Del Global Technologies Announces Fiscal 2004 Fourth Quarter and Year-End Operating Results.VALHALLA Valhalla or Walhalla (both: vălhäl`ə, –hăl`ə), in Norse mythology, Odin's hall for slain heroes. This martial paradise was one of the most beautiful halls of Asgard. , N.Y. -- Del Global Technologies Corp. (DGTC) ("Del Global" or "the Company") today announced operating results for its fiscal 2004 fourth quarter and year ended July July: see month. 31, 2004, as well as summary balance sheet data (see attached tables). CORPORATE OVERVIEW As previously announced, Del Global completed the sale of its High Voltage The term high voltage characterizes electrical circuits, in which the voltage used is the cause of particular safety concerns and insulation requirements. High voltage is used in electrical power distribution, in cathode ray tubes, to generate X-rays and particle beams, to Power business, a part of its Power Conversion Group, on October October: see month. 1, 2004 as part of the Company's previously announced strategic alternatives review. Accordingly, this business is presented as a discontinued operation discontinued operation A segment of a business that has been abandoned or sold or for which plans for one or another of these actions have been approved. See also continuing operations. for the fiscal 2004 and 2003 periods. Also as previously announced, the Company entered into non-binding letters of intent for the sale of both the Medical Systems Group and the remainder of its Power Conversion Group business segments. The Company intends to call a meeting of stockholders to seek approval under New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of law for the sale of the Medical Systems Group Segment in the event a definitive agreement is entered into for such sale. There can be no assurance that these non-binding letters of intent will result in the consummation CONSUMMATION. The completion of a thing; as the consummation of marriage; (q.v.) the consummation of a contract, and the like. 2. A contract is said to be consummated, when everything to be done in relation to it, has been accomplished. of the sale of these segments or that the strategic alternatives process initiated by the Company will lead to any other transactions. The Company may seek stockholder approval of a plan of liquidation The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts. A type of proceeding pursuant to federal Bankruptcy ; however, the Board of Directors of the Company has not yet approved any plan of liquidation. Any proceeds that may be received by stockholders of the Company as a result of any plan of liquidation may be greater or less than the current market price of Del Global's common stock. FISCAL 2004 FOURTH QUARTER AND YEAR END RESULTS Consolidated net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for fiscal 2004 increased 22.9% to $83.8 million from $68.2 million last year. Consolidated net sales in the fourth quarter of fiscal 2004 rose 3.2% to $19.4 million from $18.8 million in the comparable period of the prior year. Sales at the Medical Systems Group rose 26.2% to $70.8 million during fiscal 2004 from $56.1 million last year, due primarily to higher international sales, which offset a decline in domestic sales, as well as favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. foreign currency exchange effects of approximately $1.4 million. Medical Systems Group sales Group sales Block sale (of large amounts) of securities to institutional investors. group sales The distribution of a new security issue to institutional clients. during the fourth quarter of fiscal 2004 increased 3.3 % to $15.8 million from $15.3 million in the same period last year. Fiscal 2004 sales at the Power Conversion Group improved by 8% to $13.1 million; sales last year were lower due to the impact of the Department of Defense investigation. Fiscal 2004 fourth quarter sales at the Power Conversion Group increased 5.9% to $3.6 million from $3.4 million in the fourth quarter of fiscal 2003. Consolidated gross margin improved to 25.4% during fiscal 2004 from 23% in fiscal 2003, due to higher gross margin at both the Medical Systems Group and the Power Conversion Group. Consolidated gross margin improved to 30.9% during the fiscal 2004 fourth quarter from 23.2% in the same period last year. The Power Conversion Group's gross margin for fiscal 2004 was 30.2% versus 28.9% last year, due to improved procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. practices resulting in lower average material costs. Gross margin during the fourth quarter of fiscal 2004 improved to 47.0% from 41.7% in the fourth quarter of fiscal 2003 for the same reasons. The Medical Systems Group's fiscal 2004 gross margin was 24.5% compared to 21.7% in fiscal 2003, due to higher margins domestically as a result of cost control measures. These factors also produced gross margin at the Medical Systems Group of 27.2% during the fourth quarter of fiscal 2004 versus 19.1% in the fourth quarter of fiscal 2003. Selling, General and Administrative expenses ("SG&A") during fiscal 2004 declined to 19.0% of sales from 26.2% of sales last year. SG&A also declined in the fiscal 2004 fourth quarter to 22.0% of sales from 24.1% of sales in the comparable prior year period. These decreases were the result of reduced corporate legal and accounting costs. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for fiscal 2004 improved to $194,000 from an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $6.1 million last year; operating income for the fiscal 2004 fourth quarter improved to $840,000 from an operating loss of $538,000 in the same period one year ago. Operating income also includes unallocated corporate costs of $3.7 million in Fiscal 2004, compared to unallocated corporate costs of $5.7 million in Fiscal 2003. The Medical Systems Group posted operating income of $5.4 million in fiscal 2004 and $0.9 million in the fourth quarter of fiscal 2004, as compared to operating income of $1.0 million in fiscal 2003 and operating income of $0.3 million in the fourth quarter of fiscal 2003. This was offset by operating losses of $1.6 million and $1.3 million at the Power Conversion Group in fiscal 2004 and fiscal 2003, respectively, and operating income of $1.0 million and $0.7 million for the fiscal 2004 and fiscal 2003 fourth quarters, respectively. The Company achieved operating profitability for the fiscal 2004-year and fourth quarter despite the impact of litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. settlement expenses totaling $3.7 million for the full year. Of these charges, $3.2 million related to the previously announced settlement with the U.S. Government regarding the investigation of the Company's RFI (Radio Frequency Interference) High-frequency electromagnetic waves that emanate from electronic devices such as chips. RFI - Radio Frequency Interference subsidiary (recorded in the second quarter of fiscal 2004), while $500,000 was expensed in connection with the modification to the warrants and related legal and professional fees incurred with the previously announced class action settlement (recorded in the fiscal 2004 fourth quarter). The loss from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the for fiscal 2004 was $10.7 million, or $1.04 per share, versus a loss from continuing operations of $15.2 million, or $1.46 per share, last year. Income from continuing operations for the fiscal 2004 fourth quarter was $335,000, or $.03 per share, versus a loss from continuing operations of $4.0 million, or $.39 per share, in the same period last year. Results from continuing operations included the litigation settlement costs, as well as the previously announced $9.8 million deferred tax valuation allowance, which is included in provision for income taxes. Del Global also established a $7.9 million valuation allowance in the fiscal 2003 provision for income taxes. The loss from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. for fiscal 2004 was $5.1 million, or $.49 per share, versus income from discontinued operations of $128,000, or $.01 per share, last year. The loss from discontinued operations for the fourth quarter of fiscal 2004 was $2.9 million, or $.28 per share, versus a loss from discontinued operations of $238,000, or $.02 per share, in the same period last year. The loss from discontinued operations for the fiscal 2004 periods are related to the sale of the Del High Voltage division and included a $4.9 million write down of assets to net realizable value Net realizable value (NRV) is a commonly used method of evaluating an asset's worth in the field of inventory accounting. NRV is part of GAAP rules that apply to valuing inventory, so as to not overstate or understate the value of inventory goods. . Reflecting the above, Del Global reported a net loss of $15.8 million, or $1.53 per share for fiscal 2004 versus a net loss of $15.0 million, or $1.45 per share last year. The net loss for the fiscal 2004 fourth quarter was $2.6 million, or $.25 per share, versus a net loss of $4.3 million, or $.41 per share, in the fourth quarter of fiscal 2003. The net loss for the fiscal 2003 fourth quarter includes a $3.2 million deferred tax valuation allowance, as discussed above. LITIGATION SETTLEMENT UPDATE During the first quarter of fiscal 2005, Del Global paid the US Government $5.0 million pursuant to the terms of the previously announced RFI settlement. This settlement, as previously announced, also included the Company pleading Asking a court to grant relief. The formal presentation of claims and defenses by parties to a lawsuit. The specific papers by which the allegations of parties to a lawsuit are presented in proper form; specifically the complaint of a plaintiff and the answer of a defendant plus any guilty to one criminal count and remains subject to court approval. BACKLOG Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. Consolidated backlog for continuing operations at July 31, 2004 was $25.9 million versus backlog at August 2, 2003 of approximately $16.3 million. Backlog in the Power Conversion Group at July 31, 2004 of $7.7 million was comparable to backlog at August 2, 2003. Backlog in the Medical Systems Group at July 31, 2004 was $18.2 million versus backlog at August 2, 2003 of approximately $8.6 million with increases at both operating units operating unit A type of operating company that engages in transactions with outsiders and that is owned by another business. For example, in 1995 the stockholders of Capital Cities/ABC approved a $19 billion merger with the Walt Disney Company, whereupon . Substantially all of the backlog should result in shipments within the next 12 months. FINANCIAL CONDITION Del Global's balance sheet at July 31, 2004 reflected working capital of $7.8 million (of which $4.8 million was cash and cash equivalents), shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. of $7.8 million and a stated book value of $0.75 per share. As of July 31, 2004, the Company had approximately $5.8 million of excess borrowing capacity under its domestic revolving line of credit Revolving line of credit A bank line of credit on which the customer pays a commitment fee and can take and repay funds at will. Normally a revolving LOC involves a firm commitment from the bank for a period of several years. . INVESTOR CONFERENCE CALL Suzanne Suzanne is a common female given name that was particularly popular in the United States in the 1950s and 1960s. It remained in the top 200 most popular names in the United States between 1930 and the late 1980s. M. Hopgood, Chairman of the Board, Walter Wal·ter , Bruno 1876-1962. German conductor noted for his interpretations of Mozart and Mahler. Noun 1. Walter - German conductor (1876-1962) Bruno Walter F. Schneider, President and Chief Executive Officer, and Mark A. Koch Koch , Robert 1843-1910. German bacteriologist who discovered the cholera bacillus and the bacterial cause of anthrax. He won a 1905 Nobel Prize for developing tuberculin. Koch named after Robert Koch, a German bacteriologist. , Principal Accounting Officer, will host a conference call on Tuesday, November 2, 2004 at 10:00 A.M. Eastern Time to discuss this news release. The telephone number to join this conference call is (888) 737-9832 (domestic) or (706) 679-0770. A taped replay of the call will be available through 5:00 P.M. Eastern Time on November 10, 2004. Please dial (800) 642-1687 (Domestic) or (706) 645-9291 (International) and enter the number 1886374 to listen to the replay. In addition, the conference call will be broadcast live over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the via the Webcast section of Del Global's web site at www.delglobal.com. To listen to the live call on the Internet, go to the web site at least 15 minutes early to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary audio software. If you are unable to participate in the live call, the conference call will be archived and can be accessed on Del Global's website for approximately five business days. Del Global Technologies Corp. is primarily engaged in the design, manufacture and marketing of cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. medical imaging and diagnostic systems consisting of stationary Stationary can mean:
Electromagnetic radiation of extremely short wavelength (100 nanometres to 0.001 nanometre) produced by the deceleration of charged particles or the transitions of electrons in atoms. systems, radiographic/fluoroscopic systems, dental imaging systems and proprietary high-voltage power conversion subsystems for medical and other critical industrial applications. Through its RFI subsidiary, Del Global manufactures electronic filters, high voltage capacitors, pulse modulators, transformers and reactors, and a variety of other products designed for industrial, medical, military and other commercial applications. Statements about future results made in this release may constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These statements are based on current expectations and the current economic environment. Del Global cautions that these statements are not guarantees of future performance. These statements involve a number of risks and uncertainties that are difficult to predict, including, but not limited to: the ability of Del Global to implement its business plan; retention of management; changing industry and competitive conditions; obtaining anticipated operating efficiencies; securing necessary capital facilities; favorable determinations in various legal and regulatory matters; court approval of the settlement agreement with the US Government regarding the DoD matter; the ability of Del Global to avoid a debarment de·bar tr.v. de·barred, de·bar·ring, de·bars 1. To exclude or shut out; bar. 2. To forbid, hinder, or prevent. from doing business with the U.S. Government; and favorable general economic conditions. Actual results could differ materially from those expressed or implied in the forward-looking statements. Important assumptions and other important factors that could cause actual results to differ materially from those in the forward-looking statements are specified in the Company's filings with the Securities and Exchange Commission.
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share data)
(unaudited)
Three Months Ended Year Ended
July 31, August 2, July 31, August 2,
2004 2003 2004 2003
--------- --------- --------- ---------
NET SALES $ 19,382 $ 18,769 $ 83,827 $ 68,212
COST OF SALES 13,402 14,416 62,512 52,542
--------- --------- --------- ---------
GROSS MARGIN 5,980 4,353 21,315 15,670
Selling, general and
administrative 4,269 4,525 15,907 17,904
Research and
development 418 366 1,562 1,593
Litigation settlement
costs 453 -- 3,652 2,126
Facilities
reorganization costs -- -- -- 128
--------- --------- --------- ---------
Total operating
expenses 5,140 4,891 21,121 21,751
OPERATING INCOME
(LOSS) 840 (538) 194 (6,081)
Interest expense (234) (345) (1,796) (1,340)
Other income
(expense) 16 161 123 596
--------- --------- --------- ---------
INCOME (LOSS) BEFORE
INCOME TAXES AND
MINORITY INTEREST 622 (722) (1,479) (6,825)
INCOME TAX PROVISION 212 3,289 8,691 8,233
--------- --------- --------- ---------
INCOME (LOSS)
FROM CONTINUING
OPERATIONS BEFORE
MINORITY INTEREST 410 (4,011) (10,170) (15,058)
MINORITY INTEREST 75 9 559 115
--------- --------- --------- ---------
INCOME (LOSS)
FROM CONTINUING
OPERATIONS 335 ( 4,020) (10,729) (15,173)
DISCONTINUED
OPERATIONS (2,907) (238) (5,095) 128
--------- --------- --------- ---------
NET LOSS $ (2,572) $ (4,258) $(15,824) $(15,045)
========= ========= ========= =========
LOSS PER SHARE
Continuing
operations $ .03 (.39) $ (1.04) $ (1.46)
Discontinued
operations $ (.28) $ (.02) $ (0.49) $ 0.01
--------- --------- --------- ---------
Basic and
diluted, net $ (.25) $ (.41) $ (1.53) $ (1.45)
========= ========= ========= =========
Weighted average
number of common
shares outstanding,
basic and diluted 10,333 10,338 10,335 10,344
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share data)
(unaudited)
July 31, August 2,
2004 2003
----------- ---------
Current Assets $ 38,214 $ 40,213
Total Assets $ 49,261 $ 60,492
Current Liabilities $ 30,450 $ 26,615
Total Liabilities $ 40,097 $ 36,260
Minority Interest in Subsidiary $ 1,389 $ 1,253
Shareholders' Equity $ 7,775 $ 22,979
Common Shares Outstanding End of Period 10,335 10,333
Book Value Per Share $ 0.75 $ 2.22
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion