GREENWICH, CT -- November 9, 2009 -- Presstek, Inc., a leading manufacturer and marketer of digital offset printing business solutions, today reported financial and operating results for the third quarter ended October 3, 2009. The Company reported total revenue of $33.0 million in the third quarter of 2009, compared with $48.5 million in the third quarter of 2008, a decline of $15.5 million, or approximately 32 percent. During the third quarter of 2009, the Company incurred a loss from continuing operations of $6.6 million, or $0.18 per share, including (on a pre-tax basis) a largely non-cash inventory-related charge of $2.7 million and a restructuring charge of $1.0 million related to the $10 million cost reduction program announced in the second quarter of 2009. Excluding pre-tax non-routine charges of $3.7 million in the third quarter of 2009 and $0.4 million in the third quarter of 2008, the loss from continuing operations would have been $3.0 million, or $0.08 per share, in the third quarter of 2009, compared with income from continuing operations of $1.0 million, or $0.03 per share, in the third quarter of 2008. (See "Information Regarding Non-GAAP Measures")

Results from continuing operations exclude the Company's Lasertel subsidiary, which is currently being marketed for sale and is recorded in discontinued operations. The Company expects to reach an agreement for the sale of its Lasertel subsidiary in the fourth quarter of 2009 with a closing anticipated in the first quarter of 2010. Lasertel's results improved during the third quarter of 2009 with income from operations, net of tax, of $0.7 million, compared with a loss from operations, net of tax, of $0.4 million in the same period last year.

"Although revenues for the quarter continue to be impacted by the global economic recession, sequential quarterly revenues have stabilized and we anticipate that revenue will begin to grow," said Presstek Chairman, President and Chief Executive Officer, Jeff Jacobson. "We have successfully reduced expenses and managed cash, while staying focused on our strategic initiatives of expanding our product portfolio and distribution channels. During the third quarter, we debuted and sold our first 52DI with aqueous coating capability to Quad/Graphics, the largest privately held printer in the world, and have already accepted several additional customer orders. We also introduced Aeon, our first long-run, non-preheat thermal CTP plate, which will be available by the end of this year. In addition, we have made tremendous progress expanding our distribution channels to nearly 60 distributor locations in our Europe, Africa, Middle East and Asia Pacific regions."

Third Quarter 2009 Financial Results

Total revenue in the third quarter of 2009 was $33.0 million, compared with $48.5 million in the third quarter of 2008.

- Equipment revenue declined 76 percent to $3.6 million in the third
quarter of 2009, compared with $15.2 million for the same period last year.
Sales of equipment have been negatively impacted by the global economic
recession that has caused credit markets to tighten and customers to delay
major capital investment decisions.

- Consumables revenue totaled $22.2 million in the third quarter of 2009,
compared with $25.1 million for the same period last year.  The decline in
consumables revenue was primarily related to lower industry print volume,
as well as lower sales in the Company's "traditional" portfolio of
consumables products as customers continue to migrate from analog to
digital solutions.  However, sequential quarterly revenue increased $1.0
million, or 4.9 percent.

- Service revenue declined approximately 12 percent to $7.2 million in the
third quarter of 2009 primarily due to a decrease in the level of
traditional equipment service and lower print volume.

Third quarter 2009 margin was impacted by an abnormally large inventory charge of $2.7 million to Cost of Goods Sold that lowered gross margin to 23.3 percent, compared with 34.7 percent in the third quarter of 2008. Excluding this unusual charge, gross margin in the third quarter of 2009 would have been 31.5 percent. This charge, which is mostly non-cash, was driven in large part by lower production volume levels in Presstek's equipment manufacturing plant and the impact of a change in certain product strategies. In addition, during the quarter, Presstek refined the calculations and assumptions used to determine the allocation of manufacturing spending between period costs and capitalized variances. The Company is evaluating the need for actions to further enhance its manufacturing cost efficiencies.

Third quarter 2009 operating expenses declined to $13.9 million, reflecting a year-over-year improvement of $0.8 million, or 5.7 percent. Lower expenses resulted primarily from cost reduction activities. During the second quarter of 2009, the Company implemented a cost reduction program that is substantially complete and is expected to result in annualized savings of approximately $10 million. A restructuring charge of $1.0 million related to the program was recorded in the third quarter of 2009. Excluding the impact of restructuring charges in both periods, third quarter 2009 operating expenses were down $1.5 million, or 11 percent, compared with the same period last year.

"During the last two years, we have implemented business improvement initiatives that have resulted in gross profit and operating expense improvements of approximately $40 million," said Presstek Executive Vice President and Chief Financial Officer, Jeff Cook. "With the vast majority of the cost cutting initiatives complete, we have a cost structure that is appropriately aligned with our revenue base. I am optimistic that our lean cost structure combined with the positive sales prospects we are seeing will lead to positive EBITDA in the fourth quarter of 2009."

Interest expense increased to $0.5 million in the third quarter of 2009, compared with $0.1 million in the third quarter of 2008. The increase is due to higher interest rates and a $250,000 fee associated with a modification of the Company's credit agreement. The Company is in discussions concerning a new credit facility and expects to have an arrangement in place on or prior to December 15, 2009 sufficient to repay the Company's outstanding indebtedness and provide for continuing operations.

The Company's third quarter 2009 debt net of cash totaled $16.2 million, compared with $13.3 million in the third quarter of 2008. Debt net of cash is down 56 percent from its high of $37.0 million in March 2007.

"With the anticipated continued impact of the economy on our financial results, we had previously indicated that, excluding non-routine charges in both quarters, our third quarter operating loss would be in line with our second quarter loss of $3.6 million. In addition, we would be incurring costs related to Print 09, North America's largest printing trade show held during the third quarter," added Jacobson. "I am encouraged that with a third quarter operating loss of $2.4 million, absent non-routine charges, the business performed better than expected. With the talented and dedicated employees we have and the steps we have taken to ensure that we are well positioned to thrive once the economy turns around, I am confident of the Company's future success."

Information Regarding Non-GAAP Measures
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, the Company provides non-GAAP financial measures, including income (loss) from continuing operations, excluding non-routine charges; operating income (loss), excluding non-routine charges; gross margin, excluding non-routine charges; operating expenses, excluding the impact of restructuring charges; EBITDA from continuing operations; cash earnings from continuing operations, excluding non-routine charges; working capital, excluding short-term debt; debt net of cash and other GAAP measures adjusted for certain charges, which the Company believes are useful to help investors better understand its past financial performance and prospects for the future. A full reconciliation of GAAP to non-GAAP measures is provided in the financial tables below. Supplemental financial information has been provided with this release to provide additional details on the Company's performance.