Increased order activity @ Gerber's Apparel and Industrial segment
Gerber Scientific, Inc. reported revenue and earnings results for its fiscal fourth quarter and year ended April 30, 2010.
Summary of Results for FY 2010 Fourth Quarter versus FY 2009 Fourth Quarter
• Reported revenue increased 13.7% to $121.2 million from $106.6 million. The effects of favorable currency exchange increased revenue by approximately $6.8 million, or 6.4%;
• Gross profit was $35.3 million or 29.1% of sales versus $30.5 million or 28.6% of sales. Gross profit and margin in the current quarter benefitted from improved sales volume and $2.4 million of favorable currency exchange;
• Selling, general and administrative (SG&A) expenses were $28.0 million, or 23.1% of sales, compared with $26.1 million, or 24.5% of sales. The increase in SG&A was due to $1.3 million in exchange rate fluctuations and the absence of approximately $1.5 million of temporary cost reductions that were in place during the prior year fourth quarter, which was partially offset by lower spending and certain tax contingency adjustments;
• Operating income was $1.1 million compared to an operating loss of $0.3 million. Current quarter operating income was negatively impacted by $1.2 million of restructuring and other expenses, versus $0.3 million last year. On a currency adjusted basis, operating income was $0.1 million;
• Loss from continuing operations was $1.1 million, or $0.04 per diluted share, compared to a loss of $0.9 million, or $0.04 per diluted share last year in the fourth quarter. Net loss for the current quarter was $1.6 million, or $0.06 per diluted share, compared with a net loss of $2.3 million, or $0.09 per diluted share last year; the loss reflects a decrease of $0.3 million in interest expense due to a $0.3 million charge in connection with a debt refinancing recorded last year, higher operating income of $1.4 million, offset by income tax expense of $1.5 million this year in the fourth quarter, versus a tax benefit of $0.5 million last year in the fourth quarter, due primarily to foreign tax provision adjustments;
• Net cash flows from operations, less capital expenditures, increased $2.7 million to $4.4 million, from $1.7 million in the prior year, due principally to effective working capital management;
• Total outstanding debt was $45 million. Total debt has been reduced by $28.5 million since the Company's April 30, 2009 fiscal year end.
“Both the sequential and year-over-year improvement in our key financial metrics for the fiscal fourth quarter gives us continued optimism that we've turned the corner on the depressed economic cycle that has challenged us for the past year and a half,” said Marc Giles, Gerber Scientific President and Chief Executive Officer. “On a currency adjusted basis, fourth quarter revenue year-over-year was up seven percent and up 14 percent on a sequential quarterly basis, reflecting higher demand for equipment, software and aftermarket products. In addition, due to our continued focus on manufacturing cost controls and working capital improvements, our gross margin was up 50 basis points year-over-year in the fourth quarter, or 10 basis points on a currency adjusted basis. Moreover, our total inventory was down an additional $7 million from our fiscal third quarter and we more than doubled our cash flow from operations, less capital expenditures, year-over-year in the fourth quarter.