Presstek (PRST) Reports Financial Results for the Second Quarter

GREENWICH, CT — (Marketwire) — 08/08/12 — Presstek, Inc. (NASDAQ: PRST)

• Positive adjusted EBITDA of $0.8 Million
• Quarterly operating expenses down 21% from prior year quarter
• Two 75DI units installed in Q2
• Debt net of cash at its lowest level since December, 2010

Presstek, Inc. (NASDAQ: PRST), a leading supplier of digital offset printing solutions to the printing and communications industries, today reported financial and operating results for the second quarter ended June 30, 2012. The Company reported total revenue of $29.7 million compared to $31.4 million in the second quarter of 2011.

The Company generated positive adjusted EBITDA of $0.8 million for the quarter, an increase of $0.4 million from the prior year. The Company had an operating loss of $0.3 million in the second quarter of 2012 versus an operating loss of $1.2 million in the 2011 second quarter, an improvement of $0.9 million. Cost reduction actions undertaken in the latter half of 2011 contributed significantly to this improvement. During the second quarter of 2012, the Company incurred a net loss of $0.8 million, or $0.02 per share, compared to a net loss of $1.7 million, or $0.05 per share, in the second quarter of 2011. (See “Information Regarding Non-GAAP Measures”)

“While we continue to experience the effects of the difficult economic climate, especially in Europe, our quarterly results reflect continued improvement in EBITDA and a narrowing of our quarterly operating loss. While these results are in large part due to our cost management efforts, we believe that we are positioned for improving results once the overall economic environment improves,” said Stanley Freimuth, Presstek’s Chairman, President and CEO.

Second Quarter 2012 Financial Results
Total revenue in the second quarter was $29.7 million, a decrease of $1.7 million from the second quarter of 2011.

• Equipment revenue increased $0.2 million, to $6.4 million, compared with the same prior year period due primarily to an increase in the number of DI units sold, including the sale of two 75DI units.
• Consumables revenue totaled $17.6 million compared with $19.3 million for the same prior year period resulting primarily from unfavorable economic conditions in Europe as well as the continued gradual erosion of some of our legacy plate product lines.
• Service revenue decreased $0.2 million, to $5.7 million, compared to the prior year quarter due to lower contract revenues resulting from a decrease in active legacy equipment accounts.

Gross margin percent for the second quarter of 2012 was 28.7% compared to 31.7% in the second quarter of 2011. Lower margins were primarily the result of unfavorable consumables product mix and an increase in our per unit plate costs resulting from lower overall factory volume production.

Second quarter operating expenses, including the costs of the drupa trade show, declined $2.3 million, or 21%, to $8.8 million compared with the prior year period due primarily to lower expenses resulting from the cost reduction actions taken in the second half of 2011.

“The cost reduction actions that we undertook during the second half of 2011 have resulted in three consecutive quarters of improving operating results and adjusted EBITDA, and we continue to forecast positive adjusted EBITDA for the full year,” said Arnon Dror, Presstek’s Vice President, Chief Financial Officer and Treasurer. “In addition, debt net of cash, which improved from $8.8 million to $7.9 million on a sequential quarter basis, closed at its lowest level since the fourth quarter of 2010 resulting from a continued emphasis on managing working capital.” (See “Information Regarding Non-GAAP Measures”)

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 operating expenses excluding special charges; adjusted EBITDA; 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 supplemental financial information provided with this press release.

Conference Call and Webcast Information
Management will discuss Presstek’s first quarter 2012 results in a conference call on Wednesday, August 8, 2012 at 10:30 a.m. Eastern Time. Conference call information is below:

CONFERENCE CALL ACCESS
Domestic Dial In: (866) 788-0544
International Dial In: (857) 350-1682
Passcode: 16904958

Investors can access the call in a “listen only” mode via the Internet at http://www.presstek.com

In addition, for those unable to participate at the time of the call, a rebroadcast will be available following the call from 12:30 PM Eastern Time on Wednesday, August 8, 2012 until 11:59 PM Eastern Time on Wednesday, August 15, 2012.

REBROADCAST ACCESS
Domestic Dial In: (888) 286-8010
International Dial In: (617) 801-6888
Passcode: 41211988

An archived webcast of this conference call also will be available on the “Investor Events Calendar” page of the company’s web site.

About Presstek:
Presstek, Inc. is a leading supplier of digital offset printing solutions to the printing and communications industries. Presstek’s DI® digital offset solutions bridge the gap between toner and conventional offset printing, enabling printers to cost effectively meet increasing customer demand for high quality, short run color printing with a fast turnaround time while providing improved profit margins. The Company’s CTP portfolio ranges from two-page to eight-page systems, many of which are fully automated. These systems support Presstek’s line of chemistry-free plates as well as Aeon, a no preheat thermal plate which offers run lengths up to one million impressions and PhD 830, a high resolution preheat, thermal CTP plate that offers run lengths of one million and more impressions. Presstek also offers a range of workflow solutions, pressroom supplies, and reliable service. Presstek is well positioned to support print environments of any size on a worldwide basis. Visit www.presstek.com or call +1.603.595.7000 for more information.

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 2012, the prospects for the success of the Company’s recently introduced 75DI® press and the Company’s marketing plans for the press, the ability of the Company to achieve positive adjusted EBITDA and enhanced profitability in the future, and the intention of the Company to file for a transfer of its stock listing to the NASDAQ Capital Market. 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, market acceptance of and demand for the Company’s products, revenue and adjusted EBITDA levels resulting from the Company’s sales activities, the ability of the Company to achieve sales and performance levels sufficient to achieve positive adjusted EBITDA, the Company’s dependence on its partners (both manufacturing and distribution), the Company’s ability to successfully transfer the listing of its Common Stock to the NASDAQ Capital Market, and other risks and uncertainties detailed in the Company’s 2011 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,” expressions of optimism concerning future events or results, 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.

                      PRESSTEK, INC. AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF OPERATIONS
                               (in thousands)
                                (Unaudited)

                                  Three months ended     Six months ended
                                 --------------------  --------------------
                                  June 30,   July 2,    June 30,   July 2,
                                    2012       2011       2012       2011
                                 ---------  ---------  ---------  ---------

Revenue
  Equipment                      $   6,386  $   6,230  $   9,886  $  11,348
  Consumables                       17,557     19,252     35,120     39,986
  Service and parts                  5,718      5,913     11,681     11,941
                                 ---------  ---------  ---------  ---------
    Total revenue                   29,661     31,395     56,687     63,275
                                 ---------  ---------  ---------  ---------

Cost of revenue
  Equipment                          6,081      6,269     10,294     11,833
  Consumables                       10,678     10,386     21,632     21,615
  Service and parts                  4,380      4,783      8,940      9,925
                                 ---------  ---------  ---------  ---------
    Total cost of revenue           21,139     21,438     40,866     43,373
                                 ---------  ---------  ---------  ---------

Gross profit                         8,522      9,957     15,821     19,902
                                 ---------  ---------  ---------  ---------

Operating expenses
  Research and development             770      1,110      1,744      2,185
  Sales, marketing and customer
   support                           4,343      5,609      8,285     10,873
  General and administrative         3,380      4,135      6,207      8,452
  Amortization of intangible
   assets                              289        210        535        411
  Restructuring and other
   charges                               -         48          -        363
                                 ---------  ---------  ---------  ---------
    Total operating expenses         8,782     11,112     16,771     22,284
                                 ---------  ---------  ---------  ---------

Operating loss                        (260)    (1,155)      (950)    (2,382)
Interest and other income
 (expense), net                       (487)      (360)      (984)      (675)
                                 ---------  ---------  ---------  ---------

Loss from continuing operations
 before income taxes                  (747)    (1,515)    (1,934)    (3,057)
Provision (benefit) for income
 taxes                                   8        183         45        181
                                 ---------  ---------  ---------  ---------

Net loss                         $    (755) $  (1,698) $  (1,979) $  (3,238)
                                 =========  =========  =========  =========

Loss per share (basic and
 diluted)                        $   (0.02) $   (0.05) $   (0.05) $   (0.09)
                                 =========  =========  =========  =========

                      PRESSTEK, INC. AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEETS
                     (in thousands, except share data)
                                (Unaudited)
                                                    June 30,   December 31,
                                                      2012         2011
                                                  -----------  ------------

ASSETS
  Current assets
    Cash and cash equivalents                     $     2,901  $      2,539
    Cash - restricted                                     516           512
    Accounts receivable, net                           14,987        15,904
    Inventories                                        21,178        25,038
    Other current assets                                1,580         1,345
                                                  -----------  ------------
      Total current assets                             41,162        45,338

  Property, plant and equipment, net                   17,363        18,543
  Intangible assets, net                                4,496         5,001
  Other noncurrent assets                                 769           931
                                                  -----------  ------------

      Total assets                                $    63,790  $     69,813
                                                  ===========  ============

LIABILITIES AND STOCKHOLDERS' EQUITY
  Current liabilities
    Line of credit                                $    10,813  $     13,757
    Accounts payable                                    7,260         6,864
    Accrued expenses                                    4,210         5,472
    Deferred revenue                                    3,752         4,473
                                                  -----------  ------------
      Total current liabilities                        26,035        30,566

  Other long-term liabilities                               -            31
                                                  -----------  ------------

      Total liabilities                                26,035        30,597
                                                  -----------  ------------

  Stockholders' equity
    Preferred stock, $0.01 par value, 1,000,000
     shares authorized, no shares issued                    -             -
    Common stock, $0.01 par value, 75,000,000
     shares authorized, 37,395,228 outstanding at
     June 30, 2012 and December 31, 2011,
     respectively                                         374           374
    Additional paid-in capital                        125,400       124,992
    Accumulated other comprehensive loss               (3,275)       (3,384)
    Accumulated deficit                               (84,744)      (82,766)
                                                  -----------  ------------
      Total stockholders' equity                       37,755        39,216
                                                  -----------  ------------

      Total liabilities and stockholders' equity  $    63,790  $     69,813
                                                  ===========  ============

                               PRESSTEK, INC.
                     SUPPLEMENTAL FINANCIAL INFORMATION
                                $ thousands
                                (Unaudited)

                                                          Incr/(Decr) from
                             Q2 2011  Q1 2012  Q2 2012  Q2 2011    Q1 2012
                             -------  -------  -------  -------  ----------
Operating Expenses excluding
 Special Charges
    Total Operating Expenses  11,112    7,990    8,782   (2,330)        792
    less: Restructuring and
     Other Charges                48        0        0      (48)          0
                             -------  -------  -------  -------  ----------
Operating Expenses excluding
 Special Charges (a)          11,064    7,990    8,782   (2,282)        792
                             -------  -------  -------  -------  ----------

Adjusted EBITDA
  Net income/(Loss)           (1,698)  (1,224)    (755)     943         469
    Add back:
      Interest                   281      363      296       15         (67)
      Tax charge (benefit)       183       37        8     (175)        (29)
      Amortization               210      246      289       79          43
      Depreciation             1,005      855      825     (180)        (30)
      Non cash portion of
       equity comp               373      245      164     (209)        (81)
      Restructuring and
       other charges              48        0        0      (48)          0
                             -------  -------  -------  -------  ----------
Adjusted EBITDA (a)              402      522      827      424         305
                             -------  -------  -------  -------  ----------

Debt net of cash
  Line of credit              12,897   11,283   10,813   (2,084)       (470)
  Cash (excludes restricted
   cash)                       3,720    2,512    2,901     (819)        389
                             -------  -------  -------  -------  ----------
Debt net of cash (a)           9,177    8,771    7,912   (1,265)       (859)
                             -------  -------  -------  -------  ----------

a. Operating expenses excluding special charges, Adjusted EBITDA [earnings before interest, taxes, depreciation, amortization and restructuring and other non-recurring charges (credits)], and Debt net of cash 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 Adjusted EBITDA and Operating expenses excluding special charges provide 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.

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.