Gerber Scientific Announces Fiscal 2008 Third Quarter Results

SOUTH WINDSOR, Conn., March 6 /PRNewswire-FirstCall/ -- Gerber Scientific, Inc. NYSE: GRB today reported net income of $3.1 million for the third quarter of fiscal 2008, or $0.13 per diluted share, on revenue of $152.0 million, compared with net income of $2.2 million, or $0.10 per diluted share, on revenue of $137.1 million for the third quarter of fiscal 2007. Foreign currency translation had the effect of increasing revenue by approximately $9.6 million in the third quarter of fiscal 2008 as compared with the third quarter of fiscal 2007.

For the nine months ended January 31, 2008, the Company reported net income of $8.4 million, or $0.36 per diluted share, on revenue of $466.3 million, compared with net income of $7.9 million, or $0.34 per diluted share, on revenue of $419.7 million for the nine months ended January 31, 2007. Foreign currency translation had the effect of increasing revenue by approximately $24.2 million for the nine months ended January 31, 2008, as compared with the nine months ended January 31, 2007.

The Company used $7.5 million in cash flows from operations, less capital expenditures, for the first nine months of fiscal 2008 as compared with a cash usage of $11.8 million in the prior year comparable period.

Marc T. Giles, President and Chief Executive Officer, commented: "We are pleased to report for the third quarter of fiscal 2008 that revenue, operating profit and earnings per share all increased as compared with the prior year. Revenue growth of $14.8 million, or 10.8 percent, as compared with the prior year, was led by the Sign Making and Specialty Graphics segment, through the strong performance of the Spandex business unit, with stronger aftermarket revenue and benefits from favorable foreign currency translation, and the incremental revenue provided by our acquisition of Data Technology early this fiscal year. Operating profit margin of 4.1 percent for the third quarter increased 1.1 percentage points, primarily as a result of lower selling, general and administrative expenses during the quarter as a percent of revenue compared with the fiscal quarter ended January 31, 2007. This improved operating performance resulted in a year-over-year increase in earnings per share for the third quarter of $0.03 per diluted share, after recording a non- cash pre-tax charge of $0.3 million, or $0.01 per diluted share, related to the write-off of deferred financing costs associated with the refinancing of the Company's credit facility."

Giles continued, "With regard to our exciting new product - the Solara ion(TM), we continue to expect to ship in volume during the first quarter of fiscal 2009. Also, pre-order volume has increased by approximately 45% to 125 orders from the amount reported in November 2007."

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, ophthalmic lens processing, and print and packaging industries. Headquartered in South Windsor, Connecticut, the Company operates through four primary business units: 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 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 risks and 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, 2007 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. Actual future results or events may differ materially from those expressed or implied in the Company's forward-looking statements. The Company expressly disclaims any obligation to update any of these forward-looking statements.

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

                                  Quarter Ended        Nine Months Ended
    In thousands, except            January 31,            January 31,
     per share data              2008        2007        2008       2007

    Revenue:
      Product sales            $133,637    $120,941    $411,022   $370,776
      Service sales              18,329      16,183      55,327     48,885
                                151,966     137,124     466,349    419,661
    Costs and Expenses:
      Cost of products sold      95,428      86,881     294,302    264,401
      Cost of services sold      13,085      10,242      36,737     29,922
      Selling, general and
       administrative expenses   30,691      29,863      99,972     92,216
      Research and development    6,466       6,050      19,483     18,193
                                145,670     133,036     450,494    404,732

    Operating income              6,296       4,088      15,855     14,929

    Other income
     (expense), net                (435)       (145)        (96)       (25)
    Interest expense             (1,388)       (965)     (3,460)    (2,713)

    Income before income taxes    4,473       2,978      12,299     12,191
    Income tax expense            1,410         748       3,898      4,248
    Net income                   $3,063      $2,230      $8,401     $7,943

    Earnings per share
     of common stock:
      Basic                       $0.13       $0.10       $0.36      $0.35
      Diluted                     $0.13       $0.10       $0.36      $0.34

    Weighted average
     shares outstanding:
      Basic                      23,374      23,012      23,296     22,828
      Diluted                    23,618      23,398      23,600     23,258



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

    In thousands                                   January 31,      April 30,
                                                      2008            2007
    Assets
    Current Assets:
      Cash and cash equivalents                      $12,299         $8,052
      Accounts receivable, net                       105,605        106,421
      Inventories                                     77,258         65,299
      Prepaid expenses and other current assets       15,523         15,106
        Total current assets                         210,685        194,878

    Property, plant and equipment, net                39,079         36,982
    Goodwill                                          61,348         54,825
    Deferred income taxes                             37,816         34,893
    Other assets                                      15,788         14,384
        Total assets                                $364,716       $335,962

    Liabilities and Shareholders' Equity
    Current Liabilities:
      Current portion of long-term debt                   $-         $1,773
      Accounts payable                                41,264         48,772
      Other accrued liabilities                       59,672         63,208
        Total current liabilities                    100,936        113,753

    Long-term debt                                    52,000         31,603
    Other long-term liabilities                       50,886         46,125

    Shareholders' equity                             160,894        144,481
        Total liabilities and
         shareholders' equity                       $364,716       $335,962