Excel Reports Revenue and Earnings for the Third Quarter of 1998.

NEW YORK--(BUSINESS WIRE)--Oct. 13, 1998--Excel Technology, Inc. (NASDAQ: XLTC) today announced the results for the quarter ended September 30, 1998. Revenues for the period were $17.5 million, an increase of 6.5% from the $16.5 million from the same period in 1997. After-tax profits were $2.0 million, a decline of 13%, from the $2.3 million for the third quarter of last year. Net profits per share on a fully diluted basis for the quarter were $0.18 per share, down 10% from $0.20 for the same period in 1997.

J. Donald Hill, Chairman and CEO commented, "Diversification and prominent positions in a variety of markets in part explain why current conditions in much of the world have had a minor impact on us. Our operating results remain strong and are very gratifying. Operating profit margins, though somewhat lower than the like period last year, were higher than the second quarter of this year; and further improvements in all our companies including Synrad are expected in subsequent periods. The increase in revenues was due to Synrad, the all cash acquisition of which was completed in August. Net income benefited from it also despite higher good will and interest charges. Our reorganization is progressing rapidly and smoothly as Synrad employees and management have embraced their new operating structure. Synrad research and development is being further strengthened to develop new lasers for new applications and to satisfy current customer needs at all power levels including those exceeding 500 watts. In addition, sales and marketing are being enlarged to focus on becoming more pro-active to increase Synrad's presence world wide through both direct and indirect channels and to provide better customer support. Our third quarter figures only included two months of Synrad revenue and earnings; going forward, the full benefit will be reflected. We were pleased that our other operating entities as a whole showed some modest improvement over the second quarter and all our divisions are profitable despite economic problems in many parts of the world."

Hill continued, "For some years the company has been a small owner of one of its vendors which recently signed a Definitive Agreement to be acquired by a large entity for cash. The transaction is expected to close later this year and would result in an after tax profit of about $0.10 per share to Excel. Our fourth quarter and year end results would benefit accordingly by the non recurring event."

Hill concluded, "Global uncertainties not withstanding, we expect significant gains next year from all our major operating entities, Quantronix, Cambridge Technology, Control Laser, Photo Research and Synrad. Our operating cash flow remains strongly positive. As a result, we expect to pay down our $6.5 million Synrad acquisition bank loan substantially by year end. Our share repurchase plan is active as well. We continue to believe the overall outlook for our operations remains positive."

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 NINE MONTHS
                       ENDED SEPTEMBER 30        ENDED SEPTEMBER 30
                       1998         1997         1998         1997
                       ----         ----         ----         ----

NET SALES          $17,512,000  $16,505,000  $46,187,000  $49,680,000
PRE-TAX INCOME     $ 3,068,000  $ 3,565,000  $ 8,146,000  $ 9,521,000
PROVISION FOR
 INCOME TAXES      $ 1,074,000  $ 1,247,000  $ 2,864,000  $ 3,386,000
NET INCOME         $ 1,994,000  $ 2,318,000  $ 5,282,000   $6,135,000
NET INCOME PER
 COMMON SHARE

DILUTED                  $0.18        $0.20        $0.46        $0.56

WEIGHTED AVERAGE
 COMMON SHARES
 OUTSTANDING

DILUTED             11,253,000   11,702,000   11,437,000   11,044,000