GERBER SCIENTIFIC, INC. 
By TOLLAND, Conn., June 21, 2011 /PRNewswire/ -- Gerber Scientific, Inc. (NYSE: GRB) today reported revenue and earnings results for its fiscal fourth quarter and year ended April 30, 2011.
Summary of Results from Continuing Operations for FY 2011 Fourth Quarter versus FY 2010 Fourth Quarter
-- Reported revenue increased 16.4% to $126.7 million from $108.8 million.
The effects of favorable currency exchange increased revenue by
approximately $5.4 million, or 5.0%;
-- Gross profit was adversely affected by $2.9 million in wind down charges
related to the discontinuance of the Company's inkjet printer line.
Excluding these charges, gross profit was $41.3 million, or 32.3% of
sales versus $31.8 million, or 29.2% of sales. Reported gross profit and
margin was $38.4 million, or 30.3% of sales. Gross profit and margin in
the current quarter benefitted from improved sales volume, cost savings
actions and $1.7 million of favorable currency exchange, which was
moderated by the wind down costs;
-- Selling, general and administrative (SG&A) expenses were $32.3 million,
or 25.5% of sales, compared with $26.3 million, or 24.2% of sales. The
increase in SG&A was due to the restoration of $0.8 million in temporary
wage reductions that were in place a year ago, incentive compensation of
$1.6 million, an increase of $1.3 million in commissions due to volume
and channel mix and $1.0 million in currency exchange rate fluctuations;
-- Operating income excluding wind down costs and goodwill impairment
associated with the Company's inkjet printer line and restructuring and
other expenses was $4.7 million, or 3.7% of sales, compared to $1.5
million or 1.4% of sales. The reported operating loss was $9.8 million,
or $10.5 million on a currency adjusted basis;
-- Loss from continuing operations was $9.3 million, or $0.37 per diluted
share, compared to a loss of $0.4 million, or $0.02 per diluted share
last year in the fourth quarter. Net loss for the current quarter was
$10.8 million, or $0.43 per diluted share, compared with a net loss of
$1.6 million, or $0.06 per diluted share last year;
-- Net cash flows from operations, less capital expenditures, was $1.1
million compared with $4.4 million in the prior year, due principally to
a decrease in inventory turns;
-- Total outstanding debt was reduced by $23.9 million in fiscal 2011 to
$21.1 million.
"I am pleased with both our financial results and our strategic progress in the fourth quarter, as well as for fiscal 2011," said Marc Giles, Gerber Scientific President and Chief Executive Officer. "Our Company's strong year-over-year performance continued during the fourth quarter with impressive gains in sales, gross margin and operating earnings, excluding one-time charges. On the revenue front, we posted the highest year-over-year quarterly growth, up 16%, and sequential quarterly growth, up 13%, in more than two years. Demand was broad-based with gains across every revenue category and across all our business lines, with the exception of our digital inkjet printer line. On the strategic front, we continued to narrow our focus on our key business lines with the announced wind down of our inkjet printer line."
Outlook and Guidance
"With the strong performance posted this past quarter and a stable order backlog at year end we are raising our forecast for fiscal 2012 revenue growth from a range of 3% to 5% to a range of 5% to 7% and we are reaffirming our forecast for operating margins, excluding restructuring and other charges, to range between 5% and 7%," said Mr. Giles. This forecast is in line with our stated objective of achieving and sustaining a 10% operating margin by fiscal 2013."
Quarterly Conference Call
Gerber Scientific's quarterly earnings conference is scheduled for today at 10:00 a.m. ET. Please dial 719.325.2417 and provide the operator with confirmation code 2389891 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, packaging, apparel and industrial industries. Headquartered in Tolland, Connecticut, the Company operates through three primary businesses: Gerber Scientific Products, Spandex and Gerber Technology.
Forward-looking Statements
Any statements in this news release not relating to historical matters are "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. The forward-looking statements contained in this news release involve risks and uncertainties regarding the Company's expected financial condition, results of operations and cash flows. 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, 2010, which outlines certain important risks regarding the Company's forward-looking statements, as well as information included in subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. 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, 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 forward-looking statements contained in this release are made as of the date of this release and 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 For the
Fiscal Fiscal
Quarters Years
------- -------
Ended Ended April
April 30, 30,
----- -----------
In thousands,
except per share
data 2011 2010 2011 2010
----------------- ---- ---- ---- ----
Revenue:
Product sales $111,715 $94,640 $404,152 $353,986
Service sales 14,984 14,184 58,369 58,281
------------- ------ ------ ------ ------
126,699 108,824 462,521 412,267
Cost of Sales:
Cost of products
sold 78,257 67,948 281,664 256,950
Cost of services
sold 10,071 9,077 38,094 35,016
88,328 77,025 319,758 291,966
Gross profit 38,371 31,799 142,763 120,301
Selling, general
and
administrative
expenses 32,275 26,283 116,680 100,146
Research and
development 4,352 4,021 16,005 14,930
Goodwill
impairment 5,928 --- 5,928 ---
Restructuring and
other expenses 5,630 1,213 8,607 3,227
----------------- ----- ----- ----- -----
Operating (loss)
income (9,814) 282 (4,457) 1,998
Other income
(expense), net 123 589 (155) (719)
Interest expense (524) (601) (1,798) (2,857)
---------------- ---- ---- ------ ------
(Loss) income from
continuing
operations (10,215) 270 (6,410) (1,578)
before income
taxes
Income tax
(benefit) expense (947) 667 257 (656)
------------------ ---- --- --- ----
Loss from
continuing
operations, net
of taxes (9,268) (397) (6,667) (922)
Loss from
discontinued
operations, net
of taxes (1,493) (1,225) (16,949) (536)
---------------- ------ ------ ------- ----
Net loss $(10,761) $(1,622) $(23,616) $(1,458)
-------- -------- ------- -------- -------
Basic loss per
common share:
Continuing
operations $(0.37) $(0.02) $(0.27) $(0.04)
Discontinued
operations (0.06) (0.05) (0.67) (0.02)
------------ ----- ----- ----- -----
Basic loss per
common share(1) $(0.43) $(0.06) $(0.94) $(0.06)
---------------- ------ ------ ------ ------
Diluted loss per
common share:
Continuing
operations $(0.37) $(0.02) $(0.27) $(0.04)
Discontinued
operations (0.06) (0.05) (0.67) (0.02)
------------ ----- ----- ----- -----
Diluted loss per
common share(1) $(0.43) $(0.06) $(0.94) $(0.06)
---------------- ------ ------ ------ ------
Weighted average
shares
outstanding:
Basic 25,133 25,137 25,132 24,961
Diluted 25,133 25,137 25,132 24,961
------- ------ ------ ------ ------
(1) Basic and diluted loss per share is based on actual calculated
values and totals may not sum due to rounding.
GERBER SCIENTIFIC, INC.
SUMMARY SEGMENT INFORMATION
(Unaudited)
For the For the
Fiscal Fiscal
Quarters Years
-------- -------
Ended Ended April
April 30, 30,
---------- ------------
In thousands 2011 2010 2011 2010
------------ ---- ---- ---- ----
Sign Making and
Specialty
Graphics:
Gerber Scientific
Products $8,656 $8,875 $37,922 $36,032
Spandex 63,772 54,390 228,063 211,981
------- ------ ------ ------- -------
Sign Making and
Specialty
Graphics 72,428 63,265 265,985 248,013
Apparel and
Industrial 54,271 45,559 196,546 165,226
Intersegment
revenue
elimination --- --- (10) (972)
------------ --- --- --- ----
Consolidated
revenue $126,699 $108,824 $462,521 $412,267
------------ -------- -------- -------- --------
Sign Making and
Specialty
Graphics:
Gerber Scientific
Products $(10,400) $(1,496) $(13,520) $(5,486)
Spandex 5,870 3,231 18,998 12,461
------- ----- ----- ------ ------
Sign Making and
Specialty
Graphics (4,530) 1,735 5,478 6,975
Apparel and
Industrial 2,964 4,808 17,936 18,289
Unallocated (642) (1,161) (2,577) (3,142)
----------- ---- ------ ------ ------
Segment operating
(loss) income (2,208) 5,382 20,837 22,122
Corporate
operating
expenses (2,346) (2,405) (8,873) (9,315)
Corporate
unallocated
company-wide
expenses (5,260) (2,695) (16,421) (10,809)
------------- ------ ------ ------- -------
Consolidated
operating (loss)
income $(9,814) $282 $(4,457) $1,998
----------------- ------- --- ------- ------
Unallocated segment expenses included overhead costs remaining after the sale of Gerber Coburn. Corporate unallocated company-wide expenses included insurance costs, pension, stock-based compensation, bonus costs and other expenses.
GERBER SCIENTIFIC, INC.
SELECTED FINANCIAL DATA - REVENUE BY PRODUCT TYPE
(Unaudited)
For the For the
Fiscal Fiscal
Quarters Years
-------- -------
Ended April Ended April
30, 30,
------------ ------------
In thousands 2011 2010 2011 2010
------------ ---- ---- ---- ----
Equipment and
software revenue $37,958 $28,741 $135,105 $104,011
Aftermarket
supplies revenue 73,757 65,899 269,047 249,975
Service revenue 14,984 14,184 58,369 58,281
--------------- ------ ------ ------ ------
Consolidated
revenue $126,699 $108,824 $462,521 $412,267
------------ -------- -------- -------- --------
GERBER SCIENTIFIC, INC.
SELECTED FINANCIAL DATA - KEY OPERATING RATIOS
(Unaudited)
For the For the
Fiscal Fiscal
Quarters Years
------- -------
Ended Ended April
April 30, 30,
----- -----------
2011 2010 2011 2010
---- ---- ---- ----
Gross margin 30.3% 29.2% 30.9% 29.2%
Operating margin (7.7)% 0.3% (1.0)% 0.5%
---------------- ----- --- ----- ---
GERBER SCIENTIFIC, INC.
SELECTED FINANCIAL DATA - FINANCIAL POSITION
(Unaudited)
April April
30, 30,
------ ------
In thousands, except ratio
data 2011 2010
-------------------------- ---- ----
Cash and cash equivalents $10,916 $11,305
Working capital $68,041 $76,549
Total debt $21,110 $45,000
Net debt (total debt less
cash and cash equivalents) $10,194 $33,695
Shareholders' equity $148,221 $158,206
Total capital (net debt
plus shareholders' equity) $158,415 $191,901
Current ratio 1.69 1.85
Net debt-to-total capital
ratio 6.4% 17.6%
------------------------- --- ----
GERBER SCIENTIFIC, INC.
SELECTED FINANCIAL DATA - CASH FLOWS
(Unaudited)
For the For the
Fiscal Fiscal
Quarters Years
-------- -------
Ended
Ended April
April 30, 30,
---------- ------
In thousands 2011 2010 2011 2010
------------ ---- ---- ---- ----
Net cash provided by
operating
activities $2,901 $5,618 $14,696 $25,096
Net cash (used for)
provided by
investing
activities $(2,099) $(764) $13,648 $4,535
Net cash (used for)
provided by
financing
activities $(568) $(716) $(26,876) $(28,972)
Depreciation and
amortization $1,835 $2,202 $7,673 $9,452
Capital expenditures $1,762 $1,258 $5,384 $4,489
-------------------- ------ ------ ------ ------
GERBER SCIENTIFIC, INC.
SELECTED FINANCIAL DATA - REVENUE BY GEOGRAPHIC LOCATION
(Unaudited)
For the Fiscal For the Fiscal
Quarters Year
-------------- --------------
Ended April 30, Ended April 30,
--------------- ---------------
In
thousands 2011 2010 2011 2010
---------- ---- ---- ---- ----
North
America $33,252 $32,423 $124,161 $109,048
Europe 65,698 52,622 227,822 210,743
Rest of
world 27,749 23,779 110,538 92,476
------- ------ ------ ------- ------
Consolidated
revenue $126,699 $108,824 $462,521 $412,267
------------ -------- -------- -------- --------
SOURCE Gerber Scientific, Inc.
