By Trevor Shackelford March 3, 2005 -- Presstek (NASDAQ: PRST) today announced its fourth quarter earnings results. The company reported a record $54.1 million in revenues up 82% from $29.8 million in the previous quarter and up 140% from $22.5 million in the same period last year. Presstek reported a net loss in the fourth quarter of $2.2 million, or $0.06 per share, compared to a net income of $2.0 million in the fourth quarter of 2003. The company cited costs associated with its acquisitions of Precision Lithograining and ABDick, legal charges, and increased costs of Sarbanes-Oxley compliance as reasons for the loss. Presstek also noted that without these extraordinary costs, the company would have posted net income of approximately $2.5 million. Topics of this Summary Quarter and 2004 Highlights Segment Performance Guidance Raine Radar Q & A Quarter and 2004 Highlights Presstek acquired ABDick, a press and print equipment manufacturer, on November 5, 2004. Edward J. Marino, Presstek's President and Chief Executive Officer, and Moosa E. Moosa, Presstek's Executive Vice President and Chief Financial Officer signed new three-year employment agreements with the company extending their employment through 2008. The plaintiffs in a class-action securities lawsuit against Presstek have withdrawn their appeal of the October 2004 dismissal decision. The company’s total debt at the end of the fourth quarter was $41.9 million compared to $14.5 million at the beginning of the year. Total available cash at the end of the fourth quarter was $8.7 million compared to $28.2 million at the beginning of the year. Segment Performance Core business Revenue for Presstek’s DI and CTP business recorded $24.3 million of revenue in the fourth quarter, up from $21.8 million in the fourth quarter of 2003. Net income for DI and CTP was $3.6 million in the fourth quarter, up from $3.1 million last year. Equipment revenue for the fourth quarter was $9.1 million, up from $8.5 million a year ago. DI increases were due in large part to strong sales to Kodak Polychrome Graphics. CTP sales were down as new models were introduced. Consumable revenue was a record $14.8 million in the fourth quarter, up from $12.4 million a year ago. Gross margins for the segment were 40% in the fourth quarter, up from 37% last quarter. Lasertel External Lasertel sales were up 37% to $989,000 in the fourth quarter from $722,000 in the same period last year. Lasertel’s operating loss was down $189,000 from a year ago to $604,000 in the fourth quarter of 2004. Acquisitions Presstek’s fourth quarter 2004 revenue included $24.3 million from ABDick. The new division recorded a net loss of $2.0 million in the fourth quarter, which includes approximately $1.0 million in acquisition and interest charges. Precision Lithograining, acquired in July 2004, reported record revenue of $7.4 million in the fourth quarter, $5.3 million of which came from external customers. Precision reported a net loss of $919,000 in the fourth quarter, including $1.0 million in extraordinary charges. Guidance Presstek plans on achieving an annualized revenue run-rate of at least $300 million by the end of 2005, with an annualized EBITDA run-rate of $30 million or greater. The company is planning on taking an additional $7.0 million in costs throughout 2005 to complete the integration and restructuring of their two new acquisitions. Raine Radar All in all, a solid quarter for Presstek. The debt and cash picture are not perfect and the company has broken its long run of profitable quarters, but this shouldn’t be a surprise after the recent acquisitions. Adding Precision and ABDick have more than doubled the revenue run rate for the company, and management should not find too much trouble finding synergies and reducing costs in these two new businesses to increase the company’s overall profitability. Speaking of management, signing their star management team, CEO Marino and CFO Moosa, on for three more years in the company should provide the stability Presstek will need to continue its growth. Q & A ABDick margins are expected to increase over 2005. Presstek announced that they recently filed a patent infringement lawsuit against Creo and their new “CTP” plate technology. Although one would not have guessed it based on the above, Presstek sees Kodak’s acquisition of Creo as great news since Kodak is a strategic partner. Management sees opportunities down the road that could be beneficial to both companies. Presstek’s CAPEX in 2005 should be approximately 5 million. Total inventory after the acquisitions increased to $40 million. The company wanted to dispel the perception that ABDick’s customers are mom & pop operations, and won’t be able to afford new DI presses. Presstek believes that while much of the existing customer base is small, most ABDick customers will be interested in the digital presses. According to Presstek, the upcoming Vector TX52 plate setter should make chemistry-free metal plates more affordable. Plans are to commercialize this product around mid-year of 2005. Presstek is excited about their DI platform, because they see the printer market quickly becoming a “digitize or perish” environment.