For Immediate Release

Contact:  Jay Zager

November 30 , 2006

(860) 644-1551

   

GERBER SCIENTIFIC, INC. ANNOUNCES FISCAL 2007 SECOND QUARTER RESULTS

SOUTH WINDSOR, CT -- Gerber Scientific, Inc. (NYSE: GRB) today reported net income of $3.7 million for the second quarter of fiscal 2007, or $0.16 per diluted share, on revenue of $145.0 million, compared with a net loss of $0.1 million, or $0.01 per diluted share, on revenue of $134.0 million for the second quarter of fiscal 2006. Foreign currency translation had the effect of increasing revenue by approximately $3.3 million in the second quarter of fiscal 2007 compared with the second quarter of fiscal 2006. The prior year second quarter net loss included a pre-tax charge of $2.5 million, or $0.07 per diluted share, associated with the early extinguishment of the Company's former credit facility.

For the six months ended October 31, 2006, the Company reported net income of $5.7 million, or $0.25 per diluted share, on revenue of $282.5 million, compared with a net loss of $1.2 million, or $0.05 per diluted share, on revenue of $262.7 million for the six months ended October 31, 2005. Foreign currency translation had the effect of increasing revenue by approximately $5.8 million for the six months ended October 31, 2006, as compared with the six months ended October 31, 2005. The Company's net loss for the six months ended October 31, 2005 included the $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, said: "Fiscal 2007 results through October 31, 2006 are strong, with year-to-date revenue growth of over 7 percent. During the second quarter, new products and sales to Asian markets significantly contributed to this growth as compared with the prior year. This revenue growth is contributing significantly to our operating profit, which during the second quarter increased $1.6 million, or over 34 percent, as compared to the prior year."

For additional information please see our Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 2006, 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, apparel trade quotas, 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
   October 31,   

Six Months Ended
     October 31,     

 

2006

2005

2006

2005

Revenue:

       

     Product sales

$128,423 

$118,376 

$249,835 

$231,793 

     Service sales

   16,626 

   15,585 

   32,702 

   30,932 

145,049 

133,961 

282,537 

262,725 

Costs and Expenses:

       

     Cost of products sold

91,272 

84,205 

177,520 

164,070 

     Cost of services sold

10,145 

9,306 

19,680 

18,949 

     Selling, general and administrative expenses

30,990 

29,308 

62,353 

58,883 

     Research and development

6,175 

6,518 

12,143 

12,830 

     Restructuring charges

          --- 

      (195)

         --- 

     (231)

 

 138,582 

 129,142 

271,696 

254,501 

         

Operating income

6,467 

4,819 

10,841 

8,224 

         

Other income (expense), net

279 

(508)

120 

(683)

Loss on early extinguishment of debt

--- 

(2,483)

--- 

(2,483)

Interest expense

     (971)

   (1,525)

   (1,748)

   (2,956)

Income before income taxes

5,775 

303 

9,213 

2,102 

Income tax expense

     2,086 

        427 

     3,500 

     3,309 

Net income (loss)

$   3,689 

$    (124) 

$   5,713 

$  (1,207)

         

Earnings (Loss) per share of common stock:

     Basic

$0.16 

$(0.01)

$0.25 

$(0.05)

     Diluted

$0.16 

$(0.01)

$0.25 

$(0.05)

         

Weighted average shares outstanding:

       

     Basic

22,854 

22,368 

22,737 

22,340 

     Diluted

23,343 

22,368 

23,183 

22,340 

 

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


In thousands

October 31,
    2006     

 

April 30,
   2006   

Assets

     

Current Assets:

     

     Cash and cash equivalents

$  10,312

 

$  14,145

     Accounts receivable, net

100,150

 

92,422

     Inventories

59,163

 

53,794

     Prepaid expenses and other current assets

    16,100

 

    16,718

             Total current assets

  185,725

 

  177,079

       

Property, plant and equipment, net

36,617

 

38,366

Goodwill

52,218

 

51,554

Deferred income taxes

28,285

 

27,696

Other assets

    15,500

 

    15,785

             Total assets

$318,345

 

$310,480

       

Liabilities and Shareholders' Equity

     

Current Liabilities:

     

     Current portion of long-term debt

$       831

 

$       284

     Accounts payable

47,852

 

53,886

     Accrued and other liabilities

   56,365

 

    57,248

             Total current liabilities

 105,048

 

  111,418

       

Long-term debt

39,954

 

36,836

Other long-term liabilities

36,009

 

36,610

       

Shareholders' equity

  137,334

 

  125,616

             Total liabilities and shareholders' equity

$318,345

 

$310,480