Del Global Technologies Announces Fiscal 2004 Third Quarter and Nine Months Operating Results.Business Editors 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.--(BUSINESS WIRE)--June 15, 2004 Q3 FY 2004 Highlights -- 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 Up 6% to $24.4 Million -- Consolidated Gross Margins Increase to 24.7% from 22.3% -- 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. of $1.7 Million Versus 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 $3.4 Million -- Net Loss Narrows Significantly to $289,000, or $0.03 Per Share, Which Includes $0.13 Per Share in One-Time Financing Fees and Non-Cash Income Tax Expense. -- Consolidated 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. Increases 35% to $35.5 Million from Levels at the Beginning of the 2004 Fiscal Year. Del Global Technologies Corp. (DGTC) ("Del Global") today announced operating results for its fiscal 2004 third quarter and nine month period ended May 1, 2004, as well as summary balance sheet data (see attached tables). Walter F. Schneider, President and Chief Executive Officer of Del Global, commented, "We are pleased with Del Global's progress. Profitability at the Medical Systems Group increased on a 30% rise in sales. The Power Conversion Group was profitable in the third quarter of fiscal 2004, reflecting a reduction in the infrastructure costs at our 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 division to more appropriately match lower anticipated sales. Consolidated backlog at May 1, 2004 also posted solid growth from the end of fiscal 2003, which we believe reflects both the quality of our products and Del Global's industry reputation." FISCAL 2004 THIRD QUARTER RESULTS Consolidated net sales for the third quarter of fiscal 2004 increased 6% to $24.4 million from $23.0 million in the third quarter of fiscal 2003. Sales at the Company's Medical Systems Group increased 29.8% to $17.4 million in the third quarter of fiscal 2004 from $13.4 million in the prior year period, due to higher international sales, which offset slightly lower domestic sales, plus favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. exchange rates from the Company's Villa Sistemi Medicali S.p.A. ("Villa") subsidiary. Sales at the Company's Power Conversion Group declined 27.3% to $7.0 million in the third quarter of fiscal 2004 from $9.6 million in the prior year period, due primarily to decreases in Explosive Detection System Noun 1. explosive detection system - a rapid automatic system to detect plastic explosives in passengers' luggage using X-ray technology and computers; designed for use in airports EDS ("EDS (Electronic Data Systems, Plano, TX, www.eds.com) Founded in 1962 by H. Ross Perot (independent candidate for the President of the U.S. in 1992), EDS is the largest outsourcing and data processing services organization in the country. ") business and the previously announced shift to in-house In-house In the context of general equities, keeping an activity within the firm. For example, rather than go to the marketplace and sell a security for a client to anyone, an attempt is made to find a buyer to complete the transaction with the firm. production of components formerly purchased from Del Global by a large customer. Consolidated gross margin increased to 24.7% in the fiscal 2004 third quarter from 22.3% in the third quarter of fiscal 2003. Gross margins at the Power Conversion Group rose to 28.2% from 22.4% in the prior year third quarter, due primarily to improved procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. practices that resulted in lower average material costs. Gross margins at the Medical Systems Group increased to 23.4% from 22.1% due to higher domestic margins resulting from cost control measures. Selling, general and administrative expense ("SG&A") declined as a percentage of net sales to 16.3% in the fiscal 2004 third quarter from 23.8% in the prior year third quarter. This decrease was due to reduced legal and accounting costs, reduced headcount and the consolidation of the Company's Hicksville, NY facility. Operating income in the third quarter of fiscal 2004 was $1.7 million, an improvement of $5.1 million from an operating loss of $3.4 million in the third quarter of fiscal 2003. The operating loss for the third quarter of fiscal 2003 included $2.4 million in 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 and facilities reorganization costs. Operating income at the Medical Systems Group increased to $1.6 million from $105,000 in the year earlier period. Operating income at the Power Conversion Group improved to $507,000 from an operating loss of $2.6 million in the same period last year, which included the aforementioned a·fore·men·tioned adj. Mentioned previously. n. The one or ones mentioned previously. aforementioned Adjective mentioned before Adj. 1. $2.4 million in costs. The net loss for the third quarter of fiscal 2004 narrowed significantly to $289,000, or $0.03 per share from a net loss of $3.9 million, or $0.38 per share, for the fiscal 2003 third quarter. The following impacted the net loss for the third quarter of fiscal 2004: -- a $600,000 increase in interest expense, reflecting one time fees associated with the previously announced Waiver The voluntary surrender of a known right; conduct supporting an inference that a particular right has been relinquished. The term waiver is used in many legal contexts. and Fourth Amendment to the Company's U.S. Credit Facility recently executed with its domestic lender, and -- a $784,000 increase in provision for income taxes, due primarily to a $732,000 non-cash provision for taxes on a dividend from Villa to Del Global. The net loss for the fiscal 2003 third quarter of $3.9 million, or $0.38 per share, included the aforementioned $2.4 million in aggregate litigation settlement and facilities reorganization costs. BACKLOG Consolidated backlog at May 1, 2004 was approximately $35.5 million versus backlog at August 2, 2003 of approximately $26.3 million. The backlog at the Medical Systems Group increased by $12.3 million on strong international orders, partially offset by a $3.0 million decrease in the Power Conversion Group backlog from levels at the beginning of the 2004 fiscal year. Substantially all of the backlog should result in shipments within the next 12 months. FINANCIAL CONDITION Del Global's balance sheet at May 1, 2004 reflected working capital of $8.2 million (of which $6.8 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 $10.0 million and a stated book value of $0.97 per share. As of May 1, 2004, the Company had approximately $2.1 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 M. Hopgood, Walter F. Schneider and Thomas (language) Thomas - A language compatible with the language Dylan(TM). Thomas is NOT Dylan(TM). The first public release of a translator to Scheme by Matt Birkholz, Jim Miller, and Ron Weiss, written at Digital Equipment Corporation's Cambridge Research Laboratory runs V. Gilboy will host a conference call on Thursday, June 17, 2004 at 4:30 P.M. Eastern Time to discuss this news release. The telephone number to join this conference call is (800) 915-4836. A taped replay of the call will be available through 5:00 P.M. Eastern Time on June 24, 2004. Please dial (800) 428-6051 (Domestic) or (973) 709 - 2089 (International) and enter the number 360472 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. Industrial applications for which Del Global supplies power subsystems include airport explosives detection, analytical analytical, analytic pertaining to or emanating from analysis. analytical control control of confounding by analysis of the results of a trial or test. instrumentation instrumentation, in music: see orchestra and orchestration. instrumentation In technology, the development and use of precise measuring, analysis, and control equipment. , semiconductor capital equipment and energy exploration. 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; the ability of Del Global to meet its obligations under the agreement in principle with the US Government regarding the proposed settlement of 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 Nine Months Ended
May 1, May 3, May 1, May 3,
2004 2003 2004 2003
NET SALES $ 24,413 $ 23,039 $ 75,958 $ 74,907
COST OF SALES 18,372 17,911 59,129 59,015
-------- -------- -------- --------
GROSS MARGIN 6,041 5,128 16,829 15,892
Selling, general and
administrative 3,976 5,478 13,865 16,458
Research and development 413 702 1,144 1,748
Litigation settlement costs -- 2,126 3,199 2,126
Impairment of goodwill and
other intangible assets -- -- 1,453 --
Facilities reorganization
costs -- 253 -- 706
-------- -------- -------- --------
Total operating expenses 4,389 8,559 19,661 21,038
OPERATING INCOME (LOSS) 1,652 (3,431) (2,832) (5,146)
Interest expense 915 315 1,562 1,028
Other (income) expense (52) 35 (104) (437)
-------- -------- -------- --------
INCOME (LOSS) BEFORE INCOME
TAXES AND MINORITY INTEREST 789 (3,781) (4,290) (5,737)
INCOME TAX PROVISION 940 156 8,479 4,944
-------- -------- -------- --------
LOSS BEFORE MINORITY INTEREST (151) (3,937) (12,769) (10,681)
MINORITY INTEREST 138 (11) 484 106
-------- -------- -------- --------
NET LOSS $ (289) $ (3,926) $(13,253) $(10,787)
======== ======== ======== ========
LOSS PER SHARE, BASIC AND
DILUTED $ (0.03) $ (0.38) $ (1.28) $ (1.04)
======== ======== ======== ========
Weighted average number of
common shares outstanding,
basic and diluted 10,333 10,338 10,333 10,344
======== ======== ======== ========
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share data)
(unaudited)
May 1, 2004 August 2, 2003
----------- --------------
Current Assets $ 42,098 $ 40,213
Total Assets $ 55,006 $ 60,492
Current Liabilities $ 33,864 $ 26,615
Total Liabilities $ 43,633 $ 36,260
Minority Interest in Subsidiary $ 1,326 $ 1,253
Shareholders' Equity $ 10,047 $ 22,979
Common Shares Outstanding End of Period 10,333 10,333
Book Value Per Share $ 0.97 $ 2.22
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