SOUTH WINDSOR, Conn., Feb. 27 /PRNewswire-FirstCall/ -- Gerber Scientific, Inc. today reported net income of $2.2 million for the third quarter of fiscal 2007, or $0.10 per diluted share, on revenue of $137.1 million, compared with a net loss of $0.1 million, or essentially break even on a diluted share basis, on revenue of $124.6 million for the third quarter of fiscal 2006. Foreign currency translation had the effect of increasing revenue by approximately $6.1 million in the third quarter of fiscal 2007, as compared with the third quarter of fiscal 2006.
For the nine months ended January 31, 2007, the Company reported net income of $7.9 million, or $0.34 per diluted share, on revenue of $419.7 million, compared with a net loss of $1.3 million, or $0.06 per diluted share, on revenue of $387.3 million for the nine months ended January 31, 2006. Foreign currency translation had the effect of increasing revenue by approximately $12.0 million for the nine months ended January 31, 2007, as compared with the nine months ended January 31, 2006. The Company's net loss for the nine months ended January 31, 2006 included a $2.5 million charge associated with the early extinguishment of the Company's former credit facility and a $2.3 million tax charge associated with the reversal of a deferred tax asset in the United Kingdom. These items negatively impacted the prior year-to-date diluted earnings per share by $0.18.
Marc T. Giles, President and Chief Executive Officer, commented: "Results for the third quarter reflected our continued focus on growth with revenue up 10.0 percent versus a year ago. In addition to favorable currency translation, this growth was largely a result of our initiatives in new products and in China and other Asian markets. Though our gross margin percentage declined from the prior year primarily related to business unit and product mix, our earnings per share for the third quarter grew to $0.10 per diluted share driven by higher revenue and internal focus on cost control."
For additional information please see our Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, 2007, which will be filed with the Securities and Exchange Commission.
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 and ophthalmic lens processing industries. Headquartered in South Windsor, Connecticut, the Company operates through four businesses: Gerber Scientific Products, Spandex Ltd., Gerber Technology and Gerber Coburn.
Cautionary Note Concerning Factors That May Affect Future Results 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 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, 2006 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. The Company expressly disclaims any obligation to update any of these forward- looking statements, except as required by law. Actual future results or events may differ materially from these forward-looking statements.
GERBER SCIENTIFIC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
In thousands, except
per share data Quarter Ended Nine Months Ended
January 31, January 31,
2007 2006 2007 2006
Product sales $120,941 $109,324 $370,776 $341,117
Service sales 16,183 15,288 48,885 46,220
137,124 124,612 419,661 387,337
Costs and Expenses:
Cost of products sold 86,881 78,233 264,401 242,303
Cost of services sold 10,242 9,120 29,922 28,069
Selling, general and
expenses 29,863 28,427 92,216 87,310
development 6,050 5,959 18,193 18,789
Restructuring charges --- --- --- (231)
133,036 121,739 404,732 376,240
Operating income 4,088 2,873 14,929 11,097
(expense), net (145) (754) (25) (1,437)
Loss on early
of debt --- --- --- (2,483)
Interest expense (965) (862) (2,713) (3,818)
Income before income
taxes 2,978 1,257 12,191 3,359
Income tax expense 748 1,349 4,248 4,658
Net income (loss) $2,230 $(92) $7,943 $(1,299)
Earnings (Loss) per
share of common stock:
Basic $0.10 $0.00 $0.35 $(0.06)
Diluted $0.10 $0.00 $0.34 $(0.06)
Weighted average shares
Basic 23,012 22,466 22,828 22,371
Diluted 23,398 22,466 23,258 22,371
GERBER SCIENTIFIC, INC. AND SUBSIDIARIES
CONSOLIDATED SUMMARY BALANCE SHEETS
In thousands January 31, April 30,
Cash and cash equivalents $4,911 $14,145
Accounts receivable, net 92,620 92,422
Inventories 63,630 53,794
Prepaid expenses and other current assets 16,044 16,718
Total current assets 177,205 177,079
Property, plant and equipment, net 36,692 38,366
Goodwill 54,060 51,554
Deferred income taxes 32,009 27,696
Other assets 15,754 15,785
Total assets $315,720 $310,480
Liabilities and Shareholders' Equity
Current portion of long-term debt $1,280 $284
Accounts payable 42,292 53,886
Accrued and other liabilities 55,165 57,248
Total current liabilities 98,737 111,418
Long-term debt 36,661 36,836
Other long-term liabilities 37,691 36,610
Shareholders' equity 142,631 125,616
Total liabilities and shareholders' equity $315,720 $310,480
Gerber Scientific, Inc.