HUDSON, N.H., April 27 /PRNewswire-FirstCall/ -- Presstek, Inc.
(NASDAQ: PRST), a leading manufacturer and marketer of high tech
digital imaging solutions for the graphic arts and laser imaging
markets, today reported record consolidated revenue of $70.6
million for the first quarter of 2006, as well as record operating
profit of $3.9 million. "We are off to a strong start in 2006,"
said President and Chief Executive Officer Edward J. Marino. "This
is the first quarter where we realized the full effect of the
series of strategic moves we initiated at the end of 2004. These
strategic moves included the acquisition of key assets and their
subsequent integration, as well as our efforts to strengthen
channels to market, rationalize product lines, build competencies,
and orient priorities around growth in our digital product lines.
Presstek has emerged as a new company performing with a common
purpose, completely integrated and in control of the
commercialization of our technology into products and the delivery
of our products to customers." Marino continued, "In addition to
record consolidated revenue, Presstek achieved record revenue in
several important categories in the quarter: total digital sales,
digital equipment sales and digital consumable sales. Our digital
business has grown to almost two-thirds of our revenue and is
beginning to push our top line as anticipated. The penetration of
Presstek technology, especially the Direct Imaging press line,
continued to be a key driver of our business performance in the
first quarter. This performance, along with the response of
customers at the recent IPEX 2006 trade show, clearly demonstrates
our strong leadership position in the industry's transformation to
digital technology." Consolidated Results The company reported the
following highlights in the first quarter of 2006: * Record
consolidated revenue of $70.6 million, compared to $69.3 million in
the previous quarter; * Consolidated consumable revenue, up 5% to
$34.8 million from $33.2 million in the previous quarter, led by
strong digital consumable sales; * Consolidated net income of $2.7
million, or $0.08 per basic and diluted share, compared to fourth
quarter 2005 consolidated net income of $2.4 million, or $0.07 per
basic and diluted share; * Record operating profit of $3.9 million,
up 18% from $3.3 million in the prior quarter; and * Record EBITDA
of $6.4 million, compared to $6.2 million in the fourth quarter of
2005. Executive Vice President and Chief Financial Officer Moosa E.
Moosa said, "Our European operations made good progress in the
first quarter of 2006. Revenue from our Presstek Europe business
was a record $12.8 million in the first quarter of 2006, up 5% from
the previous quarter." Commenting on Lasertel's results, Moosa
said, "Lasertel reported external sales of $1.2 million in the
first quarter of 2006, compared to $0.7 million in the same quarter
last year. Looking forward, Lasertel has a solid backlog for the
second quarter and was recently awarded a government defense
contract which is expected to result in additional revenue for
Lasertel in 2006 for contracted development work and for production
laser diode components in 2007." Moosa continued, "We delivered a
solid first quarter, established a number of records and achieved a
number of significant operational milestones that will positively
impact our business going forward. We have successfully shifted our
business model from an OEM model to a direct sales model and as a
result are now in more control of the delivery of our technology to
the customer." Moosa continued, "During the quarter we anticipated
the impending changeover to our new AnthemPro plate and began to
manage down inventory of the Anthem plate. We also reduced other
inventory during the quarter as a result of our recently
implemented inventory reduction program. As a result of these
changes, production levels were down, resulting in lower
manufacturing overhead absorption, which in turn impacted our gross
margin percentage. We are pleased to say, however, that first
quarter operating margin as a percentage of sales was 5.5% compared
to 4.7% last quarter and 3.1% a year ago. We believe the company is
well positioned to leverage its infrastructure as it grows its top
line." "Our EBITDA performance was strong at a record $6.4 million,
up 3% from the prior quarter and 31% from the same quarter last
year," said Moosa. "First quarter operating income was up by 18%,
led by growth in revenue and a very strong operating performance,
setting a new record for the company. Net income was up by 13% from
the fourth quarter of 2005." Commenting on the balance sheet, Moosa
said, "Accounts receivable were up $3.8 million due primarily to
our shift from an OEM model to a direct sales model and the timing
of equipment funding from our vendor leasing partners.
Debt-net-of-cash at the end of the quarter continues to be strong
at $28.8 million, down from $29.9 million at the end of 2005."
Moosa concluded, "We delivered solid financial results in the first
quarter of 2006, and made significant strides toward our goals of
reducing inventory and improving our operating results. We expect
to see continued progress in these areas as we move forward this
year." In Summary Marino said, "Our first quarter of 2006 produced
increased revenue and earnings exceeding our traditionally strong
fourth quarter. We increased the penetration of Presstek's digital
technology products, driving strong equipment and consumable sales.
We sold over 200 units of Presstek manufactured digital equipment
in the first quarter, which represents digital unit growth of more
than 8% on a sequential quarter basis, and more than 30% when
compared to the first quarter of last year." Marino continued, "We
made productivity gains in the quarter, reducing inventory and
operating expenses considerably. We made progress in building our
presence in Europe, including the opening of our new European
Business Center and a strong showing at IPEX 2006. We anticipate
continued solid business performance in 2006, and believe that our
new product offerings, strengthening market position and solid
financial results will make for an exciting year." Conference Call
Presstek's first quarter 2006 conference call is scheduled to take
place at 11:00 a.m. (Eastern) on Thursday, April 27, 2006. On the
call the company intends to discuss first quarter 2006 earnings
results and company positioning. To participate in the call, dial
(866) 711-8198, access code 49573449. To listen to a live web cast
of the call, visit the Events Calendar in the Investor Relations
section of Presstek's website, http://www.presstek.com/, fifteen
minutes prior to start time. The webcast will be archived and
available for replay until midnight on May 4, 2006. You may also
listen to a telephone replay of the call from 1:00 p.m. on April
27, 2006 to 12:00 a.m. on May 4, 2006, by dialing (888) 286-8010,
access code 28673305. About Presstek Presstek, Inc. is a leading
manufacturer and marketer of high tech digital imaging solutions to
the graphic arts and laser imaging markets. Presstek's patented
DI(R), CTP and plate products provide a streamlined workflow in a
chemistry-free environment, thereby reducing printing cycle time
and lowering production costs. Presstek solutions are designed to
make it easier for printers to cost effectively meet increasing
customer demand for high-quality, shorter print runs and faster
turnaround while providing improved profit margins. Presstek's
Precision Lithograining Corporation is a manufacturer of high
quality digital and conventional printing plate products, including
Presstek's award-winning, chemistry-free Anthem plate. Presstek
subsidiary, Lasertel, Inc., manufactures semiconductor laser diodes
for Presstek's and external customers' applications. For more
information visit http://www.presstek.com/, or call 603-595-7000 or
email: . "Safe Harbor" Statement under the Private Securities
Litigation Reform Act of 1995: Certain statements contained in this
News Release constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995,
including statements regarding expectations regarding future growth
and profitability; expectations regarding the sale of products in
general; expected expansion of served markets; expected organic and
strategic growth; continued accretive value of recent acquisitions;
expected benefits of new product introductions; and the ability of
the company to achieve its stated objectives. Such forward-looking
statements involve a number of known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of the company to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such
factors include, but are not limited to, market acceptance of and
demand for the company's products and resulting revenue; the
ability of the company to meet its stated financial objectives, the
company's dependency on its strategic partners (both on
manufacturing and distribution), and other risks detailed in the
company's Annual Report on Form 10-K and the company's other
reports on file with the Securities and Exchange Commission. The
words "looking forward," "looking ahead," "believe(s)," "should,"
"may," "expect(s)," "anticipate(s)," "likely," "opportunity," and
similar expressions, among others, identify forward-looking
statements. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date
the statement was made. The company undertakes no obligation to
update any forward-looking statements contained in this news
release. CONTACTS: Moosa E. Moosa Jane Miller Executive Vice
President/ Corporate Relations Manager Chief Financial Officer
(603) 594-8585 x 3346 (603) 595-7000 Email: PRESSTEK, INC.
CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per-share
data) (Unaudited) Three months ended April 1, April 2, 2006 2005
Revenue Product $58,382 $57,068 Service and parts 12,184 13,327
Total revenue 70,566 70,395 Cost of revenue Product 41,645 41,454
Service and parts 8,285 8,799 Total cost of revenue 49,930 50,253
Gross profit 20,636 20,142 Operating expenses Research and product
development 1,545 2,122 Sales, marketing and customer support 9,029
9,809 General and administrative 5,380 5,444 Amortization of
intangible assets 808 588 Restructuring and special charges - 982
Total operating expenses 16,762 18,945 Income from operations 3,874
1,197 Interest and other expense, net (552) (626) Income before
income taxes 3,322 571 Provision for income taxes 598 90 Net income
$2,724 $481 Earnings per share Basic $0.08 $0.01 Diluted $0.08
$0.01 Weighted average shares outstanding Weighted average shares
outstanding - basic 35,438 34,971 Dilutive effect of options 492
552 Weighed average shares outstanding - diluted 35,930 35,523
PRESSTEK, INC. CONSOLIDATED BALANCE SHEETS (in thousands) April 1,
December 31, 2006 2005 (Unaudited) ASSETS Current assets Cash and
cash equivalents $5,918 $5,615 Accounts receivable, net 47,904
44,088 Inventories 45,640 50,083 Other current assets 2,723 1,175
Total current assets 102,185 100,961 Property, plant and equipment,
net 44,832 45,250 Goodwill 23,089 11,974 Intangible assets, net
10,859 23,089 Other noncurrent assets 488 213 Total assets $181,453
$181,487 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities
Current portion of long-term debt and capital lease obligation
$7,041 $7,037 Line of credit 7,000 6,036 Accounts payable 22,513
21,199 Accrued expenses 11,115 16,718 Deferred revenue 9,598 8,579
Total current liabilities 57,267 59,569 Long-term debt and capital
lease obligation, less current portion 20,806 22,570 Deferred
income taxes 824 715 Total liabilities 78,897 82,854 Commitments
and contingencies Stockholders' equity Preferred stock - - Common
stock 355 354 Additional paid-in capital 107,427 106,268
Accumulated other comprehensive income (loss) (20) (59) Accumulated
deficit (5,206) (7,930) Total stockholders' equity 102,556 98,633
Total liabilities and stockholders' equity $181,453 $181,487
PRESSTEK, INC. USE OF NON-GAAP MEASURES EBITDA (earnings before
interest, taxes, depreciation, amortization and restructuring and
special charges (credits)); Debt-Net-of-Cash; and Working Capital,
Excluding Short-Term Debt, are not measures of performance under
accounting principles generally accepted in the United States of
America ("GAAP") and should not be considered alternatives for, or
in isolation from, the financial information prepared and presented
in accordance with GAAP. Presstek's management believes that EBITDA
provides meaningful supplemental information regarding Presstek's
current financial performance and prospects for the future.
Presstek's management believes that Debt-Net-of-Cash provides
meaningful information on Presstek's debt relative to its cash
position. In addition, Presstek's management believes that Working
Capital, Excluding Short-Term Debt, provides meaningful
supplemental information regarding Presstek's ability to meet its
current liability obligations. Presstek believes that both
management and investors benefit from referring to these non-GAAP
measures in assessing the performance of Presstek's ongoing
operations and liquidity, and when planning and forecasting future
periods. These non-GAAP measures also facilitate management's
internal comparisons to Presstek's historical operating results and
liquidity. Our presentations of these measures, however, may not be
comparable to similarly titled measures used by other companies.
Reconciliations of these measures to GAAP are included below:
PRESSTEK, INC. RECONCILIATION OF EBITDA TO CONSOLIDATED NET INCOME
(in thousands) (Unaudited) Three Months Ended April 1, December 31,
2006 2005 (Q1 2006) (Q4 2005) Net income $2,724 $2,443 Interest 449
580 Taxes 598 692 Depreciation and amortization 2,588 2,500
Restructuring and special charges (credits) - (35) EBITDA $6,359
$6,180 PRESSTEK, INC. RECONCILIATION OF DEBT-NET-OF-CASH TO TOTAL
DEBT (in thousands) (Unaudited) As of April 1, December 31, 2006
2005 (Q1 2006) (Q4 2005) Calculation of total debt: Current portion
of long-term debt $7,000 $7,000 Line of credit 7,000 6,036
Long-term debt, net of current portion 20,750 22,500 Total debt
34,750 35,536 Cash 5,918 5,615 $28,832 $29,921 DATASOURCE:
Presstek, Inc. CONTACT: Moosa E. Moosa, Executive Vice
President/Chief Financial Officer, +1-603-595-7000, or Jane Miller,
Corporate Relations Manager, +1-603- 594-8585 ext. 3346, both of
Presstek, Inc. Web site: http://www.presstek.com/
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