<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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
July 31, 1998 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 (IRS 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 (860) 644-1551
code ---------------
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 July 31, 1998, 22,718,941 shares of common stock of the
Registrant were outstanding.
<PAGE 1>
GERBER SCIENTIFIC, INC.
AND SUBSIDIARIES
CONTENTS OF QUARTERLY REPORT ON FORM 10-Q
Quarter Ended July 31, 1998
PAGE
Part I - Financial Information
Item 1. Consolidated Financial Statements:
Statement of Earnings for the three months
ended July 31, 1998 and 1997 2
Balance Sheet at July 31, 1998 and
April 30, 1998 3-4
Statement of Cash Flows for the three months
ended July 31, 1998 and 1997 5
Notes to Financial Statements 6
Independent Accountants' Report 11
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 12
Part II - Other Information
Item 5. Other Information 16
Item 6. Exhibits and Reports on Form 8-K 16
Signature 17
Exhibit Index
<PAGE 2>
GERBER SCIENTIFIC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS
- ------------------------------------------------------------
In thousands
(except per share amounts)
- ------------------------------------------------------------
Three Months Ended July 31, 1998 1997
- ------------------------------------------------------------
Revenue:
Product sales $142,166 $87,410
Service 11,493 11,551
-------- -------
153,659 98,961
-------- -------
Costs and Expenses:
Cost of product sales 83,868 48,088
Cost of service 6,687 7,817
Selling, general and administrative 41,756 30,943
Research and development expenses 7,628 7,588
-------- -------
139,939 94,436
-------- -------
Operating income 13,720 4,525
Other income 260 2,340
Interest expense (3,158) (94)
-------- -------
Earnings before income taxes 10,822 6,771
Provision for income taxes 4,100 2,200
-------- -------
Net earnings $ 6,722 $ 4,571
======== =======
Per share of common stock:
Basic $ .30 $ .20
Diluted $ .29 $ .19
Dividends $ .08 $ .08
Average shares outstanding:
Basic 22,673 23,327
Diluted 23,514 23,714
See Accompanying Notes
<PAGE 3-4>
GERBER SCIENTIFIC, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
In thousands
--------------------------------------------------------------
July 31, April 30,
1998 1998
--------------------------------------------------------------
Assets
Current Assets:
Cash and short-term cash investments $ 26,350 $ 27,007
Accounts receivable 106,778 79,114
Inventories 83,831 61,111
Prepaid expenses 9,712 18,227
-------- --------
226,671 185,459
-------- --------
Property, Plant and Equipment 141,401 117,334
Less accumulated depreciation 59,671 57,335
-------- --------
81,730 59,999
-------- --------
Intangible Assets 241,228 99,463
Less accumulated amortization 11,014 8,208
-------- --------
230,214 91,255
-------- --------
Other Assets 1,997 2,054
-------- --------
$540,612 $338,767
======== ========
Liabilities and Shareholders' Equity
Current Liabilities:
Notes payable $ 337 $ 326
Current maturities of long-term debt 193 193
Accounts payable 43,286 30,462
Accrued compensation and benefits 14,955 17,253
Other accrued liabilities 40,310 30,347
Deferred revenue 6,664 6,619
Advances on sales contracts 6,258 5,498
-------- --------
112,003 90,698
-------- --------
Noncurrent Liabilities:
Deferred income taxes 9,826 10,202
Long-term debt 181,256 6,953
-------- --------
191,082 17,155
-------- --------
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
23,518,941 and 23,436,523 shares 23,519 23,437
Paid-in capital 39,054 37,779
Retained earnings 192,892 187,981
Accumulated other comprehensive loss
(foreign currency translation
adjustment) (1,223) (1,833)
Unamortized value of restricted stock
grants (265) --
Treasury stock, at cost (800,000
shares) (16,450) (16,450)
-------- --------
237,527 230,914
-------- --------
$540,612 $338,767
======== ========
See Accompanying Notes
<PAGE 5>
GERBER SCIENTIFIC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
In thousands
- ---------------------------------------------------------------------
Three Months Ended July 31, 1998 1997
- ---------------------------------------------------------------------
CASH PROVIDED BY (USED FOR):
Operating Activities
Net earnings $ 6,722 $ 4,571
Adjustments to reconcile net earnings to
cash provided by operating activities:
Depreciation and amortization 5,662 3,228
Deferred income taxes (591) 78
Other non-cash items 41 --
Changes in operating accounts, net of
effects of business acquisitions:
Receivables (5,106) (67)
Inventories 4,355 (2,450)
Prepaid expenses 10,918 1,122
Accounts payable and accrued expenses (6,004) 4,874
-------- --------
Provided by Operating Activities 15,997 11,356
-------- --------
Financing Activities
Additions of long-term debt 181,686 --
Repayments of long-term debt (7,383) (47)
Net short-term financing (11,585) --
Debt issue costs (705) --
Exercise of stock options 1,051 446
Dividends on common stock (1,811) (1,867)
-------- --------
Provided by (Used for) Financing Activities 161,253 (1,468)
-------- --------
Investing Activities
Maturities of long-term debt securities -- 1,808
Additions to property, plant and equipment (2,465) (3,765)
Business acquisitions (175,923) --
Intangible and other assets (129) (239)
Other, net 610 (991)
-------- --------
(Used for) Investing Activities (177,907) (3,187)
-------- --------
Increase (Decrease) in Cash and Short-Term
Cash Investments (657) 6,701
Cash and Short-Term Cash Investments,
Beginning of Period 27,007 9,503
-------- --------
Cash and Short-Term Cash Investments, $ 26,350 $ 16,204
End of Period ======== ========
See Accompanying Notes
<PAGE 6>
GERBER SCIENTIFIC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1
The consolidated balance sheet at July 31, 1998 and the
consolidated statements of earnings and cash flows for the three-
month periods ended July 31, 1998 and 1997 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 three-month period ended July 31, 1998 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):
July 31, 1998 April 30, 1998
---------------- ----------------
Raw materials and
purchased parts $52,983 $37,329
Work in process 30,848 23,782
------- -------
$83,831 $61,111
======= =======
NOTE 3
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards (SFAS) No. 128,
"Earnings Per Share," effective for financial statements for both
annual and interim periods ending after December 15, 1997. SFAS
No. 128 replaced the previously reported primary and fully
diluted earnings per share with basic and diluted earnings per
share. Unlike primary earnings per share, basic earnings per
share excludes any dilutive effects of options, warrants, and
convertible securities. Diluted earnings per share is similar to
the previously reported fully diluted earnings per share. All
earnings per share amounts for all periods have been presented,
and where necessary restated, to conform to the SFAS No. 128
requirements. This restatement had an immaterial impact on the
prior period earnings per share amounts under the previous
method.
<PAGE 7>
The following table sets forth the computation of basic and
diluted earnings per share:
Three Months Ended
July 31,
------------------------
1998 1997
---------- ----------
Numerator:
Net Income $ 6,722,000 $ 4,571,000
========== ==========
Denominators:
Denominator for basic earnings
per share--weighted-average
shares outstanding 22,673,074 23,326,588
Effect of dilutive
securities:
Employee stock options 840,977 387,623
---------- ----------
Denominator for diluted
earnings per share-
adjusted weighted-average
shares outstanding 23,514,051 23,714,211
========== ==========
Basic earnings per share $ .30 $ .20
========== ==========
Diluted earnings per share $ .29 $ .19
========== ==========
NOTE 4
Included in other income for the three-month period ended
July 31, 1997 was a gain resulting from the final settlement of
the Company's UK patent litigation with Lectra Systemes, S.A. of
France, which added $1,563,000 to earnings before income taxes
and approximately $1,000,000, or $.04 per diluted share, to net
income.
NOTE 5
Beginning in the first quarter of FY 1999, the Company adopted
SFAS No. 130, "Reporting Comprehensive Income," which established
standards for reporting and displaying comprehensive income and
its components in an annual financial statement with the same
prominence as other financial statements. This statement also
requires that an entity report a total for comprehensive income
in condensed financial statements of interim periods.
<PAGE 8>
The Company's total comprehensive income was as follows (in
thousands):
Three Months Ended
July 31,
-------------------
1998 1997
-------- --------
Net income $6,722 $4,571
Other comprehensive income (loss):
Foreign currency translation adjustments 610 (991)
------ ------
Total comprehensive income $7,332 $3,580
====== ======
NOTE 6
On February 27, 1998, Gerber Optical, Inc., a wholly owned
subsidiary of the Company, acquired the outstanding stock of
Coburn Optical Industries, Inc. (Coburn) of Muskogee, Oklahoma,
and subsequently merged with Coburn. The company was renamed
Gerber Coburn Optical, Inc. (GC). The purchase price, including
the costs of acquisition and the repayment of Coburn's
outstanding debt, was approximately $63,000,000. Coburn was a
leading manufacturer and international distributor of a broad
range of ophthalmic lens processing equipment and related
supplies used in the production of eyeglass lenses. GC has
continued to develop, manufacture, market, and support the Coburn
product lines.
On May 5, 1998, the Company announced the successful completion
of its cash tender offer for the outstanding capital stock of
Spandex PLC (Spandex) of Bristol, UK. Spandex was the largest
distributor of equipment and related materials to the sign making
industry in Europe and North America. The offer valued Spandex at
approximately $173,000,000. In addition, Spandex had
approximately $11,600,000 in outstanding debt that was assumed.
Each acquisition was accounted for as a purchase and the results
of operations of the acquired companies have been included in the
Company's consolidated statements of earnings from the respective
dates of acquisition. The acquisition costs were allocated to
the assets and liabilities acquired based upon their fair values.
The excess of acquisition costs over the fair values of the net
assets acquired was included in intangible assets as goodwill and
is being amortized on a straight-line basis over 25 years from
the date of acquisition.
The following pro forma combined results of operations for the
quarter ended July 31, 1997 have been prepared as if the Coburn
and Spandex acquisitions occurred at May 1, 1997 and give effect
to estimated purchase accounting and other adjustments resulting
from the acquisitions. The pro forma information is presented on
the assumption that the acquisition costs would have been the
same at May 1, 1997. The pro forma financial information is not
<PAGE 9>
necessarily indicative of the results of operations that would
have been achieved had the acquisitions of Coburn and Spandex
actually been effective as of May 1, 1997 or of future results of
the combined companies.
(Unaudited)
---------------
Three months
ended July 31,
---------------
In thousands (except per share amounts) 1997
--------------------------------------- ---------------
Sales $154,979
Net earnings 4,829
Net earnings per common share-basic .21
Net earnings per common share-diluted .20
<PAGE 10>
GERBER SCIENTIFIC, INC. AND SUBSIDIARIES
With respect to the unaudited consolidated financial statements
of Gerber Scientific, Inc. and subsidiaries at July 31, 1998 and
for the three-month periods ended July 31, 1998 and 1997, 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 August
19, 1998 appearing on page 11. 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.
<PAGE 11>
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors and Shareholders of
Gerber Scientific, Inc.
We have made a review of the consolidated statements of earnings
and cash flows of Gerber Scientific, Inc. and subsidiaries for
the three-month periods ended July 31, 1998 and 1997 and the
consolidated balance sheet as of July 31, 1998 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 21, 1998 on the consolidated
financial statements for the year ended April 30, 1998 (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 statements of earnings and cash flows for the three-
month periods ended July 31, 1998 and 1997 or the consolidated
balance sheet as of July 31, 1998 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, 1998 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
August 19, 1998
<PAGE 12>
GERBER SCIENTIFIC, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
In May 1998, the Company acquired the outstanding stock of
Spandex PLC (Spandex). Accordingly, Spandex was included in the
Company's consolidated balance sheet for the first time at July
31, 1998, and the Company's results from operations and cash
flows for the first quarter ended July 31, 1998 included three
months of Spandex's activity.
In February 1998, the Company acquired the outstanding stock of
Coburn Optical Industries, Inc. (Coburn). Coburn was included in
the Company's consolidated balance sheet for the first time at
April 30, 1998, and the Company's results from operations and
cash flows for the first quarter ended July 31, 1998 also
included three months of Coburn's activity.
In March 1998, the Company sold its Gerber Systems unit, which
comprised the Company's imaging and inspection systems product
class. As a result, the Company's April 30, 1998 consolidated
balance sheet and the FY 1999 consolidated financial statements
do not include any Gerber Systems activity.
FINANCIAL CONDITION
The Company's ratio of current assets to current liabilities was
2.0 to 1 at July 31, 1998 and at April 30, 1998. Net working
capital at July 31, 1998 was $114.7 million, an increase of $19.9
million from the beginning of the current fiscal year and largely
attributable to the Spandex acquisition. The Company's cash and
investments totaled $26.4 million at July 31, 1998 compared with
$27 million at the end of the prior fiscal year.
Operating activities provided $16 million in cash for the three-
month period ended July 31, 1998 compared with $11.4 million
provided by operating activities for the same period last year.
Cash in this year's first three months was generated by earnings
and the non-cash charges for depreciation and amortization, lower
inventory balances, and a tax refund resulting from the sale of
the Company's imaging and inspection systems product class. Cash
generated from operations was somewhat offset by higher accounts
receivable balances caused by the higher volume of business and
lower accounts payable and accrued liabilities balances due
largely to the timing of vendor payments.
The principal non-operating use of cash in the three months ended
July 31, 1998 was for the purchase of Spandex and the repayment
of its debt for $187.5 million. The financing for the acquisition
was provided primarily by a five-year $235 million revolving
multi-currency credit facility the Company entered into with a
<PAGE 13>
group of major U.S., European, and Asian commercial banks. Other
non-operating uses of cash in the three months ended July 31,
1998 were repayments of long-term debt of $7.4 million, additions
to property, plant, and equipment of $2.5 million, and payment of
dividends of $1.8 million. The Company anticipates that capital
expenditures for the current fiscal year will be in the range of
$22-$24 million and expects to fund these with cash on hand and
cash from operations.
The Company's total debt at July 31, 1998 was $181.8 million, up
substantially from the April 30, 1998 balance of $7.5 million,
due to the aforementioned acquisition of Spandex. Net debt (total
debt less cash and investments) was $155.4 million at July 31,
1998 versus a net cash position of $19.5 million at April 30,
1998. The ratio of net debt to total capital was 40 percent at
July 31, 1998.
RESULTS OF OPERATIONS
Combined sales and service revenue for the three-month period
ended July 31, 1998 increased $54.7 million (55.3 percent) from
the first quarter of last year. The increase reflected higher
product sales, predominantly from the acquisitions of Spandex
($42.8 million increase in sales, net of intercompany
eliminations) and Coburn ($17.3 million increase in sales). In
addition, there was internal sales growth in the Company's core
operations. The sale of the Company's imaging and inspection
system product class in the last year's fourth quarter was an
offsetting factor ($9.5 million in sales in the prior year's
first quarter). The internal sales growth came predominantly
from higher sales of the Company's optical lens manufacturing
systems. Service revenue also increased $1.4 million (13.3
percent) from the prior year's first quarter, after adjusting for
the elimination of the service revenue from the imaging and
inspection systems products.
The consolidated gross profit margin in this year's first three
months was 41.1 percent, which was lower than the prior year
margin of 43.5 percent. Gross profit margins on product sales
were lower, while service margins were higher. The decrease in
product gross profit margins was caused predominantly by the
inclusion of Spandex in the Company's financial statements in FY
1999. As a distributor, Spandex has gross profit margins
substantially lower than the Company's. However, Spandex's
historical operating margins are incrementally higher than the
Company's recent operating margins, owing in part to the absence
of R&D spending. Also reducing the product gross profit margin
in this year's first quarter was the inclusion of Coburn. A
larger percentage of Coburn's product mix comes from aftermarkets
(e.g., consumables), which have gross profit margins lower than
equipment sales.
Service gross profit margins were higher in this year's first
quarter. The increase was caused primarily by the elimination of
<PAGE 14>
the low service margins of the Company's imaging and inspection
systems product class, which were included in last year's
results.
Selling, general, and administrative expenses in this year's
first quarter rose by $10.8 million from last year, but as a
percentage of revenue these expenses declined to 27.2 percent in
this year's first quarter from 31.3 percent last year. The
Spandex and Coburn acquisitions were the principal reasons for
the dollar increase, while the sale of the imaging and inspection
system product class was an offsetting factor. The amortization
of Spandex and Coburn acquisition goodwill ($1.9 million in this
year's first quarter) was also a factor contributing to the
overall increase.
The Company continued to commit significant resources to research
and the development of new products. However, the ratio of R&D
to revenue declined significantly this year. R&D expense of $7.6
million in this year's first quarter was roughly the same as the
prior year, while the ratio of R&D to revenue declined to 5
percent from 7.7 percent last year. The lower current year ratio
was caused by the significantly higher revenue base from the
Spandex acquisition without commensurate R&D expense as Spandex
is predominantly a distribution company. In addition to the
incremental R&D expenses of Coburn, R&D dollar increases were
also related to the development of new sign making plotters and
output devices ($0.6 million) and ophthalmic lens manufacturing
systems ($0.7 million), offset by the elimination of the
Company's imaging and inspection system product class. Management
anticipates that this lower ratio of R&D expense to revenue will
continue for the balance of the current year.
Other income in this year's first quarter was lower than last
year. The year-to-year decrease relates predominantly to a prior
year gain of approximately $1.6 million ($.04 per diluted share)
from the final settlement of outstanding patent litigation.
Interest expense increased $3.1 million to $3.2 million during
the first quarter of fiscal 1999 from the first quarter of fiscal
1998 due to significantly higher debt balances for cash borrowed
to finance the acquisition of Spandex. The majority of these
borrowings were against a five-year $235 million revolving multi-
currency credit facility. The interest rate on these borrowings
is based on the London Interbank Offered Rate (LIBOR) for the
relevant currency and term plus a margin based on the
relationship of the Company's consolidated total debt to EBITDA
(earnings before interest, taxes, depreciation, and
amortization).
The provision rate for income taxes was 37.9 percent for the
three months ended July 31, 1998 compared with 32.5 percent in
the comparable prior year period. The higher tax rate this year
was primarily the result of the goodwill amortization related to
the acquisitions of Spandex and Coburn, which is not deductible
<PAGE 15>
for Federal and state income tax purposes. The year-to-year
increase in the provision rate also reflects the higher marginal
income tax rates associated with higher levels of pre-tax
earnings in the current year and also the liquidation of the
Company's investments in tax-exempt municipal securities.
As a result of the above, net earnings increased in this year's
first quarter to $6.7 million or $.29 diluted earnings per share
from $4.6 million or $.19 diluted earnings per share in last
year's first quarter. Earnings per share in last year's first
quarter included $.04 per diluted share from the patent
litigation settlement.
YEAR 2000
The Company is in the process of assessing its exposure to the
impact of the Year 2000 date issue. The Year 2000 date issue can
affect computer programs that use only two digits to identify a
year in a date field. The Company's products and key financial
and operational systems are being reviewed and, where required,
detailed plans have been, or are being, developed and implemented
on a schedule intended to permit the Company's computer systems
and products to continue to function properly. The Year 2000
date conversion effort is expected to increase costs in
fiscal years 1999 and 2000, although cost estimates are not
complete. Management does not expect that these costs will have
a material adverse impact on the Company's financial position,
results of operations, or cash flows. However, the Year 2000
date issue could adversely impact the Company if suppliers,
customers, and other businesses do not address this issue
successfully.
FORWARD-LOOKING STATEMENTS
This report includes forward-looking statements that describe the
Company's business prospects. Readers should keep in mind
factors that could have an adverse impact on those prospects.
These include political, economic, or other conditions, such as
recessionary or expansive trends, inflation rates, currency
exchange rates, taxes, regulations and laws affecting the
business, as well as product competition, pricing, the degree of
acceptance of new products in the marketplace, and the difficulty
of forecasting sales at various times in various markets.
<PAGE 16>
PART II - OTHER INFORMATION
Item 5. Other Information
On June 1, 1998, the Company issued a press release reporting the
retirement of George M. Gentile, Chairman and Chief Executive
Officer of Gerber Scientific, Inc. Effective June 1, 1998, Mr.
Gentile stepped down from his position as Chief Executive Officer
and will retire as Chairman of the Board of Directors at the
Company's Annual Meeting of Shareholders on September 25, 1998.
The Company's Board of Directors appointed Michael J. Cheshire,
who was President and Chief Operating Officer of the Company, as
President and Chief Executive Officer, and to succeed Mr. Gentile
as Chairman in September.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(15) Letter regarding unaudited interim financial
information.
(27) Financial data schedule.
(b) Reports on Form 8-K
The Company filed two Form 8-K's with the Securities and
Exchange Commission in the first quarter of fiscal year
1999.
1. Form 8-K, dated May 20, 1998, reported that the Company
successfully completed its cash tender offer for UK-
based Spandex PLC, Europe and North America's largest
distributor of sign making systems and supplies.
2. Form 8-K, dated July 16, 1998, reported the financial
statements of Spandex PLC and unaudited pro forma
condensed consolidated statements for Gerber
Scientific, Inc. as if the purchase of Spandex PLC had
occurred as of April 30, 1996 and January 31, 1998 for
the statement of income and balance sheet,
respectively.
<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)
Date: August 26, 1998 By: / s / Gary K. Bennett
------------------ --------------------------------
Gary K. Bennett
Senior Vice President, Finance
and Principal Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit Index
Number Exhibit Page
- ------------- ------- ----
15 Letter Regarding Unaudited Interim
Financial Information.*
27 Financial Data Schedule.*
*Filed herewith.
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, No. 33-58668,
No. 333-261777, and No. 333-42879
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
August 19, 1998 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
KPMG PEAT MARWICK LLP
Hartford, Connecticut
August 19, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated balance sheets and statement of earnings of Gerber Scientific,
Inc. as of and for the three-month periods ended July 31, 1998 and 1997 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> APR-30-1999 APR-30-1998
<PERIOD-END> JUL-31-1998 JUL-31-1997
<CASH> 26,350 16,204
<SECURITIES> 0 0
<RECEIVABLES> 106,778 92,552
<ALLOWANCES> 0 0
<INVENTORY> 83,831 64,671
<CURRENT-ASSETS> 226,671 186,007
<PP&E> 141,401 123,790
<DEPRECIATION> 59,671 60,179
<TOTAL-ASSETS> 540,612 332,279
<CURRENT-LIABILITIES> 112,003 63,730
<BONDS> 0 0
0 0
0 0
<COMMON> 23,519 23,347
<OTHER-SE> 214,008 226,833
<TOTAL-LIABILITY-AND-EQUITY> 540,612 332,279
<SALES> 153,659 98,961
<TOTAL-REVENUES> 153,659 98,961
<CGS> 90,555 55,905
<TOTAL-COSTS> 139,939 94,436
<OTHER-EXPENSES> (260) (2,340)
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 3,158 94
<INCOME-PRETAX> 10,822 6,771
<INCOME-TAX> 4,100 2,200
<INCOME-CONTINUING> 6,722 4,571
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 6,722 4,571
<EPS-PRIMARY> .30 .20
<EPS-DILUTED> .29 .19
</TABLE>
