XLTC Excel Tech (MM)

Excel Technology, Inc. (NASDAQ: XLTC) today announced second quarter results for the quarter ended June 29, 2007. Sales: Excel reported revenues of $40.5 million for the quarter ended June 29, 2007 compared to $39.5 million in sales for the quarter ended June 30, 2006, an increase of 2.5% or $1.0 million. Sales for the six months increased 7.4% to $81.5 million for the six months ended June 29, 2007 as compared to $75.9 million for the same period last year. Pretax Income increased 10.0% to $6.5 million for the second quarter of 2007 as compared to $5.9 million for the same period last year. Pretax income increased 11.2% for the six months ended June 29, 2007 to $12.9 million as compared to $11.6 million for the same period last year. Non-GAAP Pretax Income increased 23.7% to $7.4 million for the quarter ended June 29, 2007 (excludes stock-based compensation expense of $851 thousand) from $6.0 million for the quarter ended June 30, 2006 (excludes stock-based compensation expense of $27 thousand). For the six-month period, non-GAAP pretax income increased 24.5% to $14.6 million (excludes stock based compensation expense of $1.6 million) as compared to $11.7 million for the same period last year (excludes stock-based compensation expense, of $77 thousand). Net Income increased 13.1% to $4.5 million for the second quarter of this year as compared to $4.0 million in the same period last year. For the six months ending June 29, 2007 net income increased 16.7% to $9.2 million as compared to $7.9 million for the same period last year. Non-GAAP Net Income increased 27.1% to $5.1 million for the second quarter of 2007 (excludes stock-based compensation expense, net of taxes, of $593 thousand) from $4.0 million for the same period last year (excludes stock-based compensation expense, net of taxes, of $27 thousand). Non-GAAP net income increased 30.3% to $10.3 million for the six months ending June 29, 2007 (excludes stock-based compensation expense, net of taxes, of $1.2 million) from $7.9 million for the same period last year (excludes stock-based compensation expense, of $77 thousand). EPS: Net income per share on a diluted basis increased 14.8% recording $0.37 for the quarter ended June 29, 2007 compared to the $0.32 per share on a diluted basis reported for the quarter ended June 30, 2006. EPS for the six months ending June 29, 2007 increased 17.8% to $0.74 per diluted share from $0.63 for the same period last year. Non-GAAP EPS: Net income per share on a diluted basis increased 28.9% recording $0.41 for the quarter ended June 29, 2007 (excludes stock-based compensation expense, net of taxes, of $0.05) compared to $0.32 per share on a diluted basis for the quarter ended June 30, 2006 (excludes stock-based compensation expense of less than $0.01). For the six months ending June 29, 2007, non-GAAP EPS increased 31.5% to $0.84 (excluding stock-based compensation, net of taxes, of $0.09) compared to $0.64 (excluding stock-based compensation of less than $0.01) for the same period last year. Antoine Dominic, Chief Executive Officer stated, �Excel has delivered solid results for the first half of 2007 as evidenced by our growth in earnings and revenues. During this time, we have broadened our product offerings and continue to expand our global market presence by focusing on increasing our geographic reach to further extend our sales growth. The combination of these efforts should enable the Company to sustain its organic growth as we enter into the second half of 2007.� Alice Hughes Varisano, Chief Financial Officer, concluded, "The Company�s pre-tax profit margins continued to improve as it achieved 18.2% on revenues for the quarter, which equates to a 21.3% increase (on a non-GAAP basis) compared to 15% (both GAAP and non-GAAP) in the same period last year. Net income after tax increased 13.1% to $4.5 million (27.1% to $5.1 million on a non-GAAP basis) compared to $4.0 million (both GAAP and non-GAAP) in the same period last year. Net income after tax includes $593 thousand of non-cash stock-based compensation expense which reduced the EPS by more than 4 cents per diluted share. During the first six months of 2007, the Company utilized $7.7 million of its cash to repurchase 292,590 shares of its common stock. Since the stock buyback plan was announced in October 2006, the Company has bought back a total of 372,090 shares. At the end of June 2007, the Company had a cash and investment balance of $61.7 million with no debt.� 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 FOR THE SIX MONTHS ENDED JUNE 29, 2007 JUNE 30, 2006 JUNE 29, 2007 JUNE 30, 2006 Net Sales & Services $ 40,532 $ 39,530 $ 81,473 $ 75,855 Cost of Sales and Services $ 22,470 $ 21,484 $ 45,570 $ 40,540 Gross Profit $ 18,062 $ 18,046 $ 35,903 $ 35,315 Operating Expenses: Selling & Marketing $ 4,619 $ 4,965 $ 8,946 $ 9,741 General & Administrative $ 3,093 $ 3,043 $ 6,476 $ 5,888 Stock-based compensation $ 851 $ 27 $ 1,642 $ 77 Research and Development $ 3,783 $ 3,655 $ 7,609 $ 7,280 Operating Income $ 5,716 $ 6,356 $ 11,230 $ 12,329 Merger Expenses $ -- $ 1,146 $ -- $ 1,984 Interest Income $ 843 $ 581 $ 1,624 $ 1,017 Other Income (Expense) $ (18) $ 155 $ 80 $ 271 Pre-Tax Income $ 6,541 $ 5,946 $ 12,934 $ 11,633 Provision for Income Taxes $ 2,028 $ 1,956 $ 3,766 $ 3,776 Net Income $ 4,513 $ 3,990 $ 9,168 $ 7,857 Net Income Per Common Share - Diluted $ 0.37 $ 0.32 $ 0.74 $ 0.63 Weighted Average Common Shares Outstanding - Diluted 12,352 12,531 12,380 12,496 FOR THE QUARTER ENDED FOR THE SIX MONTHS ENDED JUNE 29, 2007 JUNE 30, 2006 JUNE 29, 2007 JUNE 30, 2006 � Reconciliation of GAAP net income to Non-GAAP net income Net Income $ 4,513 $ 3,990 $ 9,168 $ 7,857 Stock-based compensation, net of taxes $ 593 $ 27 $ 1,174 $ 77 Non-GAAP net income $ 5,106 $ 4,017 $ 10,342 $ 7,934 � Reconciliation of GAAP income per common share to Non-GAAP income per common share GAAP income per common share: Basic $ 0.37 $ 0.33 $ 0.76 $ 0.65 Diluted $ 0.37 $ 0.32 $ 0.74 $ 0.63 Stock-based compensation Basic $ 0.05 $ 0.00 $ 0.10 $ 0.01 Diluted $ 0.05 $ 0.00 $ 0.09 $ 0.01 Non-GAAP income per common share: Basic $ 0.42 $ 0.33 $ 0.86 $ 0.66 Diluted $ 0.41 $ 0.32 $ 0.84 $ 0.64 CONDENSED BALANCE SHEET & SELECTED FINANCIAL DATA � JUNE 29, 2007 DECEMBER 31, 2006 (UNAUDITED) (AUDITED) � Cash $ 7,727 $ 9,903 Investments $ 53,950 $ 53,220 Accounts Receivable, net $ 26,398 $ 22,716 Inventory $ 35,190 $ 34,906 Other Current Assets $ 3,958 $ 3,445 Total Current Assets $ 127,223 $ 124,190 Property, Plant & Equipment, net $ 25,183 $ 25,503 Other Non-Current Assets & Goodwill $ 33,738 $ 32,286 Total Assets $ 186,144 $ 181,979 Accounts Payable $ 6,567 $ 6,386 Accrued Expenses and Other Current Liabilities $ 6,341 $ 7,256 Total Current Liabilities $ 12,908 $ 13,642 Other Non-Current Liabilities $ 4,572 $ 4,546 Minority Interest of Subsidiary $ 125 $ 66 Stockholders' Equity $ 168,539 $ 163,725 Total Liabilities & Stockholders' Equity $ 186,144 $ 181,979 Working Capital $ 114,315 $ 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 and comparisons to competitors' 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.