Presstek Reports Record Consolidated Revenue and Operating Profit
Friday, April 28, 2006
HUDSON, N.H., April 27 -- Presstek, Inc., 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."