There are glimmers of hope that the economy may be starting to pull out of its nosedive, according to Marc Giles, president and CEO of South Windsor-based Gerber Scientific Inc.
“While weak demand has persisted across most of the markets we serve due to the continued uncertainty about when the economic recovery will begin, we are seeing some encouraging signs of improved activity in this difficult economic cycle,” Giles said last week in a company report.
Capital equipment sales remain unpredictable, he said, but after-market revenues, from such things as servicing and parts sales, has improved, “indicating increased equipment use — and a positive sign regarding the recovery in our markets,” he said.
Order activity has improved, Giles said, but added that it is still difficult to complete transactions “due to the lack of credit availability and economic uncertainty. As a result, we don’t expect to see any measurable improvement in our top line until the last half of fiscal 2010,” he said.
Still, Gerber’s revenue level has stabilized, according to Giles, who said he expects the company to be “back on track to deliver improved earnings performance in the last half of the fiscal year.”
Until then, he said, Gerber will focus on “prudently managing our business and generating cash to improve our liquidity and balance sheet to position the company to rebound as the recovery begins.”
Gerber has been looking for buyers for some of its “non-core” holdings, and on Aug. 7 announced that the company signed a tentative agreement to sell its German laser marking and engraving business unit, FOBA Technology and Services, to Alltech Angewandte Laserlicht Technologie, a unit of Videojet Technologies Inc.
Financial details were not disclosed. But Giles said that the proceeds from the sale would be used to reduce Gerber’s outstanding debt and for “general corporate purposes.”
Giles said that the laser marking and engraving business “is not a core strategic focus” for Gerber.
There had been speculation that Gerber was about to sell its Tolland-based Gerber Technology division. Giles said that Gerber Technology is a key business unit and is not being considered for sale.
Gerber Technology makes automated manufacturing equipment and software for markets including apparel, aerospace, transportation interiors, furniture, composites, and industrial fabrics.
