February 22, 1995
Securities & Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Gerber Scientific, Inc.
Commission File No. 1-5865
Gentlemen:
Pursuant to regulations of the Securities and Exchange
Commission, submitted herewith for filing on behalf of Gerber
Scientific, Inc. (the "Company") is the Company's Form 10-Q for
the quarter ended January 31, 1995.
This filing is being effected by direct transmission to the
Commission's EDGAR System.
Very truly yours,
/s/ George M. Gentile
George M. Gentile
Senior Vice President, Finance
<PAGE>1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE) QUARTERLY REPORT /X/ OR TRANSITION REPORT / /
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended
January 31, 1995 Commission File No. 1-5865
GERBER SCIENTIFIC, INC.
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
CONNECTICUT 06-0640743
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
83 Gerber Road West, South Windsor, Connecticut 06074
-------------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including area code (203) 644-1551
----------------
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the Registrant was required to file such reports) and (2) has been
subject to such filing requirements for the past 90 days.
Yes /X/. No / /.
At January 31, 1995, 23,752,280 shares of common stock of the Registrant
were outstanding.
<PAGE>2
GERBER SCIENTIFIC, INC.
AND SUBSIDIARIES
CONTENTS OF QUARTERLY REPORT ON FORM 10-Q
Quarter Ended January 31, 1995
PAGE
Part I - Financial Information
Item 1. Consolidated Financial Statements:
Statement of Earnings for the three months
ended January 31, 1995 and 1994 1
Statement of Earnings for the nine months
ended January 31, 1995 and 1994 2
Balance Sheet at January 31, 1995 and
April 30, 1994 3
Statement of Cash Flows for the nine months
ended January 31, 1995 and 1994 4
Notes to Financial Statements 5
Independent Auditors' Report 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K 14
Signature 15
Exhibit Index
<PAGE>3
GERBER SCIENTIFIC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS
------------------------------------------------------------------------
In Thousands
(except per share amounts)
------------------------------------------------------------------------
Three Months Ended January 31, 1995 1994
------------------------------------------------------------------------
Revenue:
Product sales $ 71,599 $ 54,357
Service 11,211 9,418
--------- ---------
82,810 63,775
--------- ---------
Costs and Expenses:
Cost of product sales 38,036 28,813
Cost of service 7,036 6,090
Selling, general and administrative 25,648 20,349
Research and development expenses 7,145 5,615
--------- ---------
77,865 60,867
Operating income 4,945 2,908
Other income 1,625 6,663
Interest expense (91) (87)
--------- ---------
Earnings before income taxes 6,479 9,484
Provision for income taxes 1,700 3,500
--------- ---------
Net earnings $ 4,779 $ 5,984
========= =========
Net earnings per common share $ .20 $ .25
========= =========
Dividends paid per common share $ .08 $ .06
========= =========
Average common shares outstanding 23,853 23,952
========= =========
See Accompanying Notes
1
<PAGE>4
GERBER SCIENTIFIC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS
------------------------------------------------------------------------
In Thousands
(except per share amounts)
------------------------------------------------------------------------
Nine Months Ended January 31, 1995 1994
------------------------------------------------------------------------
Revenue:
Product sales $ 195,515 $ 163,810
Service 30,272 28,207
--------- ---------
225,787 192,017
--------- ---------
Costs and Expenses:
Cost of product sales 106,305 87,464
Cost of service 19,689 18,940
Selling, general and administrative 68,147 61,958
Research and development expenses 19,079 17,058
--------- ---------
213,220 185,420
Operating income 12,567 6,597
Other income 4,461 9,775
Interest expense (295) (279)
--------- ---------
Earnings before income taxes 16,733 16,093
Provision for income taxes 4,800 5,600
--------- ---------
Net earnings before cumulative effect
of accounting change 11,933 10,493
Cumulative effect of accounting change -- 788
--------- ---------
Net earnings $ 11,933 $ 11,281
========= =========
Net earnings per common share:
Before cumulative effect of
accounting change $ .50 $ .44
Cumulative effect of accounting change -- .03
--------- ---------
Net earnings per common share $ .50 $ .47
========= =========
Dividends paid per common share $ .22 $ .17
========= =========
Average common shares outstanding 23,963 23,959
========= =========
See Accompanying Notes
2
<PAGE>5
GERBER SCIENTIFIC, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
-------------------------------------------------------------------------
In Thousands
-------------------------------------------------------------------------
January 31, April 30,
1995 1994
-------------------------------------------------------------------------
ASSETS
Current Assets:
Cash and short-term cash investments $ 5,093 $ 15,605
Accounts receivable 64,677 53,731
Inventories 54,842 55,479
Prepaid expenses 12,139 4,962
---------- ----------
136,751 129,777
---------- ----------
Investments and long-term
receivables 83,642 82,539
---------- ----------
Property, plant and equipment 98,817 100,066
Less accumulated depreciation 49,155 52,586
---------- ----------
49,662 47,480
---------- ----------
Intangible assets 44,973 32,443
Less accumulated amortization 8,076 7,181
---------- ----------
36,897 25,262
---------- ----------
Other assets 2,187 1,385
---------- ----------
$ 309,139 $ 286,443
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Notes payable $ -- $ --
Current maturities of long-term debt 193 193
Accounts payable 12,513 9,875
Accrued compensation and benefits 10,126 7,765
Other accrued liabilities 27,694 17,838
Deferred revenue 4,127 2,628
Advances on sales contracts 5,857 3,630
---------- ----------
60,510 41,929
---------- ----------
Noncurrent Liabilities:
Deferred income taxes 9,995 11,913
Long-term debt 7,579 7,724
Other 53 53
---------- ----------
17,627 19,690
---------- ----------
Contingencies and Commitments
Shareholders' Equity:
Preferred stock, no par value; authorized
10,000,000 shares; no shares issued -- --
Common stock, $1.00 par value; authorized
65,000,000 shares; issued and outstanding
23,752,280 and 23,828,330 shares 23,752 23,828
Paid-in capital 34,770 34,688
Retained earnings 172,344 166,771
Cumulative translation component 136 (463)
---------- ----------
231,002 224,824
---------- ----------
$ 309,139 $ 286,443
========== ==========
See Accompanying Notes
3
<PAGE>6
GERBER SCIENTIFIC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
-----------------------------------------------------------------------
In Thousands
Nine Months Ended January 31, 1995 1994
-----------------------------------------------------------------------
CASH PROVIDED BY (USED FOR):
Operating Activities
Net earnings $ 11,933 $ 11,281
Adjustments to reconcile net earnings to
cash provided by operating activities:
Depreciation and amortization 7,742 7,064
Deferred income taxes 2,762 (1,123)
Gain from sale of investment in
Boston Digital Corporation -- (435)
Cumulative effect of accounting change -- (788)
Changes in operating accounts, net of
effects from business acquisitions:
Accounts receivable (5,360) (6,481)
Long-term receivables (460) 358
Inventories 2,689 (134)
Prepaid expenses (3,623) 1,337
Accounts payable and accrued expenses 3,007 1,976
--------- ---------
Provided by Operating Activities 18,690 13,055
--------- ---------
Financing Activities
Purchase of common stock (1,370) (1,735)
Repayments of long-term debt (645) (144)
Net short-term financing (2,755) (2)
Exercise of stock options 254 712
Dividends on common stock (5,238) (4,044)
--------- ---------
(Used for) Financing Activities (9,754) (5,213)
--------- ---------
Investing Activities
Investment in long-term debt securities (1,644) (4,167)
Business acquisitions (9,000) --
Proceeds from sale of investment in
Boston Digital Corporation -- 2,085
Additions to property, plant and equipment (7,871) (2,791)
Intangible and other assets (1,833) (1,425)
Other long-term investments 900 298
--------- ---------
(Used for) Investing Activities (19,448) (6,000)
--------- ---------
Increase (Decrease) in Cash and
Short-Term Cash Investments (10,512) 1,842
Cash and Short-Term Cash Investments,
Beginning of Period 15,605 17,307
--------- ---------
Cash and Short-Term Cash Investments,
End of Period $ 5,093 $ 19,149
========= =========
See Accompanying Notes
4
<PAGE>7
GERBER SCIENTIFIC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1
The consolidated balance sheet at January 31, 1995, the consolidated
statements of earnings for the three- and nine-month periods ended
January 31, 1995 and 1994, and the consolidated statement of cash
flows for the nine-month periods ended January 31, 1995 and 1994 are
unaudited but, in the opinion of the Company, include all adjustments,
consisting only of normal recurring accruals, necessary for a fair
statement of the results for the interim periods. The results of
operations for the nine-month period ended January 31, 1995 are not
necessarily indicative of the results to be expected for the full
fiscal year.
Note 2
The classification of inventories was as follows (in thousands):
January 31, 1995 April 30, 1994
---------------- --------------
Raw materials and
purchased parts $ 45,371 $ 43,269
Work in process 9,471 12,210
--------- ---------
$ 54,842 $ 55,479
========= =========
Note 3
Net earnings per common share were calculated on the basis of the
weighted average number of shares of common stock and common stock
equivalents outstanding during each period.
Note 4
On March 1, 1994, Gerber Garment Technology, Inc. (GGT), a wholly
owned subsidiary of the Company, purchased the business and certain
assets and liabilities of Niebuhr Maskinfabrik A/S (Niebuhr) of Ikast,
Denmark. The acqusition cost was approximately $1,000,000. Niebuhr
manufactures and markets computer-automated fabric spreading and
cutting room equipment used in the apparel and related industries.
The acquisition was accomplished through a newly formed Danish
subsidiary of GGT known as GGT-Niebuhr A/S, which will continue to
manufacture, market, and support Niebuhr equipment.
The acquisition was accounted for as a purchase, with the acquisition
cost allocated to the assets and liabilities acquired based upon their
fair values. The excess of acquisition cost over the fair values of
the net assets acquired has been included in intangible assets as
goodwill and is being amortized on a straight-line basis over 20 years
from
5
<PAGE>8
GERBER SCIENTIFIC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
the date of acquisition. The results of operations of GGT-Niebuhr A/S
have been included in the Company's consolidated statement of earnings
for the three- and nine-month periods ended January 31, 1995. The pro
forma effect of the Niebuhr acquisition on the Company's prior results
of operations was not significant.
On September 1, 1994, GGT acquired the outstanding stock of
Microdynamics, Inc. (Microdynamics) of Dallas, Texas, and subsequently
merged that company into GGT. Microdynamics was a leading supplier of
computer-aided design (CAD), graphic design, and product data
management systems for the apparel, footwear, and other sewn goods
industries. GGT will continue to develop, manufacture, market, and
support the Microdynamics' product lines.
Under terms of the acquisition agreement, the purchase price was
$12,000,000 plus additional contingent cash consideration based on the
earnings performance of a certain Microdynamics' product line over the
three-year period following the date of acquisition. Approximately
$7,700,000 of the $12,000,000 purchase price has been paid. The
balance of $4,300,000 is contingently payable over the one-year period
following the date of acquisition based on the results of an audit of
Microdynamics' closing balance sheet and the realizability of certain
acquired assets.
The acquisition has been accounted for as a purchase and the results
of Microdynamics' operations have been included in the Company's
consolidated statement of earnings from September 1, 1994. The
acquisition cost (which includes only the $7,700,000 of the purchase
price paid to date) has been allocated to the assets and liabilities
acquired based upon their fair values. The excess of acquisition cost
over the fair values of the net assets acquired has been included in
intangible assets as goodwill and is being amortized on a straight-
line basis over 20 years from the date of acquisition. Any contingent
consideration that is subsequently payable will be recorded as
additional acquisition cost at the time the contingency is resolved
and the amount is determinable. Additional goodwill resulting from
any contingency-related payment will be amortized over the remainder
of the 20-year goodwill amortization period.
The following pro forma combined results of operations for the nine-
month periods ended January 31, 1995 and 1994 and the three months
ended January 31, 1994 have been prepared as if the acquisition of
Microdynamics occurred at the beginning of each of the respective
fiscal years and give effect to estimated purchase accounting
adjustments resulting from the acquisition. The pro forma information
is presented on the assumption that the acquisition cost would have
been the same at the beginning of each period and includes only the
$7,700,000 of the purchase price that has been paid to date.
6
<PAGE>9
GERBER SCIENTIFIC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In Thousands
(except per share amounts)
-----------------------------------------
Nine months ended Three months ended
January 31 January 31
------------------- ------------------
1995 1994 1994
-------- -------- --------
Sales $233,512 $210,509 $70,713
Net earnings 11,130 10,407 6,075
Net earnings per
common share .46 .43 .25
The pro forma financial information presented is not necessarily
indicative of the results of operations that would have been achieved
had the acquisition of Microdynamics actually been effective as of the
beginning of each fiscal year or of future results of the combined
companies.
NOTE 5
In the third quarter ended January 31, 1994, the Company received the
proceeds of a U.S. District Court judgment in a patent infringement
case brought against Lectra Systemes S.A. of France and its U.S.
subsidiary. The judgment, net of the prior year's expenses associated
with it, amounted to $5,675,000 and is included in earnings before
income taxes for the third quarter and nine months ended January 31,
1994. After income taxes, this item amounted to approximately
$3,400,000, or $.14 per share.
NOTE 6
Certain amounts in the January 31, 1995 financial statements have been
reclassified to conform with this quarter's presentation.
7
<PAGE>10
GERBER SCIENTIFIC, INC. AND SUBSIDIARIES
With respect to the unaudited consolidated financial
statements of Gerber Scientific, Inc. and subsidiaries at
January 31, 1995 and for the three- and nine-month
periods ended January 31, 1995 and 1994, KPMG Peat
Marwick LLP has made a review (based on procedures
adopted by the American Institute of Certified Public
Accountants) and not an audit, as set forth in their
separate report dated February 17, 1995 appearing on page
9. That report does not express an opinion on the
interim unaudited consolidated financial information.
KPMG Peat Marwick LLP has not carried out any significant
or additional audit tests beyond those which would have
been necessary if their report had not been included.
Accordingly, such report is not a "report" or "part of
the Registration Statement" within the meaning of
Sections 7 and 11 of the Securities Act of 1933 and the
liability provisions of Section 11 of such Act do not
apply.
8
<PAGE>11
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders of
Gerber Scientific, Inc.
We have made a review of the consolidated statement of earnings
of Gerber Scientific, Inc. and subsidiaries for the three-month
and nine-month periods ended January 31, 1995 and 1994, the
consolidated statement of cash flows for the nine-month periods
ended January 31, 1995 and 1994, and the consolidated balance
sheet as of January 31, 1995 in accordance with standards
established by the American Institute of Certified Public
Accountants. We have previously audited, in accordance with
generally accepted auditing standards, and expressed our
unqualified opinion dated May 25, 1994 on the consolidated
financial statements for the year ended April 30, 1994 (not
presented herein). The aforementioned financial statements are
the responsibility of the Company's management.
A review of interim financial information consists principally
of applying analytical review procedures to financial data and
making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an
examination in accordance with generally accepted auditing
standards, the objective of which is the expression of an
opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material
modifications that should be made to the accompanying
consolidated statement of earnings for the three-month and nine-
month periods ended January 31, 1995 and 1994, the consolidated
statement of cash flows for the nine-month periods ended January
31, 1995 and 1994, or the consolidated balance sheet as of
January 31, 1995 for them to be in conformity with generally
accepted accounting principles. Also, in our opinion the
information in the accompanying consolidated balance sheet as of
April 30, 1994 is fairly presented, in all material respects, in
relation to the consolidated balance sheet from which it has
been derived.
/s/ KPMG PEAT MARWICK LLP
Hartford, Connecticut
February 17, 1995
9
<PAGE>12
GERBER SCIENTIFIC, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
As of January 31, 1995 the Company's ratio of current assets to
current liabilities was 2.3 to 1, compared with 3.1 to 1 at
April 30, 1994. Net working capital decreased $11.6 million from
the beginning of the current fiscal year to $76.2 million at
January 31, 1995. The Company's liquidity as of January 31, 1995
remained high, with cash and short-term cash investments totalling
$5.1 million and the Company's portfolio of longer-term debt
securities, primarily tax-exempt municipal bonds, totalling
$82.1 million.
The decline in the Company's short-term cash and investments and
in net working capital related primarily to the acquisition of two
businesses, Niebuhr Maskinfabrik A/S (Niebuhr) and Microdynamics,
Inc. (Microdynamics). The Company paid approximately $1.0 million
for Niebuhr and repaid approximately $1.1 million of its bank debt
subsequent to the acquisition. The Company has paid approximately
$7.7 million for Microdynamics and repaid approximately $1.7
million of its debt. These amounts were funded from the Company's
cash and short-term investments. The net working capital
positions of the acquired businesses were substantially weaker
than the Company's and, when combined with the payments described
above, contributed to the lower consolidated working capital and
current ratio at January 31, 1995.
In connection with the acquisitions, the Company has recorded
approximately $11.8 million in goodwill which is being amortized
on a straight-line basis over 20 years. With regard to the
Microdynamics acquisition, the Company is contingently liable to
make up to $4.3 million in additional payments based upon the
results of an audit of Microdynamics' closing balance sheet and
the realizability of certain of the acquired assets. The
acquisition agreement also provides for additional contingent cash
consideration based on the earnings performance of a
Microdynamics' product line over the three-year period following
the acquisition. Any amounts due based upon the earnings-related
contingency would be payable at the end of the three-year period.
Any contingent amounts subsequently payable will be recorded as
additional goodwill and amortized over the remainder of the 20
year amortization period.
Operating activities provided $18.7 million in cash in the first
nine months of the current fiscal year. In addition to the
business acquisitions and repayment of the acquired companies'
debt, the principal uses of cash were for additions to property,
plant, and equipment ($7.9 million); for dividends on common stock
($5.2 million); for additional investment in municipal bonds ($1.6
million); and for open market purchases of common stock ($1.4
million).
10
<PAGE>13
The Company's Board of Directors authorized an increase in the
quarterly dividend to $.08 per share from $.06 per share beginning
with the dividend paid in August, 1994. This action raised the
quarterly dividend payout from approximately $1.4 million to $1.9
million.
During this year's second quarter, the Company purchased 100,400
shares of its common stock in the open market at an average price
of $13.59 per share. Under a current Board authorization, the
Company may purchase up to 1,444,200 additional shares as, in the
opinion of management, market conditions may warrant.
The Company expects fiscal year 1995 capital expenditures will be
in the range of $9-11 million and expects to continue to fund
these additions with cash on hand and cash generated by
operations. Expenditures for property, plant, and equipment are
higher this year than originally anticipated due in part to
facilities improvements to accommodate the acquired Niebuhr and
Microdynamics operations.
The Company's total debt was 3.4 percent of shareholders' equity
at January 31, 1995, compared with 3.5 percent at April 30, 1994.
The Company believes that its low debt-to-equity ratio is an
important indicator of its ability to borrow funds should needs
arise.
RESULTS OF OPERATIONS
For the third quarter and nine months ended January 31, 1995,
combined sales and service revenue increased $19.0 million and
$33.8 million, respectively, from the comparable periods of the
prior year. These represented 29.8 percent and 17.6 percent
increases, respectively. Both product sales and service revenue
were higher in this year's third quarter and first nine months.
In geographic terms, the Company's U.S. markets remained strong
while its European markets have rebounded from the recessed levels
of last year.
The operations of the newly acquired businesses, Niebuhr and
Microdynamics, added approximately $9.3 million and $13.6 million,
respectively, to the Company's third quarter and nine-month
revenue in the current year. Niebuhr is a Danish-based company
that manufactures and markets computer-automated fabric spreading
and cutting room equipment used primarily in the apparel industry.
In its most recent year prior to acquisition, it had annual sales
of approximately $5 million. Niebuhr's operations were included
in the Company's results of operations for the full nine months
ended January 31, 1995 and added approximately $3.2 million and
$6.3 million, respectively, to the consolidated third quarter and
nine-month sales.
Microdynamics was a Texas-based company and a leading supplier of
computer-aided design (CAD), graphic design, and product data
management systems for the apparel, footwear, and sewn goods
industry. In its most recent year prior to acquisition it had
annual sales of approximately $25 million. Microdynamics was
acquired September 1, 1994, and its operations were included in
the Company's results of operations for only the five months ended
11
<PAGE>14
January 31, 1995. Microdynamics added approximately $6.1 million
and $7.3 million, respectively, to the consolidated third quarter
and nine-month sales.
Current year product sales of computer-controlled cutting and
marker-making systems for the apparel and related industries
continue to be stronger than the prior year. Sales in this
product class have been enhanced by the new GERBERcutter S-3000, a
compact, highly accurate mid-ply automated cutting system.
Product sales this year were also strengthened by shipments of the
Step One Blocking System, a new component in the Company's
manufacturing systems for producing prescription eyeglass lenses.
These improvements have been partially offset by lower shipments
of computerized drafting systems. The higher service revenue in
this year's third quarter and first nine months reflected the
addition of Microdynamics' service business.
Gross profit margins on product sales were slightly lower in this
year's third quarter and first nine months than in the same
periods of last year. The decrease in product margins reflected
start-up costs on the first production runs of the GERBERcutter S-
3000 and the Step One Blocking System. In addition, gross profit
margins on product sales continue to be pressured by competitive
pricing on computer-controlled cutting and marker-making systems,
especially in European markets. Gross profit margins on service
sales were higher this year as a result of the acquisition of
Microdynamics' service business.
Selling, general, and administrative expenses were higher in this
year's third quarter and first nine months primarily due to the
inclusion of the expenses of Niebuhr and Microdynamics and to
higher marketing and post-sale expenses associated with the higher
sales volume. However, as a percentage of revenue, SG&A expenses
declined to 31 percent and 30.2 percent in this year's third
quarter and first nine months compared with 31.9 percent and 32.3
percent in the corresponding periods of the prior year.
The Company continued its long-standing commitment of resources to
research and the development of new products. R&D expense of $7.1
million in this year's third quarter and $19.1 million in the
first nine months represented 8.6 percent and 8.4 percent of the
corresponding revenue compared with 8.8 percent and 8.9 percent,
respectively, in the prior year. The higher dollar expenditures
in the current year reflected primarily the additional R&D
expenditures of Microdynamics and to a lesser extent Niebuhr.
Other income in last year's third quarter and first nine months
included the settlement of a judgment in the Company's favor in a
patent infringement case. The judgment, net of the prior year's
expenses associated with it, amounted to $5.7 million before
income taxes and was included in other income in the consolidated
statement of earnings. After income taxes, this item amounted to
approximately $3.4 million, or $.14 per share.
The effective rate for income taxes was 28.7 percent for the first
nine months of this year compared with 34.8 percent for last
year's
12
<PAGE>15
first nine months and 32.2 percent for the full prior fiscal year.
The effective income tax rate continued to be lower than the 35
percent statutory U.S. Federal tax rate primarily as a result of
tax-exempt interest income, the tax benefits derived from the
Company's Foreign Sales Corporation, and, in the current year,
research and development tax credits.
Net earnings for this year's third quarter were $4.8 million.
This compares with $2.6 million in last year's third quarter
excluding the $3.4 million gain from the patent litigation
settlement. Net earnings including this item were $6.0 million in
last year's third quarter. Earnings per share were $.20 in this
year's third quarter compared with $.11 last year before the
patent settlement and $.25 after the settlement.
For the first nine months of this year, net earnings totalled
$11.9 million compared with $7.1 million in the same period last
year, excluding the effects of a change in accounting for income
taxes and the patent litigation settlement noted above. Including
these items, net earnings were $11.3 million in the first nine
months of last year. Earnings per share were $.50 for the first
nine months of this year compared with $.30 per share last year
before the accounting change and patent litigation settlement and
$.47 per share including these items.
13
<PAGE>16
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(11) Statement regarding computation of per share earnings.
(15) Letter regarding unaudited interim financial
information.
(b) Reports on Form 8-K
No Form 8-K was filed during the quarter for which this
report is filed.
14
<PAGE>17
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
GERBER SCIENTIFIC, INC.
-------------------------------
(Registrant)
Dated: February 21, 1995 By: /s/ George M. Gentile
------------------- -------------------------------
Senior Vice President, Finance
and Principal Financial Officer
15
<PAGE>18
EXHIBIT INDEX
Exhibit Index
Number Exhibit Page
------------- ------- ----
11 Statement Regarding Computation 20
of Per Share Earnings*
15 Letter Regarding Unaudited Interim 21
Financial Information*
27 Financial Data Schedule. * 22
*Filed herewith
<PAGE>19
EXHIBIT NO. 11
GERBER SCIENTIFIC, INC. AND SUBSIDIARIES
COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
Three Months Nine Months
Ended Ended
January 31 January 31
--------------------------- ---------------------------
1995 1994 1995 1994
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net earnings before cumulative
effect of accounting change $ 4,779,000 $ 5,984,000 $ 11,933,000 $ 10,493,000
Cumulative effect of accounting
change -- -- -- 788,000
------------ ------------ ------------ ------------
Net earnings $ 4,779,000 $ 5,984,000 $ 11,933,000 $ 11,281,000
============ ============ ============ ============
Weighted average shares of
common stock outstanding
during the period 23,751,749 23,764,044 23,809,037 23,792,137
Common stock equivalents:
Common stock attributable
to stock options (treasury
stock method) 100,951 188,338 154,250 167,319
------------ ------------ ------------ ------------
Average common shares
outstanding 23,852,700 23,952,382 23,963,287 23,959,456
============ ============ ============ ============
Net earnings per common share:
Before cumulative effect of
accounting change $ .20 $ .25 $ .50 $ .44
Cumulative effect of
accounting change -- -- -- .03
------------ ------------ ------------ ------------
Net earnings per common share $ .20 $ .25 $ .50 $ .47
============ ============ ============ ============
</TABLE>
<PAGE>20
EXHIBIT NO. 15
To the Board of Directors and Shareholders of
Gerber Scientific, Inc.
Re: Registration Statements on Form S-8
File No. 2-93695 and No. 33-58668
Registration Statement on Form S-3,
File No. 33-58670
With respect to the subject Registration Statements, we
acknowledge our awareness of the use therein of our report dated
February 17, 1995 related to our review of interim financial
information.
Pursuant to Rule 436(c) under the Securities Act, such reports
are not considered a part of a Registration statement prepared or
certified by an accountant or a report prepared or certified by
an accountant within the meaning of Sections 7 and 11 of the Act.
Very truly yours,
/s/ KPMG PEAT MARWICK LLP
Hartford, Connecticut
February 17, 1995
<PAGE>21
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED STATEMENTS OF EARNINGS AND CASH FLOW FOR THE NINE-MONTH PERIOD
ENDED JANAUARY 31, 1995 AND THE CONSOLIDATED BALANCE SHEET AS OF JANAUARY 31,
1995 OF GERBER SCIENTIFIC, INC AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> APR-30-1995
<PERIOD-START> NOV-01-1994
<PERIOD-END> JAN-31-1995
<CASH> 5,093
<SECURITIES> 0
<RECEIVABLES> 64,677
<ALLOWANCES> 0
<INVENTORY> 54,842
<CURRENT-ASSETS> 136,751
<PP&E> 98,817
<DEPRECIATION> 49,155
<TOTAL-ASSETS> 309,139
<CURRENT-LIABILITIES> 60,510
<BONDS> 0
<COMMON> 23,752
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 309,139
<SALES> 225,787
<TOTAL-REVENUES> 225,787
<CGS> 125,994
<TOTAL-COSTS> 213,220
<OTHER-EXPENSES> (4,461)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 295
<INCOME-PRETAX> 16,733
<INCOME-TAX> 4,800
<INCOME-CONTINUING> 11,933
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,933
<EPS-PRIMARY> .50
<EPS-DILUTED> .50
</TABLE>
