By Ann Levine February 25, 2003 -- Presstek, Inc. (NASDAQ: PRST) released fourth quarter earnings on Thursday, February 20, 2003. Presstek, located in Hudson, New Hampshire, is a leading developer of digital laser imaging and chemistry free plate technology for the printing and graphic arts industries. Presstek announced today the beginning of the beta testing of a new process-free printing plate, Applause, scheduled for release in mid-year 2003. For the fourth quarter ending December 28, 2002, Presstek reported revenue of $ 22.4 million compared to $23.1 million for the same period last year or $0.04 per diluted share as compared with $0.06 per diluted share. Total revenues for the fiscal year were $83.5 million compared to $102.3 million in 2001. The company reported a net loss of $9.3 million for the year or $0.27 per diluted share compared to $3.8 million or $0.11 per diluted share in 2001. Topics: CEO Comments New Product Announcement 2003 Outlook Q & A Summary CEO Comments Presstek President and Chief Executive Officer, Ed Marino, gave an overview of the operational elements of Presstek by indicating that even in a difficult market, the company continued to strengthen its business and had the highest quarter profit level in two years. Reasons for improved financial results were due to strong marketing efforts and that company operating resources were efficiently managed. The company’s on-press business has gained strength in the Ryobi platform in generating more sales cycles. The Heidelberg platform performance in the U.S. is solid, however, overseas, this platform is sluggish. The Heidelberg platform overall has not seen the same level of sales as that of the Ryobi. In off-press performance, CTP Anthem line has been well received by end users. Sales have doubled in the fourth quarter of 2002 over fourth quarter 2001. Lasertel, Inc., has made good progress in the fourth quarter through operational and commercial improvements. As a result, operating losses were narrowed in the fourth quarter and Presstek expects the trend to continue throughout the year. New Product Announcement The company announced the beta testing phase with external customers of a new system named Applause. Applause utilizes a process-free thermal printing plate and company CEO Marino states it is the first true process-free plate of its kind. Applause requires fewer steps, requires less equipment and will result in a lower cost benefit to end-users. Applause does not require intermediate steps between imaging and printing and will provide high resolution and compatibility with existing print chemistries. Applause has been selected as the “Hot Product” by Publishing Magazine and the “Must See ‘Em” award at the Chicago Graph Expo. Applause is expected to launch mid-year 2003. 2003 Outlook CEO Marino summarized the company’s conference call by stating 2003 plans. Those plans include: - Growth opportunities through building market channels, growing market share, providing value to customers - Launch of the Applause product - Strengthening DI sales cycles - Building external commercial business and target marketing efforts at Lasertel Growth Areas Marino stated that growth for Presstek will come from 2 sectors; --- DI business --- A drive to grow the base of process-free consumables to other manufacturers equipment Q & A Summary 1. Relationship with Heidelberg is a reflection of the state of the industry. Presstek is doing all it can to drive quick placements. They have applied new resources with marketing management and development to improve performance. 2. Presstek stated that DI technology will become a standard defacto format for smaller presses and will become mainstream. Currently, the company has more than 90% of installed DI presses worldwide and plans to remain the market leader. 3. Baseline on revenue for Lasertel in 2003 is it is expected to build. Presstek chose to stay clear of specific revenue numbers, however, they have narrowed operating loss and cash usage and expect that trend to continue in 2003. The company also expects to break-even towards year-end 2003. The majority of the improvement will come through external customer business. 4. When asked about long-term partnerships, particularly about marketing capabilities in the U. S., Presstek indicated that long-term partner relationships are confidential, but they expect to continue to enhance channels and continue exploring options. 5. Presstek sees room for future growth of DI presses. It is estimated that there are 2500 DI presses installed on the market today with the expectation that it will grow to 6000 units in 2005. Presstek plans to leverage their products to gain market share and grow the DI market. 6. Presstek’s intent is that 2004 will be the time frame to reach a crossover point where consumables on non-proprietary presses would be at least as popular as consumables on proprietary systems. 7. Although no price was fixed to the new Applause product in relationship to Presstek’s spool products or Anthem product, the company sees it as a higher value-added product for the industry. The initial launch of the Applause product will be in the CTP market, but the product will also have application in spool form as well.