Thursday, Gerber Scientific Inc. (GRB), an automated manufacturing systems supplier, reported a net loss for the third quarter, hurt by impairment charges and lower sales volume. The company lowered its fiscal 2009 outlook, blaming delays in orders from its customers and overall weaker demand. Following the news, the company's stock lost more than 24% in the trading hours.
Gerber Scientific posted a net loss of $2.2 million or $0.09 per share, compared to net income of $3.1 million or $0.13 per share in the prior year quarter. On average, 3 analysts polled by Thomson Reuters expected the company to earn $0.06 per share for the third quarter. Analysts' estimate typically excludes special items.
The result for the latest quarter included a non-cash charge of $2.3 million or $0.06 per share for other-than-temporary impairment of investments held in a rabbi trust for a supplemental non-qualified pension plan.
Total revenues for the third quarter declined 21% to $120.1 million from $152.0 million in the same quarter of last year.
Gerber Scientific President and CEO, Marc Giles, said, "We saw a continued, significant slowdown in sales due to the pervasively weak global economic conditions."
In addition, the company said it completed an amendment to its revolving credit facility with several banks and other financial institutions and lenders, which provides additional flexibility by modifying several financial covenants to make them generally less restrictive.
The company also requested a reduction in the size of the facility from $125 million to $100 million to minimize the commitment fees on unneeded borrowing capacity. The company agreed to a reduction of one year in the term of the facility and an increase in the interest rates and commitment fees applicable to borrowings.
The company expects to incur financing costs of $1.3 million to $1.7 million in connection with the credit agreement amendment, which will be capitalized and amortized over the remaining life of the agreement through January 31, 2012.
For the nine-month period of 2008, net income was $4.5 million or $0.19 per share, down from $8.4 million or $0.36 per share in the previous year period.
Total revenue for the year-to-date period declined to $432.7 million from $466.3 million in the preceding year period.
For fiscal year 2009, the company now expects earnings of $0.20 to $0.30 per share, and sales of $550 million to $570 million.
Earlier, the company estimated earnings of $0.50 to $0.65 per share, and sales of $600 million to $620 million.
GRB is currently trading at $2.01, down 64 cents or 24.15%.
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