XLTC Excel Tech (MM)

Excel Technology, Inc. (NASDAQ: XLTC) today announced record results for the quarter ended March 30, 2007. Sales: Excel reported record revenues of $40.9 million for the quarter ended March 30, 2007 compared to $36.3 million in sales for the quarter ended March 31, 2006, an increase of 12.7% or $4.6 million. Pretax Income increased 12.4% to $6.4 million for the first quarter of 2007 as compared to $5.7 million for the same period last year. Non-GAAP Pretax Income increased 26.3% to $7.2 million for the quarter ended March 30, 2007 (excludes stock-based compensation expense of $791 thousand) from $5.7 million for the quarter ended March 31, 2006 (excludes stock-based compensation expense of $50 thousand). Net Income increased 20.4% to $4.7 million for the first quarter of this year as compared to $3.9 million in the same period last year. Non-GAAP Net Income increased 33.7% to $5.2 million for the first quarter of 2007 (excludes stock-based compensation expense, net of taxes, of $580 thousand) from $3.9 million for the same period last year (excludes stock-based compensation expense, net of taxes, of $50 thousand). EPS: Net income per share on a diluted basis increased 22.6% recording a record $0.38 for the quarter ended March 30, 2007 compared to the $0.31 per share on a diluted basis reported for the quarter ended March 31, 2006. Non-GAAP EPS: Net income per share on a diluted basis increased 35.9% recording a record $0.42 for the quarter ended March 30, 2007 (excludes stock-based compensation expense, net of taxes, of $0.04) compared to $0.31 per share on a diluted basis for the quarter ended March 31, 2006 (excludes stock- based compensation expense of less than $0.01). Antoine Dominic, Chief Executive Officer, stated, "Our focus on re-executing our growth strategy over the past six months continues to yield positive results as evidenced by our first quarter revenue and profit achievements. Excel�s objectives of broadening its global presence, expanding its product portfolio and penetrating new application opportunities are all contributing positively towards our growth. The Company continues to emphasize innovation, as the key ingredient to achieve its organic growth strategies. Our commitment to research and development of nearly 10% of sales has resulted in an increased flow of new product offerings which has been well received in the market. Operational profit margins continue to rise as we capitalize on increased operational efficiencies as sales levels grow. Bookings and backlog are good and we maintained a very healthy balance sheet with over $65 million in cash. We are actively looking for strategic acquisitions to further complement and accelerate our organic growth. We have started the year well and plan to build on this success.� Alice Hughes Varisano, Chief Financial Officer, concluded, "The Company increased its sales by 12.7% to report record revenues of $41 million for the quarter ended March 30, 2007. Pretax profits increased 12.4% to $6.4 million compared to the same period last year and 25.5% compared to the prior quarter. Net income after tax increased 20.4% to $4.7 million (33.7% to $5.2 million on a non-GAAP basis) compared to $3.9 million (both GAAP and non-GAAP) in the same period last year. Net income after tax includes $580 thousand non-cash stock-based compensation expense which had an over $.04 per share effect on diluted earnings per share. The Company�s cash and investment balance is $65.2 million as of March 30, 2007, with no debt. The backlog at the end of the first quarter of 2007 was $36 million equal to the backlog as of the end of the fourth quarter of 2006.� This news release contains forward-looking statements, which are based on current expectations. Actual results could differ materially from those discussed or implied in the forward-looking statements as a result of various factors including future economic, competitive, regulatory, and market conditions, future business decisions, market acceptance of the Company�s products, and those factors discussed in the Company�s Form 10-K for the year ended December 31, 2006. In light of the significant uncertainties inherent in such forward-looking statements, they should not be regarded as a representation that the Company�s objectives and plans will be achieved, and they should not be relied upon by investors when making an investment decision. Words such as "believes," "anticipates," "expects," "intends," "may," and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. Excel and its wholly owned subsidiaries manufacture and market photonics-based solutions, consisting of laser systems and electro-optical components, primarily for industrial and scientific applications. FINANCIAL SUMMARY (unaudited and in thousands, except per share data) � FOR THE QUARTER ENDED MARCH 30 MARCH 31 2007� 2006� � Net Sales & Services $ 40,941� $ 36,325� Cost of Sales and Services $ 23,100� $ 19,056� Gross Profit $ 17,841� $ 17,269� Operating Expenses: Selling & Marketing $ 4,327� $ 4,776� General & Administrative $ 4,174� $ 2,895� Research and Development $ 3,826� $ 3,625� Operating Income $ 5,514� $ 5,973� Interest Income $ 781� $ 435� Other Income (Expense) $ 98� $ (721) Pre-Tax Income $ 6,393� $ 5,687� Provision for Income Taxes $ 1,738� $ 1,820� Net Income $ 4,655� $ 3,867� Net Income Per Common Share - Diluted $ 0.38� $ 0.31� Weighted Average Common Shares Outstanding - Diluted 12,409� 12,614� FOR THE QUARTER ENDED MARCH 30 MARCH 31 2007� 2006� Reconciliation of GAAP net income to Non-GAAP net income � Net Income $ 4,655� 3,867� Stock-based compensation, net of taxes $ 580� 50� Non-GAAP net income $ 5,235� 3,917� � Reconciliation of GAAP income per common share to Non-GAAP income per common share � GAAP income per common share: Basic $ 0.38� 0.32� Diluted $ 0.38� 0.31� Stock-based compensation Basic $ 0.05� --� Diluted $ 0.04� --� Non-GAAP income per common share: Basic $ 0.43� 0.32� Diluted $ 0.42� 0.31� BALANCE SHEET & SELECTED FINANCIAL DATA � MARCH 30, 2007 DECEMBER 31, 2006 (UNAUDITED) (AUDITED) Cash $ 8,731� $ 9,903� Investments $ 56,450� $ 53,220� Accounts Receivable, net $ 27,397� $ 22,716� Inventory $ 34,756� $ 34,906� Other Current Assets $ 3,669� $ 3,445� Total Current Assets $ 131,003� $ 124,190� Property, Plant & Equipment, net $ 25,437� $ 25,503� Other Non-Current Assets & Goodwill $ 33,697� $ 32,286� Total Assets $ 190,137� $ 181,979� Accounts Payable $ 6,959� $ 6,386� Accrued Expenses and Other Current Liabilities $ 7,976� $ 7,256� Total Current Liabilities $ 14,935� $ 13,642� Other Non-Current Liabilities $ 4,547� $ 4,546� Minority Interest of Subsidiary $ 65� $ 66� Stockholders' Equity $ 170,590� $ 163,725� Total Liabilities & Stockholders' Equity $ 190,137� $ 181,979� Working Capital $ 116,068� $ 110,548� The non-GAAP financial measures used in this press release are not prepared in accordance with generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. The Company's management refers to these non-GAAP financial measures in making operating decisions because they provide meaningful supplemental information regarding the Company's operating comparisons to the Company's historical operating results. We include these non-GAAP financial measures (which should be viewed as a supplement to, and not a substitute for, their comparable GAAP measures) in this press release because we believe they are useful to investors in allowing for greater transparency to supplemental information used by management in its financial and operational decision-making. For a reconciliation of our GAAP and non-GAAP financial results, please refer to our Reconciliation of Reported GAAP Results to Non-GAAP Measures, presented in this release.