Financial: Excel Reports Revenue and Earnings for the Second Quarter of 1998

Edge: Work-Group Computing Report, July 13, 1998

                        FINANCIAL SUMMARY

                     FOR THE QUARTER            FOR THE SIX MONTHS

                     ENDED JUNE 30              ENDED JUNE 30

                     1998         1997          1998           1997

NET SALES     $14,375,000  $16,847,000    $28,675,000   $33,175,000

PRE-TAX INCOME$ 2,578,000  $ 3,379,000    $ 5,078,000   $ 5,956,000

PROVISION FOR

INCOME TAXES  $   901,000  $ 1,186,000    $ 1,790,000   $ 2,140,000

NET INCOME    $ 1,677,000  $ 2,193,000    $ 3,288,000   $ 3,816,000

NET INCOME

PER COMMON SHARE

DILUTED             $0.15        $0.20          $0.29         $0.36

WEIGHTED AVERAGE COMMON

SHARES OUTSTANDING

DILUTED        11,437,000   11,066,000     11,528,570    10,731,000

Excel Technology, Inc. (NASDAQ:XLTC) Tuesday announced the results for the quarter ended June 30, 1998. Revenues for the period were $14.4 million, a decrease of 14.7% from the $16.8 million from the same period in 1997. After-tax profits were $1.7 million, a decline of 23.5%, from $2.2 million for the second quarter of last year. Net profits per share on a fully diluted basis for the quarter were $0.15 per share, down 25% from $0.20 for the same period in 1997 on a somewhat higher number of shares.

Donald Hill, Chairman and CEO commented, "Operating cash flow continues to be strongly positive; we repurchased another 225,000 shares in the second quarter and acquired a building for Photo Research which will sharply reduce their occupancy costs beginning August 1. Operating profit margins were satisfactory under the circumstances, but revenues were disappointing. Contributing factors include the difficult conditions in Asia, consolidating and restructuring trends in the global automotive industry, the reshaping of the dermatology laser device business (served by our galvos) and delays in the introductions of certain new products - some ours, some others. All these factors will resolve themselves sooner or later; those that we control will be sooner."

Hill added, "Quantronix' new facility is working out very well and their micromachining business is excellent. While delayed, Control Laser's Instamark Express "on the fly" beam steered laser marking for the beverage, pharmaceutical, cosmetics and packaged food industries may well be the first such system on the market (installations should begin this quarter). Cambridge, with their superior galvo technology, stands ready to serve all wishing to enter this potentially large emerging market." Hill concluded, "All our operating companies are very strong in their respective fields and have lost market share to no one. We continue to try to add other strong entities synergistic with those we have to enhance our overall performance. We expect a better second half of 1998 and remain very positive about 1999 and beyond.."

Excel and its wholly-owned subsidiaries develop, manufacture and market laser systems and electro-optical components for electronic, semiconductor, other industrial, scientific and medical applications.