Presstek Reports Record Consolidated Revenue and Operating Profit

HUDSON, N.H., April 27  /PRNewswire-FirstCall/ -- Presstek, Inc. (NASDAQ: PRST), 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."

Conference Call

Presstek's first quarter 2006 conference call is scheduled to take place at 11:00 a.m. (Eastern) on Thursday, April 27, 2006. On the call the company intends to discuss first quarter 2006 earnings results and company positioning.

To participate in the call, dial [phone], access code 49573449. To listen to a live web cast of the call, visit the Events Calendar in the Investor Relations section of Presstek's website, http://www.presstek.com/, fifteen minutes prior to start time. The webcast will be archived and available for replay until midnight on May 4, 2006. You may also listen to a telephone replay of the call from 1:00 p.m. on April 27, 2006 to 12:00 a.m. on May 4, 2006, by dialing [phone], access code 28673305.

About Presstek

Presstek, Inc. is a leading manufacturer and marketer of high tech digital imaging solutions to the graphic arts and laser imaging markets. Presstek's patented DI(R), CTP and plate products provide a streamlined workflow in a chemistry-free environment, thereby reducing printing cycle time and lowering production costs. Presstek solutions are designed to make it easier for printers to cost effectively meet increasing customer demand for high-quality, shorter print runs and faster turnaround while providing improved profit margins.

Presstek's Precision Lithograining Corporation is a manufacturer of high quality digital and conventional printing plate products, including Presstek's award-winning, chemistry-free Anthem plate. Presstek subsidiary, Lasertel, Inc., manufactures semiconductor laser diodes for Presstek's and external customers' applications.

For more information visit http://www.presstek.com/, or call 603-595-7000 or email: .

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Certain statements contained in this News Release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding expectations regarding future growth and profitability; expectations regarding the sale of products in general; expected expansion of served markets; expected organic and strategic growth; continued accretive value of recent acquisitions; expected benefits of new product introductions; and the ability of the company to achieve its stated objectives. Such forward-looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, market acceptance of and demand for the company's products and resulting revenue; the ability of the company to meet its stated financial objectives, the company's dependency on its strategic partners (both on manufacturing and distribution), and other risks detailed in the company's Annual Report on Form 10-K and the company's other reports on file with the Securities and Exchange Commission. The words "looking forward," "looking ahead," "believe(s)," "should," "may," "expect(s)," "anticipate(s)," "likely," "opportunity," and similar expressions, among others, identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. The company undertakes no obligation to update any forward-looking statements contained in this news release.

  CONTACTS:
   Moosa E. Moosa                Jane Miller
   Executive Vice President/     Corporate Relations Manager
   Chief Financial Officer       [phone] x 3346
   [phone]                Email: 



                              PRESSTEK, INC.
                    CONSOLIDATED STATEMENTS OF INCOME
                  (in thousands, except per-share data)
                               (Unaudited)



                                                  Three months ended
                                                April 1,          April 2,
                                                  2006              2005

  Revenue
    Product                                      $58,382           $57,068
    Service and parts                             12,184            13,327
      Total revenue                               70,566            70,395

  Cost of revenue
    Product                                       41,645            41,454
    Service and parts                              8,285             8,799
      Total cost of revenue                       49,930            50,253

  Gross profit                                    20,636            20,142

  Operating expenses
    Research and product development               1,545             2,122
    Sales, marketing and customer support          9,029             9,809
    General and administrative                     5,380             5,444
    Amortization of intangible assets                808               588
    Restructuring and special charges                  -               982
      Total operating expenses                    16,762            18,945

  Income from operations                           3,874             1,197
  Interest and other expense, net                   (552)             (626)

  Income before income taxes                       3,322               571
  Provision for income taxes                         598                90

  Net income                                      $2,724              $481

  Earnings per share

    Basic                                          $0.08             $0.01

    Diluted                                        $0.08             $0.01

  Weighted average shares outstanding
    Weighted average shares outstanding
     - basic                                      35,438            34,971
    Dilutive effect of options                       492               552
    Weighed average shares outstanding
     - diluted                                    35,930            35,523



                              PRESSTEK, INC.
                       CONSOLIDATED BALANCE SHEETS
                              (in thousands)



                                               April 1,         December 31,
                                                 2006               2005
                                              (Unaudited)
  ASSETS
   Current assets
    Cash and cash equivalents                    $5,918             $5,615
    Accounts receivable, net                     47,904             44,088
    Inventories                                  45,640             50,083
    Other current assets                          2,723              1,175
      Total current assets                      102,185            100,961

   Property, plant and equipment, net            44,832             45,250
   Goodwill                                      23,089             11,974
   Intangible assets, net                        10,859             23,089
   Other noncurrent assets                          488                213

      Total assets                             $181,453           $181,487

  LIABILITIES AND STOCKHOLDERS'
   EQUITY
   Current liabilities
    Current portion of long-term debt
     and capital lease obligation                $7,041             $7,037
    Line of credit                                7,000              6,036
    Accounts payable                             22,513             21,199
    Accrued expenses                             11,115             16,718
    Deferred revenue                              9,598              8,579
      Total current liabilities                  57,267             59,569

   Long-term debt and capital lease
    obligation, less current portion             20,806             22,570
   Deferred income taxes                            824                715

      Total liabilities                          78,897             82,854

   Commitments and contingencies

   Stockholders' equity
    Preferred stock                                   -                  -
    Common stock                                    355                354
    Additional paid-in capital                  107,427            106,268
    Accumulated other comprehensive
     income (loss)                                  (20)               (59)
    Accumulated deficit                          (5,206)            (7,930)
      Total stockholders' equity                102,556             98,633

      Total liabilities and
       stockholders' equity                    $181,453           $181,487


                              PRESSTEK, INC.
                         USE OF NON-GAAP MEASURES



EBITDA (earnings before interest, taxes, depreciation, amortization and restructuring and special charges (credits)); Debt-Net-of-Cash; and Working Capital, Excluding Short-Term Debt, are not measures of performance under accounting principles generally accepted in the United States of America ("GAAP") and should not be considered alternatives for, or in isolation from, the financial information prepared and presented in accordance with GAAP. Presstek's management believes that EBITDA provides meaningful supplemental information regarding Presstek's current financial performance and prospects for the future.  Presstek's management believes that Debt-Net-of-Cash provides meaningful information on Presstek's debt relative to its cash position.  In addition, Presstek's management believes that Working Capital, Excluding Short-Term Debt, provides meaningful supplemental information regarding Presstek's ability to meet its current liability obligations.  Presstek believes that both management and investors benefit from referring to these non-GAAP measures in assessing the performance of Presstek's ongoing operations and liquidity, and when planning and forecasting future periods. These non-GAAP measures also facilitate management's internal comparisons to Presstek's historical operating results and liquidity.  Our presentations of these measures, however, may not be comparable to similarly titled measures used by other companies.  Reconciliations of these measures to GAAP are included  below:

                              PRESSTEK, INC.
           RECONCILIATION OF EBITDA TO CONSOLIDATED NET INCOME
                              (in thousands)
                               (Unaudited)


                                                    Three Months Ended
                                                April 1,        December 31,
                                                 2006                2005
                                               (Q1 2006)           (Q4 2005)


  Net income                                     $2,724              $2,443
  Interest                                          449                 580
  Taxes                                             598                 692
  Depreciation and amortization                   2,588               2,500
  Restructuring and special charges (credits)         -                 (35)

  EBITDA                                         $6,359              $6,180



                              PRESSTEK, INC.
             RECONCILIATION OF DEBT-NET-OF-CASH TO TOTAL DEBT
                              (in thousands)
                               (Unaudited)


                                                         As of
                                               April 1,         December 31,
                                                 2006                2005
                                               (Q1 2006)           (Q4 2005)

  Calculation of total debt:
    Current portion of long-term debt            $7,000              $7,000
    Line of credit                                7,000               6,036
    Long-term debt, net of current portion       20,750              22,500

      Total debt                                 34,750              35,536

  Cash                                            5,918               5,615

                                                $28,832             $29,921


DATASOURCE: Presstek, Inc.



CONTACT:  Moosa E. Moosa, Executive Vice President/Chief Financial

Officer, [phone], or Jane Miller, Corporate Relations Manager, +1-603-

594-8585 ext. 3346,  both of Presstek, Inc.



Web site:  http://www.presstek.com/

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