Gerber Scientific, Inc. Reports Fiscal 2009 Fourth Quarter and Full Year Results

SOUTH WINDSOR, Conn., June 26 /PRNewswire-FirstCall/ -- Gerber Scientific,
Inc. (NYSE: GRB) today reported revenue and earnings results for its fiscal
fourth quarter and year ended April 30, 2009.

Summary of Results for FY 2009 Fourth Quarter versus FY 2008 Fourth Quarter

-- Reported revenue declined 31% to $120.1 million from $173.7 million.
Core business was down 35.9% including the effects of currency
fluctuations, which decreased revenue $16.9 million, or 9.7%, while
acquisitions completed in the current fiscal year increased reported
revenue by $8.7 million, or 5.0%;
-- Gross profit was $33.2 million or 27.7% of sales versus $51.2 million
or
29.5% of sales. The adverse impact of significantly lower sales volume
and unfavorable currency fluctuations more than offset the incremental
gross profit contribution from the recent acquisitions. 2008 gross
profit and margin also benefited from $2.3 million of patent license
income;
-- Selling, general and administrative (SG&A) expenses declined $6.8
million to $29.4 million, or 24.5% of sales, compared with $36.3
million, or 20.9% of sales. Current quarter SG&A expenses included
$3.1 million of expenses added by recent acquisitions while currency
fluctuations lowered SG&A costs by $3.3 million. The Company also
incurred a $0.5 million non-cash charge to freeze its pension plan and
an increase of $1.8 million in bad debt expense. SG&A expenses,
excluding the impact of these items, were reduced by $9.0 million
year-over-year in the fourth quarter. Additionally, although the
recent
acquisitions increased R&D spending by $1.0 million; consolidated
R&D expenses were down $1.6 million;
-- Operating loss was $1.3 million, or a (1.1%) operating margin,
compared
with $8.2 million of operating income and an operating margin of 4.7%.
Operating results in the current quarter reflected the significantly
lower sales volume and related adverse margin impact;
-- The net loss was $2.3 million or $0.10 per diluted share, compared
with
net income of $6.1 million or $0.26 per diluted share. Current quarter
net loss included a pre-tax non-operating charge of $0.3 million from
the write-off of capitalized debt financing costs related to the
Company's credit facility amendment. Fourth quarter 2008 results
benefited from a $1.3 million pre-tax gain on the sale of a
non-operating asset;

-- Net cash flows from operations, less capital expenditures, totaled
$1.7
million versus $9.4 million. The Company recorded positive cash flow
in
the quarter due to working capital improvements.

"The sharp global economic downturn that began in the last half of 2008
continued to severely impact our performance in the fiscal fourth quarter,"
said Marc Giles, Gerber Scientific President and Chief Executive Officer.
"Sales in the fourth quarter, normally our strongest quarter of the year, were
essentially flat with the third quarter. The lack of any seasonal rebound
indicates that conditions in the markets we serve continued to worsen. Facing
this situation, we continued to make substantial progress in lowering our cost
structure to combat the downturn, which resulted in the significant
year-over-year spending reductions."

"The decisive actions of our management team to rapidly lower our cost
structure are allowing us to weather this unprecedented downturn. We will
continue to diligently manage our costs while not diminishing our ability to
respond to both our current customer requirements and new business
opportunities as our markets rebound. We are intently focused on generating
and preserving cash through working capital management and are currently
considering several asset sales that could generate proceeds of up to $20
million, which would allow us to substantially improve our liquidity and
flexibility under our existing credit facility."

Outlook and Guidance
"The Company continues to experience delays in orders from its customers and
overall weaker demand due to the global recession and depressed credit
markets, which has limited our customers' access to capital," said Mr. Giles.
"The continued volatility in the global economy and lack of market visibility
makes it difficult to forecast our customers' purchasing patterns with high
certainty, and, as a result, our future performance. Therefore, until our
markets stabilize and we gain better visibility, we will not provide sales and
earnings guidance. Although we continue to be very cautious in our near term
outlook, we have begun to see some encouraging signs in quote and order
activity, which may indicate that we are near or at the bottom of the
recessionary cycle. Nevertheless, while we believe our revenue level has
stabilized, we do not expect to see any significant improvement in business
conditions until the last half of our fiscal year 2010. Moreover, we believe
that the strength of our product lines, our diversified business model and our
more streamlined organization will allow us to return to a growth path quickly
when our markets begin to rebound. In the mean time, we will continue to
prudently manage all aspects of our business and remain focused on cash
generation."

Quarterly Conference Call
Gerber Scientific's quarterly earnings conference is scheduled for today at
10:00 a.m. EDT. Please dial 719.325.4833 and provide the operator with
confirmation code 5041917 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. (http://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, 2008 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 For the Fiscal Years
In thousands, except per Ended April 30, Ended April 30,
share data 2009 2008 2009 2008
Revenue:
Product sales $102,248 $154,923 $479,362 $565,945
Service sales 17,853 18,745 73,452 74,072

Total revenue 120,101 173,668 552,814 640,017

Cost of Sales:
Cost of products sold 75,471 109,474 350,722 403,776
Cost of services sold 11,409 12,971 47,714 49,708

Total cost of sales 86,880 122,445 398,436 453,484

Gross profit 33,221 51,223 154,378 186,533

Selling, general and
administrative expenses 29,431 36,275 125,726 135,297
Research and development 5,086 6,704 22,417 26,187

Operating (loss) income (1,296) 8,244 6,235 25,049

Other income (expense),
net (132) 914 (4,190) (132)
Interest expense (1,392) (705) (3,746) (4,165)

(Loss) Income before
income taxes (2,820) 8,453 (1,701) 20,752
Income tax (benefit)
expense (513) 2,350 (3,937) 6,248
Net (loss) income $(2,307) $6,103 $2,236 $14,504
(Loss) Earnings per share
of common stock:
Basic $(0.10) $0.26 $0.09 $0.62
Diluted $(0.10) $0.26 $0.09 $0.61
Weighted average shares
outstanding:
Basic 23,630 23,175 23,561 23,320
Diluted 23,630 23,372 23,673 23,598

GERBER SCIENTIFIC, INC.
SUMMARY SEGMENT INFORMATION
(Unaudited)

For the Fiscal Quarters For the Fiscal Years
Ended April 30, Ended April 30,
In thousands 2009 2008 2009 2008
Sign Making and Specialty
Graphics:
Gerber Scientific Products $18,983 $27,671 $89,712 $102,689
Spandex 50,461 72,785 230,993 258,397
Sign Making and Specialty
Graphics 69,444 100,456 320,705 361,086
Apparel and Flexible Materials 36,676 54,880 174,566 207,945
Ophthalmic Lens Processing 13,981 18,332 57,543 70,986
Consolidated revenue $120,101 $173,668 $552,814 $640,017
Sign Making and Specialty
Graphics:
Gerber Scientific Products $(1,507) $1,447 $(1,741) $1,376
Spandex 3,127 3,982 9,559 10,592
Sign Making and Specialty
Graphics 1,620 5,429 7,818 11,968
Apparel and Flexible Materials 719 7,552 12,059 26,681
Ophthalmic Lens Processing 573 1,345 3,198 4,384
Segment operating income 2,912 14,326 23,075 43,033
Corporate operating expenses (4,208) (6,082) (16,840) (17,984)
Consolidated operating
(loss) income $(1,296) $8,244 $6,235 $25,049

GERBER SCIENTIFIC, INC.
SELECTED FINANCIAL DATA - REVENUE BY PRODUCT TYPE
(Unaudited)

For the Fiscal Quarters For the Fiscal Years
Ended April 30, Ended April 30,
In thousands 2009 2008 2009 2008
Equipment and software revenue $31,380 $56,477 $159,505 $205,180
Aftermarket supplies revenue 70,868 98,446 319,857 360,765
Service revenue 17,853 18,745 73,452 74,072
Consolidated revenue $120,101 $173,668 $552,814 $640,017

GERBER SCIENTIFIC, INC.
SELECTED FINANCIAL DATA - KEY OPERATING RATIOS
(Unaudited)
For the Fiscal Quarters For the Fiscal Years
Ended April 30, Ended April 30,
2009 2008 2009 2008
Gross margin 27.7% 29.5% 27.9% 29.1%
Operating margin (1.1)% 4.7% 1.1% 3.9%

GERBER SCIENTIFIC, INC.
SELECTED FINANCIAL DATA - FINANCIAL POSITION
(Unaudited)

April 30, April 30,
In thousands, except ratio data 2009 2008

Cash and cash equivalents $10,313 $13,892
Working capital $92,839 $106,005
Total debt $73,500 $42,000
Net debt (total debt less cash and cash
equivalents) $63,187 $28,108
Shareholders' equity $148,302 $169,563
Total capital (net debt plus shareholders'
equity) $211,489 $197,671
Current ratio 2.02:1 1.89:1
Net debt-to-total capital ratio 29.9% 14.2%

GERBER SCIENTIFIC, INC.
SELECTED FINANCIAL DATA - CASH FLOWS
(Unaudited)

For the Fiscal Quarters For the Fiscal Years
Ended April 30, Ended April 30,
In thousands 2009 2008 2009 2008
Net cash provided by operating
activities $3,456 $11,573 $9,774 $10,205
Net cash used for investing
activities $(1,859) $(2,433) $(40,418) $(13,764)
Net cash (used for) provided
By financing activities $(2,489) $(8,071) $30,139 $7,986
Depreciation and amortization $2,444 $2,513 $9,991 $9,518
Capital expenditures $1,716 $2,184 $8,187 $8,589

GERBER SCIENTIFIC, INC.
SELECTED FINANCIAL DATA - ORDERS BY GEOGRAPHIC LOCATION
(Unaudited)

For the Fiscal Quarters For the Fiscal Years
Ended April 30, Ended April 30,
In thousands 2009 2008 2009 2008
North America $46,398 $53,353 $190,117 $201,681
Europe 59,304 87,527 273,552 314,796
Rest of world 14,421 31,640 72,620 122,604
Consolidated orders $120,123 $172,520 $536,289 $639,081

SOURCE Gerber Scientific, Inc.

Michael R. Elia, Exec. VP and CFO, +1-860-644-1551, or Melodye Demastus,
Investor Relations, +1-614-771-8810, mdemastus@columbus.rr.com