HUDSON, N.H., Feb. 20 -- Presstek, Inc., a leading provider of direct digital imaging technology, today announced financial results for the fourth quarter and fiscal year ended December 28, 2002. Fourth Quarter Results The company reported net income for the fourth quarter of 2002 of $1.4 million, or $0.04 per diluted share, compared to a net loss of $2.1 million, or $0.06 per diluted share, for the corresponding period in the prior year, and net income of $621,000 or $0.02 per diluted share in the third quarter of fiscal 2002. Revenues for the fourth quarter ended December 28, 2002 were $22.4 million, compared to $21 million in the third quarter of fiscal 2002 and $23.1 million in the same period a year ago. The fourth quarter 2001 revenues include $1.7 million from programs that have been discontinued. Consumable revenues for the fourth quarter of 2002 were $13.5 million, down slightly from $13.8 million in the third quarter of 2002, and up from $12.4 million in the fourth quarter of 2001. Equipment revenues for the fourth quarter were $7.2 million, up 21% from $5.9 million in the previous quarter, and down from $8.3 million in the same period a year ago. The decrease in equipment sales from the fourth quarter of 2001 is primarily the result of discontinued programs and a reduction in kit shipments. Results for the fourth quarter of 2002 include an operating loss before inter-company charges of $1.6 million at the company's Lasertel subsidiary, compared to an operating loss before inter-company charges of $2.0 million in the previous quarter, and $3.2 million in the same period a year ago. Lasertel received purchase orders from external commercial customers and began production shipments of laser diode products in the fourth quarter of 2002. Gross margins for the fourth quarter of 2002 were 39%, compared to 37% in the prior quarter and 38% in the fourth quarter of 2001. This was the result primarily of productivity and yield improvements. Operating expenses were $7.1 million in the fourth quarter of 2002, compared to $10.5 million in the same period last year, and $6.9 million in the previous quarter. The year-over-year decrease is primarily the result of the company's tightened financial management. During the quarter, the company generated $4.6 million in cash from operations and working capital. Cash and cash equivalents at the end of the quarter were $17.6 million, up from $14 million at the end of the third quarter of 2002. Full Year 2002 Results Revenues for the fiscal year ended December 28, 2002 were $83.5 million, compared to $102.3 million in fiscal year 2001, which included $10.8 million of revenues from programs that were discontinued. Presstek reported a net loss for the year of $9.3 million, or $0.27 per diluted share for the year ended December 28, 2002, compared to a net loss of $3.8 million, or $0.11 per diluted share, for the same period in the previous year. Excluding inventory write downs due to discontinued programs and special charges, the company's results would have been a net income of $1.4 million, or $0.04 per diluted share, for the fiscal year ended December 28, 2002. Consumable revenues for fiscal year 2002 were a record $53.2 million, compared to $46.9 million in fiscal 2001. Equipment revenues for fiscal year 2002 were $24.2 million, down from $46.7 million a year ago. The year over year decrease in equipment sales is primarily the result of reductions in press and kit shipments to partners. Results for fiscal year 2002 include an operating loss before inter-company charges of $7.9 million at the company's Lasertel subsidiary, compared to $11.3 million a year ago. Gross margins for fiscal 2002 improved to 39% (excluding $4.7 million in inventory write-offs and other charges relating to discontinued programs), from 37% in fiscal 2001. Operating expenses for fiscal 2002 were $30.3 million, compared to $40.5 million a year ago. The company generated $17 million in cash from operations and working capital in fiscal year 2002. Discussion and Outlook Presstek's President and Chief Executive Officer Edward J. Marino said, "Presstek built operating momentum in the second half of 2002, and we are very pleased to report that the changes we implemented earlier in the year are yielding the results we intended. Despite the continued worldwide slowdown in the capital equipment and printing markets, we have improved our financial performance and strengthened the company's foundation." "We are also pleased to report that our balance sheet continues to improve," said Chief Financial Officer Moosa E. Moosa. "We closed the year with cash and cash equivalents of $17.6 million, compared to $2.5 million at the same time last year. We have a cash position that is in excess of our debt." "Total debt at the end of the fourth quarter was $16.7 million compared with $17.4 million at the beginning of the year," said Moosa. "Inventories and receivables have been managed to lower levels over the last two quarters. Working capital, excluding cash and current portion of debt has decreased to $13.0 million from $27.6 million at the beginning of the year." "Our outlook for Lasertel continues to be optimistic," said Marino. "It is beginning to gain traction with external customers in the industrial and military sectors, and we expect to be able to report improving external revenues for Lasertel in 2003." Marino continued, "Our efforts to streamline operations and to expand our market channels and improve relationships with our existing partners are bearing fruit. Our work to lower our breakeven point and to tighten our financial management has strengthened the foundation upon which our continuing customer-focused efforts can build. We believe we have positioned the company for revenue growth, positive cash flow and profitability. It is important to keep in mind, however, that we cannot predict how the current uncertainty in the worldwide political and economic climate, or the ongoing lack of recovery in the printing and capital equipment markets, may impact our business."