UNITED STATES
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 March 28, 2008
[ ] TRANSITION REPORT PURSUANT TO SECTION 12 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ............. to ...........
Commission File Number: 0-19306
.............................
EXCEL TECHNOLOGY, INC.
Delaware 11-2780242
(State or other jurisdiction of (I.R.S. Employer
incorporation of organization) Identification No.)
41 Research Way, East Setauket, New York 11733
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (631) 784-6175
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 by check mark whether the registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated filer. See definition
of "accelerated filer and large accelerated filer" in Rule 12b-2 of the
Exchange Act. (Check one):
Large accelerated filer [ ] Accelerated filer [ X ]
Non-accelerated filer [ ] (Do not check if a smaller reporting company)
Smaller reporting company [ ]
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [ X ]
The number of shares outstanding of registrant's common stock, par value
$.001 on May 2, 2008 was 10,859,886.
CONTENTS
PART I. FINANCIAL INFORMATION
Page
Item 1. Consolidated Financial Statements:
..................................
Consolidated Balance Sheets as of March 28, 2008 (unaudited)
and December 31, 2007 3
Consolidated Statements of Income (unaudited) for the Three
Months Ended March 28, 2008 and March 30, 2007 4
Consolidated Statements of Cash Flows (unaudited) for the
Three Months Ended March 28, 2008 and March 30, 2007 5
Notes to Consolidated Financial Statements (unaudited) 6
Item 2. Management's Discussion and Analysis of Financial
.................................................
Condition and Results of Operations 14
...................................
Item 3. Quantitative and Qualitative Disclosures about Market Risk 18
..........................................................
Item 4. Controls and Procedures 19
.......................
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 19
.................
Item 1A. Risk Factors 19
............
Item 2. Issuer Purchases of Equity Securities 19
.....................................
Item 3. Defaults Upon Senior Securities 20
...............................
Item 4. Submission of Matters to a Vote of Security-Holders 20
...................................................
Item 5. Other Information 20
.................
Item 6. Exhibits 20
........
Exhibits - (11) Computation of net income per share 23
(31) Certifications Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002 24
(32) Certifications Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002, 18 U.S.C.
Section 1350 26
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements:
..................................
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
March 28, 2008 Dec. 31, 2007
.............. .............
(Unaudited)
Assets
.......
Current assets:
Cash and cash equivalents $ 18,207 $ 9,981
Investments 0 47,550
Accounts receivable, less allowance for
doubtful accounts of $1,117 and $833
in 2008 and 2007, respectively 27,874 24,008
Inventories 35,353 33,792
Deferred income taxes, net 2,388 2,518
Other current assets 1,746 1,544
Income taxes receivable 712 2,155
......... .........
Total current assets 86,280 121,548
......... .........
Investments 32,420 0
Property, plant and equipment 24,713 24,679
Other assets 2,009 1,925
Goodwill 32,783 32,380
......... .........
Total Assets $ 178,205 $ 180,532
......... .........
......... .........
Liabilities and Stockholders' Equity
.....................................
Current liabilities:
Accounts payable $ 7,680 $ 5,090
Accrued expenses and other current liabilities 8,243 7,116
Income taxes payable 1,107 1,543
......... .........
Total current liabilities 17,030 13,749
......... .........
Deferred income taxes, net 3,481 3,533
Accrued deferred compensation 1,549 1,535
Minority interest in subsidiary 121 128
Stockholders' equity:
Preferred stock, par value $.001 per share:
2,000 shares authorized, none issued 0 0
Common stock, par value $.001 per share:
20,000 shares authorized, 10,854 and 11,280
shares issued and outstanding in 2008 and 2007,
respectively 11 11
Additional paid-in capital 15,895 27,361
Retained earnings 133,661 129,334
Accumulated other comprehensive income 6,457 4,881
......... .........
Total stockholders' equity 156,024 161,587
......... .........
Total Liabilities and Stockholders' Equity $ 178,205 $ 180,532
......... .........
......... .........
See Notes to Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited and in thousands, except income per share amounts)
Three Months Ended
........................
March 28, March 30,
2008 2007
......... .........
Net sales and services $ 39,334 $ 40,941
Cost of sales and services 22,236 23,100
......... .........
Gross profit 17,098 17,841
Operating expenses:
Selling and marketing 4,767 4,327
General and administrative 3,674 4,174
Research and development 3,886 3,826
......... .........
Total operating expenses 12,327 12,327
......... .........
Income from operations 4,771 5,514
Non-operating income (expense):
Interest income 633 781
Minority interest 7 1
Foreign currency gains and other, net 256 97
......... .........
Income before provision for income taxes 5,667 6,393
Provision for income taxes 1,340 1,738
......... .........
Net income $ 4,327 $ 4,655
......... .........
......... .........
Basic income per common share $0.39 $0.38
......... .........
......... .........
Basic weighted average common
shares outstanding 11,011 12,107
......... .........
......... .........
Diluted income per common share $0.39 $0.38
......... .........
......... .........
Diluted weighted average common and
common equivalent shares outstanding 11,222 12,409
......... .........
......... .........
See Notes to Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited and in thousands)
Three Months Ended
........................
March 28, March 30,
2008 2007
......... .........
Operating activities:
Net income $ 4,327 $ 4,655
Adjustments to reconcile net income to net cash
provided by operating activities:
Minority interest (7) (1)
Depreciation and amortization 626 648
Stock-based compensation expense 233 791
Tax benefit from employee stock option
exercises (23) (23)
Provision for doubtful accounts 288 54
Deferred income taxes 78 (241)
Changes in operating assets and liabilities:
Accounts receivable (3,295) (4,622)
Inventories (816) 255
Other current assets 1,293 23
Other assets (449) 60
Accounts payable 2,426 551
Accrued expenses, other current
liabilities and income taxes payable 535 663
Accrued deferred compensation 14 (1,375)
......... .........
Net cash provided by
operating activities 5,230 1,438
......... .........
Investing activities:
Proceeds from investment redemptions,
net of purchases 14,951 (3,230)
Purchases of property, plant and equipment (590) (527)
Net cash provided by (used in)
investing activities 14,361 (3,757)
......... .........
Financing activities:
Proceeds from exercise of common stock options 65 1,094
Repurchases of common stock (11,782) 0
Stock-based compensation excess tax benefit 23 23
......... .........
Net cash (used in) provided by
financing activities (11,694) 1,117
......... .........
Effect of exchange rate changes on
cash and cash equivalents 329 30
Net increase (decrease) in cash
and cash equivalents 8,226 (1,172)
Cash and cash equivalents - beginning of period 9,981 9,903
......... .........
Cash and cash equivalents - end of period $ 18,207 $ 8,731
......... .........
......... .........
Supplemental cash flow information:
....................................
Cash paid for:
Interest $ 0 $ 0
Income taxes $ 184 $ 1,358
See Notes to Consolidated Financial Statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
A. CONSOLIDATED FINANCIAL STATEMENTS
.................................
Excel Technology, Inc. and Subsidiaries (the "Company") manufactures
and markets laser systems and electro-optical components primarily for
industrial and scientific applications.
The consolidated balance sheet as of March 28, 2008, the
consolidated statements of income for the three months ended March 28,
2008 and March 30, 2007 and the consolidated statements of cash flows for
the three months ended March 28, 2008 and March 30, 2007 have been
prepared by the Company and are unaudited. In the opinion of management,
all adjustments (which included only normal recurring adjustments) have
been made which are necessary to present fairly the financial position,
results of operations and cash flows of the Company at March 28, 2008 and
for all periods presented.
The preparation of financial statements in conformity with U.S.
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets,
liabilities, revenues and expenses reported in those financial
statements. These judgments can be subjective and complex, and
consequently actual results could differ from those estimates and
assumptions.
For information concerning the Company's significant accounting
policies, reference is made to the Company's Annual Report on Form 10-K
for the year ended December 31, 2007. While the Company believes that the
disclosures presented are adequate to make the information contained
herein not misleading, it is suggested that these statements be read in
conjunction with the consolidated financial statements and notes included
in the Form 10-K. Results of operations for the period ended March 28,
2008 are not necessarily indicative of the operating results to be
expected for future interim periods or the full year ending December 31,
2008.
The Company's quarterly closing dates end on the Friday prior and
closest to or on the last day of each calendar quarter. The Company's
fiscal year always ends on December 31st.
B. ACCOUNTING FOR STOCK-BASED COMPENSATION
.......................................
The Company's stock-based employee compensation plans are described
more fully below. Effective January 1, 2006, the Company adopted the
fair value recognition provisions of SFAS No. 123(R), "Share-Based
Payment" ("SFAS No. 123 (R)"), using the modified prospective transition
method. Under that transition method, compensation expense recognized
for the three months ended March 28, 2008 and March 30, 2007 includes
compensation expense for all share-based payments granted prior to, but
not yet vested as of January 1, 2006, based on the grant date fair value
determined in accordance with the original provisions of SFAS No. 123.
The fair value of the options was determined at the date of grant using
the Black-Scholes option pricing model and is being amortized to expense
over the options' vesting periods. Stock based compensation expense for
an award with only service conditions that has a graded vesting schedule
is recognized on a straight-line basis over the requisite service period
for the entire award, with such amount recognized at any date at least
equaling the portion of the grant date fair value of the award that is
vested at that date. Stock based compensation expense for an award that
includes a performance condition that has a graded vesting schedule is
recognized on a straight-line basis over the requisite service period for
each separately vesting portion of the award.
There were 40 thousand shares of restricted stock granted during the
three months ended March 28, 2008, none of which had vested as of March
28, 2008. There were 125 thousand shares of restricted stock granted
during the three months ended March 30, 2007, 106 thousand of which had
vested as of March 28, 2008.
During the three months ended March 28, 2008, 23 thousand restricted
shares from a prior year grant vested and were issued to employees, of
which 8 thousand shares were surrendered to the Company to fulfill the
employee's minimum statutory tax withholding obligations of $218 thousand
for the applicable income. The 8 thousand acquired shares were retired.
These net share settlements had no impact on the amount of compensation
cost recognized in respect of these awards.
There were no stock option grants during the three months ended
March 28, 2008 and March 30, 2007.
The following table illustrates the stock based compensation expense
recorded in the consolidated statements of income for the three months
ended March 28, 2008 and March 30, 2007 and the impact on the Company's
income before provision for income taxes, net income and income per share
(In thousands, except per share data).
Three months Three months
ended ended
March 28, 2008 March 30, 2007
.............. ..............
Stock based compensation expense:
Stock options $ 4 $ 17
Restricted stock $ 229 $ 774
Impact on income before
provision for income taxes $ 233 $ 791
Impact on net income $ 150 $ 580
Impact on basic income per
common share $ 0.01 $ 0.05
Impact on diluted income
per common share $ 0.01 $ 0.04
The actual income tax benefit realized for the tax deductions from
stock option exercises for both the three months ended March 28, 2008 and
March 30, 2007 was $23 thousand.
There was an $83 thousand net tax benefit recognized related to the
compensation expense for share-based payment arrangements for the three
months ended March 28, 2008, resulting in a $83 thousand deferred tax
asset at March 28, 2008. There was no tax benefit recognized related to
the $4 thousand and $17 thousand of compensation expense for stock
options for the quarters ended March 28, 2008 and March 30, 2007,
respectively, as all the related options were incentive stock options and
the tax benefit associated with disqualified incentive stock options is
recognized by the Company only after such incentive stock options are
exercised and disqualified.
The following paragraphs describe each of the Company's stock-based
compensation plans:
In 1990, the Company adopted a stock option plan (the "Plan") which
provided for the granting of incentive stock options and non-incentive
stock options to certain key employees, including officers and directors,
to purchase an aggregate of 2,000,000 shares of common stock, as amended,
at prices and terms determined by the Board of Directors. Options
granted under the Plan, which terminated on July 30, 2000, may be
exercisable for a period of up to ten years. All options granted to
employees under the Plan have exercise prices equal to the market value
of the stock on the date of grant, vest ratably over three or five years
and expire either five or ten years from date of grant.
In 1998, the Company adopted a stock option plan (the "1998 Plan")
which provides for the granting of incentive stock options and non-
incentive stock options to certain key employees, including officers and
directors, and consultants to purchase an aggregate of 1,000,000 shares
of common stock at prices and terms determined by the Board of Directors.
The exercise price per share of incentive stock options must be at least
100% of the market value of the stock on the date of the grant, except in
the case of shareholders owning more than 10% of the outstanding shares
of common stock, the option price must be at least 110% of the market
value on the date of the grant, and for non-incentive stock options such
price may be less than 100% of the market value of the stock on the date
of grant. Options granted under the 1998 Plan, which terminated on April
8, 2008, may be exercisable for a period up to ten years. Through March
28, 2008, all options granted to employees under the 1998 Plan have
exercise prices equal to the market value of the stock on the date of
grant, vest ratably over three or five years, and expire either five or
ten years from the date of grant. As of March 28, 2008, options for the
purchase of 20,692 shares were available for future grant under the 1998
Plan.
In 2004, the Company adopted a stock option plan (the "2004 Plan")
which provides for the granting of incentive stock options and non-
incentive stock options to certain key employees, including officers and
directors of the Company and consultants to purchase an aggregate of
1,000,000 shares of common stock at prices and terms determined by the
Board of Directors. The option price per share of incentive stock
options must be at least 100% of the market value of the stock on the
date of the grant, except in the case of shareholders owning more than
10% of the outstanding shares of common stock, the option price must be
at least 110% of the market value on the date of the grant, and for non-
incentive stock options such price may be less than 100% of the market
value of the stock on the date of grant. Options granted under the 2004
Plan, which terminates on February 23, 2014, may be exercisable for a
period up to ten years. Through March 28, 2008, all options granted to
employees under the 2004 Plan have exercise prices equal to the market
value of the stock on the date of grant, vest immediately, and expire ten
years from the date of grant. Although there were 445,000 shares of
common stock available for issuance under the 2004 Plan, when the 2006
option plan discussed below was approved, the Company agreed to
discontinue granting options under the 2004 Plan.
In 2006, the Company adopted a stock option / stock issuance plan
(the "2006 Plan"), which provides for an aggregate of up to 750,000
shares of common stock, which may be directly issued to eligible
participants, granted as incentive stock options to employees of the
Company or granted as non-statutory stock options to employees, including
officers and directors of the Company, as well as to certain advisors and
consultants. Shares of common stock issued under the 2006 Plan may, in
the discretion of the Company's Compensation Committee ("the Committee"),
be fully and immediately vested upon issuance or may vest in one or more
installments over the participant's period of service and / or upon
attainment of specified performance objectives. Recipients of common
stock under the stock issuance program have full stockholder rights with
respect to those shares, whether or not their interest in those shares is
vested. The exercise price for the common stock underlying the options
is determined by the Committee, but in no event shall it be less than
100% of the fair market value of the Company's common stock on the date
the option is granted (110% in the case of incentive stock options
granted to optionees who own more than 10% of the voting power of all
classes of stock of the Company). No option granted under the 2006 Plan
may be exercised after the expiration of the option, which may not, in
any case, exceed ten years from the date of grant (five years in the case
of incentive options granted to persons who own more than 10% of the
voting power of all classes of the stock of the Company). Options granted
under the 2006 Plan are exercisable on such basis as determined by the
Committee, and become fully exercisable upon the sale or merger of the
Company, as defined in the 2006 Plan. As of March 28, 2008, no options
were granted and 165 thousand restricted common shares were awarded under
the 2006 Plan.
The following table summarizes activity related to the Company's
stock option / stock issuance plans during the three months ended
March 28, 2008:
Stock Weighted Stock
Options' Average Options'
Number of Number Weighted Remaining Aggregate
restricted of stock Average Contractual Intrinsic
shares (in options (in Exercise Term (in Value(in
thousands) thousands) Price years) thousands)
.......... ........... ........ ........... ..........
Outstanding at
December 31, 2007 42 1,139 $ 22.18
Granted 40 0 $ 0
Options exercised/
restricted stock
vested (23) (5) $ 13.06
Cancelled 0 0 $ 0
.......... ...........
Outstanding at
March 28, 2008 59 1,134 $ 22.22 5.04 $ 6,056
.......... ...........
.......... ...........
Shares/Options
not vested at
March 28, 2008 59 1 $ 29.70 5.99 $ 0
Vested and exercisable
at March 28, 2008 0 1,133 $ 22.21 5.04 $ 6,056
The aggregate intrinsic value in the table above represents the
total pre-tax intrinsic value (the difference between the Company's
closing common stock price on the last trading day of the first quarter
of 2008 and the exercise price, multiplied by the number of in-the-money
options) that would have been received by the option holders had all
option holders exercised their options on March 28, 2008. This amount
changes based on the fair market value of the Company's common stock.
Total intrinsic value of options exercised for the three months ended
March 28, 2008 and for the three months ended March 30, 2007 was $65
thousand and $441 thousand, respectively.
As of March 28, 2008, there was $12 thousand of unrecognized stock-
based compensation expense related to non-vested stock options, which is
expected to be recognized over a weighted average period of less than one
year and $1.3 million of unrecognized stock-based compensation expense
related to non-vested restricted stock, which is expected to be
recognized over a weighted average period of approximately 2 years.
When an option is exercised, the Company issues new shares of common
stock.
No shares were used by employees to exercise options in 2008. In
2007, 15 thousand shares of common stock were used by employees to
exercise options. Such shares, which had a market value of $420
thousand, were retired.
C. INVENTORIES
...........
Inventories are recorded at the lower of cost, on a first-in, first
out basis, or market value. Inventories consist of the following (in
thousands):
March 28, 2008 December 31, 2007
.............. .................
Raw Materials $ 17,978 $ 18,421
Work-in-Process 9,649 8,206
Finished Goods 5,227 5,064
Consigned Inventory 2,499 2,101
......... ..........
$ 35,353 $ 33,792
D. COMPREHENSIVE INCOME
....................
Comprehensive income is comprised of net income, foreign currency
translation adjustments, and unrealized losses on investments amounting
in the aggregate to $5.9 million and $5.0 million for the three months
ended March 28, 2008 and March 30, 2007, respectively. The differences
between net income and comprehensive income for each of these periods
were as follows (in thousands):
March 28, 2008 March 30, 2007
.............. ..............
Net Income $ 4,327 $ 4,655
Foreign Currency
Translation Adjustment 1,755 317
Unrealized Losses on
Investments (179) 0
........ .......
Total Other
Comprehensive Income 1,576 317
Comprehensive Income $ 5,903 $ 4,972
........ ........
........ ........
A rollforward of the amounts included in accumulated other
comprehensive income, net of taxes is shown below (in thousands):
Balance at December 31, 2007 $ 4,881
Foreign Currency Translation Adjustment 1,755
Unrealized Losses on Investments (179)
........
Balance at March 28, 2008 $ 6,457
........
........
E. ACCRUED WARRANTY COSTS
......................
Quarterly, the Company analyzes its warranty liability for
reasonableness based upon a five-year history of warranty costs incurred,
the nature of the products shipped subject to warranty and anticipated
warranty trends.
Changes in the warranty liability during the three-month period
ended March 28, 2008 were as follows (In thousands):
Balance at December 31, 2007 $ 846
Provisions for warranties during
the three-months ended March 28, 2008 155
Costs of warranty obligations during
the three-months ended March 28, 2008 (125)
........
Balance at March 28, 2008 $ 876
........
........
F. COMMITMENTS AND CONTINGENCIES
.............................
The Company and its subsidiaries are subject to various claims,
which have arisen in the normal course of business. The impact of the
final resolution of these matters on the Company's results of operations
in a particular reporting period is not known. Management is of the
opinion, however, that the ultimate outcome of such matters will not have
a material adverse effect upon the Company's financial condition or
liquidity.
G. INVESTMENTS
...........
As of March 28, 2008, the Company had $32.7 million of auction rate
notes, which are classified as long-term assets. These auction rate
notes are student loans backed by the federal government and are
privately insured. Current capital market conditions have impacted the
Company's ability to liquidate certain auction-rate securities.
Liquidity for these auction-rate securities is typically provided by an
auction process that resets the applicable interest rate at pre-
determined intervals, usually every 7, 28, 35 or 90 days. In the past,
the auction process has allowed investors to roll over their holdings or
obtain immediate liquidity by selling the securities at par. In recent
months, certain auctions have not had sufficient bidders to allow
investors to complete a sale of some auction-rate securities. Due to the
uncertainty in the market as to when these auction rate notes will be
refinanced or the auctions will resume the Company has classified them as
long-term assets and recorded an unrealized loss on these investments of
$179 thousand. See Note L for further discussion.
H. GOODWILL
........
The change in the goodwill balance during the three months ended
March 28, 2008 is attributable to changes in foreign currency exchange
rates used to translate the goodwill contained in the financial
statements of foreign subsidiaries.
I. TREASURY STOCK
..............
Effective November 1, 2006, the Company's Board of Directors
authorized a stock buy-back program for the repurchase of up to 2,000,000
shares of its common stock. Purchases have occurred and will continue to
occur from time to time in open market transactions or privately
negotiated transactions at the Company's discretion, including the
quantity, timing and price thereof. During the three months ended March
28, 2008, the Company repurchased 445,788 shares of common stock for
$11.6 million. As of March 28, 2008, the Company had repurchased
1,494,656 shares of common stock under the program as treasury stock and
all of its treasury stock had been retired.
J. DEFERRED COMPENSATION
.....................
The Company has a deferred compensation plan whereby certain
compensation earned by a participant can be deferred and, if funded, the
related assets are placed in an employee benefit trust, also known as a
"rabbi trust." Under the deferred compensation plan, the participant may
choose from several investment designations. At March 28, 2008, the
Company had $1.5 million of accrued deferred compensation, which was
funded and the related assets are included in non-current assets on the
balance sheet.
K. INCOME TAXES
............
On January 1, 2007, the Company adopted FASB Interpretation No.
("FIN") 48, Accounting for Uncertainty in Income Taxes-an Interpretation
of SFAS No. 109. This Interpretation clarifies the accounting for
uncertainty in income taxes recognized in an enterprise's financial
statements in accordance with Statement of Financial Accounting Standards
(SFAS) No. 109, Accounting for Income Taxes. FIN 48 prescribes a
recognition threshold and measurement attribute for the financial
statement recognition and measurement of an income tax position taken or
expected to be taken in an income tax return. FIN 48 provides that
unrecognized tax benefits should be based on the facts, circumstances and
information available at each balance sheet date and that subsequent
changes in judgment should be based on new facts and circumstances and
any resulting change in the amount of unrecognized tax benefit should be
accounted for in the interim period in which the change occurs. The
adoption of FIN 48 had no impact on the Company's consolidated financial
statements.
The aggregate amount of unrecognized tax benefits included in
liabilities was as follows (in thousands):
Balance at December 31, 2007 $ 1,531
Gross increase related to tax
positions taken prior to 2008 2
Decrease from settlements with
taxing authorities (426)
.......
Balance at March 28, 2008 $ 1,107
.......
.......
As of March 28, 2008, there were no significant changes to the
Company's unrecognized income tax benefit which was recorded as of
January 1, 2008, except a reduction of $426 thousand, including the
related accrued interest, for a settlement with taxing authorities.
All unrecognized tax benefits, if recognized, would affect the
effective tax rate. The liability for unrecognized tax benefits includes
accrued interest for tax positions, which either do not meet the more-
likely-than-not recognition threshold or where the tax benefit is
measured at an amount less than the tax benefit claimed or expected to be
claimed on an income tax return. At March 28, 2008 and December 31,
2007, accrued interest on uncertain tax positions was approximately $166
thousand and $205 thousand, respectively.
Interest expense recognized in the statement of income related to
liabilities for unrecognized tax benefits for the three months ended
March 28, 2008 was $2 thousand.
Interest expense related to income tax liabilities recognized in
accordance with the provisions of FIN 48 is included in income tax
expense, consistent with the Company's historical policy.
With a few exceptions, the Company is no longer subject to federal,
state or local income tax audits by taxing authorities for years before
2004. The most significant jurisdictions in which the Company is
required to file income tax returns include the states of California,
Massachusetts and New York. As of March 28, 2008, the Company has
completed its Internal Revenue Service audit for the tax years ended
December 31, 2005 and 2006, and other state and local audits; the results
of which are reflected in the income tax expense for the quarter.
L. FAIR VALUE MEASUREMENT
......................
In September 2006, the FASB issued SFAS No. 157, "Fair Value
Measurements" ("SFAS 157"), which defines fair value, establishes a
framework for measuring fair value and expands the related disclosure
requirements. SFAS 157 applies under other accounting pronouncements
that require or permit fair value measurements and does not require any
new fair value measurements. SFAS 157 indicates, among other things,
that a fair value measurement assumes that the transaction to sell an
asset or transfer a liability occurs in the principal market for the
asset or liability or, in the absence of a principal market, the most
advantageous market for the asset or liability. SFAS 157 defines fair
value based upon an exit price model.
In February 2008, the FASB issued FASB Staff Positions (FSP) SFAS
No. 157-1, "Application of FASB Statement No. 157 to FASB Statement No.
13 and Its Related Interpretive Accounting Pronouncements That Address
Leasing Transactions," and FSP SFAS No. 157-2, "Effective Date of FASB
Statement No. 157." FSP SFAS 157-1 removes leasing transactions from the
scope of SFAS No. 157, while SFAS No. 157-2 defers the effective date of
SFAS 157 to the fiscal year beginning after November 15, 2008 for
nonfinancial assets and nonfinancial liabilities that are recognized or
disclosed at fair value in the financial statements on a nonrecurring
basis. It does not defer recognition and disclosure requirements for
financial assets and financial liabilities, or for nonfinancial assets
and nonfinancial liabilities that are remeasured at least annually.
Effective January 1, 2008, the Company adopted SFAS 157, with the
exception of the application of the statement to non-recurring
nonfinancial assets and nonfinancial liabilities. Non-recurring
nonfinancial assets and nonfinancial liabilities for which we have not
applied the provisions of SFAS 157 include those measured at fair value
in goodwill impairment testing, indefinite lived intangible assets
measured at fair value for impairment testing, asset retirement
obligations initially measured at fair value, and those initially
measured at fair value in a business combination.
SFAS 157 establishes a valuation hierarchy for disclosure of the
inputs to valuation used to measure fair value. This hierarchy
prioritizes the inputs into three broad levels as follows. Level 1
observable inputs such as quoted prices (unadjusted) in active markets
for identical assets or liabilities. Level 2 inputs are quoted prices
for similar assets and liabilities in active markets or inputs that are
observable for the asset or liability, either directly or indirectly
through market corroboration, for substantially the full term of the
financial instrument. Level 3 inputs are unobservable inputs in which
little or no market data exists therefore requiring a Company to develop
its our own assumptions to measure assets and liabilities at fair value.
A financial asset or liability's classification within the hierarchy is
determined based on the lowest level input that is significant to the
fair value measurement.
As of March 28, 2008, the Company held certain assets that are
required to be measured at fair value on a recurring basis. These assets
are auction rate notes and are measured at fair value using quoted market
prices of the same or similar assets and are classified within Level 2 of
the valuation hierarchy. The fair value of auction rate notes held by
the Company on March 28, 2008 has been established at $32.4 million and
has been reflected in the Company's consolidated financial statements as
non-current investments. The unrealized losses, net of taxes of $179
thousand are included in other comprehensive income.
The following table provides the assets carried at fair value
measured on a recurring basis as of March 28, 2008 (in millions):
Fair Value Measurements at March 28, 2008 Using
.................................................
Observable
inputs such
Total as quoted Significant
Carrying prices in other Significant
Value at active observable unobservable
March 28, markets inputs inputs
2008 (Level 1) (Level 2) (Level 3)
.................................................
Auction rate notes $ 32.7 0 $ 32.4 0
Item 2. Management's Discussion and Analysis of Financial Condition and
...............................................................
Results of Operations
.....................
Overview
The Company designs, manufactures and markets photonics-based
solutions consisting of laser systems and electro-optical components
primarily for industrial and scientific applications. The Company's
current range of products include laser marking and engraving systems,
laser micro-machining systems, CO2 lasers, optical scanners, high power
solid state CW and Q-switched lasers, ultrafast lasers, high energy solid
state pulsed lasers, precision optical components and light and color
measurement instruments. The laser and electro-optical industry is
subject to intense competition and rapid technological developments. Our
strength and success is dependent upon us developing and delivering
successful, timely and cost effective solutions to our customers. The
Company believes, for it to maintain its performance, it must continue to
increase its operational efficiencies, improve and refine its existing
products, expand its product offerings and develop new applications for
its technology. The Company's strategy has been to grow internally and
through acquisitions of complementary businesses. Historically, the
Company has successfully integrated acquired companies.
Results of Operations
......................
Net sales and services for the quarter ended March 28, 2008
decreased $1.6 million or 3.9% to $39.3 million from $40.9 million for
the quarter ended March 30, 2007. The decrease for the quarters in
comparison is attributable to decreased high power and high energy solid
state laser, scanner and optical product sales partially offset by
increased marking and engraving system, CO2 laser and light and color
instrument sales.
Gross margins decreased to 43.5% for the three months ended March
28, 2008 from 43.6% for the three months ended March 30, 2007. The
marginal decrease is primarily due to the product mix as gross margins
vary among the numerous Company product configurations.
Selling and marketing expenses increased to $4.8 million in the
quarter ended March 28, 2008 from $4.3 million in the quarter ended March
30, 2007. The increase of $440 thousand or 10.2% is primarily
attributable to an investment in fixed and variable costs associated with
increasing our sales force. Selling and marketing expenses as a
percentage of sales increased to 12.1% for the quarter ended March 28,
2008 from 10.6% for the quarter ended March 30, 2007. The increase as a
percentage of sales is essentially attributable to higher fixed costs
being absorbed by lower sales volume.
General and administrative expenses decreased $500 thousand or 12.0%
from $4.2 million in the quarter ended March 30, 2007 to $3.7 million in
the quarter ended March 28, 2008. The decrease is primarily attributable
to decrease in stock-based compensation expense in 2008 of $558 thousand
for the three months ended March 28, 2008.
Research and development costs increased $60 thousand or 1.6% to
$3.9 million from $3.8 million for the quarters ended March 28, 2008 and
March 30, 2007, respectively. The increase in research and development
costs was primarily attributable to increased investments throughout our
product lines.
Interest income decreased $148 thousand to $633 thousand in the
quarter ended March 28, 2008 from $781 thousand in the same period of
2007. The decrease is primarily due to the Company's use of cash to buy
back shares, reducing the investing cash balance and the earned interest
income.
Foreign currency gains and other income, net was $256 thousand for
the quarter ended March 28, 2008 as compared to $97 thousand for the
quarter ended March 30, 2007, which included foreign currency transaction
gains of $198 thousand and $21 thousand, respectively, principally at
Excel Europe and Japan for the settlement of payables due in U.S. dollars
for the purchase of inventories from the Company's U.S. subsidiaries, as
a result of the decline in the value of the U.S. dollar against the Euro
and Japanese Yen.
The provision for income taxes decreased $398 thousand or 22.9% from
$1.7 million in the quarter ended March 30, 2007 to $1.3 million for the
current quarter ended March 28, 2008. The effective tax rate was 23.7%
for the quarter ended March 28, 2008 compared to 28.1% for the year ended
December 31, 2007. In 2008, the effective tax rate was lower due to
settlements with taxing authorities.
Liquidity and Capital Resources
................................
Cash Flow Overview
Cash, cash equivalents and investments decreased $6.9 million during
the three months ended March 28, 2008 to $50.6 million. The decrease was
primarily due to $11.8 million used for the repurchase of common shares
and net cash used for capital expenditures of $590 thousand partially
offset by the net cash provided by operating activities of $5.2 million
and proceeds from the exercise of common stock options of $65 thousand.
The Company also experienced a favorable foreign exchange effect on cash
of $329 thousand in 2008. As of March 28, 2008 the Company had no bank
debt.
At March 28, 2008, the Company had working capital of $69.3 million,
including cash and cash equivalents of $18.2 million, compared to working
capital of $107.8 million, including cash and investments of $57.5
million, at December 31, 2007. Working capital decreased by $38.5
million during the three months ended March 28, 2008 primarily because
auction rate notes were classified as long-term investments at March 28,
2008 whereas they were classified as short-term investments at December
31, 2007.
Net cash provided by operating activities was $5.2 million for the
three months ended March 28, 2008 and $1.4 million for the three months
ended March 30, 2007, which were primarily attributable to net income
plus depreciation and amortization expenses, and net changes in working
capital items. Depreciation and amortization for the three months ended
March 28, 2008 was $626 thousand. Accounts receivable at March 28, 2008
of $27.9 million increased $3.9 million from December 31, 2007 primarily
due to the timing of the shipments in the first quarter of 2008 compared
to the fourth quarter of 2007. Inventory at March 28, 2008 of $35.4
million increased $1.6 million from December 31, 2007 primarily due to
increased projected sales volume for the second quarter of 2008 compared
to the first quarter of 2008.
Net cash provided by investing activities of $14.4 million was
attributable to the net redemptions of auction rate notes for $15.0
million offset by purchases of equipment for $590 thousand for the three
months ended March 28, 2008. Net cash used in investing activities of
$3.8 million was attributable to the purchase of auction rate notes for
$3.2 million and equipment for $527 thousand for the three months ended
March 30, 2007. The fair value of auction rate notes held by the Company
on March 28, 2008 has been established at $32.4 million and has been
reflected in the Company's consolidated financial statements as non-
current investments. The unrealized losses, net of taxes of $179
thousand are included in other comprehensive income.
Net cash used in financing activities of $11.7 million for the three
months ended March 28, 2008 was primarily attributable to the repurchase
of common stock for $11.8 million, offset by $65 thousand of proceeds
received upon the exercise of employee stock options and a $23 thousand
income tax benefit from employee stock option exercises. Net cash
provided by financing activities was $1.1 million for the three months
ended March 30, 2007 resulting primarily from the proceeds received upon
the exercise of employee stock options.
As of March 28, 2008, the Company has no lines of credit.
The Company intends to continue to invest in product development,
plant and equipment and marketing in support of its growth strategy.
These investments aid in retaining and acquiring new customers, expanding
the Company's current product offerings and further developing its
operating infrastructure. The Company believes that current cash, cash
equivalents and investments will be sufficient to meet these anticipated
cash needs for at least the next twelve months. However, any projections
of future cash needs and cash flows are subject to substantial
uncertainty. If current cash, cash equivalents and investments and those
that may be generated from operations are insufficient to satisfy the
Company's liquidity requirements, the Company may seek to sell additional
equity or debt securities or secure lines of credit. The sale of
additional equity or convertible debt securities could result in
additional dilution to the Company's stockholders. In addition, the
Company will, from time to time, consider the acquisition of, or
investment in, complementary businesses, products, services and
technologies, which might impact the Company's liquidity requirements or
cause the Company to issue additional equity or debt securities. There
can be no assurance that financing will be available, on terms that are
acceptable to the Company or at all.
Inflation
..........
In the opinion of management, inflation has not had a material
effect on the operations of the Company.
Accounting Pronouncements Adopted in Fiscal 2008
.................................................
Effective January 1, 2008, the Company adopted SFAS No. 157, "Fair
Value Measurements" ("SFAS 157"), which defines fair value, establishes a
framework for measuring fair value and expands the related disclosure
requirements. SFAS 157 applies under other accounting pronouncements
that require or permit fair value measurements and does not require any
new fair value measurements. SFAS 157 indicates, among other things,
that a fair value measurement assumes that the transaction to sell an
asset or transfer a liability occurs in the principal market for the
asset or liability or, in the absence of a principal market, the most
advantageous market for the asset or liability. SFAS 157 defines fair
value based upon an exit price model. Refer to Note K to the
consolidated financial statements for additional discussion on fair value
measurements.
In February 2007, the FASB issued SFAS No. 159, "The Fair Value
Option for Financial Assets and Financial Liabilities Including an
Amendment of FASB Statement No. 115" ("SFAS 159") which permits entities
to choose to measure many financial instruments and certain other items
at fair value that are not currently required to be measured at fair
value. The fair value measurement election is irrevocable and subsequent
changes in fair value must be recorded in earnings. SFAS 159 also
establishes presentation and disclosure requirements designed to
facilitate comparisons between entities that choose different measurement
attributes for similar types of assets and liabilities. Unrealized gains
and losses on items for which the fair value option is elected would be
reported in earnings. Effective January 1, 2008, the Company has adopted
SFAS No. 159 and has elected not to measure any additional financial
instruments and other items at fair value.
Recently Issued Accounting Pronouncements Not Yet Adopted
..........................................................
In December 2007, the FASB issued SFAS No. 141(R), "Business
Combinations" ("SFAS 141(R)") which requires the acquiring entity in a
business combination to recognize most identifiable assets acquired,
liabilities assumed, noncontrolling interests and goodwill acquired in a
business combination at full fair value; establishes the acquisition-date
fair value as the measurement objective for all assets acquired and
liabilities assumed; and requires the acquirer to disclose to investors
and other users all of the information they need to evaluate and
understand the nature and financial effect of the business combination.
SFAS 141(R) is effective for fiscal years beginning after December 15,
2008. As SFAS 141(R) will be applied to business combinations occurring
after the effective date, management does not believe that adoption of
this standard will have any impact on the Company's consolidated
financial statements.
In December 2007, the FASB issued SFAS No. 160, "Noncontrolling
Interests in Consolidated Financial Statements - an amendment of ARB
No.51" ("SFAS 160") which requires all entities to report noncontrolling
interests (previously referred to as minority interests) in subsidiaries
as a separate component of equity in the consolidated financial
statements. Moreover, SFAS 160 eliminates the diversity that currently
exists in accounting for transactions between an entity and
noncontrolling interests by requiring they be treated as equity
transactions. SFAS 160 is effective for fiscal years beginning after
December 15, 2008. Management is evaluating the impact the adoption of
this standard will have on the Company's consolidated financial
statements.
In February 2008, the FASB issued FASB Staff Positions (FSP) SFAS
No. 157-1, "Application of FASB Statement No. 157 to FASB Statement No.
13 and Its Related Interpretive Accounting Pronouncements That Address
Leasing Transactions," and FSP SFAS No. 157-2, "Effective Date of FASB
Statement No. 157." FSP SFAS 157-1 removes leasing transactions from the
scope of SFAS No. 157, while SFAS No. 157-2 defers the effective date of
SFAS 157 to the fiscal year beginning after November 15, 2008 for
nonfinancial assets and nonfinancial liabilities that are recognized or
disclosed at fair value in the financial statements on a nonrecurring
basis. It does not defer recognition and disclosure requirements for
financial assets and financial liabilities, or for nonfinancial assets
and nonfinancial liabilities that are remeasured at least annually.
In March 2008, the FASB issued SFAS No. 161, "Disclosures about
Derivative Instruments and Hedging Activities - an amendment of SFAS
No.133" ("SFAS 161") which establishes, among other things, the
disclosure requirements for derivative instruments and for hedging
activities. SFAS 161 amends and expands the disclosure requirements of
SFAS No. 133 and thereby improves the transparency of financial
reporting. SFAS 161 is effective for fiscal years beginning after
November 15, 2008. Management is evaluating the impact the adoption of
this standard will have on the Company's consolidated financial
statements.
Forward-Looking Statements
...........................
The information set forth in this Report (and other reports issued
by the Company and its officers from time to time) contain certain
statements concerning the Company's future results, future performance,
intentions, objectives, plans and expectations that are or may be deemed
to be "forward-looking statements". Such statements are made in reliance
upon safe harbor provisions of the Private Securities Litigation Reform
Act of 1995. These forward-looking statements are based on current
expectations that involve numerous risks and uncertainties, including
those risks and uncertainties discussed in the Company's Annual Report on
Form 10K for the year ended December 31, 2007. Assumptions relating to
the foregoing involve judgments with respect to, among other things,
future economic, competitive, and market conditions and future business
decisions, all of which are difficult or impossible to predict accurately
and many of which are beyond the Company's control. Although the Company
believes that its assumptions underlying the forward-looking statements
are reasonable, any of the assumptions could prove inaccurate and,
therefore, the Company cannot assure you that the results discussed or
implied in such forward-looking statements will prove to be accurate. In
light of the significant uncertainties inherent in such forward-looking
statements, the inclusion of such statements should not be regarded as a
representation by the Company or any other person that the Company's
objectives and plans will be achieved. Words such as "believes,"
"anticipates," "expects," "intends," "may," and similar expressions are
intended to identify forward-looking statements, but are not the
exclusive means of identifying such statements. The Company undertakes
no obligation to revise any of these forward-looking statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
..........................................................
Market Risk
...........
The principal market risks (i.e. the risk of loss arising from
adverse changes in market rates and prices) to which the Company is
exposed are interest rates on demand deposits with banks, money market
funds and auction rate notes and foreign currency exchange rates,
generating translation and transaction gains and losses.
Interest Rates
...............
The Company manages its cash and investment portfolios considering
investment opportunities and risks, tax consequences and overall
financing strategies. The Company's investment portfolios consist
primarily of cash, cash equivalents and investments, with carrying
amounts approximating market value. Assuming March 28, 2008 cash, cash
equivalents and investment levels, a one-point change in interest rates
would have an approximate $506 thousand impact on the annual interest
income of the Company.
Foreign Currency Exchange Rates
................................
Operating in international markets involves exposure to movements in
currency exchange rates that are volatile at times. The economic impact
of currency exchange rate movements on the Company is complex because
such changes are often linked to variability in real growth, inflation,
interest rates, governmental actions and other factors. These changes,
if material, could cause the Company to adjust its financing and
operating strategies. Consequently, isolating the effect of changes in
currency does not incorporate these other important economic factors.
The Company's net sales and services to foreign customers represent
a large percentage of total net sales and services. The Company expects
net sales and services to foreign customers will continue to represent a
large percentage of its total net sales and services. The Company
generally has not engaged in foreign currency hedging transactions. The
aggregate foreign exchange gains included in determining consolidated
results of operations were $198 thousand and $21 thousand in the three
months ended March 28, 2008 and March 30, 2007, respectively.
Changes in the Euro and Yen have the largest impact on the Company's
operating profits. The Company estimates that a 10% change in foreign
exchange rates would not materially impact reported operating profits.
Item 4. Controls and Procedures
.......................
Conclusion Regarding the Effectiveness of Disclosure Controls
..............................................................
and Procedures
..............
As of the end of the period covered by this Quarterly Report on Form
10-Q, the Company carried out an evaluation, under the supervision and
with the participation of the Company's management, including the CEO and
CFO, of the effectiveness of the design and operation of the Company's
disclosure controls and procedures pursuant to Exchange Act Rule 13a-
15(b). Based upon that evaluation, the Company's CEO and CFO concluded
that the Company's disclosure controls and procedures are effective in
timely alerting them to material information relating to the Company
(including its consolidated subsidiaries) required to be included in the
Company's periodic SEC filings.
There were no changes in the Company's internal control over
financial reporting during the quarterly period ended March 28, 2008 that
has materially affected, or is reasonably likely to materially affect,
the Company's internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
.................
The Company and its subsidiaries are subject to various claims,
which have arisen in the normal course of business. The impact
of the final resolution of these matters on the Company's
results of operations in a particular reporting period is not
known. Management is of the opinion, however, that the
ultimate outcome of such matters will not have a material
adverse effect upon the Company's financial condition or
liquidity.
Item 1A. Risk Factors
............
A description of the risk factors associated with our business
is contained in Item 1A, "Risk Factors," of our 2007 Annual
Report on Form 10-K filed with the Securities and Exchange
Commission on February 14, 2008 and incorporated herein by
reference. There have been no material changes in the risk
factors associated with our business. These cautionary
statements are to be used as a reference in connection with any
forward-looking statements. The factors, risks and
uncertainties identified in these cautionary statements are in
addition to those contained in any other cautionary statements,
written or oral, which may be made or otherwise addressed in
connection with a forward-looking statement or contained in any
of our subsequent filings with the Securities and Exchange
Commission.
Item 2. Issuer Purchases of Equity Securities
.....................................
Effective November 1, 2006, the Company's Board of Directors
authorized a stock buy-back program for the repurchase of up to
2,000,000 shares of its common stock. Purchases have occurred
and will continue to occur from time to time in open market
transactions or privately negotiated transactions at the
Company's discretion, including the quantity, timing and price
thereof.
The following table summarizes the Company's purchases of its
common stock for the three months ended March 28, 2008:
Total Total number of Maximum Number
number of Average shares purchased of shares
shares price as part of that may yet
purchased paid per publicly be purchased
(In thousands) share announced plan under the plan
Period (a) (b) (In thousands) (In thousands)
.................. ............. ........ ................ ..............
1/01/08 - 1/25/08 205 $25.88 197 754
1/26/08 - 2/29/08 244 $25.97 244 510
3/01/08 - 3/28/08 5 $25.42 5 505
.................. ............. ........ ................ ..............
Total 454 $25.95 446 505
(a) Includes 8 thousand shares repurchased to satisfy employee
minimum tax withholding obligations upon vesting of restricted
stock granted to employees under the Company's equity
compensation plans.
(b) The average price paid per share of stock repurchased under
the stock buy-back program includes the commissions paid to
the brokers.
Item 3. Defaults Upon Senior Securities
...............................
None.
Item 4. Submission of Matters to a Vote of Security-Holders
...................................................
None.
Item 5. Other Information
.................
None.
Item 6. Exhibits
........
Exhibits - See accompanying Index to Exhibits included after
the signature page of this report for a list of the
exhibits filed or furnished with this report.
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: May 6, 2008
EXCEL TECHNOLOGY, INC.
By: /s/ Alice Varisano
...........................
Alice Varisano,
Chief Financial Officer
By: /s/ Antoine Dominic
...........................
Antoine Dominic, President,
Chief Executive Officer and
Chief Operating Officer
INDEX TO EXHIBITS
Exhibit No. Description
11 Computation of Net Income Per Share
31.1 Certification of Chief Executive Officer Pursuant to
Exchange Act Rule 13a-14(a)/15d-14(a) as Adopted Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 Certification of Chief Financial Officer Pursuant to
Exchange Act Rule 13a-14(a)/15d-14(a) as Adopted Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 Certification of Chief Executive Officer Pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
32.2 Certification of Chief Financial Officer Pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
EXHIBIT 11
COMPUTATION OF NET INCOME PER SHARE
(In thousands, except per share data)(Unaudited)
BASIC DILUTED
.................... ...................
Three Months Ended Three Months Ended
.................... ...................
March 28, March 30, March 28, March 30,
2008 2007 2008 2007
......... ......... ......... ........
Net income $ 4,327 $ 4,655 $ 4,327 $ 4,655
......... ......... ......... ........
......... ......... ......... ........
Weighted average common
shares outstanding 11,011 12,107 11,011 12,107
Weighted average common share
equivalents outstanding:
Stock options and
restricted stock 0 0 211 302
......... ......... ......... ........
Weighted average common shares
and common share equivalents
outstanding 11,011 12,107 11,222 12,409
......... ......... ......... ........
......... ......... ......... ........
Net income per share $ 0.39 $ 0.38 $ 0.39 $ 0.38
......... ......... ......... ........
......... ......... ......... ........
For the three months ended March 28, 2008 and March 30, 2007, there
were 185 thousand and 145 thousand,respectively, stock options
outstanding that are antidilutive and are not included in the above
income per share calculations.
EXHIBIT 31.1
CERTIFICATION
I, Antoine Dominic, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Excel
Technology, Inc.;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules 13a-
15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
(b) Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting
principles;
(c) Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such evaluation;
and
(d) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth fiscal quarter in the
case of an annual report) that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over
financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
(a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
control over financial reporting.
Dated: May 6, 2008
By: /s/ Antoine Dominic
............................
Antoine Dominic, President,
Chief Executive Officer, and
Chief Operating Officer
EXHIBIT 31.2
CERTIFICATION
I, Alice Varisano, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Excel
Technology, Inc.;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules 13a-
15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
(b) Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting
principles;
(c) Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such evaluation;
and
(d) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth fiscal quarter in the
case of an annual report) that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over
financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
(a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
control over financial reporting.
Dated: May 6, 2008
By: /s/ Alice Varisano
..........................
Alice Varisano,
Chief Financial Officer
EXHIBIT 32.1
CERTIFICATION OF PERIODIC REPORT
I, Antoine Dominic, Chief Executive Officer of Excel Technology, Inc.
(the "Company"), certify, pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, 18 U.S.C. Section 1350, that, to my knowledge,:
(1) the Quarterly Report on Form 10-Q of the Company for the period
ended March 28, 2008 (the "Report") fully complies with the requirements
of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15.
U.S.C. 78m or 78o(d)); and
(2) the information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of
the Company.
Dated: May 6, 2008
/s/ Antoine Dominic
............................
Antoine Dominic, President,
Chief Executive Officer, and
Chief Operating Officer
A signed original of this written statement required by Section 906 of
the Sarbanes-Oxley Act of 2002 has been provided to the Company and will
be retained by the Company and furnished to the Securities and Exchange
Commission or its staff upon request.
EXHIBIT 32.2
CERTIFICATION OF PERIODIC REPORT
I, Alice Varisano, Chief Financial Officer of Excel Technology, Inc.
(the "Company"), certify, pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, 18 U.S.C. Section 1350, that, to my knowledge,:
(1) the Quarterly Report on Form 10-Q of the Company for the period
ended March 28, 2008 (the "Report") fully complies with the requirements
of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15.
U.S.C. 78m or 78o(d)); and
(2) the information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of
the Company.
Dated: May 6, 2008
/s/ Alice Varisano
..........................
Alice Varisano,
Chief Financial Officer
A signed original of this written statement required by Section 906 of
the Sarbanes-Oxley Act of 2002 has been provided to the Company and will
be retained by the Company and furnished to the Securities and Exchange
Commission or its staff upon request.