Presstek Reports Improved 2010 Second Quarter Operating Profits

August 9, 2010

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Second Quarter 2010 Financial Results

Total revenue in the second quarter of 2010 was $31.6 million, a decrease of $1.9 million from the second quarter of 2009.

• Equipment revenue decreased $0.5 million to $4.7 million in the second quarter of 2010, compared with $5.2 million for the same period last year. The decrease versus the prior year's quarter is due primarily to a reduction in DI press revenue of $1.0 million and a decline of CTP platesetter revenue of $0.5 million; offset by an increase in traditional equipment during the quarter.

• Consumables revenue totaled $20.7 million in the second quarter of 2010, compared with $21.1 million for the same period last year. Increases in the "growth" thermal CTP plates and DI plates of 8 percent and 4 percent, respectively, were more than offset by reductions in the Company's "traditional" product categories.

• Service revenue declined approximately 15 percent to $6.1 million in the second quarter of 2010 compared to the year ago quarter primarily due to the impact of the overall decrease in equipment placements and a general trend by customers to delay service calls and maintenance to save money in a difficult economy.

Gross margin percent for the second quarter of 2010 was 32.6% compared to 32.9% in the second quarter of 2009. The reduction versus the second quarter of 2009 was due primarily to the negative impact of reduced equipment manufacturing productivity and lower service margins caused by reduced equipment placements and service calls; partially offset by improved consumable margins, which increased to 46.4% in the quarter.

Second quarter 2010 operating expenses of $12.0 million represented a reduction of $21.7 million from the second quarter of 2009. Excluding the impact of the one-time write-off of goodwill in the second quarter of 2009, operating expenses declined by $2.6 million, or 18%. The decline in operating expenses was primarily related to reduced payroll costs, professional service fees and travel expenses; offset partially by increased non-cash stock compensation expenses and the cost of the IPEX tradeshow, which caused an increase in operating expenses of $0.4 million in the 2010 second quarter.

Debt net of cash totaled $8.8 million at the end of the second quarter, a reduction of $4.3 million versus the second quarter of 2009. The primary cause of the decrease from the prior year level was the proceeds received from the sale of our Lasertel subsidiary in the first quarter of 2010; partially offset in the 2010 second quarter by increases in working capital, primarily related to increased inventory levels to meet the anticipated demand for the Company's "growth" products and the timing of European equipment installations.

"We continue to be committed to maintaining a proper balance of maximizing cash generation from operations while investing strategically in our long-term growth initiatives," said Presstek Executive Vice President and Chief Financial Officer, Jeff Cook. "While our debt net of cash did increase sequentially, it increased within the range of our expectations and we continue to be vigilant in our efforts to drive the future growth of our business in a managed and controlled way. Even with the decline in revenue in the quarter we were able to remain EBITDA positive due to our strong cost containment discipline."

"While we are disappointed that the global economic recovery is taking longer than expected, we are pleased with the 'growth' consumables ramp up, our operating expense discipline and our year-on-year adjusted EBITDA improvement," commented Jacobson. "We are confident in our growth strategy. We have expanded our product portfolio with thirteen new and innovative products that allow us to move up-market, expanded our geographic reach beyond our US and UK strongholds and optimized our cost structure. We have the products and resources in place to drive our strategy and we continue to be confident that following this downturn we will emerge as a leader in the graphics industry. As we've said many times before, future top-line growth, particularly in consumables, will provide strong bottom line results as we leverage our optimized cost structure."

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; operating loss excluding special charges; adjusted EBITDA; adjusted EBITDA excluding the IPEX tradeshow cost; net loss from continuing operations excluding special charges; working capital excluding short-term debt; 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 financial tables below. Supplemental financial information has been provided with this release to provide additional details on the Company's performance.

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. 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.