Presstek Announces Second Quarter 2009 Financial Results

$10 Million in Expected Annualized Savings Through Additional Cost Reductions; Non-Cash Charges Totaling $35.9 Million -- Write Down of Goodwill and a Deferred Tax Asset Valuation Allowance; Presstek to Debut Its New Long-Run Thermal Plate at Print 09

• Press Release
• Source: Presstek, Inc.
• On 7:00 am EDT, Thursday August 13, 2009

GREENWICH, CT--(Marketwire - 08/13/09) - Presstek, Inc. (NASDAQ:PRST - News), a leading manufacturer and marketer of digital offset printing business solutions, today reported financial and operating results for the second quarter ended July 4, 2009. The Company's second quarter 2009 results reflect the global economic recession and significant non-cash charges.

Including non-cash, non-routine charges totaling $35.9 million, the Company incurred a loss from continuing operations (after tax) for the second quarter of 2009 of $39.9 million, or $1.09 per share, compared with income from continuing operations of $1.0 million, or $0.03 per share, in the second quarter of 2008. Results from continuing operations exclude the Company's Lasertel subsidiary, which is currently being marketed for sale and is recorded in discontinued operations.

Excluding the non-cash, non-routine charges, the Company reported a pre-tax operating loss in the second quarter of 2009 of $3.6 million, a decrease of $5.6 million from the prior year. In addition to lower sales, earnings were negatively impacted by foreign currency exchange rates and a $0.7 million increase in bad debt reserves, partially offset by continued improvements in operating expenses.

Second quarter 2009 revenue totaled $33.5 million, compared to $51.6 million in the second quarter of 2008, reflecting the global economic recession and an unfavorable change in foreign currency exchange rates.

"Although non-cash charges and additions to our bad debt reserves significantly reduced our second quarter results, we were able to hold sequential quarterly revenues relatively stable despite ongoing challenges created by the state of the economy," said Presstek Chairman, President and Chief Executive Officer, Jeff Jacobson.

Cost-Reduction Initiative

The Company has begun implementing additional cost reductions that primarily will be completed by the end of 2009 and will generate approximately $10 million of annualized savings. Including savings from the Company's Business Improvement Plan, once these additional actions are fully implemented, the Company will have achieved nearly $40 million in annualized savings since 2007. Presstek expects to incur one-time costs of approximately $1.0 million related to these actions. As part of these initiatives, the Company will reduce its global workforce across all levels of the organization by approximately 60 positions, or ten percent. Additional cost actions will result in the elimination of the 401(k) company matching contribution and furloughs in certain of the Company's operating areas.

"These actions, while difficult, are necessary to help us weather the current economic conditions and properly position ourselves to capture market share and grow revenues once the industry and economy start to recover," added Jacobson. "We strongly believe in the strategy we have put in place and will continue to stay focused on building a stronger product portfolio and expanding our distribution channels while carefully managing our cost structure and cash position."

Second Quarter 2009 Financial Results

Revenue for the second quarter of 2009 fell $18.1 million, or 35 percent, to $33.5 million when compared to the same quarter in 2008. The year-over-year decline in revenue was driven primarily by the deterioration of the global economy resulting in a 64 percent reduction in equipment sales due to delays in customer purchasing decisions and continued tightening in the credit markets. Consumable sales were down 26 percent in the second quarter of 2009 to $21.1 million, when compared to the second quarter of 2008. The decline in consumables revenue was primarily attributable to lower print volume. However, sales of 52DI plates were up 14 percent from last year's second quarter performance. In addition, sales of Presstek's new chemistry-free CTP thermal plate, Aurora Pro, were up 54 percent over last year's second quarter sales. Service revenue declined approximately 16 percent to $7.2 million in the second quarter of 2009 primarily due to reduced service of traditional equipment and lower parts sales.

Gross margin in the second quarter of 2009 was 32.9 percent, compared with 33.8 percent in the second quarter of 2008. Margins in the second quarter of 2009 were negatively impacted by an unfavorable change in foreign currency exchange rates as well as lower manufacturing productivity.

Excluding the goodwill impairment charge of $19.1 million and a $0.7 million addition to bad debt reserves, second quarter operating expenses declined to $13.9 million, reflecting a year-over-year improvement of $1.5 million, or approximately 10 percent. Lower expenses resulted primarily from cost reduction activities as well as lower trade show costs and restructuring charges.

Second Quarter 2009 Non-Cash Accounting Charges

Special charges totaled $19.2 million in the second quarter of 2009, primarily due to the Company recording a non-cash, non-routine charge of $19.1 million related to goodwill. The goodwill write-off reflects the full impairment of amounts relating to the 2004 acquisitions of A.B. Dick and Precision Lithograining.

During the second quarter of 2009, the Company also recorded a non-cash valuation allowance against its deferred tax assets of $16.8 million related to its U.S. business entities. However, the benefit of the net operating losses remains available to offset the Company's future U.S. income tax liability.

The Company's second quarter 2009 debt net of cash totaled $13.1 million, an increase of $3.5 million from the first quarter of 2009. This increase was due to lower earnings, the timing of inventory purchases, and the reduction of accrued expenses. However, debt net of cash was down $9.6 million, or 42 percent, from the second quarter of 2008.

Including discontinued operations and the non-cash charges, the Company reported a net loss of $41.4 million for the second quarter of 2009, compared with net income of $0.6 million in the second quarter of 2008.

Credit Facility

As a result of the Company's financial performance during the second quarter, the Company is not in compliance with certain financial covenants under its credit agreement. The Company is in discussions with the agent bank to ensure that the Company continues to have access to its revolving credit facility. Concurrently, the Company is in discussions with potential lenders concerning a new credit facility and expects to have a new credit agreement in place on or prior to the expiration of the current credit agreement on November 4, 2009.

Print 09 Trade Show

"While we are disappointed with the impact that the economy has had on our business, we remain encouraged about our future and are making good progress toward our key strategic initiatives," commented Jacobson. "We have many exciting new products in our pipeline, some of which will be highlighted at the upcoming Print 09 trade show taking place next month in Chicago. We will officially announce our first long-run thermal plate at Print 09, which will debut as an expansion to our current digital plate offerings. Our newest offering is a non-preheat thermal technology plate which, along with our latest chemistry-free technology, can be imaged on a substantial number of new and a large installed base of existing platesetters worldwide. In addition, we will be showcasing a 52DI press with ultraviolet printing capability, which is currently available, as well as a 52DI with aqueous coating capability, which will be available for order starting in the fourth quarter of 2009."

Second Quarter 2009 Report on Form 10-Q

The Company announced it would be filing a Form 12b-25, Notification of Late Filing, with the Securities and Exchange Commission regarding its quarterly report on Form 10-Q for the second quarter of 2009. The late filing is caused by delays in documenting supporting schedules for the report. The Company expects to file its second quarter 2009 Form 10-Q within the five-day extension period permitted by the Securities and Exchange Commission.

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 debt net of cash, which is defined as debt minus 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.

Conference Call and Webcast

Management will discuss Presstek's second quarter 2009 results in a conference call today at 10:30 a.m. Eastern Time. Conference call information is below:

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                 Conference Call Access:
                 Domestic Dial In: 866-713-8564
                 International Dial In: 617-597-5312
                 Passcode: 44029027

In addition, for those unable to participate at the time of the call, a rebroadcast will be available following the call from Thursday, August 13, 2009 at 1:30 PM Eastern Time until Thursday, August 20, 2009 Eastern Time at 11:59 PM.

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                 Rebroadcast Access:
                 Domestic Dial In: 888-286-8010
                 International Dial In: 617-801-6888
                 Passcode: 99214445

An archived webcast of this conference call will also be available on the "Investor Events Calendar" page of the Company's web site, www.presstek.com.

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�, 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 subsidiary, Lasertel, Inc., manufactures semiconductor laser diodes for Presstek's and external customers' applications. For more information visit www.presstek.com, or call 603-595-7000 or email: info@presstek.com. DI is a registered trademark of Presstek, Inc.

"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 expected revenue, gross margins, operating income (loss), EBITDA, asset impairments, expectations concerning the reductions of costs, the level of customer demand, the results of the Company's Business Improvement Plan, the ability of the Company to achieve its stated objectives, and the Company's expectations concerning its ability to access its current revolving credit facility and to obtain a new credit facility. 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: the severity and length of the current economic downturn, the impact of the economic downturn on the availability of credit for the Company's customers, the ability of the Company to continue to have access to its revolving credit facility, the ability of the Company to obtain an adequate credit facility to replace its current credit facility, the Company's ability to successfully market its Lasertel subsidiary for sale, market acceptance of and demand for the Company's products and resulting revenue, the ability of the Company to successfully expand into new territories, the ability of the Company to meet its stated financial and operational objectives, the Company's dependence on its partners (both manufacturing and distribution), the results of the pending formal investigation by the Securities and Exchange Commission and the impact of any civil penalty on the Company, the ability of the Company's insurer to fund the settlement of the class action lawsuit and certain costs associated with the lawsuit and the SEC investigation, and other risks and uncertainties detailed in the Company's 2008 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)," "project(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.

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


                                 Three months ended     Six months ended
                                 July 4,    June 28,   July 4,   June 28,
                                  2009       2008       2009       2008
                                ---------  ---------  ---------  ---------

Revenue
  Product                       $  26,324  $  43,086  $  53,220  $  84,476
  Service and parts                 7,186      8,520     14,750     17,924
                                ---------  ---------  ---------  ---------
    Total revenue                  33,510     51,606     67,970    102,400
                                ---------  ---------  ---------  ---------

Cost of revenue
  Product                          17,107     27,602     33,484     53,070
  Service and parts                 5,367      6,539     11,356     13,465
                                ---------  ---------  ---------  ---------
    Total cost of revenue          22,474     34,141     44,840     66,535
                                ---------  ---------  ---------  ---------

Gross profit                       11,036     17,465     23,130     35,865
                                ---------  ---------  ---------  ---------

Operating expenses
  Research and development          1,164      1,275      2,424      2,638
  Sales, marketing and
   customer support                 6,884      7,903     13,249     15,323
  General and administrative        6,321      5,416     12,293     12,389
  Amortization of intangible
   assets                             233        274        487        565
  Restructuring and other
   charges                             38        560        122      1,195
  Goodwill impairment              19,114          -     19,114          -
                                ---------  ---------  ---------  ---------
    Total operating expenses       33,754     15,428     47,689     32,110
                                ---------  ---------  ---------  ---------

Income (loss) from operations     (22,718)     2,037    (24,559)     3,755
Interest and other income
 (expense), net                      (246)       185        214       (287)
                                ---------  ---------  ---------  ---------

Income (loss) from continuing
 operations before income
 taxes                            (22,964)     2,222    (24,345)     3,468
Provision for income taxes         16,905      1,219     16,630      1,578
                                ---------  ---------  ---------  ---------

Income (loss) from continuing
 operations                       (39,869)     1,003    (40,975)     1,890
Loss from discontinued
 operations, net of income
 taxes                          $  (1,580) $    (436) $  (1,665) $  (1,105)
                                ---------  ---------  ---------  ---------

Net income (loss)               $ (41,449) $     567  $ (42,640) $     785
                                =========  =========  =========  =========

Earnings (loss) per
 share - basic
  Income (loss) from
   continuing operations        $   (1.09) $    0.03  $   (1.12) $    0.05
  Loss from discontinued
   operations                       (0.04)     (0.01)     (0.04)     (0.03)
                                ---------  ---------  ---------  ---------
                                $   (1.13) $    0.02  $   (1.16) $    0.02
                                =========  =========  =========  =========
Earnings (loss) per
 share - diluted
  Income (loss) from
   continuing operations        $   (1.09) $    0.03  $   (1.12) $    0.05
  Loss from discontinued
   operations                       (0.04)     (0.01)     (0.04)     (0.03)
                                ---------  ---------  ---------  ---------
                                $   (1.13) $    0.02  $   (1.16) $    0.02
                                =========  =========  =========  =========

Weighted average shares
 outstanding
  Weighted average shares
   outstanding - basic             36,665     36,584     36,652     36,578
  Dilutive effect of stock
   options                              -         16          -         12
                                ---------  ---------  ---------  ---------
  Weighed average shares
   outstanding - diluted           36,665     36,600     36,652     36,590
                                =========  =========  =========  =========





                              PRESSTEK, INC.
                        CONSOLIDATED BALANCE SHEETS
                              (in thousands)
                                (Unaudited)


                                                     July 4,    January 3,
                                                      2009         2009
                                                   ----------   ----------

ASSETS
  Current assets
    Cash and cash equivalents                      $    4,453   $    4,738
    Accounts receivable, net                           26,570       30,759
    Inventories                                        38,864       37,607
    Assets of discontinued operations                  13,607       13,330
    Deferred income taxes                                 243        7,066
    Other current assets                                3,864        4,095
                                                   ----------   ----------
      Total current assets                             87,601       97,595

  Property, plant and equipment, net                   25,024       25,530
  Goodwill                                                  -       19,114
  Intangible assets, net                                4,399        4,174
  Deferred income taxes                                   700       10,494
  Other noncurrent assets                                 500          606
                                                   ----------   ----------

      Total assets                                 $  118,224   $  157,513
                                                   ==========   ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
  Current liabilities
    Current portion of long-term debt
     and capital lease obligation                  $    1,644   $    4,074
    Line of credit                                     15,948       12,415
    Accounts payable                                   14,996       12,060
    Accrued expenses                                    9,824       13,261
    Deferred revenue                                    6,525        7,300
    Liabilities of discontinued operations              5,950        5,702
                                                   ----------   ----------
      Total current liabilities                        54,887       54,812

  Other long-term liabilities                             159          170
                                                   ----------   ----------

      Total liabilities                                55,046       54,982
                                                   ----------   ----------

  Stockholders' equity
    Preferred stock                                         -            -
    Common stock                                          368          366
    Additional paid-in capital                        119,178      117,985
    Accumulated other comprehensive loss               (3,855)      (5,954)
    Accumulated deficit                               (52,513)      (9,866)
                                                   ----------   ----------
      Total stockholders' equity                       63,178      102,531
                                                   ----------   ----------

      Total liabilities and stockholders' equity   $  118,224   $  157,513
                                                   ==========   ==========





                              PRESSTEK, INC.
         CONTINUING OPERATIONS SUPPLEMENTAL FINANCIAL INFORMATION
                                  $000's
                               (Unaudited)


                           Q2 2008   Q3 2008   Q4 2008   Q1 2009   Q2 2009
                          --------  --------  --------  --------  --------
Key Units
  DI Presses
   (Excludes QMDI)              35        37        25        13        11
  CtP Platesetters
   (Excludes DPM)               31        36        35        24        21

Revenue - Growth
 Portfolio
  DI Presses
   (Excludes QMDI)          11,863    12,867     7,528     3,521     3,732
  Presstek Branded
   DI Plates                 4,796     4,653     4,661     4,025     4,301
                          --------  --------  --------  --------  --------
  Total DI Revenue          16,659    17,520    12,189     7,546     8,033

  Presstek CtP
   Platesetters
   (Excludes DPM)            2,183     2,228     2,039     1,109     1,505
  Chemistry Free
   CtP Plates                5,136     4,064     4,402     3,426     3,678
                          --------  --------  --------  --------  --------
  Total CtP Revenue          7,319     6,292     6,441     4,535     5,183

  Service Transfer          (1,334)     (976)   (1,176)     (601)     (603)
  Service Revenue            3,110     2,804     3,002     2,723     2,588

                          --------  --------  --------  --------  --------
  Total Revenue -
   Growth Portfolio         25,754    25,640    20,456    14,203    15,201
                          --------  --------  --------  --------  --------

Revenue - Traditional
 Portfolio
  QMDI Platform              4,357     3,456     3,417     2,962     2,987
  Polyester CtP Platform     4,524     4,077     3,601     3,575     3,178
  Other DI Plates            2,249     2,059     1,693     1,295     1,128
  Conventional/Other         9,427     7,943     7,916     7,775     6,608
                          --------  --------  --------  --------  --------
  Total Product Revenue
   - Traditional            20,557    17,535    16,627    15,607    13,901

  Service Transfer            (116)      (85)     (102)     (190)     (190)
  Service Revenue
   - Traditional             5,411     5,444     5,336     4,840     4,598

                          --------  --------  --------  --------  --------
  Total Revenue -
   Traditional Portfolio    25,852    22,894    21,861    20,257    18,309
                          --------  --------  --------  --------  --------

                          --------  --------  --------  --------  --------
Total Revenue               51,606    48,534    42,318    34,460    33,510
                          --------  --------  --------  --------  --------

Product Revenue
 Components %
  Growth                      49.9%     52.8%     48.3%     41.2%     45.4%
  Traditional                 50.1%     47.2%     51.7%     58.8%     54.6%

Geographic Revenues
 (Origination)
  North America             35,918    35,244    32,374    26,715    26,076
  Europe                    15,688    13,290     9,944     7,745     7,434
                          --------  --------  --------  --------  --------
  Consolidated              51,606    48,534    42,318    34,460    33,510
                          ========  ========  ========  ========  ========

Gross Margin
  Presstek
    Equipment                 10.1%     15.1%     11.7%      5.9%      0.9%
    Consumables               49.1%     49.5%     51.2%     46.7%     43.5%
    Service                   23.3%     26.1%     29.7%     20.8%     25.3%
                          --------  --------  --------  --------  --------
  Consolidated                33.8%     34.7%     37.9%     35.1%     32.9%
                          ========  ========  ========  ========  ========

Operating Expense
 (Excluding Special
 Charges) (A)             $ 14,868  $ 14,337  $ 16,409  $ 13,851  $ 14,602

Profitability
  Net income (loss)       $    567  $    195  $   (456) $ (1,191) $(41,449)
    Add back: Loss
     from discontinued
     operations                436       431     1,070        85     1,580
                          --------  --------  --------  --------  --------
  Net income (loss) from
   continuing operations     1,003       626       614    (1,106)  (39,869)
    Add back:
      Interest                 195       147       121        56       110
      Other (income)
       expense                (380)      212    (1,705)     (516)      136
      Tax charge
       (benefit)             1,219     1,153        49      (275)   16,905
      Impairment                 -         -         -         -    19,114
      Other charges
       (credits)               560       374       539        84        38
                          --------  --------  --------  --------  --------
  Operating income (loss)
   from continuing
   operations                2,597     2,512      (382)   (1,757)   (3,566)
    Add back:
      Depreciation and
       amortization          1,440     1,379     1,172     1,191     1,150
    Other income
     (expense)                 380      (212)    1,705       516      (136)
                          --------  --------  --------  --------  --------
  EBITDA From Continuing
   Operations (A)         $  4,417  $  3,679  $  2,495  $    (50) $ (2,552)
                          ========  ========  ========  ========  ========

Cash Earnings From
 Continuing Operations
  Income (loss) from
   continuing operations     1,003       626       614    (1,106)  (39,869)
    Add back:
      Other charges
       (credits)               560       374       539        84        38
      Impairment                 -         -         -         -    19,114
      Depreciation and
       amortization          1,440     1,379     1,172     1,191     1,150
      Non cash portion
       of equity
       compensation
       (2006 forward
       123R related)           381       498       482       457       505
      Non cash portion
       of taxes                371       749        36      (454)   17,071
                          --------  --------  --------  --------  --------
      Cash Earnings
       From Continuing
       Operations (A)        3,755     3,626     2,843       172    (1,991)
                          ========  ========  ========  ========  ========

Working Capital
  Current assets
   (excluding net assets
   of discontinued
   operations)            $103,619  $ 93,152  $ 84,263  $ 83,850  $ 73,994
                          --------  --------  --------  --------  --------
  Current liabilities
    Short-term debt         25,356    15,130    16,489    14,941    17,592
    All other current
     liabilities            45,250    37,163    32,575    33,847    31,345
                          --------  --------  --------  --------  --------
      Current
       liabilities          70,606    52,293    49,064    48,788    48,937
                          --------  --------  --------  --------  --------
      Working capital       33,013    40,859    35,199    35,062    25,057
  Add back short-term
   debt                     25,356    15,130    16,489    14,941    17,592
                          --------  --------  --------  --------  --------
      Working capital,
       excluding
       short-term
       debt (A)           $ 58,369  $ 55,989  $ 51,688  $ 50,003  $ 42,649
                          ========  ========  ========  ========  ========

Debt net of cash (A)
  Calculation of total
   debt:
    Current portion of
     long-term debt       $ 10,356  $  3,240  $  4,074  $  2,454  $  1,644
    Line of credit          15,000    11,890    12,415    12,487    15,948
    Long-term debt,
     net of current
     portion                 1,644       834         -         -         -
                          --------  --------  --------  --------  --------
      Total debt            27,000    15,964    16,489    14,941    17,592
  Cash                       4,268     2,634     4,738     5,262     4,453
                          --------  --------  --------  --------  --------
      Debt net of cash    $ 22,732  $ 13,330  $ 11,751  $  9,679  $ 13,139
                          ========  ========  ========  ========  ========

Days Sales Outstanding          64        60        69        74        69

Days Inventory
 Outstanding                    86        87        87       100       105

Capital Expenditures      $    417  $    437  $    831  $    180  $    238

Employees                      628       622       608       612       608


  A. Operating expenses, excluding special charges and EBITDA from
     continuing operations [earnings before interest, taxes, depreciation,
     amortization and restructuring and merger-related charges (credits)];
     Working capital, excludingshort-term debt; Debt net of cash; and Cash
     earning from continuing operations 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 preparedand 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 Cash earnings from continuing operations
     provide meaningful supplemental information regarding Presstek's
     current financial performance and prospects for the future. 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's
     management believes that Debt net of cash provides meaningful
     information on Presstek's debt relative to its cash position. 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 in the tables
     above.

     ** Certain amounts may be subject to reclassification to conform to
        current presentation

 
Contacts:
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Investor Relations Consultant
(203) 275-6292
Email Contact
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(603) 594-8585, ext. 3441
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