Presstek to Reposition Lasertel Subsidiary, Warns of Marginal Profits for Quarter
Press release from the issuing company
HUDSON, N.H., June 11 -- Presstek, Inc. (Nasdaq: PRST), a leading provider of direct digital imaging technology, today announced its plans to streamline its Lasertel operations in order to focus in the short term on laser diodes supplied to Presstek as well as on opportunities that match the current level of resources employed. The company also indicated that the general slowdown in the telecommunications market appears to have reached those segments of the market Lasertel was previously targeting. As a result of these factors, the company is planning to implement cost reductions at Lasertel that will principally affect non-production areas of operation.
Commenting on the repositioning, Presstek President and Chief Executive Officer Robert Hallman said, "During the quarter Lasertel has been working diligently to refine its processes for Presstek and other markets. In the last few days we have learned that the slowdown in the telecommunications market is broader than we had expected, and this has delayed anticipated purchase orders for the metropolitan applications targeted by Lasertel. As a result of these delays, together with unexpectedly large expenses related to process improvements, we now expect Lasertel to record losses of approximately $3 million for the second quarter of this year. While the fundamentals of the Lasertel opportunity appear sound, slippage of one or more quarters from previous expectations is likely. At the same time, Presstek's core business remains strong and we are confident that production will be in line with our goals by the end of the quarter. We now expect revenues for the second quarter of 2001 to be in the range of $27 million to $28 million. In addition, as a consequence of the losses at Lasertel, we anticipate only marginal profits for the quarter.
Our outlook for Presstek, however, remains positive, with core business revenues anticipated at around $120 million for the year, and we expect sequential revenue growth with improved profitability over the coming quarters."
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