million this quarter compared to last year. We will continue to benefit in future periods from lower interest rates associated with the July 9, 2004 amendment to our credit facilities."

In the fiscal 2005 first quarter, Gerber:

• Reported improved operating margins despite lower revenue, indicating the effectiveness of cost control programs implemented.
• Amended its credit facilities to include more favorable terms.
• Continued to reduce its debt and realized $1.0 million of year-over-year interest expense savings.
• Commenced the relocation of the Gerber Coburn operations in Muskogee, Oklahoma resulting in a $1.4 million restructuring charge.
• Benefited from continued new order entry momentum in the Gerber Technology business.
• Continued to expand its business in China.

Fiscal 2005 First Quarter Consolidated Results

Fiscal 2005 first quarter revenue and order entry were $127.7 million and $129.8 million, respectively, versus $129.0 million and $130.5 million in the prior year comparable periods. Foreign currency translation had the effect of increasing revenue approximately $4.2 million in the fiscal 2005 first quarter versus the prior year comparable period. Gerber's backlog of orders increased $2.1 million to $38.0 million during the fiscal 2005 first quarter. This increase occurred in the Apparel and Flexible Materials segment and we expect these orders to be converted to revenue during the fiscal 2005 second quarter.

Fiscal 2005 first quarter gross margin of 34.5 percent increased 0.5 percentage points from the prior year comparable period and increased 1.1 percentage points after adjusting for service costs recorded as selling, general, and administrative expenses (S,G,&A) in the prior year comparable period. The higher gross margin was the result of operating leverage from our cost reduction efforts, higher prices, and mitigated costs as a result of our hedging activities. These effects were partially offset by lower business volume and a product mix favoring lower margin equipment products. The service cost adjustment was caused by better visibility resulting from the November 1, 2003 implementation of SAP for the Ophthalmic Lens Processing segment.

Consolidated operating income was $3.1 million in the fiscal 2005 first quarter versus $4.6 million in the prior year comparable period. Restructuring charges of $1.9 million more than offset the effect of improved gross margin, lower pension expense, and savings from cost control. Of these charges, approximately $1.4 million related to the relocation of Gerber Coburn's operations in Muskogee, Oklahoma and $0.4 million related to an adjustment to a previously established lease accrual.

Other expenses in the fiscal 2005 first quarter decreased $0.8 million from the prior year comparable period primarily because of lower losses incurred on the translation of foreign currency denominated transactions. Also included in other expenses in the fiscal 2004 first quarter was the write-off of deferred financing charges of $0.3 million associated with the Company's prior credit facility that did not recur in fiscal 2005.

Fiscal 2005 first quarter interest expense decreased $1.0 million from the prior year comparable period, which was largely the result of lower average debt balances.

The Company's consolidated income tax rate was 17.1 percent compared to the statutory rate of 35.0 percent. The difference from the statutory rate was primarily attributable to benefits related to export tax incentives and foreign tax planning strategies.

Fiscal 2005 First Quarter Segment Results

Segment profit (defined as segment earnings before interest and taxes - see attached segment information for reconciliation to GAAP measure) for the fiscal 2005 first quarter was $6.4 million versus $8.0 million in the prior year comparable period.

Sign Making and Specialty Graphics

The Sign Making and Specialty Graphics segment reported fiscal 2005 first quarter revenue of $68.7 million, which was a decrease of $4.1 million from the prior year comparable period. Adjusting for the effect of foreign currency translation, fiscal 2005 first quarter revenue was $7.3 million lower than the prior year comparable period. The decrease was primarily the result of strong competition from inkjet products. The fiscal 2004 first quarter also included revenue of $2.4 million representing sales to a large office supply retailer that did not, and were not expected to, repeat this year.

Fiscal 2005 first quarter segment profit decreased $2.6 million from the prior year comparable period primarily because of lower business volume. Higher restructuring expenses of $0.4 million related to a change in assumptions concerning a previously established lease accrual also contributed to the lower segment profit. Favorable foreign currency effects, savings from cost control, and lower pension expense partially offset the segment profit decline.

Apparel and Flexible Materials

The Apparel and Flexible Materials segment reported fiscal 2005 first quarter revenue of $39.8 million, which was an increase of $2.2 million from the prior year comparable period. Foreign currency translation had the effect of increasing revenue by $0.7 million in the fiscal 2005 first quarter versus the prior year comparable period. The higher revenue reflected improved North American, Asian, and Latin American markets and this increase occurred across all product lines except for the multi-ply cutter line. Delays in the shipment of multi-ply cutter orders at the end of the first quarter contributed to the $2.7 million increase in segment backlog.

Fiscal 2005 first quarter segment profit of $4.6 million increased $1.6 million from the prior year comparable period, which was primarily the result of higher volume, favorable foreign currency effects, savings from cost control, favorable pricing, and lower pension expense. A product mix favoring lower margin equipment was a partial offset.

The Chinese market has grown to be the second largest for Gerber Technology, the business comprising the Apparel and Flexible Materials segment, following the United States. New orders for the Far East region grew approximately 20 percent in the fiscal 2005 first quarter versus the prior year comparable period and were driven by increased Chinese business levels. On September 7, 2004, Gerber Technology will open an Advanced Technology Center in Shanghai, where its Far East regional operations will be based. This facility will also provide the infrastructure needed by Gerber's other operating segments to expand into the Chinese market. Gerber Technology operates through 24 locations (including ten independent agents) within greater China and has more than 1,500 customers operating more than 5,000 systems. Gerber Technology plans to increase to over 200 the number of personnel in China by the end of fiscal 2005.

Ophthalmic Lens Processing

The Ophthalmic Lens Processing segment reported fiscal 2005 first quarter revenue of $19.2 million, which was an increase of $0.7 million from the prior year comparable period. Foreign currency translation had the effect of increasing revenue by $0.3 million in the fiscal 2005 first quarter from the prior year comparable period. The increase reflected higher aftermarkets revenue, while equipment revenue was flat compared to the prior year.

Fiscal 2005 first quarter segment loss of $0.6 million increased $0.6 million from the prior year comparable period. The segment loss was caused by the $1.4 million restructuring charge associated with the relocation of the Muskogee, Oklahoma facility. The favorable effects of cost control, product mix, lower pension expense, and higher prices partially offset the impact of the restructuring charge.

Corporate Expenses

Corporate expenses, net of other income, of $3.5 million in the fiscal 2005 first quarter decreased $0.9 million from the prior year comparable period. The decrease was primarily the result of fiscal 2004 first quarter costs associated with the settled SEC investigation and credit facility amendments that did not recur, as well as lower fiscal 2005 first quarter pension expense.

Financial Condition

The Company's total debt decreased $1.1 million during the fiscal 2005 first quarter. Cash provided by operating activities was $2.7 million in the fiscal 2005 first quarter versus cash used for operating activities of $8.6 million during the prior year comparable period. This variance was caused primarily by incentive bonus payments made during the fiscal 2004 first quarter that did not recur this year.

At July 31, 2004, the Company had $6.5 million in cash and cash equivalents and $57.9 million in debt. Gerber's net debt (defined as total debt less cash and cash equivalents) was lowered $1.3 million during the fiscal 2005 first quarter to $51.4 million. The ratio of net debt to capital (defined as the sum of net debt plus shareholders' equity) was 30.1 percent at July 31, 2004 compared to 30.9 percent at April 30, 2004.

As previously announced, the Company amended its revolver and term loan credit agreements on July 9, 2004. These amendments, among other changes, reduced the weighted-average annual interest rates accruing on the Company's outstanding term loans by 3.75 percent and improved certain operating and financial covenants. The amendments also modified operating covenants to permit the Company, within specified limits, to prepay the term loans more frequently, make business acquisitions, pay dividends, and repurchase its common stock. Please refer to the Company's annual report on Form 10-K filed with the SEC on July 14, 2004 for additional information.

About Gerber Scientific, Inc.

Safe Harbor Statement:

• Delays in new product development and commercialization.
• Delays in product introductions, product defects or loss of market focus caused by efforts to lower the Company's cost platform.
• Reliance on manufacturers or suppliers to timely supply parts or aftermarket consumables to the Company's specifications.
• Fluctuations in currency exchange rates that cause the Company's financial results to decline.
• Financial and operating covenants associated with the Company's primary credit facilities.
• Intense competition in each of the Company's operating segments.
• Sign shops' transition to lower-cost ink jet imaging systems, calendered vinyls, and digital media systems.
• Phasing out of apparel trade quotas as of January 1, 2005.
• Non-recurring orders from key customers.
• Delays caused by facility relocations.

GERBER SCIENTIFIC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)