XLTC Excel Tech (MM)

Excel Technology, Inc. (NASDAQ: XLTC) today announced the results for the quarter and year ended December 31, 2007. Sales: Excel reported sales of $41.1 million for the quarter ended December 31, 2007 compared to $38.3 million in sales for the quarter ended December 31, 2006, an increase of 7.2% or $2.8 million. Sales for the year increased 3.6% to $160.0 million for the year ended December 31, 2007 as compared to $154.5 million for the same period last year. Pretax Income increased 25.2% to $6.4 million for the fourth quarter of 2007 as compared to $5.1 million for the same period last year. Pretax income increased 20.6% for the year ended December 31, 2007 to $24.6 million as compared to $20.4 million for the same period last year. Non-GAAP Pretax Income increased 35.0% to $6.9 million for the quarter ended December 31, 2007 (excludes stock-based compensation expense of $525 thousand) from $5.1 million for the quarter ended December 31, 2006 (excludes stock-based compensation expense of $17 thousand). For the year, non-GAAP pretax income increased 33.6% to $27.5 million (excludes stock-based compensation expense of $2.8 million) as compared to $20.6 million for the same period last year (excludes stock-based compensation expense of $113 thousand). Net Income increased 26.6% to $4.7 million for the fourth quarter of this year as compared to $3.7 million in the same period last year. For the year ended December 31, 2007 net income increased 26.5% to $17.7 million as compared to $14.0 million for the same period last year. Non-GAAP Net Income increased 35.1% to $5.0 million for the fourth quarter of 2007 (excludes stock-based compensation expense, net of taxes, of $338 thousand) from $3.7 million for the same period last year (excludes stock-based compensation expense, net of taxes, of $17 thousand). Non-GAAP net income increased 38.4% to $19.6 million for the year ended December 31, 2007 (excludes stock-based compensation expense, net of taxes of $1.8 million) from $14.1 million for the same period last year (excludes stock-based compensation expense, net of taxes of $113 thousand). EPS: Net income per share on a diluted basis increased 34.0% recording $0.40 for the quarter ended December 31, 2007 compared to the $0.30 per share on a diluted basis reported for the quarter ended December 31, 2006. EPS for the year ended December 31, 2007 increased 30.2% to $1.46 per diluted share from $1.12 for the same period last year. Non-GAAP EPS: Net income per share on a diluted basis increased 43.0% recording $0.42 for the quarter ended December 31, 2007 (excludes stock-based compensation expense, net of taxes, of $0.02) compared to $0.30 per share on a diluted basis for the quarter ended December 31, 2006 (excludes stock-based compensation expense of less than $0.01). For the year ended December 31, 2007, non-GAAP diluted EPS increased 42.2% to $1.61 (excluding stock-based compensation, net of taxes of $0.15) compared to $1.13 (excluding stock-based compensation of $0.01) for the same period last year. Antoine Dominic, Chief Executive Officer, stated, "Excel attained new highs in sales, net income, EPS and bookings for the fourth quarter and the year ended 2007. Last year, we focused our efforts on re-launching our strategies and rebuilding the organization due to the disruptions created by the failed merger with Coherent. Considering this, I think Excel executed plans well for which I am quite pleased. During the year we expanded our product portfolio and our global presence, which enabled us to penetrate and enter new markets and applications. During the year we have repurchased over 10% of our outstanding shares and still maintained a healthy cash and investments balance of $58 million with no debt. We have a healthy backlog going into 2008 and plan to build on 2007 achievements.� Alice Hughes Varisano, Chief Financial Officer, concluded, "The Company achieved record sales for the fourth quarter and for the year ended December 31, 2007. Sales increased 7.2% from $38.3 million to $41.1 million for the quarter and 3.6% from $154.5 million to $160.0 million for the year ended December 31, 2007. The Company also achieved record net income both on a GAAP and Non-GAAP basis for the quarter and the year. Net income for the quarter on a GAAP and Non-GAAP basis of $4.7 million and $5.0 million was an increase of 26.6% and 35.1%, respectively, as compared to the quarter ended December 31, 2006. The Company�s cash and investments balance at the end of the year is $58 million after utilizing $25.4 million of cash during the year to repurchase 969 thousand shares of its stock. The stock buy back program was authorized in November 2006 to repurchase 2 million shares. The Company had purchased 1.1 million of its shares through December 31, 2007 and as of this press release an additional 200 thousand shares, in the first quarter of 2008, which to date is greater than 10% of its outstanding shares. Bookings for the fourth quarter were $45 million with a backlog at the end of the fourth quarter of $35 million.� 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 DECEMBER 31 � FOR THE YEAR ENDED DECEMBER 31 2007 � 2006 2007 � � 2006 Net Sales and Services $ 41,103 $ 38,343 $ 160,023 $ 154,496 Cost of Sales and Services $ 23,417 $ 22,713 $ 90,271 $ 85,602 Gross Profit $ 17,686 $ 15,630 $ 69,752 $ 68,894 Operating Expenses: Selling & Marketing $ 4,618 $ 4,393 $ 17,671 $ 18,745 General & Administrative $ 3,879 $ 3,362 $ 15,930 $ 13,051 Research and Development $ 3,563 $ 3,716 $ 14,834 $ 14,523 Merger and Merger Related and Deferred Compensation Expenses $ - $ - $ - $ 5,069 Operating Income $ 5,626 $ 4,159 $ 21,317 $ 17,506 Interest Income $ 715 $ 774 $ 3,041 $ 2,545 Other Income, net $ 39 $ 162 $ 287 $ 391 Pretax Income $ 6,380 $ 5,095 $ 24,645 $ 20,442 Provision for Income Taxes $ 1,730 $ 1,421 $ 6,913 $ 6,423 Net Income $ 4,650 $ 3,674 $ 17,732 $ 14,019 Net Income Per Common Share - Diluted $ 0.40 $ 0.30 $ 1.46 $ 1.12 Weighted Average Common Shares Outstanding - Diluted 11,750 12,437 12,131 12,488 � � FOR THE QUARTER ENDED DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 2007 2006 2007 � 2006 Reconciliation of GAAP pretax income to Non-GAAP pretax income � � � � Pretax Income $ 6,380 $ 5,095 $ 24,645 $ 20,442 Stock-based compensation $ 525 $ 17 $ 2,817 $ 113 Non-GAAP pretax income $ 6,905 $ 5,112 $ 27,462 $ 20,555 Reconciliation of GAAP net income to Non-GAAP net income � � � � Net Income $ 4,650 $ 3,674 $ 17,732 $ 14,019 Stock-based compensation, net of taxes $ 338 $ 17 $ 1,823 $ 113 Non-GAAP net income $ 4,988 $ 3,691 $ 19,555 $ 14,132 Reconciliation of GAAP income per common share to Non-GAAP income per common share � � � � GAAP income per common share: � Basic $ 0.40 $ 0.30 $ 1.49 $ 1.16 Diluted $ 0.40 $ 0.30 $ 1.46 $ 1.12 Stock-based compensation Basic $ 0.03 $ -- $ 0.15 $ 0.01 Diluted $ 0.02 $ -- $ 0.15 $ . 0.01 Non-GAAP income per common share: � Basic $ 0.43 $ 0.31 $ 1.64 $ 1.17 Diluted $ 0.42 $ 0.30 $ 1.61 $ 1.13 BALANCE SHEET & SELECTED FINANCIAL DATA (unaudited and in thousands ) � DECEMBER 31, 2007 � DECEMBER 31, 2006 Cash $ 9,981 $ 9,903 Investments $ 47,550 $ 53,220 Accounts Receivable, net $ 24,008 $ 22,716 Inventory $ 33,792 $ 34,906 Other Current Assets $ 6,217 $ 3,445 Total Current Assets $ 121,548 $ 124,190 Property, Plant & Equipment, net $ 24,679 $ 25,503 Other Non-Current Assets & Goodwill $ 34,305 $ 32,286 Total Assets $ 180,532 $ 181,979 Accounts Payable $ 5,090 $ 6,386 Accrued Expenses and Other Current Liabilities $ 8,649 $ 7,256 Total Current Liabilities $ 13,749 $ 13,642 Other Non-Current Liabilities $ 5,068 $ 4,546 Minority Interest in Subsidiary $ 128 $ 66 Stockholders' Equity $ 161,587 $ 163,725 Total Liabilities & Stockholders' Equity $ 180,532 $ 181,979 Working Capital $ 107,799 $ 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.