Excel Technology, Inc. (NASDAQ: XLTC) announced record quarterly
results for the period ended September 29, 2006. Sales for the
quarter were $40.3 million and pretax income was $3.7 million and
net income was $2.5 million ($0.20 per diluted share), which
included $2.1 million (net of taxes) of special items. Excluding
the $2.1 million (net of taxes) of special items ($0.17 per diluted
share), the Company�s pretax profit was $6.8 million and net income
was $4.6 million ($0.36 per diluted share). Sales: The Company
realized record sales of $40.3 million, an increase of 6.5% or $2.5
million, for the three months ended September 29, 2006 and $116.2
million, an increase of 14.6% or $14.8 million, for the nine months
ended September 29, over the comparable periods in 2005. Pretax
Profits: Pretax profits, excluding special items was $6.8 million
for the third quarter of the year as compared to $6.0 million in
the same period last year, an increase of 14%. For the nine months
ended September 29, 2006 pretax profits, excluding special items
were $20.4 million compared to $14.7 for the same period in 2005,
an increase of 38.8%. Profits: Net income, excluding special items
was $4.6 million for the third quarter of this year as compared to
$4.4 million in the same period last year, an increase of 4.6%. For
the nine months ended September 2006, net income, excluding special
items was $13.8 million compared to $10.9 million for the same
period in 2005, an increase of 26.8%. EPS: Net income per share,
including special items, is $0.20 per diluted share for the quarter
and $0.83 per diluted share for the nine months ending September
29, 2006. Net income per share, excluding special items, was $0.36
on a diluted basis for the quarter ended September 29, 2006, and
$0.36 per share on a diluted basis reported for the same period in
2005. For the nine months ended September 29, 2006, net income per
share, excluding special items, was $1.10 on a diluted basis in
2006 compared to $0.89 on a diluted basis for 2005, a 23.6%
increase. Antoine Dominic, Chief Executive Officer, stated �We are
quite pleased with our quarter and year to date results considering
that we achieved these results while having to work within the
framework of the merger contract, the uncertainty in the market and
lack of new efforts to further expand our market presence due to
the pending merger. Now that the merger is officially terminated,
we are committed to growing Excel by expanding our product
portfolio and markets organically and through acquisitions. Our
year to date sales growth of 14.6% was good because it was all
organic. However, our year to date pre-tax income growth of 38.8%
(excluding special items) was even more satisfying as we increased
our operational efficiencies. We need to continue our emphasis on
organic growth as the ratio of sales increase to profitability is
far greater as evidenced this year. During the year the Company has
introduced several new products that have been well received in the
market and we plan to enter 2007 with a record product portfolio
that should aid in our organic growth. We also have a fairly
healthy cash balance that we hope will enable us to expand our
acquisition objectives and also to utilize it wisely for share
repurchases.� Alice Hughes Varisano, Chief Financial Officer,
concluded, �The third quarter of 2006 was the Company�s fifth
straight quarter of record sales, pre tax profits, net income and
earnings per share (excluding special items). Sales increased 6.5%
during the quarter and 14.6% for the first nine months compared to
the same period last year. Pre tax profits (excluding special
items) increased 14% to $6.8 million for the third quarter and for
the nine months ended September 30, 2006 increased 38.8% to $20.4
million compared to the same period last year. Profits for the
quarter increased 4.6% and for the nine months 26.8% (excluding
special items), less of an increase than pre tax profits due to the
effective tax rate increasing from 27% to 33% in 2006. This
increase in the tax rate was due in part to the suspension of the
R&D credit, non deductibility of certain merger related costs,
and the reduction of a tax exposure liability due to a settlement
in 2005 that did not reoccur in 2006. The Company generated $9
million of cash during the first nine months, resulting in a cash
and investment balance of $59.0 million as of September 30, 2006;
with no debt. Year to date bookings at September 30, 2006 were $118
million, an increase of over 11% or $12.0 million over the same
period in the prior year. The backlog at the end of the third
quarter 2006 was $36.5 million an increase of 16.0% or $5.0 million
compared to $31.5 million backlog for the third quarter 2005, which
is quite strong.� Excel and its wholly owned subsidiaries
manufacture and market photonics-based solutions, consisting of
laser systems and electro-optical components, primarily for
industrial/commercial and scientific applications. FINANCIAL
SUMMARY (unaudited and in thousands, except per share data) � FOR
THE QUARTER FOR THE NINE MONTHS ENDED SEPTEMBER 30 ENDED SEPTEMBER
30 (unaudited) (unaudited) 2006� 2005� 2006� 2005� Net Sales &
Services $ 40,299� $ 37,842� $ 116,154� $ 101,352� Cost of Sales
and Services $ 22,350� $ 19,803� $ 62,890� $ 53,068� Gross Profit $
17,949� $ 18,039� $ 53,264� $ 48,284� Operating Expenses: Selling
& Marketing $ 4,611� $ 5,027� $ 14,352� $ 14,094� General &
Administrative $ 3,724� $ 3,536� $ 9,689� $ 9,496� Research and
Development $ 3,527� $ 3,757� $ 10,807� $ 10,848� Operating Income
(without merger, merger related & deferred compensation
expenses) $ 6,087� $ 5,719� $ 18,416� $ 13,846� Merger, Merger
Related and Deferred Compensation Expense $ 3,085� $ 0� $ 5,069� $
0� Interest Income $ 755� $ 337� $ 1,770� $ 794� Other Income
(Expense) $ (43) $ (92) $ 230� $ 69� Pre-Tax Income $ 3,714� $
5,964� $ 15,347� $ 14,709� Provision for Income Taxes $ 1,226� $
1,610� $ 5,002� $ 3,853� Net Income $ 2,488* $ 4,354� $ 10,345* $
10,856� Net Income Per Common Share - Diluted $ 0.20� $ 0.36� $
0.83� $ 0.89� � Weighted Average Common Shares Outstanding -
Diluted 12,522� 12,259� 12,505� 12,243� Reconciliation of GAAP to
non-GAAP net income and EPS Net income as reported under GAAP of
$2,488 and $10,345, excluding the merger, merger related and
deferred compensation expenses, net of tax effect, of approximately
$2.1 million for the three months ending September 29, 2006 (or .17
cents per diluted share) and $3.4 million for the nine months
ending September 29, 2006 (or .27 cents per diluted share) would
have been $4,635 and $13,835 respectively (unaudited). EPS without
these charges would have been $0.36 and $1.10 per diluted share for
the three and nine months ending September 29, 2006, respectively
(unaudited). BALANCE SHEET & SELECTED FINANCIAL DATA �
SEPTEMBER 29, 2006 DECEMBER 31, 2005 Cash $ 9,774� $ 16,303�
Investments $ 49,150� $ 34,000� Accounts Receivable, net $ 26,044�
$ 22,879� Inventories $ 36,497� $ 30,269� Other Current Assets $
2,855� $ 3,013� Total Current Assets $ 124,320� $ 106,464�
Property, Plant & Equipment, net $ 25,158� $ 25,983� Other
Non-Current Assets & Goodwill $ 32,142� $ 31,591� Total Assets
$ 181,620� $ 164,038� Accounts Payable $ 6,950� $ 4,829� Accrued
Expenses and Other Current Liabilities $ 9,013� $ 5,882� Income
Taxes Payable $ 436� $ 1,097� Total Current Liabilities $ 16,399� $
11,808� Deferred Compensation $ 1,375� $ --� Other Non-Current
Liabilities $ 3,478� $ 3,492� Minority Interest in Net Income of
Subsidiary $ 89� $ 48� Stockholders' Equity $ 160,279� $ 148,690�
Total Liabilities & Stockholders' Equity $ 181,620� $ 164,038�
Working Capital $ 107,921� $ 94,656� Current Ratio 7.58� 9.02�
Excel Technology, Inc. (NASDAQ: XLTC) announced record quarterly
results for the period ended September 29, 2006. Sales for the
quarter were $40.3 million and pretax income was $3.7 million and
net income was $2.5 million ($0.20 per diluted share), which
included $2.1 million (net of taxes) of special items. Excluding
the $2.1 million (net of taxes) of special items ($0.17 per diluted
share), the Company's pretax profit was $6.8 million and net income
was $4.6 million ($0.36 per diluted share). Sales: The Company
realized record sales of $40.3 million, an increase of 6.5% or $2.5
million, for the three months ended September 29, 2006 and $116.2
million, an increase of 14.6% or $14.8 million, for the nine months
ended September 29, over the comparable periods in 2005. Pretax
Profits: Pretax profits, excluding special items was $6.8 million
for the third quarter of the year as compared to $6.0 million in
the same period last year, an increase of 14%. For the nine months
ended September 29, 2006 pretax profits, excluding special items
were $20.4 million compared to $14.7 for the same period in 2005,
an increase of 38.8%. Profits: Net income, excluding special items
was $4.6 million for the third quarter of this year as compared to
$4.4 million in the same period last year, an increase of 4.6%. For
the nine months ended September 2006, net income, excluding special
items was $13.8 million compared to $10.9 million for the same
period in 2005, an increase of 26.8%. EPS: Net income per share,
including special items, is $0.20 per diluted share for the quarter
and $0.83 per diluted share for the nine months ending September
29, 2006. Net income per share, excluding special items, was $0.36
on a diluted basis for the quarter ended September 29, 2006, and
$0.36 per share on a diluted basis reported for the same period in
2005. For the nine months ended September 29, 2006, net income per
share, excluding special items, was $1.10 on a diluted basis in
2006 compared to $0.89 on a diluted basis for 2005, a 23.6%
increase. Antoine Dominic, Chief Executive Officer, stated "We are
quite pleased with our quarter and year to date results considering
that we achieved these results while having to work within the
framework of the merger contract, the uncertainty in the market and
lack of new efforts to further expand our market presence due to
the pending merger. Now that the merger is officially terminated,
we are committed to growing Excel by expanding our product
portfolio and markets organically and through acquisitions. Our
year to date sales growth of 14.6% was good because it was all
organic. However, our year to date pre-tax income growth of 38.8%
(excluding special items) was even more satisfying as we increased
our operational efficiencies. We need to continue our emphasis on
organic growth as the ratio of sales increase to profitability is
far greater as evidenced this year. During the year the Company has
introduced several new products that have been well received in the
market and we plan to enter 2007 with a record product portfolio
that should aid in our organic growth. We also have a fairly
healthy cash balance that we hope will enable us to expand our
acquisition objectives and also to utilize it wisely for share
repurchases." Alice Hughes Varisano, Chief Financial Officer,
concluded, "The third quarter of 2006 was the Company's fifth
straight quarter of record sales, pre tax profits, net income and
earnings per share (excluding special items). Sales increased 6.5%
during the quarter and 14.6% for the first nine months compared to
the same period last year. Pre tax profits (excluding special
items) increased 14% to $6.8 million for the third quarter and for
the nine months ended September 30, 2006 increased 38.8% to $20.4
million compared to the same period last year. Profits for the
quarter increased 4.6% and for the nine months 26.8% (excluding
special items), less of an increase than pre tax profits due to the
effective tax rate increasing from 27% to 33% in 2006. This
increase in the tax rate was due in part to the suspension of the
R&D credit, non deductibility of certain merger related costs,
and the reduction of a tax exposure liability due to a settlement
in 2005 that did not reoccur in 2006. The Company generated $9
million of cash during the first nine months, resulting in a cash
and investment balance of $59.0 million as of September 30, 2006;
with no debt. Year to date bookings at September 30, 2006 were $118
million, an increase of over 11% or $12.0 million over the same
period in the prior year. The backlog at the end of the third
quarter 2006 was $36.5 million an increase of 16.0% or $5.0 million
compared to $31.5 million backlog for the third quarter 2005, which
is quite strong." Excel and its wholly owned subsidiaries
manufacture and market photonics-based solutions, consisting of
laser systems and electro-optical components, primarily for
industrial/commercial and scientific applications. -0- *T FINANCIAL
SUMMARY (unaudited and in thousands, except per share data) FOR THE
QUARTER FOR THE NINE MONTHS ENDED SEPTEMBER 30 ENDED SEPTEMBER 30
(unaudited) (unaudited) 2006 2005 2006 2005 --------- ---------
--------- --------- Net Sales & Services $ 40,299 $ 37,842
$116,154 $101,352 Cost of Sales and Services $ 22,350 $ 19,803 $
62,890 $ 53,068 --------- --------- --------- --------- Gross
Profit $ 17,949 $ 18,039 $ 53,264 $ 48,284 Operating Expenses:
Selling & Marketing $ 4,611 $ 5,027 $ 14,352 $ 14,094 General
& Administrative $ 3,724 $ 3,536 $ 9,689 $ 9,496 Research and
Development $ 3,527 $ 3,757 $ 10,807 $ 10,848 --------- ---------
--------- --------- Operating Income (without merger, merger
related & deferred compensation expenses) $ 6,087 $ 5,719 $
18,416 $ 13,846 Merger, Merger Related and Deferred Compensation
Expense $ 3,085 $ 0 $ 5,069 $ 0 Interest Income $ 755 $ 337 $ 1,770
$ 794 Other Income (Expense) $ (43) $ (92) $ 230 $ 69 ---------
--------- --------- --------- Pre-Tax Income $ 3,714 $ 5,964 $
15,347 $ 14,709 Provision for Income Taxes $ 1,226 $ 1,610 $ 5,002
$ 3,853 --------- --------- --------- --------- Net Income $ 2,488*
$ 4,354 $ 10,345* $ 10,856 ========= ========= ========= =========
Net Income Per Common Share - Diluted $ 0.20 $ 0.36 $ 0.83 $ 0.89
Weighted Average Common Shares Outstanding - Diluted 12,522 12,259
12,505 12,243 *T Reconciliation of GAAP to non-GAAP net income and
EPS -- Net income as reported under GAAP of $2,488 and $10,345,
excluding the merger, merger related and deferred compensation
expenses, net of tax effect, of approximately $2.1 million for the
three months ending September 29, 2006 (or .17 cents per diluted
share) and $3.4 million for the nine months ending September 29,
2006 (or .27 cents per diluted share) would have been $4,635 and
$13,835 respectively (unaudited). EPS without these charges would
have been $0.36 and $1.10 per diluted share for the three and nine
months ending September 29, 2006, respectively (unaudited). -0- *T
BALANCE SHEET & SELECTED FINANCIAL DATA SEPTEMBER 29, 2006
DECEMBER 31, 2005 Cash $ 9,774 $ 16,303 Investments $ 49,150 $
34,000 Accounts Receivable, net $ 26,044 $ 22,879 Inventories $
36,497 $ 30,269 Other Current Assets $ 2,855 $ 3,013
------------------ ----------------- Total Current Assets $ 124,320
$ 106,464 Property, Plant & Equipment, net $ 25,158 $ 25,983
Other Non-Current Assets & Goodwill $ 32,142 $ 31,591
------------------ ----------------- Total Assets $ 181,620 $
164,038 ================== ================= Accounts Payable $
6,950 $ 4,829 Accrued Expenses and Other Current Liabilities $
9,013 $ 5,882 Income Taxes Payable $ 436 $ 1,097 ------------------
----------------- Total Current Liabilities $ 16,399 $ 11,808
Deferred Compensation $ 1,375 $ -- Other Non-Current Liabilities $
3,478 $ 3,492 Minority Interest in Net Income of Subsidiary $ 89 $
48 Stockholders' Equity $ 160,279 $ 148,690 ------------------
----------------- Total Liabilities & Stockholders' Equity $
181,620 $ 164,038 ================== ================= Working
Capital $ 107,921 $ 94,656 Current Ratio 7.58 9.02 *T
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