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Contact: Mike Elia, Exec. VP & CFO |
Melodye Demastus, Investor Relations Tele: 614.771.8810 mdemastus@columbus.rr.com |
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Gerber Scientific, Inc. Reports Fiscal 2010 Third Quarter Results SOUTH WINDSOR, CT – March 4, 2010 – Gerber Scientific, Inc. (NYSE: GRB) today reported revenue and earnings results for its fiscal 2010 third quarter ended January 31, 2010 Summary of Results from Continuing Operations for FY 2010 Third Quarter versus FY 2009 Third Quarter
“We were pleased with our performance during this fiscal third quarter,” said Marc Giles, Gerber Scientific President and Chief Executive Officer. “Since our fiscal 2009 year end, we have reduced our debt by $28.5 million to $45.0 million through tight cost and working capital management and the sales of certain non-core businesses. Though recovery in our US markets continues to progress slowly, our European markets remain stable and we continue to see solid improvement in our Asian markets and remain optimistic about our prospects there.”
Outlook and Guidance
“We began our fiscal fourth quarter with the highest backlog level we’ve seen since the fiscal second quarter of 2009,” said Mr. Giles. “We continue to see several encouraging signs including increased quote activity overall for systems, especially from our Asian markets, which is an important growth market for us. We expect the fourth quarter to follow its historical seasonality and to be stronger on a sequential quarterly basis as well as ahead of last year. However, we do anticipate we will incur additional restructuring charges in the fourth quarter as a result of our ongoing efforts to reduce our permanent cost structure and will continue to tightly manage expenses. We are confident that we will be able to leverage our improved cost structure to deliver higher earnings as the economy and our markets rebound.”
Quarterly
Conference Call
Gerber Scientific’s quarterly earnings conference is scheduled for today at 10:00 a.m. ET. Please dial
719.325.4794 and provide the operator with confirmation code 1242962 to participate in the call in a listen only mode. The Company will also provide a live webcast of the call which may be accessed through the Company’s website (www.gerberscientific.com). A webcast replay of the call will also be available for ninety days, as well as a conference call transcription, which will be available three business days after the conference call, on the Company’s website under the Investor Relations tab.
About Gerber
Scientific, Inc.
Gerber Scientific, Inc. (www.gerberscientific.com) is a leading international supplier of sophisticated automated manufacturing systems for the sign making, specialty graphics and packaging, apparel and flexible materials, and ophthalmic lens processing industries. Headquartered in South Windsor, Connecticut, the Company operates through four primary businesses: Gerber Scientific Products, Spandex, Gerber Technology and Gerber Coburn.
Cautionary Note
Concerning Factors That May Affect Future Results
This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements contained in this news release regarding the Company's expected financial condition, results of operations, cash flows, product launches and cost reductions 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, 2009 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, continued adverse economic and credit market conditions, volatility in foreign currency exchange rates and fluctuations in interest rates. Actual future results or events may differ materially from these forward-looking statements. The Company expressly disclaims any obligation to update any of these forward-looking statements, except as required by law.
GERBER SCIENTIFIC, INC.
SUMMARY OF OPERATIONS
(Unaudited)
For the Fiscal Quarters Ended January 31,
For the Nine Months
Ended January 31,
In thousands, except per share data
2010
2009
2010
2009
Revenue:
Product sales
$
94,794
$
88,752
$
292,104
$
341,702
Service sales
15,877
17,439
49,315
55,207
110,671
106,191
341,419
396,909
Cost of Sales:
Cost of products sold
67,618
63,674
211,048
247,298
Cost of services sold
10,196
10,291
30,267
35,636
77,814
73,965
241,315
282,934
Gross profit
32,857
32,226
100,104
113,975
Selling, general and administrative expenses
27,276
27,122
78,987
88,996
Research and development
4,626
4,847
13,586
16,778
Restructuring and other expenses
1,194
40
1,450
884
Operating (loss) income
(239
)
217
6,081
7,317
Other income (expense), net
(126
)
(2,470
)
(1,525
)
(3,007
)
Interest expense
(1,374
)
(654
)
(3,234
)
(1,941
)
(Loss) Income from continuing operations
before income taxes
(1,739
)
(2,907
)
1,322
2,369
Income tax benefit
(981
)
(1,616
)
(996
)
(3,429
)
(Loss) Income from continuing operations,
net of taxes
(758
)
(1,291
)
2,318
5,798
Loss from discontinued operations, net of
taxes
(51
)
(941
)
(2,154
)
(1,255
)
Net (loss) income
$
(809
)
$
(2,232
)
$
164
$
4,543
Basic (loss) earnings per common share:
Continuing operations
$
(0.03
)
$
(0.05
)
$
0.09
$
0.24
Discontinued operations
---
(0.04
)
(0.08
)
(0.05
)
Basic (loss) earnings per common share
$
(0.03
)
$
(0.09
)
$
0.01
$
0.19
Diluted (loss) earnings per common share:
Continuing operations
$
(0.03
)
$
(0.05
)
$
0.09
$
0.24
Discontinued operations
---
(0.04
)
(0.08
)
(0.05
)
Diluted (loss) earnings per common share
$
(0.03
)
$
(0.09
)
$
0.01
$
0.19
Weighted average shares outstanding:
Basic
25,195
24,131
24,904
23,953
Diluted
25,195
24,131
24,936
24,064
GERBER SCIENTIFIC, INC.
SUMMARY SEGMENT INFORMATION
(Unaudited)
For the Fiscal Quarters Ended January 31,
For the Nine Months
Ended January 31,
In
thousands
2010
2009
2010
2009
Sign Making and Specialty Graphics:
Gerber Scientific Products
$
9,341
$
11,938
$
33,603
$
45,457
Spandex
50,267
45,430
159,094
177,122
Sign Making and Specialty Graphics
59,608
57,368
192,697
222,579
Apparel and Flexible Materials
40,095
36,437
112,249
130,768
Ophthalmic Lens Processing
10,968
12,386
36,473
43,562
Consolidated revenue
$
110,671
$
106,191
$
341,419
$
396,909
Sign Making and Specialty Graphics:
Gerber Scientific Products
$
(2,488
)
$
334
$
(4,950
)
$
(881
)
Spandex
2,730
704
9,255
6,832
Sign Making and Specialty Graphics
242
1,038
4,305
5,951
Apparel and Flexible Materials
4,140
2,778
11,597
11,373
Ophthalmic Lens Processing
(318
)
737
2,002
2,625
Segment operating income
4,064
4,553
17,904
19,949
Corporate operating expenses
(4,303
)
(4,336
)
(11,823
)
(12,632
)
Consolidated operating (loss) income
$
(239
)
$
217
$
6,081
$
7,317
GERBER SCIENTIFIC, INC.
SELECTED FINANCIAL DATA – REVENUE BY PRODUCT TYPE
(Unaudited)
For the Fiscal Quarters Ended January 31,
For the Nine Months
Ended January 31,
In
thousands
2010
2009
2010
2009
Equipment and software revenue
$
30,523
$
30,501
$
86,252
$
115,484
Aftermarket supplies revenue
64,271
58,251
205,852
226,218
Service revenue
15,877
17,439
49,315
55,207
Consolidated revenue
$
110,671
$
106,191
$
341,419
$
396,909
GERBER SCIENTIFIC, INC.
For the Fiscal Quarters Ended January 31,
For the Nine Months
Ended January 31,
2010
2009
2010
2009
Gross margin
29.7
%
30.3
%
29.3
%
28.7
%
Operating margin
(0.2
%
)
0.2
%
1.8
%
1.8
%
GERBER SCIENTIFIC, INC.
SELECTED FINANCIAL DATA – FINANCIAL POSITION
(Unaudited)
In
thousands, except ratio data
January 31, 2010
April 30,
2009
Cash and cash equivalents
$
7,921
$
10,313
Working capital
$
77,267
$
92,839
Total debt
$
45,000
$
73,500
Net
debt (total debt less cash and cash equivalents)
$
37,079
$
63,187
Shareholders' equity
$
163,642
$
148,302
Total capital (net debt plus shareholders' equity)
$
200,721
$
211,489
Current ratio
1.90:1
2.02:1
Net
debt-to-total capital ratio
18.5
%
29.9
%
GERBER SCIENTIFIC, INC.
For the Fiscal Quarters Ended January 31,
For the Nine Months
Ended January 31,
In
thousands
2010
2009
2010
2009
Net
cash provided by operating activities
$
3,724
$
3,377
$
19,478
$
6,318
Net
cash (used for) provided by investing activities
$
(3,200
)
$
(478
)
$
5,299
$
(38,559
)
Net
cash (used for) provided by financing activities
$
(6,206
)
$
(9,009
)
$
(28,256
)
$
32,628
Depreciation and amortization
$
2,106
$
2,721
$
7,250
$
7,547
Capital expenditures
$
1,239
$
1,550
$
3,231
$
6,471
GERBER SCIENTIFIC, INC.
SELECTED FINANCIAL DATA – ORDERS BY GEOGRAPHIC LOCATION
(Unaudited)
For the Fiscal Quarters Ended January 31,
For the Nine Months
Ended January 31,
In
thousands
2010
2009
2010
2009
North America
$
29,734
$
36,781
$
98,032
$
118,363
Europe
54,444
52,787
167,876
203,527
Rest of world
27,138
9,928
76,876
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