EX-99.1 2 exhibit99_1.htm EXHIBIT 99.1 exhibit99_1.htm


 
Exhibit 99.1
Gerber Scientific, Inc. Reports Fiscal 2011 Fourth Quarter and Full Year Results
 
TOLLAND, CT – June 21, 2011 – 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 Fiscal Quarters Ended April 30,
    
For the Fiscal Years  Ended April 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
    before income taxes 
    
(10,215
)
    
270
      
(6,410
)
    
(1,578
)
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 share1
  
$
(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 share1
  
$
(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 Fiscal Quarters Ended April 30,
    
For the Fiscal Years Ended April 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 Fiscal Quarters Ended April 30,
    
For the Fiscal Years Ended April 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 Fiscal Quarters Ended April 30,
  
For the Fiscal Years Ended April 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)
  
 
In thousands, except ratio data
  
April 30, 2011
    
April 30, 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 Fiscal Quarters Ended April 30,
    
For the Fiscal Years Ended April 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 Quarters Ended April 30,
    
For the Fiscal Year 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