Excel Reports Results for the Fourth Quarter and for the Year 2003.

Business Editors/High-Tech Writers

EAST SETAUKET, N.Y.--(BUSINESS WIRE)--Jan. 22, 2004

Excel Technology, Inc. (NASDAQ: XLTC) today announced results for the quarter and year ended December 31, 2003. Revenues of $31.0 million and $122.7 million for the quarter and year ended December 31, 2003, respectively, were 4% and 30% higher than the $29.8 million and $94.5 million reported for the quarter and year ended December 31, 2002, respectively. Net after tax earnings of $2.9 million for the quarter ended December 31, 2003 which were 63% higher than the $1.8 million for the same period in 2002, and net earnings of $11.3 million were 33% higher compared with earnings of $8.5 million for the full year 2002. Net earnings per diluted share of $0.24 and $0.93 for the quarter and year ended December 31, 2003, respectively, were 60% and 31% higher than the $0.15 earned in the fourth quarter of 2002 and $0.71 earned per diluted share for the full year ended December 31, 2002.

J. Donald Hill, Chairman, stated, "Excel achieved record revenues in 2003 and a sharp improvement in profitability, as well. We believe the execution of our business plan is proceeding on course as reflected by our progress last year. More importantly, we expect our strategic initiatives will serve us very well going forward and allow us to continue to strengthen our relative position in our industry."

Antoine Dominic, Chief Executive Officer, added, "Last year, we focused on further strengthening our product offerings throughout all our product lines with focused R & D and product engineering, invested in expanding our global market presence, and continued with our operating efficiency improvement programs. These ongoing efforts are an integral part of our long term growth strategy."

Dominic continued, "In 2003, we achieved record revenues, good profitability and positive cash flow. Our goal is to continue to build on our revenue, profit, and cash flow achievements in 2004. Our investment in CSI is beginning to show results, and Continuum is progressing as we had planned and should improve its performance in 2004. In December 2003, we completed the purchase of Doug Green Electronics, a small power supply manufacturer based in the U.K. that currently supplies two of our subsidiaries. We ended the year with $25.7 million in cash, up from $11.8 million as of December 31, 2002. We have remained debt free since 1999."

Dominic concluded, "Although the global economic environment shows signs of improvement, we continue to take a cautious approach. We believe our growth opportunities both internal and external are significant, and we are optimistic about our future prospects."

This news release contains forward-looking statements which are based on current expectations. Actual results could differ materially from those discussed or implied in the forward-looking statements as a result of various factors including future economic, competitive, regulatory, and market conditions, future business decisions, market acceptance of the Company's products, and those factors discussed in the Company's Form 10-K for the year ended December 31, 2002. In light of the significant uncertainties inherent in such forward-looking statements, they should not be regarded as a representation that the Company's objectives and plans will be achieved, and they should not be relied upon by investors when making an investment decision. Words such as "believes," "anticipates," "expects," "intends," "may," and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements.

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

                          FINANCIAL SUMMARY
                (in thousands, except per share data)


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

                                      2003     2002     2003     2002

Net Sales                         $ 31,040 $ 29,801 $122,681 $ 94,513
Pre-Tax Income                    $  4,144 $  2,647 $ 16,932 $ 12,705
Provision for Income Taxes        $  1,201 $    872 $  5,614 $  4,193
Net Income                        $  2,944 $  1,775 $ 11,318 $  8,512
Net Income Per Common Share
 - Diluted                        $   0.24 $   0.15 $   0.93 $   0.71
Weighted Average Common
Shares Outstanding - Diluted        12,362   12,073   12,231   12,071


               BALANCE SHEET & SELECTED FINANCIAL DATA

                                             DECEMBER 31, DECEMBER 31,
                                                    2003        2002

Cash and Equivalents                            $  25,740  $  11,822
Accounts Receivable                             $  21,917  $  22,375
Inventory                                       $  25,038  $  24,482
Other Current Assets                            $   2,314  $   2,373
                                                ---------  ---------
Total Current Assets                            $  75,009  $  61,052
Property, Plant & Equipment, net                $  27,665  $  27,782
Goodwill                                        $  30,649  $  29,383
Other Non-Current Assets                        $     415  $     507
                                                ---------  ---------
Total Assets                                    $ 133,738  $ 118,724
                                                =========  =========

Accounts Payable                                $   4,801  $   5,245
Accrued Expenses and Other Current Liabilities  $  10,668  $  11,042
                                                ---------  ---------
Total Current Liabilities                       $  15,469  $  16,287
Deferred Tax Liability                          $     991  $     180
Minority Interest in Subsidiary                 $       6  $      --
Common Stock                                    $      12  $      12
Additional Paid-in-Capital                      $  47,514  $  45,401
Retained Earnings                               $  67,613  $  56,295
Accumulated Other Comprehensive Income          $   2,133  $     549
                                                ---------  ---------
Total Liabilities & Stockholders' Equity        $ 133,738  $ 118,724
                                                =========  =========
Working Capital                                 $  59,540  $  44,765
Current Ratio                                        4.85       3.75