================================================================================

                                  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 June 28, 2003


                                       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 NO. 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.)


              55 EXECUTIVE DRIVE, HUDSON, NEW HAMPSHIRE 03051-4903
           -----------------------------------------------------------
           (Address of principal executive offices including 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 by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).  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 8, 2003, there were 34,172,965 shares of the registrant's common
stock, $.01 par value per share, outstanding.

================================================================================

PRESSTEK, INC.

INDEX



PART I       FINANCIAL INFORMATION                                          PAGE

   Item 1.   Financial Statements

             Balance Sheets as of June 28, 2003 (unaudited) and
             December 28, 2002                                                3

             Statements of Operations for the three and six months
             ended June 28, 2003 and June 29, 2002 (unaudited)                4

             Statements of Cash Flows for the six months ended
             June 28, 2003 and June 29, 2002 (unaudited)                      5

             Notes to Financial Statements (unaudited)                        6

   Item 2.   Management's Discussion and Analysis of Financial
             Condition and Results of Operations                             13

   Item 3.   Quantitative and Qualitative Disclosures About Market Risk      22

   Item 4.   Controls and Procedures                                         22



PART II      OTHER INFORMATION

   Item 1.   Legal Proceedings                                               23

   Item 4.   Submission of Matters to a Vote of Security Holders             23

   Item 6.   Exhibits and Reports on Form 8-K                                24



Signatures                                                                   25







                                        2

PART I - FINANCIAL INFORMATION
================================================================================
ITEM 1.    FINANCIAL STATEMENTS

PRESSTEK, INC.


                                                                             JUNE 28,      December 28,
BALANCE SHEETS                                                                 2003            2002
(In thousands, except share data)                                           (UNAUDITED)
-----------------------------------------------------------------------     ----------      ----------
                                                                                      
ASSETS

CURRENT ASSETS:
  Cash and cash equivalents                                                 $   23,066      $   17,563
  Accounts receivable, net of allowance for losses of
    $2,510 and $2,170, in fiscal 2003 and 2002, respectively                    16,602          15,108
  Inventories                                                                   10,055          11,715
  Other current assets                                                           1,158             554
-----------------------------------------------------------------------     ----------      ----------
        Total current assets                                                    50,881          44,940
-----------------------------------------------------------------------     ----------      ----------

PROPERTY, PLANT AND EQUIPMENT, NET                                              49,022          52,291

OTHER ASSETS:
  Patent application costs and license rights, net                               3,633           4,409
  Other                                                                            590             156
-----------------------------------------------------------------------     ----------      ----------
        Total other assets                                                       4,223           4,565
-----------------------------------------------------------------------     ----------      ----------

               TOTAL                                                        $  104,126      $  101,796
=======================================================================     ==========      ==========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Current portion of long-term debt                                              3,241           3,045
  Accounts payable                                                               3,700           3,331
  Accrued expenses                                                               9,775           9,992
-----------------------------------------------------------------------     ----------      ----------
        Total current liabilities                                               16,716          16,368
-----------------------------------------------------------------------     ----------      ----------

LONG-TERM DEBT, NET OF CURRENT PORTION                                          11,921          13,662

COMMITMENTS AND CONTINGENCIES

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 34,157,230 shares at
    June 28, 2003; 34,125,481 shares at December 28, 2002                          342             341
  Additional paid-in capital                                                    97,510          97,403
  Accumulated deficit                                                          (22,363)        (25,978)
-----------------------------------------------------------------------     ----------      ----------
        Total stockholders' equity                                              75,489          71,766
-----------------------------------------------------------------------     ----------      ----------

               TOTAL                                                        $  104,126      $  101,796
=======================================================================     ==========      ==========


See accompanying notes to financial statements

                                        3

PRESSTEK, INC.

STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE AND SIX MONTHS ENDED
(In thousands, except per share data)

                                                                    THREE MONTHS ENDED               SIX MONTHS ENDED
-----------------------------------------------------------     --------------------------      --------------------------
                                                                 JUNE 28,        June 29,        JUNE 28,        June 29,
                                                                   2003            2002            2003            2002
-----------------------------------------------------------     ----------      ----------      ----------      ----------
                                                                                                    
REVENUE:
  Product sales                                                 $   22,043      $   17,997      $   43,332      $   37,756
  Royalties and fees from licensees                                    476           1,296           1,629           2,334
-----------------------------------------------------------     ----------      ----------      ----------      ----------
     Total revenue                                                  22,519          19,293          44,961          40,090
-----------------------------------------------------------     ----------      ----------      ----------      ----------

COSTS AND EXPENSES:
  Cost of products sold                                             12,890          15,915          25,842          28,671
  Research and product development                                   1,874           2,446           3,824           5,337
  Sales, marketing and customer support                              3,060           3,184           5,914           5,705
  General and administrative                                         2,221           3,071           4,965           5,316
  Special charges                                                      550           5,961             550           5,961
-----------------------------------------------------------     ----------      ----------      ----------      ----------
     Total costs and expenses                                       20,595          30,577          41,095          50,990
-----------------------------------------------------------     ----------      ----------      ----------      ----------

INCOME (LOSS) FROM OPERATIONS                                        1,924         (11,284)          3,866         (10,900)

OTHER INCOME (EXPENSE), NET:
  Interest, net                                                       (119)           (224)           (272)           (455)
  Other, net                                                            20             (13)             21              17
-----------------------------------------------------------     ----------      ----------      ----------      ----------
    Total other expense, net                                           (99)           (237)           (251)           (438)
-----------------------------------------------------------     ----------      ----------      ----------      ----------

INCOME (LOSS) BEFORE INCOME TAXES                                    1,825         (11,521)          3,615         (11,338)

PROVISION FOR INCOME TAXES                                              --              --              --              --

NET INCOME (LOSS)                                               $    1,825      $  (11,521)     $    3,615      $  (11,338)
===========================================================     ==========      ==========      ==========      ==========

EARNINGS (LOSS) PER SHARE - BASIC:                              $     0.05      $    (0.34)     $     0.11      $    (0.33)
===========================================================     ==========      ==========      ==========      ==========

EARNINGS (LOSS) PER SHARE - DILUTED                             $     0.05      $    (0.34)     $     0.11      $    (0.33)
===========================================================     ==========      ==========      ==========      ==========
WEIGHTED AVERAGE
COMMON SHARES OUTSTANDING - BASIC                                   34,156          34,125          34,149          34,123
===========================================================     ==========      ==========      ==========      ==========
WEIGHTED AVERAGE
COMMON SHARES OUTSTANDING - DILUTED                                 34,283          34,125          34,211          34,123
===========================================================     ==========      ==========      ==========      ==========


See accompanying notes to financial statements

                                        4

PRESSTEK, INC.

STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)


                                                                                            JUNE 28,        June 29,
FOR THE SIX MONTHS ENDED                                                                      2003            2002
--------------------------------------------------------------------------------------     ----------      ----------
                                                                                                     
CASH FLOWS - OPERATING ACTIVITIES:

  Net Income (loss)                                                                        $    3,615      $  (11,338)
    Adjustments to reconcile net income (loss) to net
    cash provided by operating activities:
     Special charges and discontinued programs                                                    550          10,696
     Depreciation and amortization                                                              4,408           4,907
     Provision for warranty and other costs                                                       993             352
     Provision for losses on accounts receivable                                                  791             282
    Changes in operating assets and liabilities:
     Accounts receivable                                                                       (2,285)          4,915
     Inventories                                                                                1,660          (1,722)
     Other current assets                                                                        (604)             22
     Accounts payable                                                                             369           2,358
     Accrued expenses                                                                          (1,761)           (492)
    Other                                                                                         (99)              3
--------------------------------------------------------------------------------------     ----------      ----------
  Net cash provided by operating activities                                                     7,637           9,983
--------------------------------------------------------------------------------------     ----------      ----------

CASH FLOWS - INVESTING ACTIVITIES:
     Purchases of property, plant and equipment                                                  (697)           (600)
     Proceeds from sale of equipment                                                               --             203
--------------------------------------------------------------------------------------     ----------      ----------
  Net cash used in investing activities                                                          (697)           (397)
--------------------------------------------------------------------------------------     ----------      ----------

CASH FLOWS - FINANCING ACTIVITIES:
     Net proceeds from the issuance of common stock                                               108              61
     Repayment of mortgage term loan                                                             (593)           (527)
     Proceeds under lease line of credit                                                           --           3,000
     Repayment of lease line of credit                                                           (952)           (714)
     Repayment of revolving line of credit                                                         --            (967)
--------------------------------------------------------------------------------------     ----------      ----------
  Net cash provided by (used in) financing activities                                          (1,437)            853
--------------------------------------------------------------------------------------     ----------      ----------

INCREASE IN CASH AND CASH EQUIVALENTS                                                           5,503          10,439
CASH AND CASH EQUIVALENTS BEGINNING OF PERIOD                                                  17,563           2,492
--------------------------------------------------------------------------------------     ----------      ----------
CASH AND CASH EQUIVALENTS END OF PERIOD                                                    $   23,066      $   12,931
======================================================================================     ==========      ==========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
  Cash paid during the period for:
     Interest                                                                              $      424      $      518
======================================================================================     ==========      ==========

     Income taxes                                                                          $       --      $       --
======================================================================================     ==========      ==========


See accompanying notes to financial statements

                                        5

PRESSTEK, INC.

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
JUNE 28, 2003

1.   BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
     ---------------------------------------------------------

NATURE OF BUSINESS - Presstek, Inc. ("Presstek", or "the Company") is a
manufacturer, developer and marketer of digital laser imaging and chemistry-free
plate technologies for the printing and graphic arts industries. Presstek's
products and applications incorporate its patented direct imaging ("DI(R)"),
technologies and consumables for computer-to-plate, ("CTP") and direct-to-press
applications. The Company's subsidiary, Lasertel, Inc. ("Lasertel") is engaged
in the manufacture and development of high-powered laser diodes for the Company
and external customers.

The Company operates in two reportable segments, the Digital Imaging Products
segment and the Lasertel segment. The Digital Imaging Products segment is
primarily engaged in the development, manufacture and sale of patented digital
imaging systems and printing plate technologies for CTP and direct-to-press
applications. The Lasertel segment is primarily engaged in the manufacture and
development of high-powered laser diodes for Presstek and other customers.

BASIS OF PRESENTATION - The financial statements include the accounts of the
Company and its subsidiaries. All significant intercompany accounts and
transactions have been eliminated. Certain prior period amounts have been
reclassified for comparative purposes. The unaudited financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and in accordance with Rule 10-01 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 this quarterly report should
be read in conjunction with the Company's audited financial statements and
related notes thereto for the fiscal year ended December 28, 2002. The December
28, 2002 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. Operating results for the three and six months ended June 28,
2003 are not necessarily indicative of the results that may be expected for the
fiscal year ending January 3, 2004.

FISCAL YEAR - The Company operates and reports on a 52 or 53 week fiscal year
ending on the Saturday closest to December 31. Accordingly, the financial
statements include the thirteen-week periods ended June 28, 2003 ("the second
quarter of fiscal 2003") and June 29, 2002 ("the second quarter of fiscal
2002"), and the twenty-six week periods ended June 28, 2003 ("the first six
months of fiscal 2003"), and June 29, 2002 ("the first six months of fiscal
2002").

USE OF ESTIMATES - The Company prepares its financial statements in accordance
with accounting principles generally accepted in the United States. The
preparation of these financial statements requires management to make estimates
and judgments that affect the reported amounts of assets and liabilities and
related disclosure of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of revenue and expenses during
the reporting period. The Company evaluates its estimates, including those
related to product returns, allowances for doubtful accounts, inventories,
long-lived assets, warranty obligations, and litigation on an on-going basis.
The Company bases its estimates on historical experience and on various other
assumptions that are believed to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values
of assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates under different assumptions or
conditions.

REVENUE RECOGNITION - The Company recognizes revenue in accordance with Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" ("SAB
No. 101"). Under SAB No. 101, revenue is

                                        6

recognized when persuasive evidence of an agreement exists, delivery has
occurred or services have been rendered, the price to the customer is fixed or
determinable, and collection is reasonably assured.

The Company records revenue for product sales net of estimated returns, which
are adjusted periodically, based upon historical rates of return. Revenue and
related royalties for products sold where installation is not required is
recorded at the time of shipment. Revenue for products that require
installation, for which the installation is not deemed inconsequential, is
recognized upon completion of installation and customer acceptance. Revenue
related to service maintenance agreements is recognized ratably over the
duration of the particular contract. Certain fees and other reimbursements are
recognized as revenue when the related services have been performed or the
revenue otherwise earned. Deferred revenue includes certain customer advances
received as a result of the Company's distribution agreements. This revenue is
recognized as product is shipped or services are performed.

STOCK-BASED COMPENSATION - The Company accounts for stock options and other
equity instruments granted to employees under the provisions of Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees"
("APB 25"), as permitted by Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation" ("SFAS 123"). APB 25 provides for
compensation cost to be recognized over the vesting period of the options based
on the difference, if any, between the fair market value of the Company's stock
and the option price on the grant date. As the Company has only issued fixed
term stock option grants at or above the quoted market price on the date of the
grant, there is no compensation expense recognized in the accompanying financial
statements. The Company adopted the disclosure provisions of SFAS 123, which
requires the Company to provide pro forma disclosure of net income and earnings
per share as if the optional fair value method had been applied to determine
compensation costs for the Company's stock-based compensation plans.

Accordingly, the Company's net income (loss) and earnings (loss) per share for
the three and six months ended June 28, 2003 and June 29, 2002, would have been
reduced to the pro forma amounts indicated in the following table:

                                                        THREE MONTHS ENDED          SIX MONTHS ENDED
---------------------------------------------------   -----------------------   -----------------------
                                                       JUNE 28,     June 29,     JUNE 28,     June 29,
(In thousands except per share data)                     2003         2002         2003         2002
---------------------------------------------------   ----------   ----------   ----------   ----------
                                                                                 
Net income, as reported                               $    1,825   $  (11,521)  $    3,615   $  (11,338)
Less: Total stock-based employee compensation
    expense determined under fair value method        $     (664)  $   (1,423)  $   (1,333)  $   (2,164)
---------------------------------------------------   ----------   ----------   ----------   ----------
Adjusted net income (loss)                            $    1,161   $  (12,944)  $    2,282   $  (13,502)
===================================================   ==========   ==========   ==========   ==========
Net income per common share, as reported:
    Basic                                             $     0.05   $    (0.34)  $     0.11   $    (0.33)
===================================================   ==========   ==========   ==========   ==========
    Diluted                                           $     0.05   $    (0.34)  $     0.11   $    (0.33)
===================================================   ==========   ==========   ==========   ==========
Adjusted net income (loss) per common share:
    Basic                                             $     0.03   $    (0.38)  $     0.07   $    (0.40)
===================================================   ==========   ==========   ==========   ==========
    Diluted                                           $     0.03   $    (0.38)  $     0.07   $    (0.40)
===================================================   ==========   ==========   ==========   ==========

The above adjusted net income (loss) and net income (loss) per share do not
consider any related tax benefit from stock option exercises.

                                        7

The Company used the Black-Scholes option-pricing model to estimate the fair
value of $3.70 and $3.79 for each stock option issued in the second quarter and
first six months of fiscal 2003 and 2002, respectively, using the following
weighted average assumptions for both the second quarter and first six months of
fiscal 2003 and 2002:
                                                        2003        2002
                    ------------------------------    --------    --------
                    Dividend yield                        NONE        None
                    Expected volatility                 73.62%      74.57%
                    Risk free interest rate              3.15%       3.43%
                    Expected option life                  6.59        6.45

In June 2003, the Company's shareholders approved the 2003 Stock Option and
Incentive Plan, ("2003 Plan") which provides for grants of stock options, stock
issuances and other equity interests in the Company. The number of shares of
common stock authorized for issuance under the 2003 Plan is 2,000,000 shares.

EFFECT OF NEW ACCOUNTING PRONOUNCEMENTS - In January 2003, the Financial
Accounting Standards Board ("FASB"), issued Interpretation No. 46,
"Consolidation of Variable Interest Entities, an Interpretation of Accounting
Research Bulletin No. 51, ("FIN No. 46")" which requires all variable interest
entities ("VIEs") to be consolidated by the primary beneficiary. The primary
beneficiary is the entity that holds the majority of the beneficial interests in
the VIE. In addition, the interpretation expands disclosure requirements for
both variable interest entities that are consolidated, as well as VIEs from
which the entity is the holder of a significant amount of the beneficial
interests, but not the majority. The disclosure requirements of this
interpretation are effective for all financial statements issued after January
31, 2003. The consolidation requirements of this interpretation are effective
for all periods beginning after June 15, 2003. The Company does not have any
VIEs, therefore the adoption of this interpretation will not have a material
effect on its results of operations or financial condition.

In April 2003, the FASB issued Statement of Financial Accounting Standards,
("SFAS"), No. 149, "Amendment of Statement 133 on Derivative Instruments and
Hedging Activities." SFAS No. 149 amends and clarifies the accounting for
derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities under SFAS No, 133, "Accounting for
Derivative Instruments and Hedging Activities." SFAS No. 149 is generally
effective for contracts entered into or modified after June 29, 2003 and for
hedging relationships designated after June 29, 2003. The Company does not
anticipate that the adoption of this statement will have a material effect on
the Company's results of operations or financial condition.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." SFAS No. 150
requires that certain financial instruments, which under previous guidance were
accounted for as equity, must now be accounted for as liabilities. The financial
instruments affected include mandatorily redeemable stock, certain financial
instruments that require or may require the issuer to buy back some of its
shares in exchange for cash or other assets and certain obligations that can be
settled with shares of stock. SFAS No. 150 is effective for all financial
instruments entered into or modified after May 31, 2003 and must be applied to
existing financial instruments effective June 29, 2003. The Company does not
anticipate that the adoption of this statement will have a material effect on
the Company's results of operations or financial condition.


                                        8

2.   INVENTORIES
     -----------
Inventories consisted of the following at June 28, 2003 and December 28, 2002:

                                                          JUNE 28,  December 28,
     (In thousands)                                         2003       2002
     --------------------------------------------------   --------   --------
     Raw materials                                        $  1,380   $  2,162
     Work in process                                         4,800      4,179
     Finished goods                                          3,875      5,374
     --------------------------------------------------   --------   --------
         Total inventories                                $ 10,055   $ 11,715
     ==================================================   ========   ========

3.   PROPERTY, PLANT AND EQUIPMENT, NET
     ----------------------------------
Property, plant and equipment, net consisted of the following at June 28, 2003
and December 28, 2002:
                                                          JUNE 28,  December 28,
     (In thousands)                                         2003       2002
     --------------------------------------------------   --------   --------
     At cost:
     Land and improvements                                $  2,038   $  2,038
     Buildings and leasehold improvements                   24,517     24,456
     Production equipment and other                         46,527     46,023
     Office furniture and equipment                          4,619      4,545
     --------------------------------------------------   --------   --------
                                                            77,701     77,062
     Less accumulated depreciation                         (28,679)   (24,771)
     --------------------------------------------------   --------   --------
         Total property, plant and equipment, net         $ 49,022   $ 52,291
     ==================================================   ========   ========

Certain property and equipment with a cost and net book value of $44.2 million
and $33.5 million, respectively, is pledged as security for long-term debt.

4.   ACCRUED EXPENSES
     ----------------
Accrued expenses consisted of the following at June 28, 2003 and December 28,
2002:
                                                          JUNE 28,  December 28,
     (In thousands)                                         2003       2002
     --------------------------------------------------   --------   --------
     Accrued payroll and benefits                         $  1,963   $  2,152
     Accrued warranty                                          914      1,089
     Accrued special charges                                 3,097      3,226
     Other current liabilities                               1,887      1,687
     Deferred revenue                                          473        389
     Net liabilities of discontinued operations              1,441      1,449
     --------------------------------------------------   --------   --------
         Total accrued expenses                           $  9,775   $  9,992
     ==================================================   ========   ========

5.   LONG-TERM DEBT
     --------------
Long-term debt consisted of the following at June 28, 2003 and December 28,
2002:
                                                          JUNE 28,  December 28,
     (In thousands)                                         2003       2002
     --------------------------------------------------   --------   --------
     Mortgage term loans                                  $  6,823   $  7,417
     Lease line of credit                                    8,339      9,290
     --------------------------------------------------   --------   --------
                                                            15,162     16,707
     Less current portion                                   (3,241)    (3,045)
     --------------------------------------------------   --------   --------
         Total long-term debt, net of current portion     $ 11,921   $ 13,662
     ==================================================   ========   ========

                                        9

6.   INCOME TAXES
     ------------

The Company did not record a provision for federal or state income taxes for the
second quarter and first six months of fiscal 2003, as a result of the
utilization of net operating loss carryforwards. The Company did not record a
provision for federal or state income taxes for the second quarter and first six
months of fiscal 2002 as a result of tax losses incurred in the periods.

7.   EARNINGS (LOSS) PER SHARE
     -------------------------

The following represents the calculation of basic and diluted earnings (loss)
per share for the three and six months ended June 28, 2003 and June 29, 2002:

                                                           THREE MONTHS ENDED        SIX MONTHS ENDED
                                                         JUNE 28,     June 29,     JUNE 28,     June 29,
(In thousands, except per share data)                      2003         2002         2003         2002
-----------------------------------------------------   ----------   ----------   ----------   ----------
                                                                                   
Net income (loss)                                       $    1,825   $  (11,521)  $    3,615   $  (11,338)
-----------------------------------------------------   ----------   ----------   ----------   ----------
Weighted average common shares
     outstanding - Basic                                    34,156       34,125       34,149       34,123

Weighted average common stock equivalents                      127           --           62           --
-----------------------------------------------------   ----------   ----------   ----------   ----------
Weighted average common shares
     outstanding - Diluted                                  34,283       34,125       34,211       34,123
=====================================================   ==========   ==========   ==========   ==========
 Earnings (loss) per share - Basic:                     $     0.05   $    (0.34)  $     0.11   $    (0.33)
=====================================================   ==========   ==========   ==========   ==========
 Earnings (loss) per share - Diluted:                   $     0.05   $    (0.34)  $     0.11   $    (0.33)
=====================================================   ==========   ==========   ==========   ==========


Options and warrants to purchase 2,485,172 and 2,536,047 shares of common stock
at exercise prices ranging from $5.32 to $22.75 per share were outstanding
during a portion of the second quarter and first six months of fiscal 2003,
respectively, but were not included in the computation of diluted earnings per
share as the exercise prices of the options and warrants were greater than the
average market price of the shares of common stock.

All options and warrants outstanding during the second quarter and first six
months of fiscal 2002 were not included in the computation of diluted earnings
per share as their effect would be anti-dilutive.

8.   COMPREHENSIVE INCOME
     --------------------

Comprehensive income is comprised of net income and all changes in stockholder's
equity except those due to investments by owners and distributions to owners.
For the second quarter and first six months of fiscal 2003 and fiscal 2002,
respectively, comprehensive income was comprised solely of net income.

                                       10

9.   SEGMENT INFORMATION
     -------------------

The following table presents a summary of the Company's operations by segment
for the three and first six months ended June 28, 2003 and June 29, 2002:


                                      DIGITAL
                                      IMAGING                  INTER-
(In thousands)                        PRODUCTS    LASERTEL    SEGMENT      TOTAL
----------------------------------    --------    --------    --------    --------
                                                              
THREE MONTHS ENDED JUNE 28, 2003
----------------------------------------------------------------------------------
REVENUE                               $ 22,191    $  1,713    $ (1,385)   $ 22,519
INCOME (LOSS) FROM OPERATIONS            2,920        (996)         --       1,924
TOTAL ASSETS                            89,007      15,119                 104,126

Three months ended June 29, 2002
----------------------------------------------------------------------------------
Revenue                               $ 19,292    $    (58)   $     59    $ 19,293
Income (loss) from operations           (8,664)     (2,620)                (11,284)
Total assets                            80,673      22,871                 103,544

SIX MONTHS ENDED JUNE 28, 2003
----------------------------------------------------------------------------------
REVENUE                               $ 44,358    $  3,458    $ (2,855)   $ 44,961
INCOME (LOSS) FROM OPERATIONS            5,935      (2,069)                  3,866
TOTAL ASSETS                            89,007      15,119                 104,126

Six months ended June 29, 2002
----------------------------------------------------------------------------------
Revenue                               $ 40,089    $    234    $   (233)   $ 40,090
Income (loss) from operations           (6,653)     (4,247)                (10,900)
Total assets                            80,673      22,871                 103,544







                                       11

10.  DISCONTINUED PROGRAMS AND SPECIAL CHARGES
     -----------------------------------------

In fiscal 2003, the Company expanded its repositioning actions to reduce costs,
initiated in the second quarter of fiscal 2002. The Company recorded a charge of
$550,000 in the second quarter of fiscal 2003, primarily related to severance
and benefit costs, as a result of headcount reductions in April 2003.

The Company recorded a charge of $4.7 million to cost of products sold and $6.0
million in special charges in the second quarter of fiscal 2002. These charges
included inventory, equipment and other asset write-downs, severance and fringe
benefit costs, and executive and other contractual obligations.

The following table summarizes the activity related to the discontinued programs
and special charges and accrued balances for the six months ended June 28, 2003:


                                                                       ADDITIONAL
                                                      BALANCE AT       PROVISIONS       UTILIZATION
                                                      DECEMBER 28,       THROUGH          THROUGH        BALANCE AT
(In thousands)                                           2002         JUNE 28, 2003    JUNE 28, 2003    JUNE 28,2003
-------------------------------------------------     ----------       ----------       ----------       ----------
                                                                                             
Equipment and other asset write-downs                 $       39       $       --       $       --       $       39
Discontinued programs                                      1,501                                (2)           1,499
Executive contractual obligations                          1,257                              (265)             992
Severance and fringe benefits                                262              550             (305)             507
Lease termination and other costs                            167                              (107)              60
-------------------------------------------------     ----------       ----------       ----------       ----------
Total accrued special charges and
  discontinued programs                               $    3,226       $      550       $     (679)      $    3,097
=================================================     ==========       ==========       ==========       ==========
Deferred revenue associated with
  discontinued programs                               $      120       $       --       $      (70)      $       50
=================================================     ==========       ==========       ==========       ==========



The cumulative cash paid by the Company at June 28, 2003 as a result of the
forgoing repositioning actions totaled $2.5 million. The Company anticipates the
remaining payments related to the discontinued programs and special charges will
be completed by May 2005.






                                       12

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:

Certain statements contained in this Quarterly Report on Form 10-Q constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995, including statements regarding our expectations
for our financial and operating performance in 2003 and beyond; the adequacy of
internal cash and working capital for our operations; the strength of our
various strategic partnerships (both on manufacturing and distribution); our
ability to secure other strategic alliances and relationships; our expectations
regarding Presstek's strategy for growth; our expectations and plans regarding
market penetration, including the strength and scope of our distribution
channels and our expectations regarding sales of DI presses in Europe; our
expectations regarding our new OEM relationships with Heidelberg, our
expectations regarding the sale of our products and use of our technology
including pricing; our expectations regarding performance of existing, planned
and recently introduced products; the effects, market acceptance, or pricing of
competitive products, including the impact of a competitive plate product
introduced by a strategic partner; the placement of orders for direct imaging
kits; our expectations regarding the effects and benefits of the Company's
streamlining of operations and reductions in force, and the expected effect of
adopting recently issued accounting standards, among others. Such
forward-looking statements involve a number of known and unknown risks,
uncertainties and other factors which may cause our actual results, performance
or achievements to be materially different from any future results, performance
or achievements expressed or implied by such forward-looking statements. Such
factors that could cause or contribute to such differences include, but are not
limited to, our dependency on our strategic partners (both on manufacturing and
distribution); uncertainty surrounding patent protection, shortages of critical
or sole-source component supplies; the availability and quality of Lasertel's
laser diodes; manufacturing constraints or difficulties (as well as
manufacturing difficulties experienced by our sub-manufacturing partners and
their capacity constraints); the impact of general market factors in the print
industry generally and the economy as a whole; market acceptance of and demand
for our products and resulting revenues; the introduction and market acceptance
of competitive products; risk and impact of litigation, and other risks detailed
in the Company's reports on file with the Securities and Exchange Commission,
including its Annual Report on Form 10-K for the fiscal year ended December 28,
2002, as well as those discussed elsewhere in this report. The words "looking
forward," "looking ahead," "believe(s)," "should," "plan," "expect(s),"
"project(s)," "anticipate(s)," "may," "likely," "potential," "opportunity" and
similar expressions identify forward-looking statements. Readers are cautioned
not to place undue reliance on these forward-looking statements, which speak
only as of the date the statements, were made and readers are advised to
consider such forward-looking statements in light of the risks set forth below.
Presstek undertakes no obligation to update any forward-looking statements
contained in this Quarterly Report on Form 10-Q.

BACKGROUND

Presstek, Inc. ("Presstek (R)", "we" or "us"), incorporated in Delaware in 1987,
is a manufacturer, developer and marketer of digital laser imaging and
chemistry-free plate technologies for the printing and graphic arts industries.
Presstek's products and applications incorporate its patented Direct Imaging
("DI(R)") technologies and consumables for computer-to-plate ("CTP") and
direct-to-press applications. Presstek's DI technology enables "direct to press"
imaging, whereby the printing plates are imaged on the press directly from
digital files, bypassing numerous prepress procedures and chemical processes in
preparing jobs for presswork. Our CTP or off-press imaging allows operators of
conventional printing presses the ability to image plates directly from digital
files to the CTP device. The printer then uses these plates as they would a
traditional plate, but without the chemical processes required for conventional
plates.

Our patented DI thermal laser diode product family enables customers to produce
high quality, full-color lithographic printed materials more quickly and cost
effectively than conventional methods. Our DI technology eliminates photographic
darkrooms, film, and chemical processing, which results in reduced

                                       13

turn-around time and lowers the effective cost of production for commercial
printers. We are a leader in our industry with an environmentally friendly
process that avoids the chemicals associated with plate development. Our DI
technologies, which use digital information and high-powered semiconductor laser
diodes to create images on our patented printing plate materials, are marketed
to leading press manufacturers and are used in our Dimension(R) series of CTP
systems. Presstek's Dimension CTP systems incorporate our patented ProFire(R)
laser imaging technology and use our chemistry free printing plate, Anthem(R).

Presstek's CTP workflow and automated DI printing technology, not only
complement digital publishing technology, they also are designed to help
printers meet the short-run, quick turn-around, color demands of the
marketplace. By significantly increasing the efficiency with which jobs are
prepared for print, Presstek's technology is designed to make shorter printing
runs more feasible at lower costs. Presstek's technology utilizes the offset
lithographic method of applying ink to paper that we believe is universally
accepted by printers and consumers, and produces the versatile, high-quality
characteristics they require.

Lasertel, Inc. ("Lasertel"), a subsidiary of Presstek, is primarily engaged in
the manufacture and development of high-powered laser diodes. Lasertel's
products include semiconductor lasers and active components for the graphics,
industrial and defense industries. Lasertel offers high-powered laser diodes in
both standard and customized configurations, including chip on sub-mount,
un-mounted bars, and fiber-coupled devices, to support various applications.

We operate and report on a 52 or 53 week fiscal year, ending on the Saturday
closest to December 31. Accordingly, the financial statements include the
thirteen-week periods ended June 28, 2003 ("the second quarter of fiscal 2003")
and June 29, 2002 ("the second quarter of fiscal 2002"), and the twenty-six week
periods ended June 28, 2003 ("the first six months of fiscal 2003"), and June
29, 2002 ("the first six months of fiscal 2002").

We operate in two reportable segments, the Digital Imaging Products segment and
the Lasertel segment. The Digital Imaging Products segment is primarily engaged
in the development, manufacture and sale of Presstek's patented digital imaging
systems and printing plate technologies for CTP and direct-to-press
applications. The Lasertel segment is primarily engaged in the manufacture and
development of high-powered laser diodes for Presstek and other customers.

In July 2003, we entered into OEM agreements with Heidelberger Druckmaschinen,
AG, ("Heidelberg") and Heidelberg USA that provide us with certain preferred
supplier rights, which vary based on territory, time period and sales volume.
Under the terms of the OEM agreements, which include minimum volume commitments
from Heidelberg and Heidelberg USA, we will manufacture and supply Heidelberg
branded consumable plate products for the Heidelberg Quickmaster DI press.
Supply to Heidelberg of the branded consumable product is expected to be
available in August 2003.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

GENERAL

Presstek's Management's Discussion and Analysis of Financial Condition and
Results of Operations are based upon our consolidated financial statements,
which have been prepared in accordance with generally accepted accounting
principles as adopted in the United States. The preparation of these financial
statements requires management to make estimates and judgments that affect the
reported amounts of assets, liabilities, and related disclosure of contingent
assets and liabilities, and the reported amounts of revenue and expenses during
the reporting period. On an on-going basis, Presstek evaluates its estimates,
including those related to product returns, allowances for doubtful accounts,
inventories, long-lived assets, warranty obligations, and litigation. Presstek
bases its estimates on historical experience and on various other assumptions
that are believed to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying values of


                                       14

assets and liabilities that are not readily apparent from other sources. Actual
results may differ from these estimates under different assumptions or
conditions.

We believe the following critical accounting policies affect our more
significant judgments and estimates used in the preparation of our consolidated
financial statements. Presstek's significant accounting policies are presented
in Note 1 of our financial statements in our Annual Report on Form 10-K for the
fiscal year ended December 28, 2002, filed with the Securities Exchange
Commission on March 28, 2003.

REVENUE RECOGNITION

Presstek recognizes revenue in accordance with Staff Accounting Bulletin No.
101, "Revenue Recognition in Financial Statements" ("SAB No. 101"). Under SAB
No. 101, revenue is recognized when persuasive evidence of an agreement exists,
delivery has occurred or services have been rendered, the price to the customer
is fixed or determinable, and collection is reasonably assured.

We record revenue for product sales net of estimated returns, which are adjusted
periodically, based upon historical rates of return. Revenue and related
royalties for products sold where installation is not required is recorded at
the time of shipment. Revenue for products that require installation, for which
the installation is not deemed inconsequential, is recognized upon completion of
installation and customer acceptance. Revenue related to service maintenance
agreements is recognized ratably over the duration of the particular contract.
Certain fees and other reimbursements are recognized as revenue when the related
services have been performed or the revenue otherwise earned. Deferred revenue
includes certain customer advances received as a result of our distribution
agreements. This revenue is recognized as product is shipped or services are
performed.

ALLOWANCE FOR DOUBTFUL ACCOUNTS

Presstek evaluates its accounts receivable on an ongoing basis and establishes
an allowance for doubtful accounts based on specific customer circumstances and
on its historical rate of write-offs. We include any accounts receivable
balances that are determined to be uncollectible, along with a general reserve,
in an overall allowance for doubtful accounts. After all attempts to collect a
receivable have failed, the receivable is written off against the allowance.
While we believe the allowance for doubtful accounts as of June 28, 2003 is
adequate, actual write-offs might exceed the recorded allowance.

PRODUCT WARRANTIES

Presstek warrants its products against defects in material and workmanship for
various periods, determined by the product, generally from a period of ninety
days to a period of one year from the date of installation. We provide for the
estimated cost of product warranties at the time revenue is recognized. While we
engage in product quality programs and processes, our warranty obligation is
affected by product failure rates, material usage and service costs incurred in
correcting a product failure. Should actual product failure rates, material
usage or service costs differ from our estimates, revisions to the estimated
warranty liability would be required.

INVENTORY VALUATION

Inventories are valued at the lower of cost or net realizable value, with cost
determined using the first-in, first-out method. We assess the recoverability of
inventory to determine whether adjustments for impairment are required.
Inventory that is in excess of future requirements is written down to its
estimated value based upon forecasted demand for its products. If actual demand
is less favorable than what has been forecasted by management, additional
inventory write-downs may be required.

LONG-LIVED ASSETS

Long-lived assets, such as intangible assets and property and equipment, are
evaluated for impairment when events or changes in circumstances indicate that
the carrying amount of the assets may not be

                                       15

recoverable through the estimated undiscounted future cash flows from the use of
these assets. When any such impairment exists, the related assets will be
written down to fair value.


RESULTS OF OPERATIONS

REVENUE

Revenue for the second quarter and first six months of fiscal 2003 of $22.5
million and $45.0 million, respectively, consisted of product sales, customer
support revenue, royalties and license fees. Revenue for the second quarter and
first six months of fiscal 2003 increased $3.2 million or 17% and $4.9 million
or 12%, respectively, as compared to $19.3 million and $40.1 million for the
second quarter and first six months of 2002.

Product sales for the Digital Imaging Products segment, including the sale of
equipment and consumables, were $21.2 million and $41.7 million for the second
quarter and first six months of fiscal 2003, respectively, an increase of $3.5
million or 20% and $4.7 million or 13%, as compared to $17.7 million and $37.0
million for the second quarter and first six months of fiscal 2002,
respectively. The increase in product sales for the second quarter and first six
months of fiscal 2003 was due primarily to volume increases in sales of the
Karat 46 press to Koenig & Bauer, AG ("KBA"), the KPG DI press to Kodak
Polychrome Graphics ("KPG"), our CTP platesetter products, and volume increases
in sales of our consumable products. This revenue increase was partially offset
by a decrease in shipments of direct imaging kits to Heidelberger Druckmaschinen
AG, ("Heidelberg") for use in the Quickmaster DI.

The revenue generated from the sale of consumable products was $13.6 million and
$27.2 million for the second quarter and first six months of fiscal 2003,
respectively, an increase of $1.5 million or 12% and $1.3 million or 5%, as
compared to $12.1 million and $25.9 million in the second quarter and first six
months of fiscal 2002, respectively. The increase in consumable sales for the
second quarter and first six months of fiscal 2003 was primarily related to a
volume increase in sales of our Anthem plate and our PEARLdry consumables used
in the Quickmaster DI. Revenue derived from the volume increase in sales of
Quickmaster DI consumables were somewhat offset by a decrease in price,
primarily as a result of price reductions on sales through select dealers in our
European distribution channel.

Consumable product revenue includes sales under our agreements with Heidelberg
and its distributors of $3.4 million and $9.0 million for the second quarter and
first six months of fiscal 2003, a decrease of $1.2 million or 26% and $1.5
million or 14%, respectively, as compared to $4.6 million and $10.5 million in
the second quarter and first six months of fiscal 2002.

As previously disclosed, in March 2003, we expanded the product offerings to
select dealers in our European distribution channel to include the sale of
Quickmaster DI consumables. In connection with this offering, we reduced pricing
on our full line of spooled consumables distributed through this dealer channel
by up to 20%. This new pricing reduced the revenue generated by Presstek from
its spooled consumable products by approximately $200,000 in the second quarter
of fiscal 2003. This new pricing, in addition to our new OEM agreements with
Heidelberg, may result in a further reduction of up to $1.5 million in the
second half of fiscal 2003. While the expected lost revenue resulting from the
price reduction may be offset by increased revenue from increased volume of
spooled consumable sales derived from additional presses installed and increased
usage of spooled consumables, there can be no assurance that this expected lost
revenue will be offset. In addition, market conditions may require us to expand
the regions in which we offer reduced prices, or to further reduce our spooled
consumable prices, which could further reduce our revenues in 2003 and beyond.
This could have a material adverse effect on our business, results of operations
and financial position.

Revenue generated from services related to customer support, including
installation and service contract revenue, was $523,000 and $992,000 for the
second quarter and first six months of fiscal 2003, respectively, an increase of
$202,000 or 63% and $260,000 or 36%, as compared to $321,000 and

                                       16

$732,000 for the second quarter and first six months of fiscal 2002,
respectively. This increase relates primarily to the sale of service maintenance
agreements related to our CTP Dimension products.

Royalties and fees from licensees for the second quarter and first six months of
fiscal 2003 were $476,000 and $1.6 million, a decrease of $820,000 or 63% and
$705,000 or 31%, as compared to $1.3 million and $2.3 million for the second
quarter and first six months of fiscal 2002, respectively. This decrease relates
primarily to decreased shipments to Heidelberg of direct imaging kits used in
the Quickmaster DI. Heidelberg has indicated, as a result of the global economic
slowdown, that it has an inventory of direct imaging kits on hand to support its
production requirements for at least six months. We currently believe that
orders for direct imaging kits may not resume until sometime in the first half
of fiscal 2004, however, there can be no assurance that any orders will be
received at this time.

Revenue generated under our agreements with Heidelberg and its distributors was
$3.6 million and $11.4 million for the second quarter and first six months of
fiscal 2003, a decrease of $3.7 million or 51%, and $3.8 million or 25%, as
compared to $7.3 million and $15.2 million in the second quarter and first six
months of fiscal 2002. The decreases are due primarily to decreased shipments to
Heidelberg for direct imaging kits used in the Quickmaster DI. Revenue from
Heidelberg represented 16% and 25% of total revenue for the second quarter and
first six months of fiscal 2003, as compared to 38% and 45% of total revenue for
the second quarter and first six months of fiscal 2002, respectively.

Heidelberg announced in March 2003 that it plans to introduce a competitive
plate product, as an alternative to Presstek's PEARLdry for the Quickmaster DI,
beginning in the second quarter of fiscal 2003. While it is too early to
estimate the impact this plate may have on our business, the introduction of a
competitive plate could reduce the revenue generated by Presstek under its
agreements with Heidelberg, including the recently announced OEM agreements.
This could also lead to downward pricing pressure for our full line of spooled
consumable products, which could have a material adverse effect on our business,
results of operations or financial condition.

Revenue generated under our agreements with KBA and its distributors was $3.1
million and $5.0 million for the second quarter and first six months of fiscal
2003, respectively, an increase of $2.2 million or 261% and $1.6 million or 47%,
as compared to $858,000 and $3.4 million for the comparable periods in fiscal
2002, respectively.

As previously disclosed, in March 2003, we negotiated the termination of our
supply and distribution agreement with Xerox for DocuColor DI presses. Xerox
will no longer sell the DocuColor 233 DI-4, the DocuColor 400 DI-4 and the
DocuColor 400 DI-5 presses and related consumables. The revenue generated from
the sale of these presses was not material in fiscal 2002, and as a result, the
termination of this agreement is not expected to have a material adverse effect
on our business, results of operations or financial condition.

Revenue for the Lasertel segment for the second quarter and first six months of
fiscal 2003 was $328,000 and $603,000, respectively, and primarily related to
the sale of products for defense industry applications. Product sales to
external customers for the second quarter and first six months of fiscal 2002
were not material.

COST OF PRODUCTS SOLD

Cost of products sold consists of the cost of material, labor and overhead,
shipping and handling costs and warranty expenses. Cost of products sold for the
Digital Imaging Products segment were $12.2 million and $24.5 million or 55% of
revenue, for the second quarter and first six months of fiscal 2003,
respectively, a decrease of $1.6 million or 12%, and $900,000 or 4% as compared
to $13.8 million or 72% of revenue and $25.4 million or 63% of revenue, for the
comparable periods in fiscal 2002, respectively. These decreases relate
primarily to the decrease in inventory write-downs and other charges for
discontinued operations, as a result of a $4.0 million charge recorded in the
second quarter of fiscal 2002, offset by an increase in production costs as a
result of increased sales volume.

                                       17

Gross margin (defined as total revenue less cost of products sold) as a
percentage of total revenue for the Digital Imaging Products segment was 45% for
each of the second quarter and first six months of fiscal 2003, as compared to
29% and 37% for the second quarter and first six months of fiscal 2002,
respectively. In the second quarter and first six months of fiscal 2002, gross
margin was unfavorably impacted by a $4.0 million charge related to inventory
write-downs and other charges for discontinued programs. The gross margin
improvement for the second quarter and first six months of fiscal 2003 was also
the result of lower warranty costs.

Cost of products sold for the Lasertel segment was $653,000 and $1.4 million for
the second quarter and first six months of fiscal 2003, respectively, a decrease
of approximately $1.4 million or 67% and $1.9 million or 58%, as compared to
$2.1 million and $3.3 million for the second quarter and first six months of
fiscal 2002, respectively. The decrease in cost of products sold relates
primarily to yield improvements, as well as a reduction in inventory write-downs
for discontinued programs as a result of a $688,000 charge recorded in the
second quarter of fiscal 2002.

RESEARCH AND PRODUCT DEVELOPMENT

Research and product development expenses consist primarily of payroll and
related expenses for personnel, parts and supplies, and contracted services
required to conduct our equipment, consumables and high-powered laser diode
product development efforts.

Research and product development expenses for the Digital Imaging Products
segment were $1.6 million and $3.3 million or 7% of revenue, for the second
quarter and first six months of fiscal 2003, respectively, a decrease of
$800,000 and $2.0 million as compared to $2.4 million or 12% of revenue and $5.3
million or 13% of revenue for the comparable periods in fiscal 2002,
respectively. These decreases relate primarily to a reduction in the number of
development programs which resulted in reduced expenditures in salaries and
benefits, parts and supplies, and professional and contractor services.
Presstek's product development cycle centers around major industry trade shows,
and as a result, our research and product development expenses vary in
accordance with our product development cycle.

Research and product development expenses for the Lasertel segment were $249,000
and $519,000, for the second quarter and first six months of fiscal 2003,
respectively, an increase of $211,000 and $446,000, as compared to $38,000 and
$73,000 for the comparable periods in fiscal 2002, respectively. These increases
relate primarily to additional research and product development activities
undertaken in the industrial markets.

SALES, MARKETING AND CUSTOMER SUPPORT

Sales, marketing and customer support expenses consist primarily of payroll and
related expenses for personnel, advertising, trade shows, promotional expenses,
and travel costs related to our sales, marketing and customer support
activities.

Sales, marketing and customer support expenses for the Digital Imaging Products
segment were $3.0 million and $5.7 million or 13% of revenue, for the second
quarter and first six months of fiscal 2003, respectively, a decrease of
$100,000 and an increase of $200,000, as compared to $3.1 million, or 16% of
revenue and $5.5 million, or 14% of revenue for the comparable periods in fiscal
2002, respectively. The decrease for the second quarter of fiscal 2003 relates
primarily to a decrease in travel and related expenses for customer support
activities, somewhat offset by increased promotional activities. The increase
for the first six months of fiscal 2003 relates primarily to increased salaries
and benefits, as a result of head count increases in the second quarter of
fiscal 2003, as well as increased professional and contracted services to
support increased promotional activities directed at product distribution.

Sales and marketing expenses for the Lasertel segment were $105,000 and $173,000
for the second quarter and first six months of fiscal 2003, respectively, an
increase of $30,000 and $15,000, as compared

                                       18

to $75,000 and $158,000 for the comparable periods in fiscal 2002, respectively.
These increases were the result of increased promotional activities related to
trade shows held in the second quarter of fiscal 2003.

GENERAL AND ADMINISTRATIVE

General and administrative expenses consist primarily of payroll and related
expenses for personnel, and contracted professional services necessary to
conduct our finance, information systems, human resources and administrative
activities.

General and administrative expenses for the Digital Imaging Products segment
were $2.0 million or 9% of revenue and $4.4 million or 10% of revenue, for the
second quarter and first six months of fiscal 2003, respectively, a decrease of
$700,000 and $200,000, as compared to $2.7 million or 14% of revenue and $4.6
million or 11% of revenue for the comparable periods in fiscal 2002,
respectively. These decreases relate primarily to decreased legal fees as a
result of the resolution of patent litigation with Creo Products, Inc., as well
as decreases in salaries and benefits as a result of a decrease in head count in
the second quarter of fiscal 2003.

General and administrative expenses for the Lasertel segment were $238,000 and
$516,000, for the second quarter and first six months of fiscal 2003,
respectively, a decrease of $91,000 and $151,000, as compared to $329,000 and
$667,000, for the comparable periods in fiscal 2002, respectively. These
decreases relate primarily to a decrease in professional services rendered.

DISCONTINUED PROGRAMS AND SPECIAL CHARGES

In the second quarter of fiscal 2003, we recorded special charges of $550,000
related to severance and fringe benefit costs associated with the reduction of
approximately 43 employees, primarily in manufacturing, research and development
and administration in April 2003, of which $471,000 was recorded by the Digital
Imaging Products segment and $79,000 by the Lasertel segment.

In fiscal 2002, we initiated various repositioning actions to reduce costs. As a
result of the repositioning programs, we recorded a charge of $4.7 million to
cost of products sold in the second quarter of fiscal 2002, of which $4.0
million was recorded by the Digital Imaging Products segment and $688,000 by the
Lasertel segment. In addition, the Digital Imaging products segment recorded
$6.0 million in special charges in the second quarter of fiscal 2002. These
charges included inventory, equipment and other asset write-downs, severance and
fringe benefit costs, and executive and other contractual obligations.

OTHER INCOME (EXPENSE), NET

Other income (expense), net consists primarily of net interest expense, and
other miscellaneous expenses. Interest expense, net was $120,000 and $272,000
for the second quarter and first six months of fiscal 2003, a decrease of
$104,000 and $183,000, respectively, as compared to $224,000 and $455,000 for
the comparable periods in fiscal 2002.

Interest income was $79,000 and $151,000 for the second quarter and first six
months of fiscal 2003, an increase of $30,000 and $88,000, respectively, as
compared to $49,000 and $63,000 for the comparable periods in fiscal 2002. These
increases are a result of increased cash balances available for investment.

Interest expense was $199,000 and $423,000 for the second quarter and first six
months of fiscal 2003, a decrease of $74,000 and $95,000, respectively, as
compared to $273,000 and $518,000 for the comparable periods in fiscal 2002.
These decreases are a result of lower average debt balances and lower interest
rates on borrowings.

                                       19

PROVISION FOR INCOME TAXES

We did not record a provision for federal or state income taxes for the second
quarter and first six months of fiscal 2003, as a result of the utilization of
net operating loss carryforwards. We did not record a provision for federal or
state income taxes for the second quarter and first six months of fiscal 2002 as
a result of tax losses incurred in the periods.

NET INCOME

As a result of the foregoing, we had net income of $1.8 million and $3.6 million
for the second quarter and first six months of fiscal 2003, as compared to net
losses of $11.5 million and $11.3 million for the second quarter and first six
months of fiscal 2002.

LIQUIDITY AND CAPITAL RESOURCES

We finance our operating and capital investment requirements primarily through
cash flows from operations and borrowings. At June 28, 2003, we had cash and
cash equivalents of $23.1 million and working capital (defined as total current
assets less total current liabilities) of $34.2 million as compared to cash and
cash equivalents of $17.6 million and working capital of $28.6 million at
December 28, 2002. The increase in cash and cash equivalents of $5.5 million for
the first six months of fiscal 2003 was primarily due to net cash provided by
operating activities of $7.6 million, offset by cash of $2.1 million used in
investing and financing activities.

Net cash provided by operating activities was $7.6 million for the first six
months of fiscal 2003, due primarily to net income of $3.6 million, non-cash
charges of depreciation, amortization, and other charges of $6.7 million,
including $550,000 in special charges as a result of head count reductions, and
a decrease in inventories of $1.7 million, offset by increases in accounts
receivable of $2.3 million. The increase in accounts receivable is attributable
to the timing of sales later in the second quarter. The decrease in inventories
is primarily the result of inventory management programs initiated in fiscal
2002.

Net cash used in investing activities was $697,000 for the first six months of
fiscal 2003, and consisted primarily of additions to property, plant and
equipment, used in the business.

Net cash used in financing activities was $1.4 million for the first six months
of fiscal 2003, and consisted primarily of payments on the mortgage term loans
and the equipment lease line of credit facility.

Our long-term debt consists of two mortgage term loans from Citizens Bank New
Hampshire ("Citizens"), and a lease line of credit from Keybank National
Association ("Keybank").

The first mortgage term loan is a 1998 ten-year mortgage term loan from Citizens
in the amount of $6.9 million and bears a fixed rate of interest of 7.12% per
year during the first five years, and a variable rate of interest at the LIBOR
rate plus 2%, (3.12% at June 28, 2003) for the remaining five years. Principal
and interest payments during the first five years of the loan will be made in 60
monthly installments of $80,500. During the remaining five years, principal and
interest payments will be made on a monthly basis in the amount of one-sixtieth
of the outstanding principal amount as of the first day of the second five year
period, plus accrued interest through the monthly payment date. All outstanding
principal and accrued interest is due and payable on February 6, 2008.

The second mortgage term loan is a 2000 ten-year mortgage term loan in the
amount of $4.0 million and bears a fixed rate of interest equal to 7.95% per
year during the first five years, and a fixed rate of interest equal to United
States Treasury Notes or Bills with a maturity date closest to the end of the
second five years plus 225 basis points for the remaining five years. During the
first five years, principal and interest payments will be made in 60 monthly
installments of $34,993 plus interest. During the remaining five years,
principal and interest payments will be made on a monthly basis in the amount of
one-sixtieth of the outstanding principal amount as of the first day of the
second five year period, plus accrued interest

                                       20

through the monthly payment date. All outstanding principal and accrued and
unpaid interest is due and payable on October 30, 2010.

The two mortgage term loans are secured by land and buildings with a cost and
net book value of approximately $25.7 million and $21.9 million, respectively.

We also borrowed $13.0 million against a $15.0 million lease line of credit
facility, which expired in April 2002, from Keybank pursuant to a 1999 loan
agreement. The $13.0 million in borrowings is secured by equipment with a cost
and net book value at June 28, 2003 of $18.4 million and $11.6 million,
respectively. The loan bears a variable rate of interest based upon the LIBOR
rate plus 4.25% (5.37% at June 28, 2003) or the prime rate (4.25% at June 28,
2003), with a future fixed rate conversion provision. Principal and interest
under the Keybank lease line of credit are payable in 84 monthly installments.

In addition to the Citizens' mortgage term loans and the borrowings under the
Keybank lease line of credit, we also have a revolving line of credit loan with
Citizens, under which we may borrow a maximum of $16.0 million. This revolving
line of credit, which expires in October 2003, is subject to a borrowing base
formula based on eligible accounts receivable and inventories, as defined by the
revolving line of credit loan agreement, and reduced by the amount of all
letters of credit outstanding. The revolving line of credit loan is secured by
substantially all of our assets, with interest payable at the LIBOR rate plus
1.50% (2.62% at June 28, 2003). As of June 28, 2003, we had $14.0 million
available under the revolving line of credit loan, reduced by $5.5 million
outstanding under standby letters of credit.

Under the terms of the Citizens' mortgage term loans, the Keybank lease line of
credit and the Citizens' revolving line of credit, we are required to meet
various restrictive covenants on a quarterly and annual basis, including maximum
funded debt to EBITDA and minimum fixed charge coverage covenants. As of June
28, 2003, we were in compliance with all financial covenants.

We have future contractual payment obligations through 2010 that primarily
relate to debt, royalty obligations, executive contractual obligations and
operating leases. The following table represents our future commitments at June
28, 2003 and December 28, 2002:

                                                  JUNE 28,   December 28,
     (In thousands)                                 2003         2002
     --------------------------------------       --------     --------
     Credit facilities                            $ 15,162     $ 16,707
     Royalty obligation                             11,567       11,900
     Executive contractual obligations               2,829        3,100
     Lease agreements                                   10          121
     --------------------------------------       --------     --------
       Total contractual obligations              $ 29,568     $ 31,828
     ======================================       ========     ========

Our anticipated capital expenditures for fiscal 2003 are approximately $2.0
million, and primarily relate to the purchase of capital equipment to be used in
the production of our DI and CTP equipment and consumable products.

Heidelberg announced in March 2003 that it plans to introduce a competitive
plate product, as an alternative to Presstek's PEARLdry for the Quickmaster DI,
beginning in the second quarter of fiscal 2003. While it is too early to
estimate the impact this plate may have on our business, the introduction of a
competitive plate could reduce the revenue generated by Presstek under its
agreements with Heidelberg, including the recently announced OEM agreements.
This could also lead to downward pricing pressure for our full line of spooled
consumable products, which could have a material adverse effect on our
liquidity.

We believe that existing funds, cash flows from operations, and cash available
under our Citizens' revolving line of credit should be sufficient to satisfy
working capital requirements and capital expenditures through the next twelve
months. We are currently negotiating the renewal of the Citizens' revolving line
of credit loan agreement, which expires in October 2003. There can be no
assurance, however, that we will

                                       21

be able to renew this loan agreement, will not require additional financing, or
that such additional financing, if needed, will be available on acceptable
terms.

EFFECT OF INFLATION

Inflation has not had, and is not expected to have, a material impact upon our
operations.


ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
           -----------------------------------------------------------

We are exposed to market risk from changes in interest rates primarily as a
result of our borrowing activities, and to a lesser extent, our investing
activities. The majority of our long-term borrowings are in fixed rate
instruments, or variable rate instruments with fixed rate conversion provisions.
We do not enter into interest rate swap agreements or other speculative or
leveraged transactions. We currently have no material exposure to interest rate
fluctuations on our short-term investments.

We have limited exposure to foreign currency exchange rate risk. While
substantially all of our transactions are currently denominated in U.S. dollars,
a limited number of sales transactions are denominated in our customers'
currency. To date, the currency exposure related to these transactions has not
been material. Furthermore, some of our customers and strategic partners are not
located in the United States, and are themselves subject to fluctuations in
foreign exchange rates. If the home country currency of these customers and
strategic partners were to decrease in value relative to the United States
dollar, their ability to purchase and/or market our products could be adversely
affected and our products may become less competitive to them. This may have an
adverse impact on our business. Likewise, some of our suppliers are not located
in the United States and thus, such suppliers are subject to foreign exchange
rate risks in transactions with us. Decreases in the value of their home country
currency versus that of the United States dollar could cause fluctuations in
supply pricing which could have an adverse effect on our business.

ITEM 4.    CONTROLS AND PROCEDURES.
           ------------------------

(a)        Evaluation of Disclosure Controls and Procedures

As of a date (the "Evaluation Date") within ninety days prior to the filing date
of this Quarterly Report on Form 10-Q, we have, under the supervision and with
the participation of the Presstek's management, including its Chief Executive
Officer and Chief Financial Officer, evaluated the effectiveness of the design
and operation of Presstek's disclosure controls and procedures pursuant to Rule
13a-15 promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). Based upon that evaluation, Presstek's Chief Executive Officer
and Chief Financial Officer concluded that, as of the Evaluation Date,
Presstek's disclosure controls and procedures are effective in ensuring that
material information relating to Presstek (including its consolidated
subsidiaries) required to be disclosed by Presstek in the reports that it files
or submits under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission's rules and forms, including ensuring that such material information
is accumulated and communicated to Presstek's management, including its Chief
Executive Officer and Chief Financial Officer, as appropriate to allow timely
decisions regarding required disclosure.

(b)        Changes in Internal Controls

There were no significant changes in Presstek's internal controls or in other
factors that could significantly affect Presstek's internal controls subsequent
to the Evaluation Date.

                                       22

PART II - OTHER INFORMATION

Item 1.    Legal Proceedings

See Part I - Item 3 of the Company's Annual Report on Form 10-K for the fiscal
year ended December 28, 2002 filed with the Commission on March 28, 2003 for a
description of certain legal proceedings involving the Company. All of such
information is hereby incorporated by reference in response to this item.

Item 4.    Submission of Matters to a Vote of Security Holders

(a)  On June 17, 2003, the Company held its Annual Meeting of Stockholders.
(b)  Not Applicable.
(c)  At such meeting, the stockholders of the Company voted:

     (1)   To elect nine (9) Directors to serve for the ensuing year. The votes
           cast were as follows:

                                                          Votes      Votes    Broker Non
                    Nominees        Votes For  Against   Withheld  Abstained     Votes
           ----------------------  ----------  -------  ---------  ---------  ----------
                                                               
           Richard A. Williams     27,742,278    N/A    2,413,039     N/A         N/A
           Edward J. Marino        27,650,043    N/A    2,507,274     N/A         N/A
           Dr. Lawrence Howard     28,077,601    N/A    2,079,716     N/A         N/A
           John W. Dreyer          29,094,174    N/A    1,063,143     N/A         N/A
           Daniel S. Ebenstein     27,571,066    N/A    2,586,251     N/A         N/A
           John B. Evans           29,647,139    N/A      510,178     N/A         N/A
           Michael D. Moffitt      27,667,069    N/A    2,490,248     N/A         N/A
           Barbara A. Pellow       29,443,521    N/A      713,796     N/A         N/A
           Donald C. Waite, III    29,667,796    N/A      489,521     N/A         N/A


     (2)   To approve and adopt the Company's 2003 Stock Option and Incentive
           Plan. The votes cast were as follows:

           Votes For    Votes Against   Votes Withheld   Abstained   Broker Non Votes
           ----------   -------------   --------------   ---------   ----------------
                                                         
           13,646,117     4,372,434          N/A          168,490          N/A


     (3)   To ratify the selection of BDO Seidman, LLP, as the Company's
           independent auditors for the fiscal year ending January 3, 2004. The
           votes cast were as follows:

           Votes For    Votes Against   Votes Withheld   Abstained   Broker Non Votes
           ----------   -------------   --------------   ---------   ----------------
                                                         
           29,617,390      447,595           N/A           92,332          N/A


(d)  Not Applicable.


                                       23

Item 6.    Exhibits and Reports on Form 8-K

(a)        Exhibits

10.1*      2003 Stock Option and Incentive Plan (filed herewith).

99.1       Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
           to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished
           herewith).

99.2       Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
           to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished
           herewith).


* Denotes management employment contracts or compensatory plans.



(b)        Reports on Form 8-K

           A Form 8-K was filed on April 24, 2003 furnishing information
           pursuant to Item 9 and 12 relating to the press release of Presstek,
           Inc., dated April 24, 2003 reporting Presstek Inc.'s financial
           results for the fiscal quarter ended March 29, 2003.








                                       24

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.

                               PRESSTEK, INC.
                               (Registrant)


Date: August 12, 2003          /s/ Edward J. Marino
                               -------------------------------------------------
                               By: Edward J. Marino
                               President and Chief Executive Officer
                               (Principal Executive and Duly Authorized Officer)


Date: August 12, 2003          /s/ Moosa E. Moosa
                               -------------------------------------------------
                               By: Moosa E. Moosa
                               Vice President - Finance,
                               Chief Financial Officer, Treasurer and Secretary
                               (Principal Financial and Accounting Officer)























                                       25


                                 CERTIFICATIONS

I, Edward J. Marino, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Presstek, Inc.;

2.   Based on my knowledge, this quarterly 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 quarterly
report;

3.   Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly report;

4.   The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a) designed such disclosure controls and procedures 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 quarterly report is being
     prepared;

     b) evaluated the effectiveness of the registrant's disclosure controls and
     procedures as of a date within 90 days prior to the filing date of this
     quarterly report (the "Evaluation Date"); and

     c) presented in this quarterly report our conclusions about the
     effectiveness of the disclosure controls and procedures based on our
     evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of registrant's board of directors (or persons performing the equivalent
function):

     a) all significant deficiencies in the design or operation of internal
     controls which could adversely affect the registrant's ability to record,
     process, summarize and report financial data and have identified for the
     registrant's auditors any material weaknesses in internal controls; and

     b) any fraud, whether or not material, that involves management or other
     employees who have a significant role in the registrant's internal
     controls; and

6.   The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date:  August 12, 2003                  /s/ Edward J. Marino
                                        --------------------
                                        Edward J. Marino
                                        President and Chief Executive Officer
                                        (Principal Executive Officer)


I, Moosa E. Moosa, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Presstek, Inc.;

2.   Based on my knowledge, this quarterly 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 quarterly
report;

3.   Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly report;

4.   The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a) designed such disclosure controls and procedures 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 quarterly report is being
     prepared;

     b) evaluated the effectiveness of the registrant's disclosure controls and
     procedures as of a date within 90 days prior to the filing date of this
     quarterly report (the "Evaluation Date"); and

     c) presented in this quarterly report our conclusions about the
     effectiveness of the disclosure controls and procedures based on our
     evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of registrant's board of directors (or persons performing the equivalent
function):

     a) all significant deficiencies in the design or operation of internal
     controls which could adversely affect the registrant's ability to record,
     process, summarize and report financial data and have identified for the
     registrant's auditors any material weaknesses in internal controls; and

     b) any fraud, whether or not material, that involves management or other
     employees who have a significant role in the registrant's internal
     controls; and

6.   The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date:  August 12, 2003        /s/ Moosa E. Moosa
                              ------------------
                              Moosa E. Moosa
                              Vice President - Finance, Chief Financial Officer,
                              Treasurer and Secretary
                              (Principal Financial and Accounting Officer)


EXHIBIT INDEX


No.        Description
---        -----------

10.1*      2003 Stock Option and Incentive Plan (filed herewith).

99.1       Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
           to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished
           herewith).

99.2       Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
           to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished
           herewith).






*  Denotes management employment contracts or compensatory plans.