Excel Reports Record Fourth Quarter and Results for 1998.

NEW YORK--(BUSINESS WIRE)--Jan. 21, 1999--Excel Technology, Inc. (NASDAQ:XLTC) today announced results for the quarter and year ended December 31, 1998. Revenues of $20.9 million and $67.1 million for the quarter and year then ended were, respectively, 28.5% and 1.7% higher than the $16.268 million and $65.948 million reported for the quarter and year ended December 31, 1997. Net after tax earnings for the quarter and year ended December 31, 1998 were $3.6 million, or $0.32 per share, and $8.88 million, or $0.78 per share, respectively, of which $1.1 million or $0.10 per share was non-recurring from the sale of a non-operating asset. For the like periods of 1997, after tax earnings were $2.1 million, or $0.17 per share, and $8.24 million, or $0.73 per share.

J. Donald Hill, Chairman and CEO commented, "All our activities in the fourth quarter met or exceeded our expectations and we look for additional progress going forward. Clearly, Synrad helped our top and bottom lines, but all our other subsidiaries also did well. Operating profit margins climbed again to 17.5% in the fourth quarter, the highest for any period in 1998, and further improvement is anticipated. In December, we prepaid $3 million of our $6.5 million bank loan from the Synrad acquisition, and another $1.25 million was prepaid last week, leaving $2.25 million outstanding. We expect to be debt free again by March or April as our operating cash flow continues to be strongly positive. Moreover, we repurchased 126,000 shares in the fourth quarter bringing the cumulative total to more than 750,000 shares since we began the program in late 1997."

Hill continued, "At this time, we believe Excel will achieve record revenues and earnings in 1999. Laser marking on-the-fly for the packaging industry should benefit Control Laser's Express systems, Cambridge's galvonometer optical scanners and Synrad's lasers. The Company's first installations, so far, are performing well. Quantronix should have an excellent year in its scientific and micro machining activities, and a new model DRS, currently near completion, adds to its outlook. Of course, seven more months of Synrad revenues and earnings in 1999 versus 1998 is a significant plus, and its future prospects are very bright as well. New products at Photo Research also should improve its results. The substantial effort to develop new products in all our operating companies is bearing fruit, and that effort will continue unabated. We believe we gained significant strength in 1998. We remain optimistic about our future."

This news release contains forward-looking statements including those relating to corporate opportunities, market opportunities for new products, and revenues and earnings. Actual results could vary materially from the description contained herein due to many factors, including a wide variety of difficulties in identifying, closing and digesting acquisitions; market acceptance of and the ability to efficiently manufacture effective new products; many micro and macro factors that can affect revenues and earnings.

Excel and its wholly-owned subsidiaries develop, manufacture and market laser systems and electro-optical components for electronic, semiconductor, other industrial, scientific and medical applications. -0-

                           FINANCIAL SUMMARY

                    FOR THE QUARTER               FOR THE YEAR
                    ENDED DECEMBER 31             ENDED DECEMBER 31

                    1998           1997           1998           1997

NET SALES           $20,905,000  $16,268,000   $67,092,000 $65,948,000

PRE-TAX INCOME      $ 5,538,000  $ 3,122,000   $13,683,000 $12,643,000

PROVISION FOR       $ 1,938,000  $ 1,022,000   $ 4,801,000 $ 4,408,000
INCOME TAXES

NET INCOME          $ 3,600,000  $ 2,100,000   $ 8,882,000 $ 8,235,000

NET INCOME
PER COMMON SHARE    $      0.32  $      0.17   $      0.78 $      0.73

WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING

FULLY DILUTED        11,290,500   12,049,000    11,395,000  11,327,000

NET INCOME PER
COMMON SHARE
EXCLUDING ONE TIME
INVESTMENT GAIN     $      0.22  $    0.17(a)  $      0.68 $   0.73(a)

(a)  No one time investment gain occurred in 1997.