HUDSON, N.H., Sept. 29 -- Presstek, Inc., a leading manufacturer and marketer of high tech digital imaging solutions for the graphic arts and laser imaging markets, today announced preliminary financial results for the third quarter, ending September 30, 2006. For the third quarter, Presstek expects revenue to be between $65 and $66 million. This compares to expectations of flat sequential revenue of $74.2 million in the second quarter of 2006. Presstek expects break-even operating profits and a net loss of approximately $0.02 per share diluted in Q3. Edward J. Marino, President and Chief Executive Officer stated, "We are disappointed with the results we expect to report for the third quarter. A number of factors are leading to revenue below expectations for the quarter. "First, our analog business was softer than we expected in Q3 in the equipment, consumables and service areas, and we expect that this will result in reductions of approximately $2.5 million in revenues. This is a non- strategic, lower margin part of our business and we have to make further efforts to get ahead of the declines that will naturally occur in this area of business as our industry continues to move toward digital. "The second relates to delays in the timing of certain digital equipment transactions in Q3. We weren't able to close on as much business during the quarter as we had anticipated. These delays will result in reductions of approximately $3.5 million over the last quarter. We believe the pending Graph Expo Trade Show coming up in the middle of October has had a greater impact than we expected. "The third issue involves manufacturing of our Vector CTP product. We effectively stopped sales of the Vector CTP product in the third quarter until we got our arms around certain manufacturing issues. This is expected to result in a decline in CTP units in Q3 over Q2, which we believe will result in a reduction of approximately $1 million in revenues. We believe that the product improvements we have made will allow us to resume full Vector sales and return to growth in Q4 and into 2007. "Finally, our DI plate sales were down in the quarter primarily due to a lowering of inventory by major OEM partners, which we expect will unfavorably impact revenues by approximately $1 million. We do not believe this to be in any way competitive, but rather a business decision on our partners' part. "We expect to have a better quarter in Q4, but, based on the current trends, we do not expect to realize the anticipated 10% growth in consolidated revenues this year. "The third quarter is not yet over and we will provide a full update during our 3rd quarter earnings conference call on October 26, 2006." Moosa E. Moosa, Executive Vice President and Chief Financial Officer, stated "The Company's performance this quarter was disappointing. As a result, we expect consolidated equipment revenues to be approximately $21-$22 million compared with $27.5 million last quarter. Consumables revenues are expected to be approximately $33 million compared with $35.0 million last quarter. Service revenues, which are also impacted by lower equipment installations, are expected to be approximately $11 million compared with $11.7 million last quarter." Marino continued, "We were not pleased with the quarter, and we are taking actions to improve our business performance. We will continue to take steps to stem the impact of our analog business erosion, we have made corrections to address the Vector manufacturing issues, and we believe we have a solid pipeline and industry fundamentals that will position us for improved performance in Q4. We also have a number of new digital products in our pipeline that will broaden our portfolio, such as our new 52DI press, which we will be formally introducing in the US at Graph Expo 2006 from October 15th through 18th. On top of this, our increased emphasis on digital products and services will let us improve our margin potential in the longer-term."