SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 29, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-17541
PRESSTEK, INC.
(Exact name of registrant as specified in its charter)
Delaware 02-0415170
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8 Commercial Street, Hudson, New Hampshire 03051-3907
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (603) 595-7000
---------------------------------------------------------
Former name, former address and former fiscal year,
if changed since last report.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
----- -----
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date: As of August 7, 1996 there
were 15,264,039 shares outstanding of the Registrant's common stock, $.01 par
value per share.
<PAGE>
PRESSTEK, INC.
INDEX
PAGE
PART I FINANCIAL INFORMATION
Item 1 Financial Statements
Balance Sheets as of June 29, 1996
(unaudited) and December 30, 1995 3
Statements of Operations for the three
and six month periods ended June 29, 1996
and July 1, 1995 (unaudited) 4
Statements of Cash Flows for the six month
periods ended June 29, 1996 and July 1, 1995
(unaudited) 5
Notes to Financial Statements (unaudited) 6
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations 11
PART II OTHER INFORMATION 16
Item 1 Legal Proceedings
Item 4 Submission of Matters to a Vote of Security-Holders
Item 6 Exhibits and Reports on Form 8-K
Signatures 21
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
PRESSTEK, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
June 29, December 30,
1996 1995
------------ ------------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ................. $ 9,658,295 $ 3,628,021
Marketable securities ..................... 9,111,208 3,050,825
Accounts receivable ....................... 10,756,908 7,888,559
Inventory ................................. 7,651,848 5,861,743
Costs and estimated earnings in excess
of billings on uncompleted contracts .... 1,955,937 --
Other current assets ...................... 396,712 350,031
------------ ------------
Total current assets .................. 39,530,908 20,779,179
------------ ------------
PROPERTY AND EQUIPMENT:
Land ..................................... 901,660 -
Machinery and equipment ................... 8,179,450 5,659,211
Furniture and fixtures .................... 542,309 372,889
Leasehold improvements .................... 1,758,960 1,247,803
Other ..................................... 178,522 34,498
------------ ------------
Total ................................. 11,560,901 7,314,401
Less accumulated depreciation
and amortization ........................ (3,501,186) (3,023,089)
------------ ------------
Property and equipment, net ........... 8,059,715 4,291,312
------------ ------------
OTHER ASSETS:
Goodwill, net ............................. 6,306,525 --
Patent application costs and
license rights, net ..................... 1,516,542 1,012,147
Software development costs, net ........... 702,077 585,980
Other ..................................... 175,000 --
------------ ------------
Total other assets ...................... 8,700,144 1,598,127
------------ ------------
TOTAL ................................. $ 56,290,767 $ 26,668,618
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable .......................... $ 4,035,054 $ 2,392,846
Accrued expenses .......................... 1,775,817 1,091,036
Accrued salaries and employee benefits .... 643,977 458,300
------------ ------------
Total current liabilities ............. 6,454,848 3,942,182
------------ ------------
COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST .............................. 235,336 --
------------ ------------
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value; authorized
1,000,000 shares; no shares issued or
outstanding ............................. -- --
Common stock, $.01 par value; authorized
75,000,000 shares; issued and outstanding
15,263,627 shares at June 29, 1996;
14,765,300 shares at December 30, 1995 .. 152,636 147,653
Additional paid-in capital ................ 45,567,715 21,559,856
Unrealized loss on investments
available for sale, net ................. (78,005) (3,176)
Retained earnings ......................... 3,958,237 1,022,103
------------ ------------
Stockholders' equity .................... 49,600,583 22,726,436
------------ ------------
TOTAL ................................. $ 56,290,767 $ 26,668,618
============ ============
</TABLE>
See notes to financial statements
3
<PAGE>
PRESSTEK, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 29, 1996 July 1, 1995 June 29, 1996 July 1, 1995
------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
REVENUES:
Product sales ..................... $ 7,927,685 $ 3,915,541 $ 15,452,642 $ 7,498,954
Royalties and fees from licensees . 3,951,983 1,587,906 7,431,780 3,088,744
------------ ------------ ------------ ------------
Total revenues ............... 11,879,668 5,503,447 22,884,422 10,587,698
------------ ------------ ------------ ------------
COSTS AND EXPENSES:
Cost of products sold ............. 4,825,227 2,901,095 10,225,950 5,549,585
Engineering and product development 1,799,598 1,211,534 4,033,156 2,627,746
Marketing ......................... 636,419 569,713 1,181,790 953,936
General and administrative ........ 1,808,739 752,666 2,770,532 1,276,038
------------ ------------ ------------ ------------
Total costs and expenses ..... 9,069,983 5,435,008 18,211,428 10,407,305
------------ ------------ ------------ ------------
OTHER INCOME (EXPENSE):
Dividend and interest ............. 261,134 95,275 473,389 172,043
Other, net ........................ (114,099) 24,947 (130,249) 8,226
------------ ------------ ------------ ------------
Total other income - net ..... 147,035 120,222 343,140 180,269
------------ ------------ ------------ ------------
INCOME BEFORE INCOME TAXES ............. 2,956,720 188,661 5,016,134 360,662
PROVISION FOR INCOME TAXES ............. 1,310,000 12,000 2,080,000 24,000
------------ ------------ ------------ ------------
NET INCOME ............................. $ 1,646,720 $ 176,661 $ 2,936,134 $ 336,662
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER
OF COMMON AND COMMON
EQUIVALENT SHARES ...................... 16,705,674 15,933,563 16,551,029 15,733,870
============ ============ ============ ============
NET INCOME PER COMMON AND
COMMON EQUIVALENT SHARE ................ $ .10 $ .01 $ .18 $ .02
============ ============ ============ ============
</TABLE>
See notes to financial statements
4
<PAGE>
PRESSTEK, INC
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
June 29, 1996 July 1, 1995
------------- ------------
<S> <C> <C>
CASH FLOWS - OPERATING ACTIVITIES:
Net income ..................................................... $ 2,936,134 $ 336,662
Adjustments to reconcile net income to net
cash provided by (used for) operating activities:
Tax benefit related to employee stock options .............. 1,980,000 --
Depreciation and amortization .............................. 880,793 406,044
Provision for warranty costs ............................... 316,000 177,500
Other, net ................................................. (41,010) (8,226)
(Increase) decrease in:
Accounts receivable ........................................ (2,722,001) (1,226,665)
Inventory .................................................. (1,833,205) (1,373,978)
Costs and estimated earnings in excess of
billings on uncompleted contracts ..................... (936,356) --
Other current assets ....................................... (16,628) 304,489
Increase (decrease) in:
Accounts payable and accrued expenses ...................... 1,647,434 500,816
Accrued salaries and employee benefits ..................... 126,875 80,944
Billings in excess of costs and estimated
earnings on uncompleted contracts ..................... (687,325) --
------------ ------------
Net cash provided by (used for) operating activities 1,650,711 (802,414)
------------ ------------
CASH FLOWS - INVESTING ACTIVITIES:
Investment in subsidiary, net of cash acquired ................. (7,456,020) --
Purchases of property and equipment ............................ (3,957,633) (861,863)
Increase in other assets ....................................... (330,509) (198,831)
Proceeds from sale of equipment ................................ 47,000 76,300
Sales and maturities of marketable securities .................. 1,000,000 1,167,413
Purchases of marketable securities ............................. (6,956,117) --
------------ ------------
Net cash provided by (used for)
investing activities ........................... (17,653,279) 183,019
------------ ------------
CASH FLOWS - FINANCING ACTIVITIES:
Net proceeds from sale of common stock
and warrants ............................................... 22,032,842 616,045
------------ ------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS .................... 6,030,274 (3,350)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD ..................... 3,628,021 1,532,636
------------ ------------
CASH AND CASH EQUIVALENTS - END OF PERIOD ........................... $ 9,658,295 $ 1,529,286
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION -
Income taxes paid .............................................. $ 45,000 $ 52,000
============ ============
</TABLE>
See notes to financial statements
5
<PAGE>
PRESSTEK, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
JUNE 29, 1996
1. BASIS OF PRESENTATION
The unaudited financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Rule 10 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. The financial
information included in the quarterly report should be read in conjunction with
the Company's audited financial statements and related notes thereto for the
year ended December 30, 1995. The December 30, 1995 information has been derived
directly from the annual financial statements. In the opinion of management, all
adjustments considered necessary for a fair presentation have been included and
all such adjustments were normal and recurring.
Presstek, Inc. (the "Company" or "Presstek") was organized as a Delaware
corporation on September 3, 1987 and was a development stage company through
1991. In September, 1991, Heidelberger Druckmaschinen A.G. ("Heidelberg") the
world's largest printing press manufacturer introduced the Company's initial
spark discharge based imaging technology, in a jointly developed product, the
Heidelberg GTO-DI. In 1993, after investing substantial effort and resources,
the Company completed the development of PEARL(R), a patented proprietary,
nonphotographic, toxic- free, digital imaging and printing plate technology for
the printing and graphic arts industries. PEARL's laser diode technology is
capable of imaging various types of Presstek printing plates either off-press or
on-press which may then be used to produce high quality, full color lithographic
printed materials. PEARL has completely replaced the Company's spark discharge
technology. The GTO-DI was re-introduced in September 1993, utilizing PEARL as
its direct imaging technology. The Company is now building an installed base of
customers which utilizes its proprietary consumable printing plates on PEARL
equipped Heidelberg presses. During the second quarter of 1995, the Company
commenced shipments of kits to be utilized on Heidelberg's Quickmaster DI 46-4.
Presstek is also engaged in the development of additional products and
applications that incorporate its proprietary PEARL technologies and
consumables, including both computer-to-plate and other direct-to-press
applications. At this time, the Company relies on Heidelberg to generate
substantially all of its revenues.
During February, 1996, the Company completed private placements of an
aggregate of 282,846 shares of its common stock for net proceeds of $20,208,758
to a limited number of domestic individual and institutional investors.
A portion of the funds raised from the private placements were utilized to
complete the acquisition referred to below.
On February 15, 1996, the Company acquired 90% of the outstanding common
stock (the "Purchased Shares") of Catalina Coatings, Inc., an Arizona
corporation ("Catalina"). Catalina is engaged in the development, manufacture
and sale of vacuum deposition coating equipment and the
6
<PAGE>
licensing and sublicensing of patent rights with respect to a vapor deposition
process to coat moving webs of material at high speeds. The Company has
continued the business of Catalina which now operates as a subsidiary of the
Company. The Purchased Shares were acquired from the selling shareholders
pursuant to a Stock Purchase Agreement (the "Stock Purchase Agreement") dated
and effective as of January 1, 1996. The aggregate consideration paid by the
Company pursuant to the Stock Purchase Agreement was $8,400,000, of which
$8,200,000 represented the purchase price of the Purchased Shares and $200,000
represented consideration for the non-competition and confidentiality covenants
of the selling shareholders.
Catalina's results of operations were immaterial and accordingly pro forma
information has not been provided.
Simultaneous with the closing of the acquisition, the Company entered into
a Put and Call Option Agreement (the "Option Agreement") which provides the
Company with the right, at any time after February 15, 2000, to acquire the
remaining 10% of the outstanding common stock of Catalina for an aggregate
consideration of $2,000,000. The Option Agreement also provides the selling
shareholders and another employee of Catalina with the right, at any time after
August 15, 2000, to cause the Company to purchase the remaining shares for
aggregate consideration of $1,000,000. The Option Agreement will terminate if
Catalina consummates an initial public offering of its securities prior to
February 15, 2000.
The Company granted the selling shareholders and the other employee of
Catalina five-year non-qualified options to purchase an aggregate 100,000 shares
of the Company's common stock at an exercise price of $89.50 per share,
representing fair market value at the date of grant, and Catalina granted to the
same individuals an option to purchase an aggregate 5% of the issued and
outstanding common stock of Catalina in the event that a registration statement
relating to an initial public offering of Catalina common stock is declared
effective by February 15, 2000.
On June 19, 1995, the Company's Board of Directors determined to change its
fiscal year from a calendar year ending December 31 to a fiscal year ending on
the Saturday closest to December 31. Accordingly, the 1995 fiscal year ended on
December 30, 1995, and the second quarters of 1996 and 1995 ended on June 29,
1996, and July 1, 1995 respectively.
The results of operations for the second quarter ended June 29, 1996 are
not indicative of results of operations to be expected for the full year.
The Company intends to disclose pro forma information pursuant to Statement
of Financial Accounting Standard No. 123, "Accounting for Stock-Based
Compensation", in its 1996 annual financial statements.
7
<PAGE>
2. INVENTORY
Inventory is valued at the lower of cost or market, with cost determined on
the first-in, first-out method. At June 29, 1996 and December 30, 1995,
inventory consisted of the following:
June 29, 1996 December 30, 1995
------------- -----------------
Raw materials $5,356,295 $3,476,713
Work in process 1,683,403 1,959,382
Finished goods 612,150 425,648
---------- ----------
Total $7,651,848 $5,861,743
========== ==========
8
<PAGE>
3. NET INCOME PER COMMON SHARE
Net income per common share is computed by dividing net income by the
weighted average number of common and common equivalent shares outstanding.
Common stock equivalents represent the dilutive effect of the assumed exercise
of outstanding stock options and warrants. A summary of the calculations for the
three and six month periods ended June 29, 1996 and July 1, 1995 follows:
<TABLE>
<CAPTION>
1996
---------------------------------------------------------------
Three Months Six Months
----------------------------- -----------------------------
Fully Fully
Primary Diluted Primary Diluted
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net income .................... $ 1,646,720 $ 1,646,720 $ 2,936,134 $ 2,936,134
============ ============ ============ ============
Weighted average common
shares outstanding ............ 15,268,117 15,268,117 15,168,668 15,168,668
Common equivalent shares from
assumed conversion of
outstanding options and
warrants whose effect are
not antidilutive on earnings
per share ................... 1,763,398 1,763,428 1,721,086 1,721,086
Less shares assumed repurchased
using the treasury method for
calculation of net shares
outstanding ................. (325,841) (325,841) (338,725) (338,725)
------------ ------------ ------------ ------------
Weighted average common and
common equivalent shares
outstanding ................. 16,705,674 16,705,704 16,551,029 16,551,029
============ ============ ============ ============
Net income per common and
common equivalent share ..... $ .10 $ .10 $ .18 $ .18
============ ============ ============ ============
<CAPTION>
1995
---------------------------------------------------------------
Three Months Six Months
----------------------------- -----------------------------
Fully Fully
Primary Diluted Primary Diluted
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net income .................... $ 176,661 $ 176,661 $ 336,662 $ 336,662
============ ============ ============ ============
Weighted average common
shares outstanding ............ 14,527,154 14,558,318 14,470,483 14,558,318
Common equivalent shares from
assumed conversion of
outstanding options and
warrants whose effect are
not antidilutive on earnings
per share ................... 1,950,128 1,967,378 1,947,628 1,967,378
Less shares assumed repurchased
using the treasury method for
calculation of net shares
outstanding ................. (543,719) (485,133) (684,241) (485,133)
------------ ------------ ------------ ------------
Weighted average common and
common equivalent shares
outstanding ................. 15,933,563 16,040,563 15,733,870 16,040,563
============ ============ ============ ============
Net income per common and
common equivalent share ..... $ .01 $ .01 $ .02 $ .02
============ ============ ============ ============
</TABLE>
9
<PAGE>
4. INCOME TAXES
The provision for income taxes for the second quarter and first six months
of 1996 represents substantially the charge in lieu of income taxes arising
during the periods relating to the tax effect of employee stock option
deductions, based upon the estimated effective income tax rate for the full
fiscal year. The tax benefit related to such stock options has been credited to
stockholders' equity.
The provision for income taxes for the second quarter and first six months
of 1995 represents substantially the charge in lieu of state income taxes
arising during the periods relating to the tax effect of employee stock option
deductions. No charge for federal income taxes was required due to the
availability of federal net operating loss carryforwards for accounting
purposes.
As of June 29, 1996, the Company had net operating loss carryforwards
totaling approximately $27,000,000 resulting from compensation deductions, for
tax purposes, relative to stock option plans. To the extent net operating losses
resulting from stock option plan compensation deductions become realizable, the
benefit will be credited directly to additional paid in capital. The amount of
the net operating loss carryforwards which may be utilized in any future period
may be subject to certain limitations, based upon changes in the ownership of
the Company's common stock.
5. LEGAL PROCEEDINGS
Between June 28,1996 and July 31, 1996, seven lawsuits were filed against
the Company and certain other defendants, including, but not limited to the
Company's officers and directors. Six of such actions, were purportedly brought
on behalf of similarly situated classes of defendants and were commenced in a
United States District Court in either the State of New Hampshire or the
Southern District of New York. The remaining action was filed derivatively, on
behalf of the Company in the Chancery Court of the State of Delaware.
The lawsuits each contain a variety of allegations (some of them
overlapping) including, among other things, that the defendants violated Section
10(b) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5
promulgated thereunder, violations of Section 20(a) of the Exchange Act, common
law fraud and deceit, negligent misrepresentation and waste of corporate assets.
The plaintiffs generally are seeking to recover unspecified damages and
reimbursement of their costs and expenses incurred in connection with the
action. Moreover, the plaintiff in the derivative action is also seeking a
return to the Company of all salaries and the value of other remuneration paid
to the defendants by the Company during the time they were in breach of their
fiduciary duties and an accounting of and/or constructive trust on the proceeds
of defendants trading activities in the Common Stock.
The Company believes that the allegations against it and its officers and
directors alleged in the foregoing actions are without merit, and the Company
intends to vigorously defend all actions. However, the outcome of any litigation
is subject to uncertainty and a successful claim against the Company, in any of
the foregoing actions, could have a material adverse effect on the financial
position and results of operations of the Company. At the present time, the
Company cannot reasonably estimate the ultimate liability, if any, resulting
from these lawsuits. Accordingly, no provision for any liability that may result
has been recorded in the accompanying financial statements.
10
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995:
The statements which are not historical facts contained in this Form 10-Q
are forward looking statements that involve a number of risks and uncertainties,
including, but not limited to, the risks of uncertainty of patent protection,
the impact of supply and manufacturing constraints or difficulties, possible
technological obsolescence, increased competition, litigation, and other risks
detailed in the Securities and Exchange Commission filings, of Presstek, Inc.
(the "Company" or "Presstek").
Results of Operations
The Company was organized as a Delaware corporation on September 3, 1987
and was a development stage company through 1991. In September 1991,
Heidelberger Druckmaschinen A.G. ("Heidelberg"), the world's largest printing
press manufacturer introduced the Company's initial spark discharge based
imaging technology, in a jointly developed product, the Heidelberg GTO-DI. In
1993, after investing substantial effort and resources, the Company completed
the development of PEARL, a patented, proprietary, nonphotographic, toxic-free,
digital imaging and printing plate technology for the printing and graphic arts
industries. PEARL's laser diode technology is capable of imaging various types
of Presstek printing plates either off-press or on-press which may then be used
to produce high-quality, full-color lithographic printed materials at what the
Company believes is a lower cost than competitive processes. PEARL has
completely replaced the Company's spark discharge technology. The GTO-DI was
re-introduced in September 1993, utilizing PEARL as its direct imaging
technology and the Company is now building an installed base of customers which
utilizes its proprietary consumable printing plates on PEARL equipped Heidelberg
presses. The Company's relationship with Heidelberg has been expanded to include
the development and manufacture of direct imaging kits to be utilized in
Heidelberg's new four color, fully automated lithographic press, the Quickmaster
DI 46-4. This press was introduced in May, 1995 at DRUPA '95, the industry's
largest trade show, and was well received. Shipments of production kits to
Heidelberg for use in the Quickmaster commenced in the second quarter of 1995.
This new press incorporates certain improvements to the Company's PEARL direct
imaging technologies and employs the Company's automatic plate changing cylinder
which eliminates the need for manually changing plates between jobs.
The Company is also engaged in the development of additional products and
applications that incorporate the use of its proprietary technologies and
consumables, including both computer-to-plate and computer-to-press
applications. Some of these additional activities have resulted in an agreement
with the Adast Adamov Company, another manufacturer of sheet fed offset presses.
This agreement will result in the availability of the Company's PEARL direct
imaging technology on a larger format Omni-Adast (19" x 26") multicolor press,
the first showing of which took place at an industry trade show during the first
quarter of 1996. Also, during the first quarter of 1996, the Company began
shipments of its PEARL platesetter, now referred to as the PEARLsetter(TM). The
PEARLsetter is a computer-to-plate imaging device that images both the Company's
wet and dry offset plates. Another agreement, recently entered into with
Nilpeter A/S of Denmark will result in the utilization of the PEARL technology
on a high-speed rotary label printing press called the OFFSET 3300. Presstek
will supply a special PEARL-based digital imaging system which will image
Presstek's thermal plates
11
<PAGE>
directly on the press plate cylinder. This will be the first application of
the PEARL technology to a web press, and the OFFSET 3300 is expected to be shown
at an industry trade show in September, 1996.
On February 15, 1996, the Company acquired 90% of the outstanding common
stock (the "Purchased Shares") of Catalina Coatings, Inc., an Arizona
corporation ("Catalina"). Catalina is engaged in the development, manufacture
and sale of vacuum deposition coating equipment and the licensing and
sublicensing of patent rights with respect to a vapor deposition process to coat
moving webs of material at high speeds. The Company has continued the business
of Catalina which operates as a subsidiary of the Company. The Purchased Shares
were acquired from the selling shareholders pursuant to a Stock Purchase
Agreement (the "Stock Purchase Agreement") dated and effective as of January 1,
1996. The aggregate consideration paid by the Company pursuant to the Stock
Purchase Agreement was $8,400,000, of which $8,200,000 represented the purchase
price of the Purchased Shares and $200,000 represented consideration for the
non-competition and confidentiality covenants of the selling shareholders.
Simultaneous with the closing of the acquisition, the Company entered into
a Put and Call Option Agreement (the "Option Agreement") which provides the
Company with the right, at any time after February 15, 2000, to acquire the
remaining 10% of the outstanding common stock of Catalina for an aggregate
consideration of $2,000,000. The Option Agreement also provides the selling
shareholders and another employee of Catalina with the right, at any time after
August 15, 2000, to cause the Company to purchase the remaining shares for an
aggregate consideration of $1,000,000. The Option Agreement will terminate if
Catalina consummates an initial public offering of its securities prior to
February 15, 2000.
The Company granted the selling shareholders and the other employee of
Catalina five-year non-qualified options to purchase an aggregate of 100,000
shares of the Company's common stock at an exercise price of $89.50 per share,
and Catalina granted to the same individuals an option to purchase an aggregate
5% of the issued and outstanding common stock of Catalina in the event that a
registration statement relating to an initial public offering of Catalina common
stock is declared effective by February 15, 2000.
On June 19, 1995, the Company's Board of Directors determined to change its
fiscal year from a calendar year ending December 31 to a fiscal year ending on
the Saturday closest to December 31. Accordingly, the 1995 fiscal year ended on
December 30, 1995, and the second quarters of 1996 and 1995 ended on June 29,
1996 and July 1, 1995 respectively.
Revenues
Revenues for the second quarter of 1996 totaled $11,880,000, an increase of
$6,377,000 (116%) compared to $5,503,000 recorded for the second quarter of
1995. For the first six months of 1996, revenues totaled $22,884,000, an
increase of $12,296,000 (116%) compared to $10,588,000 for the same period in
1995. Product sales increased $4,012,000 and $7,954,000, respectively, comparing
the three and six month periods in 1996 with the same periods in 1995, primarily
as a result of volume increases in sales by the Company of products to be used
in the Quickmaster DI 46-4, as well as sales of the PEARLsetter, consumable
printing plates and spare parts. Royalties and fees from licensees increased
$2,364,000 and $4,343,000 respectively in the second quarter and first six
months of 1996
12
<PAGE>
compared to the same periods in 1995, primarily as a result of increased
royalties earned on product sales to Heidelberg and increased revenues earned
for engineering services under the Company's agreements with Heidelberg and
other customers.
Cost of Products Sold
Costs of products sold for the second quarter and first six months of 1996
totaled $4,825,000 and $10,226,000 compared to $2,901,000 and $5,550,000 for the
same periods in 1995. These costs include materials, labor and overhead
associated with product sales, as well as future warranty costs.
Engineering and Product Development
Engineering and product development expenses for the second quarter and
first six months of 1996 totaled $1,800,000 and $4,033,000 compared to
$1,212,000 and $2,628,000 for the same periods in 1995. The increases of
$588,000 (49%) for the second quarter and $1,405,000 (53%) for the first six
months of 1996 resulted principally from increased expenditures for parts,
supplies, labor, and contracted services related to the Company's PEARL
technology, as well as other product development efforts.
Marketing
Marketing expenses for the second quarter and first six months of 1996
totaled $636,000 and $1,182,000 compared to $570,000 and $954,000 for the same
periods in 1995. The increases for the second quarter and first six months of
1996 of $66,000 (12%) and $228,000 (24%), respectively, related principally to
increased expenditures for additional personnel and related costs, as well as
promotional activities.
General and Administrative
General and administrative expenses for the second quarter and first six
months of 1996 totaled $1,809,000 and $2,771,000 compared to $753,000 and
$1,276,000 for the same periods in 1995. The increases of $1,056,000 (140%) for
the second quarter and $1,495,000 (117%) for the first six months of 1996
related principally to increased expenditures for salaries and other costs
required to conduct various general and administrative functions of the Company,
including legal fees incurred in connection with certain legal proceedings and
regulatory matters.
Dividend and Interest Income
Dividend and interest income earned on the Company's cash and investments
increased $166,000 for the second quarter and $301,000 for the first six months
principally as a result of the increased funds available for investment.
Income Taxes
The provision for income taxes for the second quarter and first six months
of 1996 represents substantially the charge in lieu of income taxes arising
during the periods relating to the tax effect of employee stock option
deductions, based upon the estimated effective income tax rate for the full
fiscal year. The tax benefit related to such stock options has been credited to
stockholders' equity.
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The provision for income taxes for the second quarter and first six months
of 1995 represents substantially the charge in lieu of state income taxes
arising during the periods relating to the tax effect of employee stock option
deductions. No charge for federal income taxes was required due to the
availability of federal net operating loss carryforwards for accounting
purposes.
Net Income
As a result of the foregoing, the Company had net income of $1,647,000 and
$2,936,000 for the second quarter and first six months of 1996, compared to net
income of $177,000 and $337,000 for the same periods in 1995. Catalina did not
have a material effect on net income for the second quarter or first six months
of 1996.
Liquidity and Capital Resources
At June 29, 1996, the Company had working capital of $33,076,000, an
increase of $16,239,000 as compared to working capital of $16,837,000 at
December 30, 1995. This increase was primarily attributed to the proceeds from
the issuances of common stock of $22,033,000, plus net income for the first six
months of 1996 of $2,936,000 offset by the Company's investment in Catalina, net
of cash acquired, of $7,456,000 and additions to property and equipment of
$3,958,000.
Net cash provided by operating activities of $1,651,000 for the six months
ended June 29, 1996, resulted primarily from net income from operations of
$2,936,000, noncash items including the tax effect related to employee stock
options, depreciation and amortization, and provision for warranty costs of
$1,980,000, $881,000 and $316,000 respectively, an increase in accounts payable
and accrued expenses of $1,774,000, offset by increases in accounts receivable,
inventory, and costs and estimated earnings in excess of billings on uncompleted
contracts of $2,722,000, $1,833,000, and $936,000, respectively, and by a
decrease in billings in excess of costs and estimated earnings on uncompleted
contracts of $687,000.
Net cash used for investing activities of $17,653,000 for the first six
months ended June 29, 1996, resulted primarily from the Company's investment in
Catalina, net of cash acquired, of $7,456,000, purchases of marketable
securities net of maturities of $5,956,000, additions to property and equipment
used in the Company's business of $3,958,000 and increases in other assets of
$331,000.
Net cash provided by financing activities during the first six months of
1996 totaled $22,033,000, which included the private placements of an aggregate
of 282,846 shares of the Company's common stock for net proceeds of $20,209,000,
and the sale of common stock incident to the exercise of various stock options.
The Company's agreements with Heidelberg provide that during 1996 the
Company will receive certain royalty payments and be reimbursed for certain
engineering and development work provided to Heidelberg.
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The Company is currently planning the construction of two facilities
including a new 60,000 square foot facility in Tucson, Arizona for Catalina, and
a new 100,000 square foot manufacturing facility in Hudson, New Hampshire. The
proposed Hudson manufacturing facility is expected to accommodate the Company's
new plate manufacturing operation, which will utilize a new vacuum deposition
coating system currently being developed and built for the Company by Catalina,
along with the necessary plate finishing and packaging equipment. The Company
currently estimates that the total capital cost of these projects, including
land purchases for the buildings, the construction of the coating system by
Catalina, and the related plate manufacturing and finishing equipment to be
approximately $28,000,000. The Company is currently exploring various funding
options with respect to these projects, including, but not limited to state
industrial development revenue bonds and bank financing. During the second
quarter of 1996, the Company acquired the land for the Arizona facility for
approximately $902,000, and during the first six months of 1996, expended
approximately $3,200,000 for the new plate manufacturing and packaging
equipment. As of June 29,1996, the Company had outstanding purchase commitments
of $2,500,000 with respect to the new plate manufacturing and packaging
equipment. The Company anticipates the land acquisition for the New Hampshire
facility to take place during August, 1996 for $1,500,000.
Except for the Company's plan for the construction of new facilities
described above, the Company estimates that existing funds and the funds
generated under its agreements with Heidelberg and other customers will be
sufficient to satisfy its anticipated cash requirements for the foreseeable
future.
Effect of Inflation
Inflation has not had, and is not expected to have, a material impact upon
the Company's operations.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Between June 28, 1996 and July 31, 1996 the following seven lawsuits were
filed against the Company and certain other defendants referred to below. All
such actions, except the one filed by Richard Strauss ("Strauss") were
purportedly brought on behalf of similarly situated classes of defendants. The
Strauss action was filed derivatively, on behalf of the Company.
1. On June 28, 1996 Tonia Alfonso and Dick Ruestman filed a class action
lawsuit in the United States District Court, District of New Hampshire, against
the Company, Robert Howard and Lawrence Howard, who are both directors of the
Company, Richard Williams and Robert Verrando, who are both officers and
directors of the Company, Cabot Heritage Corp., ("Heritage"), Cabot Market
Letter ("Market"), Carlton Lutts, Timothy Lutts and Robert Lutts (Carlton Lutts,
Timothy Lutts and Robert Lutts are sometimes hereinafter collectively referred
to as the "Lutts Defendants") and the Cabot Money Management ("CabotMM"). The
plaintiffs allege that the defendants engaged in a plan and scheme and unlawful
courses of conduct to artificially inflate, maintain and otherwise manipulate
the value of the Company's common stock in order to cause individual defendants
to profit from their sales of the Company's common stock and to induce
plaintiffs and other members of the purported class to purchase securities of
the Company at artificially inflated prices. The plaintiffs also allege that (i)
all defendants except CabotMM violated Section 10(b) ("Sect. 10(b)") of the
Securities Exchange Act of 1934, (the "Exchange Act") and Rule 10b-5 ("Rule
10b-5") promulgated thereunder, (ii) that all individual defendants and Heritage
violated Section 20(a) ("Sect. 20(a)") of the Exchange Act and (iii) that all
defendants except CabotMM committed common law fraud and deceit. The basis for
the action against the Company and its officers and directors include, among
other things, the Company's alleged issuance of false and misleading reports or
failure to disclose material facts including a misstatement of earnings in the
Company's financial statements for the quarter ended March 30, 1996, the failure
to disclose to the public certain alleged adverse information concerning the
Company's patents and its proprietary technology including that certain United
States patents previously issued to the Company were the subject of a
reexamination or reissuance procedure by the U.S. Patent Office and that the
Company was facing formidable competition as a result of technological advances
made by other companies and the failure to disclose that the investigation into
trading in the securities of the Company being conducted by the Securities and
Exchange Commission (the "SEC Investigation") included the service of a subpoena
upon the Lutts Defendants. The plaintiffs also allege that the Company conspired
with the Lutts Defendants to have false reports issued about the Company in
order to drive up the market price of the Company's common stock. The plaintiffs
seek unspecified compensatory damages, attorney and accountant fees and other
costs and expenses incurred by the plaintiffs in connection with the action and
the imposition of a constructive trust on, and disgorgement of, profits made by
defendants who were allegedly unjustly enriched as a result of the purported
artificial inflation of the Company's common stock.
2. On June 28, 1996 Bill Berke ("Berke") filed a class action lawsuit in
the United States District Court, District of New Hampshire, against the
Company, Richard Williams, Glenn DiBenedetto, the Company's Chief Financial
Officer, Lawrence Howard, Robert Howard, Robert Verrando, Bert DePamphilis (a
director of the Company), Harold Sparks (a director of the Company) and BDO
Seidman LLP, the Company's independent auditors. The plaintiff alleges that the
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defendants violated Sect. 10(b) and Rule 10b-5 by issuing financial statements
for the fiscal year ended December 30, 1995 and the fiscal quarter ended March
30, 1996 and corresponding financial press releases that overstated net income
in the Statements of Operations for those periods as a result of the improper
application of certain accounting principles relating to the tax benefits
received upon exercise of certain stock options previously granted by the
Company. The plaintiff seeks unspecified damages and reimbursement of the
plaintiff's costs and expenses incurred in connection with the action.
3. On July 9, 1996 Sidney Gellman and Robert Ehrenreich filed a class
action lawsuit in the United States District Court, District of New Hampshire,
against the Company and Robert Verrando, Richard Williams, Robert Howard,
Lawrence Howard, Glenn DiBenedetto, Bert DePamphilis, Frank Pensavecchia, the
Company's Senior V.P. - Engineering, Harold Sparks and John Dreyer (a director
of the Company), the Lutts Defendants, Heritage and CabotMM. The plaintiffs
allege that the Company and the individual officers and directors named as
defendants violated Sect. 10(b) and Rule 10b-5, that the individual officer and
director defendants and CabotMM violated Sect. 20(a) and committed acts of
common law negligent misrepresentation and fraud by causing an artificial
inflation in the price of the Company's common stock and helping maintain such
increase at a time when certain of the Company's officers and directors were
selling such stock by, among other things, failing to adequately disclose
certain alleged adverse information concerning certain Company patents and its
proprietary technology, failing to timely disclose claims made against the
Company by Agfa-Gevaert, N.V. in an arbitration proceeding, failing to disclose
stock sales by certain of the defendants at alleged artificially increased
prices while they were in possession of material non-public information
concerning the Company, issuing a misleading financial statement that overstated
earnings for the quarter ended March 30, 1996 and failing to adequately disclose
the scope of the SEC Investigation. The plaintiffs also allege that the Lutts
Defendants, Heritage and CabotMM violated Sect. 10b and Rule 10b-5. The
plaintiffs seek unspecified compensatory damages and reimbursement for costs and
expenses incurred in connection with the action.
4. On July 10, 1996 Joseph C. Barton filed a class action lawsuit in the
United States District Court, Southern District of New York against the Company,
Robert Howard, Lawrence Howard, Richard Williams, Robert Verrando, Glenn
DiBenedetto, Frank Pensavecchia, Harold Sparks, Bert DePamphilis, Market,
CabotMM, Heritage and Carlton Lutts. The plaintiff alleges that the defendants
violated Sect. 10(b) and Rule 10b-5 and Sect. 20(a) by issuing false and
misleading information concerning the Company's financial results for its
quarter ended March 30, 1996 and by failing to disclose that the SEC had
broadened the scope of the SEC Investigation and that adverse competitive
factors undermined the Company's PEARL technology. The plaintiff also claims
that certain of the defendants sold shares of the Company's common stock at
artificially high prices while in possession of material non-public information
regarding the Company. The plaintiff is seeking to recover unspecified
compensatory damages together with interest, costs of the action and such other
extraordinary, equitable and/or injunctive relief as permitted by law or equity.
5. On July 12, 1996 F. Brock Walter ("Walter") filed a class action lawsuit
in the United States District Court, District of New Hampshire, against the same
defendants as the lawsuit filed by Berke on June 28, 1996. The Walter suit
contains the same allegations against the defendants as those contained in the
Berke action. Walter seeks to recover unspecified damages against the defendants
and the costs and expenses of the action.
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6. On July 16, 1996 Richard Strauss commenced a derivative suit on behalf
of the Company in the Court of Chancery of the State of Delaware, New Castle
County, against Robert Howard, Lawrence Howard, Richard Williams, Robert
Verrando, Bert DePamphilis and Harold Sparks. The plaintiff alleges that the
defendants breached the fiduciary duties they each owed to the Company and its
other shareholders and wasted corporate assets by making false and misleading
statements of fact or concealing material facts concerning the viability of the
Company's "key" patent and its proprietary interest in its PEARL technology, its
failure to properly disclose the scope of the SEC Investigation, and its
misstatement of its financial results for the first quarter of 1996, and that
they used this information for their personal use by selling common stock of the
Company at artificially inflated prices. The plaintiff also alleges that these
actions by the defendants resulted in breaches of Sect. 10(b) and Rule 10b-5
which resulted in other lawsuits being commenced against the Company which will
require the Company to expend resources to defend. The plaintiff seeks to
recover against the defendants, on behalf of the Company, unspecified damages
allegedly sustained by the Company as a result of the defendants alleged
breaches of fiduciary duty, a return to the Company of all salaries and the
value of other remuneration paid to the defendants by the Company during the
time they were in breach of their fiduciary duties, an accounting of and/or
constructive trust on the proceeds of defendants trading activities in the
Company's common stock and recovery of costs and disbursements of the action.
7. On July 31, 1996, a class action lawsuit was filed by Multi-
Measurements Inc., Multi-Measurements Inc. Pension Plan, John LaReddola,
Trustee, and Albert Schlessinger, Attorney in Fact for Andrew Schlessinger, in
the United States District Court, District of New Hampshire, against the
Company, Robert Howard and Lawrence Howard, Richard Williams and Robert
Verrando, Heritage, Market, the Lutts Defendants and CabotMM. The plaintiffs
allege that the defendants engaged in a plan and scheme and unlawful courses of
conduct to artificially inflate, maintain and otherwise manipulate the value of
the Company's common stock in order to cause individual defendants to profit
from their sales of the Company's common stock and to induce plaintiffs' and
other members of the purported class to purchase securities of the Company at
artificially inflated prices. The plaintiffs also allege that (i) all defendants
except CabotMM violated Sect. 10(b) and Rule 10b-5, (ii) that all individual
defendants and Heritage violated Sect. 20(a), and (iii) that all defendants
except CabotMM committed common law fraud and deceit. The basis for the action
against the Company and its officers and directors include, among other things,
the Company's alleged issuance of false and misleading reports or failure to
disclose material facts including a misstatement of earnings in the Company's
financial statements for the quarter ended March 30, 1996, the failure to
disclose to the public certain alleged adverse information concerning the
Company's patents and its proprietary technology including that certain United
States patents previously issued to the Company were, at the request of the
Company, the subject of a reexamination or reissuance procedure in the U.S.
Patent Office and that the Company was facing substantial competition as a
result of technological advances currently being made by other companies, and
the failure to disclose that the SEC Investigation included the service of a
subpoena upon the Lutts Defendants. The plaintiffs also allege that the Lutts
Defendants promoted the Company's common stock in order to drive up the market
price, without disclosing the fact that certain of the Lutts Defendants had
substantial holdings of the Company's common stock. The plaintiffs also claim
that certain of the defendants sold shares of the Company's common stock at
artificially high prices while in possession of material non-public information
regarding the Company, and that defendants acted to curtail short-selling in the
Company's common stock. The plaintiffs seek unspecified compensatory damages,
attorney and accountant fees and other costs and expenses incurred by the
plaintiffs in connection with the action and the imposition of a constructive
trust on,
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and disgorgement of, profits made by all defendants except CabotMM who were
allegedly unjustly enriched as a result of the purported artificial inflation of
the Company's common stock.
The Company believes that the allegations against it and its officers and
directors alleged in the foregoing actions are without merit and the Company
intends to vigorously defend all actions. However, the outcome of any litigation
is subject to uncertainty and a successful claim against the Company, in any of
the foregoing actions, could have a material adverse effect on the Company.
Item 4. Submission of Matters to a Vote of Security-Holders.
On May 28, 1996, the Company held an Annual Meeting of Stockholders at
which the holders of the Company's common stock voted on: (i) the election of
directors and (ii) a proposal to amend (the "Amendment") the Certificate of
Incorporation of the Company to increase the authorized common stock of the
Company from 25,000,000 to 75,000,000 shares. The results of the vote were as
follows:
Mr. Robert Howard, Dr. Lawrence Howard and Messrs. Richard A. Williams,
Robert E. Verrando, Bert DePamphilis, Harold Sparks, and John W. Dreyer were
elected to serve as members of the Company's Board of Directors for the ensuing
year and until the election and qualification of their successors.
The votes cast by stockholders with respect to the election of Directors
were as follows:
Votes Cast Votes
Director "For" Withheld
-------- ----- --------
Robert Howard 14,373,268 52,071
Dr. Lawrence Howard 14,371,656 53,683
Richard A. Williams 14,375,978 49,361
Robert E. Verrando 14,375,678 49,661
Bert DePamphilis 14,364,641 60,698
Harold Sparks 14,362,448 62,891
John W. Dreyer 14,374,458 50,881
The Amendment was approved by the stockholders. The votes cast by
stockholders with respect to the Amendment were as follows:
Votes Cast "For" Votes Cast "Against" Votes "Abstaining"
- ---------------- -------------------- ------------------
13,484,064 797,771 61,238
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Item 6. Exhibits and Reports on Form 8-K.
(a)
Exhibit 3. Certificate of Incorporation, as amended.
Exhibit 27. Financial Data Schedule
(b) During the fiscal quarter ended June 29, 1996 the Company filed two
amendments, dated April 2, 1996 and May 20, 1996, to its Form 8-K relating
to its acquisition of Catalina Coatings, Inc. ("Catalina") on February 15,
1996. These amended Form 8-K's contained the audited financial statements
of Catalina for its three fiscal years ended December 31, 1995 as well as
certain pro forma financial information required by Item 7 of Form 8-K.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: August 15, 1996
PRESSTEK, INC.
(Registrant)
By: /s/ Richard A. Williams
---------------------------
Richard A. Williams
Chief Executive Officer
(Duly Authorized Officer)
By: /s/ Glenn J. DiBenedetto
---------------------------
Glenn J. DiBenedetto
Chief Financial Officer
(Principal Financial and
Accounting Officer)
21
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
PRESSTEK, INC.
(Pursuant to Section 245 of the
General Corporation Law of Delaware)
The Certificate of Incorporation of PRESSTEK, INC. was filed on September
3, 1987. The Certificate of Incorporation as amended and restated shall read as
follows:
FIRST: Name. The name of the corporation is Presstek, Inc. (hereinafter
referred to as the "Corporation").
SECOND: Registered Office. The registered office of the Corporation is to
be located in the City of Wilmington, County of New Castle, in the State of
Delaware. The name of its registered agent is The Corporation Trust Company,
whose address is Corporation Trust Center, 1209 Orange Street, Wilmington,
Delaware 19801.
THIRD: Purpose. The purpose of the Corporation is to engage in any lawful
act or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware.
FOURTH: Capital Stock. The total number of shares which the Corporation
shall have authority to issue is Eleven Million (11,000,000) shares, consisting
of One Million (1,000,000) shares of Preferred Stock, of the par value of one
cents ($.01) per share (hereinafter called "Preferred Stock"), and Ten Million
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(10,000,000) shares of Common Stock, of the par value of one cent ($.01) per
share (hereinafter called "Common Stock").
FIFTH: Rights Of Stockholders. The Preferred Stock and the Common Stock
shall have the following voting powers, designations, preferences and relative,
participating, optional or other special rights and qualifications, limitations
or restrictions.
A. Preferred Stock.
1. The Preferred Stock may be issued from time to time in one or more
series, each of such series to have such voting powers (full or limited or
without voting powers), designations, preferences and relatives, participating,
optional or other special rights and qualifications, limitations or restrictions
thereof as are stated and expressed in this Certificate of Incorporation, or in
a resolution or resolutions providing for the issue of such series adopted by
the Board of Directors as hereinafter provided.
2. Authority is hereby granted to the Board of Directors, subject to the
provisions of this Article Five, to create one or more series of Preferred Stock
and, with respect to each such series, to fix by resolution or resolutions
providing for the issue of such series:
(a) the number of shares to constitute such series and the distinctive
designation thereof;
(b) the dividend rate on the shares of such series, the dividend payment
dates, the periods in respect of which dividends are payable ("dividend
periods"), whether such
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dividends shall be cumulative and, if cumulative, the date or dates from which
dividends shall accumulate;
(c) whether the shares of such series shall be redeemable and, if
redeemable, on what terms, including the redemption price or prices which the
shares of such series shall be entitled to receive upon the redemption thereof;
(d) whether the shares of such series shall be subject to the operation of
retirement or sinking fund to be applied to the purchase or redemption of such
shares for retirement and, if such retirement or sinking fund or funds be
established, the amount thereof and the terms and provisions relative to the
operation thereof;
(e) whether the shares of such series shall be convertible into, or
exchangeable for, shares of any other class or classes or any other series of
the same or any other class or classes of stock of the Corporation and the
conversion price or prices or rate or rates, or the rate or rates at which such
exchange may be made, with such adjustments, if any, as shall be stated and
expressed or provided in such resolution or resolutions.
(f) the preferences, if any, and the amounts thereof, which the shares of
such series shall be entitled to receive upon the voluntary or involuntary
dissolution;
(g) the voting power, if any, of the shares of such series; and
(h) such other terms, conditions, special rights and provisions as may seem
advisable to the Board of Directors.
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Notwithstanding the fixing of the number of shares constituting a particular
series upon the issuance thereof, the Board of Directors at any time thereafter
may authorize the issuance of additional shares of the same series.
3. No dividend shall be declared and set apart for payment on any series of
Preferred Stock in respect of any dividend period unless there shall likewise be
or have been paid, or declared and set apart for payment, on all shares of
Preferred Stock of each other series entitled to cumulative dividends at the
time outstanding which rank senior or equally as to dividenda with the series ln
question, dividends ratably in accordance with the sums which would be payable
on the said shares through the end of the last preceding dividend period if all
dividends were declared and paid in full.
4. If, upon the dissolution, liquidation or winding up of the corporation,
the assets of the Corporation distributable among the holders of any one or more
series of Preferred Stock which (i) are entitled to a preference over the
holders of the Common Stock upon such dissolution, liquidation or winding up,
and (ii) rank equally in connection with any such distribution, shall be
insufficient to pay in full the preferential amount to which the holders of such
shares shall be entitled, then such assets, or the proceeds thereof, shall be
distributed among the holders of each such series of the Preferred Stock ratably
in accordance with the sums which would be payable on such distribution if all
sums payable were discharged in full.
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5. Neither the merger or consolidation of the Corporation with or into
another corporation nor any sale, lease, conveyance or other disposition of all
or substantially all of the property, business or assets of the Corporation
shall be deemed to be a dissolution, liquidation or winding up of the
Corporation within the meaning of this Article Five.
6. In the event that the Preferred Stock of any series shall be redeemable,
then, at the option of the Board of Directors, the Corporation may, at such time
or times as may be specified herein or by a resolution or resolutions of the
Board of Directors as provided ln paragraph (c) of section 2 of Part A of this
Article Five, redeem all, or any number less than all, of the outstanding shares
of such series at the redemption price thereof and on the other terms fixed
herein or by a resolution or resolutions of the Board of Directors as provided
in said paragraph (c).
7. Subject to any applicable provisions of the General Corporation Law of
the State of Delaware, shares of Preferred Stock that have been issued and
reacquired in any manner by the Corporation (excluding, until the Corporation
elects to retire them, shares that are held as treasury shares but including
shares redeemed and shares purchased and retired, whether through the operation
of a retirement or sinking fund, or otherwise) may have the status of authorized
and unissued shares of Preferred Stock, and may be reissued as a part of the
series of which they were originally a part or be reclassified and reissued as
part of a new series of Preferred Stock to be created
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by resolution or resolutions of the Board of Directors or as part of any other
series of Preferred Stock, all subject to the conditions or restrictions on
issuance set forth in any resolution or resolutions adopted by the Board of
Directors providing for the issue of any series of Preferred Stock.
B. Common Stock.
1. Subject to the provisions of Part A or this Article Five, holders of
Common Stock shall be entitled to receive such dividenda as may be declared
thereon from time to time by the Board of Directors in its discretion from any
assets legally available for the payment of dividends.
2. In the event of the dissolution, liquidation or winding up of the
Corporation, whether voluntary or involuntary, after distribution to the holders
of all shares of Preferred Stock which shall be entitled to a preference over
the holders of Common Stock of the full preferential amounts to which the holder
of Common Stock of the full preferential amounts to which the holders of
Preferred Stock are entitled, the holders of Common Stock shall be entitled to
share ratably in the distribution of the assets of the Corporation or the
proceeds thereof.
3. Except as herein otherwise expressly provided and as otherwise required
by law, all shares of Common Stock shall have equal voting rights and the
holders of such shares shall have one vote, in person or by proxy, for each
share thereof held.
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C. No preemptive Rights.
No holder of atock of any class of the Corporation shall be entitled to any
preemptive right to subscribe for or purchase any shares of stock of any class
or aeries, whether now or hereafter authorized, or any bonds, debentures or
other securities or evidences of indebtedness, whether or not convertible into
or exchangeable for stock, but shares of stock of any class, or bonds,
debentures or other securities or evidences of indebtedness may be issued, sold
or otherwise disposed of by the Board of Directors on such terms and for such
consideration, so far as may be permitted by law, and to such person or persons
as the Board of Directors in its absolute discretion may deem advisable.
SIXTH: Action By Stockholders and Stockholders' Meetings.
1. An action required or permitted to be taken by the holders of the issued
and outstanding atock of the Corporation may be effected at an annual or special
meeting of stockholders duly called and held in accordance with law and this
Certificate of incorporation, or without a meeting, without prior notice and
without a vote, if a consent in writing, setting forth the action so taken,
shall be signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and
voted. Prompt notice of the taking of the corporate action without a
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meeting by less than unanimous written consent shall be given to those
stockholders, if any, who have not consented in writing.
2. Except as otherwise provided by law, at any annual or special meeting of
stockholders only such business shall be conducted as shall have been properly
brought before the meeting in accordance with the provisions of this Certificate
of Incorporation and the by-laws of the Corporation. In order to be properly
brought before the meeting, such business must have either been (a) specified in
the written notice of the meeting (or any supplement thereto) given to
stockholders of record on the record date for such meeting by or at the
discretion of the Board of Directors, (b) brought before the meeting at the
direction of the Board of Directors or the Chairman of the meeting, or (c)
specified in a written notice given by or on behalf of a stockholder of record
on the record date for such meeting entitled to vote thereat or a duly
authorized proxy for such stockholder, in accordance with all of the following
requirements. A notice referred to in clause (c) of this Section moat be
delivered personally to, or mailed to and received at, the principal executive
office of the Corporation, addressed to the attention of the Secretary, in the
case of business to be brought before a special meeting of stockholders, not
more than ten (10) days after the date of the initial notice referred to in
clause (a) of this Section, and in the case of business to be brought before an
annual meeting of stockholders, not less than ten (10) days prior to the first
anniversary date of the initial notice referred to in clause (a) of this Section
of the previous
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year's annual meeting, provided, however, that such notice shall not be required
to be given more than seventy-five (75) days prior to an annual meeting of
stockholders. Such notice referred to in clause (c) of this Section shall set
forth (i) a full description of each such item of business proposed to be
brought before the meeting, (ii) the name and address of the person proposing to
bring such business before the meeting, (iii) the class and number of shares
held of record, held beneficially and represented by proxy by such person as of
the record date for the meeting (if such date has then been made publicly
available) and as of the date of such notice, (iv) if any item of such business
involves a nomination for director, all information regarding each such nominee
that would be required to be set forth in a definitive proxy statement filed
with the securities and Exchange Commission pursuant to Section 14 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any
successor thereto, and the written covenant of each such nominee to serve if
elected, and (v) all other information that would be required to be filed with
the Securities and Exchange Commission if, with respect to the business proposed
to be brought before the meeting, the person proposing such business were a
participant in a solicitation subject to Section 14 of the Exchange Act, or any
successor thereto. No business shall be brought before any annual or special
meeting of stockholders of the Corporation otherwise than as provided in this
Section 2.
3. If the election of directors shall not be held on a date specified in
the By-Laws for an annual meeting or at an
9
<PAGE>
adjournment of a meeting convened on such date, the Board of Directors by
resolution or resolutions adopted by the affirmative vote of a majority of the
entire Board of Directors (as defined in Section 1 of Article Seven of this
Certificate of Incorporation) shall cause to be held a special meeting of
stockholders for such purpose as soon thereafter as is reasonably practicable.
Special meetings of stockholders other than as above provided may be called at
any other time only at th direction of the Board of Directors by resolution
adopted by the affirmative vote of a majority of the entire Board of Directors
or by such other person or persons as may be specified in this Certificate of
Incorporation. Annual and special meetings of stockholders shall not be called
or held otherwise than as herein provided. Except as otherwise provided by law
of by this Certificate of Incorporation, at any meeting of stockholders of the
Corporation the presence in person or by proxy of the holders of a majority in
voting power of the outstanding stock of the Corporation entitled to vote shall
constitute a quorum for the transaction of business brought before the meeting
in accordance with this Certificate of Incorporation and, a quorum being
present, the affirmative vote of the holders of a majority in voting power
present in person or represented by proxy and entitled to vote shall be required
to effect action by stockholders; provided, however, that the affirmative vote
of a plurality in voting power present in person or represented by proxy and
entitled to vote shall be required to effect elections of directors. Election of
directors need not be by written ballot except to the extent
10
<PAGE>
provided in the by-laws of the Corporation. At every meeting of stockholders the
Chairman of the Board of Directors, or in the absence of the Chairman of the
Board, the President, and in the absence of the Chairman of the Board of
Directors and the President, such officer or other person as shall be designated
in accordance with the by-laws of the Corporation, shall act as Chairman of the
meeting. The Chairman of the meeting shall have sole authority to prescribe the
agenda and rules of order for the conduct of each meeting of stockholders and to
determine all questions arising thereat relating to the order of business and
the conduct of the meeting, except as otherwise required by law.
SEVENTH: Board of Directors.
1. The number of directors of the Corporation shall not be fewer than three
(3) nor more than six (6) (provided, however, that such maximum number may be
increased from time to time to the extent provided for in any resolution or
resolutions adopted by the Board of Directors providing for the issuance of any
series of Preferred Stock) and within such limits shall be determined, and may
be changed from time to time, solely by resolution adopted by the affirmative
vote of a majority of the entire Board of Directors (such term meaning, for all
purposes of this Certificate of Incorporation, the total number of directors of
the Corporation as last determined by the Board of Directors in accordance
herewith, including any directorships that are vacant for any reason). Except as
otherwise provided by law or by this Certificate of Incorporation, a majority of
the directors in office at the time of a duly assembled meeting shall be
necessary
11
<PAGE>
to constitute a quorum for the transaction of business, and the act of a
majority of the directors present at such meeting shall be the act of the Board
of Directors.
2. Any vacancy in the Board of Directors caused by death, resignation,
removal, disqualification or any other cause (other than an increase in the
number of directors) may be filled solely by resolution adopted by the
affirmative vote of a majority of the directors then in office, though less than
a quorum of the entire Board of Directors, or by a sole remaining director; and
a majority of the entire board, excluding the newly created vacancies, has the
sole power, subject to the rights of any series or class of Preferred Stock, to
fill a vacancy which results from an increase in the number of directors. A
director elected to fill a vacancy shall serve for the balance of the term of
the replaced director.
3. In furtherance of and not in limitation of the powers conferred by
statute, the Board of Directors of the Corporation, from time to time (after
adoption by the undersigned of the original by-laws of the Corporation), may
make, amend or repeal by-laws of the Corporation; provided, that any by-laws
made, amended or repealed by the Board of Directors may be amended or repealed,
and that any by-laws may be made, amended or repealed by the stockholders of the
Corporation.
4. The directors of this Corporation other than those who may be elected
pursuant to the rights of holders of any class or series of Preferred Stock
shall be divided into three classes, as nearly equal in number as possible, with
the term of each
12
<PAGE>
class to run for three years and expire at successive annual meetings of
stockholders. The initial term of the first such class shall expire at the 1989
annual meeting of stockholders, and the initial terms of the second and third
classes shall expire at the 1990 and 1991 annual meetings, respectively. Each
holder of voting stock of the Corporation shall be entitled to vote for each
class of directors; however, whenever the holders of any one or more series of
Preferred Stock issued by the Corporation shall have the right, voting
separately by class or series, to elect directors at an annual or special
meeting of stockholders, the election, term of office, filling of vacancies and
other features of such directorships shall be governed by the terms of this
Certificate of Incorporation and of the By-Laws applicable thereto, and by the
terms of the resolution or resolutions providing for the issue of such Preferred
Stock, and such directors selected shall not be divided into classes pursuant to
this Article Seven unless expressly provided by such terms.
5. The by-laws may confer upon the Board of Directors powers ln addition to
the foregoing and in addition to the powers and authorities expressly conferred
upon them by law, but only to the extent permitted by law and by the provisions
of this Certificate of Incorporation.
EIGHT: Compromise. Whenever a compromise or arrangement is proposed between
this Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
13
<PAGE>
jurisdiction within the state of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this Corporation under the provisions of Section 279 of Title 8 of the
Delaware Code, order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this Corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this Corporation as a consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this corporation, as the case may be,
and also on this Corporation.
NINTH: Limited Liability. A director of the Corporation shall not be
personally liable to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability (i) for any
breach of the director's duty of loyalty to the Corporation or its
14
<PAGE>
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174 of
the Delaware General Corporation Law, or (iv) for any transaction from which the
director derived any improper personal benefit. If the Delaware General
Corporation Law is amended after approval by the stockholders of this article to
authorize corporate action further eliminating or limiting the personal
liability of directors, then the liability of a director of the Corporation
shall be eliminated or limited to the fullest extent permitted by the Delaware
General Corporation Law, as so amended.
Any repeal or modification of the foregoing paragraph by the stockholders
of the Corporation shall not adversely affect any right or protection of a
director of the Corporation existing at the time of such repeal or modification.
TENTH: Indemnification. The Corporation shall indemnify any person who was
or is a party or is threatened to he made a party to any threatened, pending or
complete action, suit or proceeding, whether civil, criminal, administrative or
investigative, or by or in the right of the Corporation to procure judgment in
its favor, by reason of the fact that he is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by
15
<PAGE>
him in connection with such action, suit or proceeding if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the Corporation, in accordance with and to the full extent
permitted by statute. Expenses incurred in defending a civil or criminal action,
suit or proceeding may be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding as authorized by the Board Of
Directors in the specific case upon receipt of an undertaking by or on behalf of
the director, officer, employee or agent to repay such amount unless it shall
ultimately be determined that he is entitled to be indemnified by the
Corporation as authorized in this section. The indemnification provided by this
section shall not be deemed exclusive of any other rights to which those seeking
indemnification may be entitled under these Articles or any agreement or vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
ELEVENTH: Amendment or Repeal.
1. Notwithstanding any other provision of this Certificate of
Incorporation, no provision set forth herein regarding stockholder action by
written consent, the size and classification of the Board of Directors, the
filling of vacancies on the Board of Directors, the calling of meetings of
16
<PAGE>
stockholders and the nomination by stockholders of directors and other
stockholder proposals may be repealed or amended in any respect unless such
action is approved by the affirmative vote of holders of not less than two
thirds in voting power of the outstanding voting stock of the Corporation
entitled to vote in the election of directors, voting together as a single
class, unless such amendment is approved by a majority of the Continuing
Directors in which event any such amendment shall require approval by the
affirmative vote of not less than a majority in voting power of the outstanding
voting stock of the Corporation entitled to vote in the election of directors.
2. For the purposes of this Article Eleven, "Continuing Director" means any
member of the Board of Directors who was a member of the Board of Directors on
July 1, 1988 or who is elected to the Board of Directors after July 1, 1988 upon
the recommendation of a majority of the Continuing Directors, voting separately
and as a subclass of directors on such recommendation.
3. To the extent now or hereafter permitted by law, the Corporation
reserves the right to amend, alter, change, supplement or repeal any provision
of this Certificate of Incorporation, as from time to time amended, altered,
changed, supplemented or repealed, and all rights of stockholders, directors,
officers, employees and agents are subject to this express reservation.
This Amended and Restated Certificate of Incorporation was duly adopted by
written consent of the stockholders in
17
<PAGE>
accordance with the applicable provisions of Sections 228, 242 and 245 of the
General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this instrument to be signed
in its name by the Chairman of the Board of the Corporation and attested by its
Secretary this 22nd day of August, 1988.
/s/ Lawrence Howard
-----------------------------------
Lawrence Howard, President
Attest:
/s/ Jennifer L. McKay
- -----------------------------------
Jennifer L. McKay, Assistant Secretary
18
<PAGE>
CERTIFICATE OF AMENDMENT
TO
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
PRESSTEK, INC.
(Pursuant to Section 242 of the
General Corporation Law of Delaware)
* * * *
PRESSTEK, INC., a corporation organized and existing under and by virtue of
the General Corporation Law of the State of Delaware (the "Corporation"), DOES
HEREBY CERTIFY:
FIRST: That the Certificate of Incorporation of the Corporation was filed
on September 3, 1987, a Certificate of Amendment to Certificate of Incorporation
of the Corporation was filed on March 9, 1988, and an Amended and Restated
Certificate of Incorporation of the Corporation was filed on August 23, 1988.
SECOND: That the Board of Directors of the Corporation, by the written
consent of directors in lieu of a meeting, pursuant to Section 141(f) of the
General Corporation Law of the State of Delaware, duly adopted resolutions
setting forth a proposed amendment to the Amended and Restated Certificate of
Incorporation of the Corporation, declaring said amendment to be advisable and
calling for the submission of said amendment to the stockholders of the
Corporation for written consent without a meeting, pursuant to Section 228 of
the General
<PAGE>
Corporation Law of the State of Delaware, and stating that such amendment will
be effective only after written consent thereto by the holders of a majority of
all of the outstanding shares of capital stock of the Corporation entitled to
vote thereon.
THIRD: That thereafter, pursuant to the resolution of the Board of
Directors of the Corporation, said amendment was submitted to the holders of a
majority of all of the outstanding shares of capital stock of the Corporation,
and such holders, by written consent taken without a meeting in accordance with
Section 228 of the General Corporation Law of the State of Delaware, gave their
written consent and agreed to the adoption of the following resolution to amend
the Amended and Restated Certificate of Incorporation of the Corporation.
RESOLVED, that the Amended and Restated Certificate of Incorporation
of the Corporation be, and it hereby is, amended by deleting in its
entirety the present Paragraph 4 of Article SEVENTH, and by redesignating
Paragraph "5" as Paragraph "4."
FOURTH: That said Amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
2
<PAGE>
IN WITNESS WHEREOF, said PRESSTEK, INC. has caused this Certificate to be
signed by Lawrence Howard, its President and attested by Richard Williams, its
Secretary, this 14th day of February, 1989.
/s/ Lawrence Howard
-----------------------------------
Lawrence Howard, President
ATTEST:
/s/ Richard A. Williams
- -----------------------------------
Richard A. Williams, Secretary
3
<PAGE>
CERTIFICATE OF AMENDMENT
OF THE
RESTATED CERTIFICATE OF INCORPORATION
OF
PRESSTEK, INC.
-----------------------------------------
Adopted in accordance with the provisions
of Section 242 of the General Corporation
Law of the State of Delaware
-----------------------------------------
WE, Robert Howard, Chairman of the Board, and Richard A. Williams,
Secretary, of Presstek, Inc. (the "Corporation"), a corporation existing under
the laws of the State of Delaware, do hereby certify as follows:
FIRST: That the Restated Certificate of Incorporation of the Corporation
has been amended as follows by striking out the whole of Article FOURTH thereof
as it now exists and inserting in lieu and instead thereof a new Article FOURTH,
reading as follows:
"FOURTH: Capital Stock: The total number of shares of stock which the
Corporation shall have authority to issue is twenty-six million (26,000,000)
shares, consisting of One Million (1,000,000 shares of Preferred Stock, of the
par value of one cent ($.01) per share (hereinafter called "Preferred Stock"),
and Twenty-Five Million (25,000,000) shares of Common Stock, of the par value
($.01) per share (hereinafter called "Common Stock")."
<PAGE>
SECOND: That such amendment has been duly adopted in accordance with the
provisions of the General Corporation Law of the State of Delaware by the
affirmative vote of the holders of a majority of the stock entitled to vote at a
meeting of the stockholders.
IN WITNESS WHEREOF, we have signed this Certificate this 2nd day of June,
1994.
/s/ Robert Howard
-----------------------------------
Robert Howard, Chairman of the
Board
ATTEST:
/s/ R. A. Williams
- -----------------------------------
Richard A. Williams, Secretary
2
<PAGE>
CERTIFICATE OF CORRECTION
OF
CERTIFICATE OF AMENDMENT
TO
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
PRESSTEK, INC.
-----------------------------------------------
Pursuant to Section 103(f) of the
General Corporation Law of the State of Delaware
-----------------------------------------------
THE UNDERSIGNED, Chief Executive Officer of Presstek, Inc., a corporation
existing under the laws of the State of Delaware, does hereby certify as
follows:
1. The Certificate of Amendment to Amended and Restated Certificate of
Incorporation was filed with the Secretary of State of Delaware on February 16,
1989 deleting in its entirety Paragraph 4 of Article SEVENTH. The said Amendment
should have also deleted Paragraph 1 of Article SEVENTH in addition to Paragraph
4.
<PAGE>
2. The following is the entire Amendment in corrected form:
"CERTIFICATE OF AMENDMENT
TO
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
PRESSTEK, INC.
(Pursuant to Section 242 of the General Corporation Law of Delaware)
PRESSTEK, INC., a corporation organized and existing under and by virtue of
the General Corporation Law of the State of Delaware (the "Corporation"), DOES
HEREBY CERTIFY:
FIRST: That the Certificate of Incorporation of the Corporation was filed
on September 3, 1987, a Certificate of Amendment to Certificate of Incorporation
of the Corporation was filed on March 9, 1988, and an Amended and Restated
Certificate of Incorporation of the Corporation was filed on August 23, 1988.
SECOND: That the Board of Directors of the Corporation, by written consent
of directors in lieu of a meeting, pursuant to Section 141(f) of the General
Corporation Law of the State of Delaware, duly adopted resolutions setting forth
a proposed amendment to the Amended and Restated Certificate of Incorporation of
the Corporation, declaring said amendment to be advisable and calling for the
submission of said amendment to the stockholders of the Corporation for written
consent without a meeting, pursuant to
2
<PAGE>
Section 228 of the General Corporation Law of the State of Delaware, and stating
that such amendment will be effective only after written consent thereto by the
holders of a majority of all of the outstanding shares of capital stock of the
Corporation entitled to vote thereon.
THIRD: That thereafter, pursuant to the resolution of the Board of
Directors of the Corporation, said amendment was submitted to the holders of a
majority of all of the outstanding shares of capital stock of the Corporation,
and such holders, by written consent taken without a meeting in accordance with
Section 228 of the General Corporation Law of the State of Delaware, gave their
written consent and agreed to the adoption of the following resolution to amend
the Amended and Restated Certificate of Incorporation of the Corporation:
RESOLVED, that the Amended and Restated Certificate of Incorporation
of the Corporation be, and it hereby is, amended by deleting in their
entirety the present Paragraphs 1 and 4 of Article SEVENTH, and by
redesignating Paragraph 2 as Paragraph 1, Paragraph 3 as Paragraph 2 and
Paragraph 5 as Paragraph 3.
FOURTH: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware."
IN WITNESS WHEREOF, I have signed this Certificate this 10th
day of April, 1996.
/s/ R.A.Williams
--------------------------------------
Name: Richard A. Williams
Title:Chief Executive Officer
<PAGE>
CERTIFICATE OF AMENDMENT
OF THE
RESTATED CERTIFICATE OF INCORPORATION
OF
PRESSTEK, INC.
----------------------------------------
Adopted in accordance with the provisions
of Section 242 of the General Corporation
Law of the State of Delaware
-----------------------------------------
The undersigned, being the President of PRESSTEK, INC. (the "Corporation"),
a corporation existing under the laws of the State of Delaware, does hereby
certify as follows:
FIRST: That the Restated Certificate of Incorporation of the Corporation
has been amended as follows by striking out the whole of Article FOURTH thereof
as it now exists and inserting in lieu and instead thereof a new Article FOURTH,
reading as follows:
"FOURTH: Capital Stock. The total number of shares of stock which the
Corporation shall have authority to issue is seventy-six million
(76,000,000) shares, consisting of One Million (1,000,000) shares of
preferred stock, of the par value of one cent ($.01) per share (hereinafter
called 'Preferred Stock'), and Seventy-Five Million (75,000,000) shares of
common stock, of the par value of one cent ($.01) per share (hereinafter
called 'Common Stock')."
SECOND: That such amendment has been duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
1
<PAGE>
IN WITNESS WHEREOF, I have signed this Certificate this 28th day of May,
1996.
PRESSTEK, INC.
By: /s/ Robert E. Verrando
-----------------------------------
Name: Robert E. Verrando
Title: President
2
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
FORM 10-Q AT JUNE 29, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-28-1996
<PERIOD-END> JUN-29-1996
<CASH> 9,658,295
<SECURITIES> 9,111,208
<RECEIVABLES> 10,756,908
<ALLOWANCES> 0
<INVENTORY> 7,651,848
<CURRENT-ASSETS> 39,530,908
<PP&E> 11,560,901
<DEPRECIATION> 3,501,186
<TOTAL-ASSETS> 56,290,767
<CURRENT-LIABILITIES> 6,454,848
<BONDS> 0
0
0
<COMMON> 152,636
<OTHER-SE> 49,447,947
<TOTAL-LIABILITY-AND-EQUITY> 56,290,767
<SALES> 15,452,642
<TOTAL-REVENUES> 22,884,422
<CGS> 10,225,950
<TOTAL-COSTS> 10,225,950
<OTHER-EXPENSES> 4,033,156
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 5,016,134
<INCOME-TAX> 2,080,000
<INCOME-CONTINUING> 2,936,134
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,936,134
<EPS-PRIMARY> .18
<EPS-DILUTED> .18
</TABLE>
