Parent Co. of Gerber Tech May Sell Assets
Executives from Gerber Scientific Inc., the parent company of Tolland, Conn.–based apparel-industry supplier Gerber Technology, said they are considering selling off some of the company’s assets to raise money for its cash-strapped coffers after reporting a $1.3 million loss for its fourth quarter, which ended April 30.
Whether the Gerber Technology unit will be sold remains to be seen. A spokesperson for the parent company said officials would not disclose which assets are sold until they are sold. They did say that they plan to raise about $20 million from the sales.
Gerber Scientific owns three divisions, which develop specialty graphics and sign making and ophthalmic-lens processing.
Gerber Technology creates product-development and design software for the apparel industry as well as cutting machines, spreaders and other equipment.
Gerber Scientific reported a $1.3 million operating loss and a 31 percent decline in sales for the fourth quarter. For fiscal year 2009, the company had only $2.2 million in profits, compared with $14.5 million in 2008. Revenue for 2009 was $121.1 million, compared with $173.7 million in 2008.
Gerber Technology had already been trimming expenses through two rounds of staff cuts, which eliminated several key executives from its West Coast operations in Cerritos, Calif.
Gerber Technology’s key products are its pattern, grading and marker-making software. It also markets plotters and spreaders.
Gerber Technology on June 10 announced that it struck a deal with Mumbai, India–based Geometric Ltd. to help Gerber customers implement and integrate the company’s PLM applications across their enterprise systems. Geometric has developed a system called DRAPED, which has been tested to speed up implementations by as much as 25 percent.
During its earnings announcement, Gerber Scientific Chief Executive Officer Marc Giles said the company does not expect to see any significant improvements in business conditions until the last half of 2010 and will focus much of its efforts on raising cash.
“The decisive actions of our management team to rapidly lower our cost structure are allowing us to weather this unprecedented downturn,” he said. “We will continue to diligently manage our costs while not diminishing our ability to respond to both our current customer requirements and new business opportunities as our markets rebound.”
Needham & Co. analyst Jim Ricciuti said it is hard to speculate about what parts of the company Gerber will sell off but added that it probably would not be the Gerber Technology division because it still holds lots of value to the company.
In response to a July 2 story about Gerber Scientific Inc.’s plan to sell some undisclosed assets, Chief Executive Officer Marc Giles has since clarified that the company’s Gerber Technology unit will not be among those targeted assets for sale. Gerber Technology provides software and cutting-room equipment for the apparel industry.
