Foilmark Third Quarter Profit More Than Triples On106% Increase in Sales; Year-to-Date Net...

Business Editors

NEWBURYPORT, Mass.--(BUSINESS WIRE)--April 27, 2000

Foilmark, Inc. [Nasdaq National Market: FLMK], a global marketer and supplier of value-added hot stamping foils, holographic security and packaging products and image transfer systems, today announced record financial

Record Third Quarter 2000 Financial Highlights - vs. quarter ended March 31, 1999

- Net sales increased 106% to $16,915,235;

- Gross margin rose to 32.9% from 31.6%

- EBITDA was up 141% to $2,664,752;

- SG&A expenses as a percent of sales decreased to 22.2% from 23.7%;

- Net income grew 227% to $1,000,780;

- Diluted EPS increased 71% to $.12, even though based on nearly twice as many
shares than last year.

Year-to-date net sales were up 112% to a record $49,286,847, while net income increased even more dramatically, by 555% to a record $2,553,248. Diluted EPS grew 244% to a record $.31, computed on a weighted average of 97% more shares than in the comparable period.

The higher sales levels for both periods were due to the inclusion of HoloPak Technologies, Inc.'s operations following the April 1999 merger. For the quarter and the nine-month period ended March 31, 2000, increased sales of higher margin products and cost savings realized under the Company's plan to reduce expenses by $3 million annually were responsible for the record profits.

Joe Olsen, President and Chief Executive Officer of Foilmark, commented, "While we had anticipated a strong second half, our financial results thus far this year have exceeded our expectations. The Company's dramatic improvement in its performance is largely attributable to a focus on expanding high margin holographic security and packaging products. At the same time, we are achieving steady growth in our hot-stamping foil segment. Sales in the holographic segment represented 38% of total sales for the quarter, up from 35% last quarter. These sales increased by 36% over last year on a pro-forma basis. This improvement in our product mix, along with continual enhancement in our hot-stamping foil operations, boosted our gross margin to 32.9% for the quarter."

"To realize the full potential of our high margin segment, we have initiated a major expansion program for our holographic business unit with $5 million earmarked for capital equipment. We are also adding key personnel to further penetrate the growing, $500 million worldwide holographic market."