SOUTH WINDSOR, CT -- Gerber Scientific, Inc. (NYSE: GRB) today reported first-quarter earnings of 16 cents per diluted share on revenues of $125.9 million for the period ended July 31, 2002, compared with a year-ago loss of $5.14 per diluted share on revenues of $124.9 million. Excluding a fiscal 2003 first-quarter sale of a discontinued operation and year-ago goodwill impairment charges, fiscal first-quarter income was 10 cents per diluted share compared with 3 cents per diluted share a year ago. Note: All prior period comparisons contained in this release are made "as restated" reflecting the previously announced restatement of the Company's historical financial statements following a review of the Company's financial reporting.

"Our first-quarter results clearly underscore the positive impact of actions we have taken to reduce costs, increase liquidity and enhance cash flow," said Marc T. Giles, president and chief executive officer. "While capital spending has yet to rebound in our core markets, we are seeing pockets where economic conditions are improving and demand is strengthening. Looking ahead in fiscal 2003, we believe that Gerber will continue to achieve improvements in its year-over-year operating results, as the markets we serve stabilize and as we continue to implement our shared-services and other cost-reduction and efficiency initiatives."

First-quarter revenue was $125.9 million, compared with $124.9 million a year ago. The impact of foreign exchange bolstered revenue by $6.3 million (5.2 percent) in the quarter, compared with the year-ago period. New orders in the first quarter totaled $126.8 million, versus $126.2 million a year ago. Operating income for the quarter increased 39% to $6.0 million, compared with $4.3 million reported in the first quarter of 2002.

Revenues reflected increases in the Sign Making & Specialty Graphics and Ophthalmic Lens Processing segments and were offset by a decline in the Apparel & Flexible Materials segment. The Ophthalmic Lens Processing segment increase was due to sales of automated lens processing equipment to large U.S. retail and discount chains. The increase in the Sign Making & Specialty Graphics operating segment was due to the favorable foreign currency translation effect. Although demand for the Apparel & Flexible Materials segment's products appears to have stabilized, that segment saw declines in revenue and orders throughout the later half of the prior fiscal year.

In the Sign Making & Specialty Graphics segment, the company reported 2003 first quarter revenue of $66.4 million, versus revenue of $64.0 million a year ago; segment profit decreased to $4.5 million, versus $4.7 million in the year-ago period. In the Apparel & Flexible Materials segment, first quarter revenue was $38.7 million, compared with revenue of $41.5 million a year ago; segment profit increased to $4.0 million from $1.9 million last year. First quarter Ophthalmic Lens Processing segment revenue was $20.8 million, versus $19.3 million a year ago; segment profit for the quarter was $1.1 million, versus segment profit of $0.6 million reported in the same period last year.

On an overall basis, the Company's geographic distribution of business was similar to a year ago; U.S. and European orders were approximately 42 percent each of total orders, with the rest of the world accounting for the remainder. U.S. orders for the Ophthalmic Lens Processing segment's equipment were higher than in the first quarter of fiscal 2002. The Sign Making & Specialty Graphics segment experienced lower orders for its products outside of U.S. and European markets. Foreign currency translation bolstered European orders in both the Sign Making & Specialty Graphics and Apparel & Flexible Materials segments this year.

Operational improvements and favorable foreign currency effects led to an overall gross margin of 34.9 percent, a year-over-year increase of 0.6 percentage points principally driven by the Apparel & Flexible Materials segment. Operational improvements also led to a $2.3 million (6.0 percent) decrease in selling, general, and administrative expenses (including research and development expenses) in this fiscal year's first quarter. These improvements were offset by incremental legal and professional costs associated with the Company's review of its financial reporting under the direction of the Audit and Finance Committee of the board of directors and the U.S. Securities and Exchange Commission's continuing investigation of approximately $1.7 million. Losses from translating foreign currency denominated transactions offset the favorable foreign currency financial statement translation effects on earnings.

The Company generated $4.6 million in operating cash flow in the first quarter compared with $3.2 million a year ago, continuing its trend of steady cash flow generation. The Company reduced total debt by $6.4 million in the first quarter due largely to the sale of a discontinued operation and certain previously identified idle facilities. The Company's total debt balance at July 31, 2002 was $121.6 million, and it had $22.6 million of cash and short-term investments at that date.

Gerber Scientific, Inc. (http://www.gerberscientific.com) is the world's leading supplier of sophisticated automated manufacturing systems that enable mass customization in sign making and specialty graphics, apparel and flexible goods, and optical lens processing. Headquartered in South Windsor, Connecticut, the Company operates through four wholly-owned subsidiaries: Gerber Scientific Products and Spandex PLC, Gerber Technology, and Gerber Coburn.