Del Global Technologies Announces Fiscal 2007 First Quarter Financial Results.FRANKLIN PARK Franklin Park, village (1990 pop. 18,485), Cook co., NE Ill., a suburb of Chicago; inc. 1892. It is chiefly residential. , Ill. -- Del Global Technologies Corp.: Q1 FY 2007 Highlights Versus Q1 FY 2006 * Sales rose 18.8% to $19.3 million * 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 $239,000 * 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. at October 28, 2006 rose 29.5% to $29.0 million Del Global Technologies Corp. (DGTC) ("Del Global" or "the Company") today announced financial results for its fiscal year 2007 first quarter ended October 28, 2006. 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 the first quarter of fiscal 2007 increased 18.8% to $19.3 million from $16.2 million in the first quarter of fiscal 2006. Most of the increase was driven by higher sales at the Medical Systems Group. Fiscal 2007 first quarter sales at the Medical Systems Group rose 30.1% to $16.6 million from $12.8 million in the comparable prior year period. Higher international sales at the Medical Systems Group were achieved during the first quarter due to completing shipments as part of large tender orders for Russia and Tunisia, and continued growth of the dental products business. Sales at the Power Conversion Group ("RFI (Radio Frequency Interference) High-frequency electromagnetic waves that emanate from electronic devices such as chips. RFI - Radio Frequency Interference ") in the first quarter fiscal 2007 were $2.7 million, a decrease of $0.8 million, or 23.1%, from last year's levels due primarily to a customer deciding to manufacture a product internally that was previously manufactured by RFI during the first quarter of fiscal 2007. Consolidated gross margin was 20.8% for the first quarter of fiscal 2007, compared to 23.0% in the first quarter of fiscal 2006. The decline was caused by an unfavorable product mix. Despite lower sales, margins at RFI were stable at 32.0% versus 32.3% in the prior year's first quarter. Increased material costs as a percent of sales was offset by reduced overhead spending. For the Medical Systems Group, first quarter gross margins of 19.0% declined from 20.5% in the prior year first quarter due to unfavorable product mix, both domestically and internationally. Selling, general and administrative expenses ("SG&A") for the first quarter of fiscal 2007 declined to 17.3% of sales from 18.5% of sales in the prior year's first quarter. Total operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. declined to 19.6% of sales from 23.7% of sales in the same period one year ago, reflecting higher total sales and the absence 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 costs in the 2007 quarter as compared to $0.5 million in litigation settlement costs during the first quarter of fiscal 2006. Operating income for the first quarter of fiscal 2007 was $0.2 million, a $0.3 million improvement 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 $0.1 million in the first quarter of fiscal 2006. The Medical Systems Group posted a first quarter fiscal 2007 operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. of $0.6 million as compared to $0.3 million in the same period one year ago, while RFI generated operating profit of $0.3 million as compared to $0.6 million one year ago. Unallocated corporate costs during the first quarter of fiscal 2007 were $0.6 million. Fiscal 2006 results included an expense of $0.5 million related to a litigation settlement. Interest expense for the first quarter of fiscal 2007 was higher than the prior year's first quarter due to higher interest rates and higher borrowings when compared to the prior year. The Company has not provided for a U.S. income tax benefit in the first quarter of fiscal 2007. With the exception of tax provisions and adjustments recorded at Villa, Del Global's Italian subsidiary, the Company recorded no adjustments to its current or net deferred tax accounts during the first quarter of fiscal 2007 or fiscal 2006. Reflecting the above, Del Global recorded a net loss in the first quarter fiscal 2007 of $0.5 million, or $0.04 per basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share on approximately 11.6 million weighted average common shares outstanding ("shares outstanding"), as compared to net loss of $0.5 million, or $0.05 per basic and diluted share on approximately 10.6 million shares outstanding, during the first quarter of fiscal 2006. BACKLOG Consolidated backlog at October 28, 2006 rose 29.5% to approximately $29.0 million from approximately $22.4 million at July 29, 2006. Backlog at the Medical Systems Group rose by $6.8 million from July 29, 2006 levels, reflecting strong bookings during the quarter. This includes an order from the California Prison System for 18 systems, valued at $2.6 million. This increase more than offset a $0.2 million decrease in backlog at RFI from levels at beginning of the fiscal year, reflecting lower bookings earlier in the quarter. Substantially all of the backlog should result in shipments within the next 12 months. COMMENTS James A. Risher, Del Global's President and Chief Executive Officer commented, "We are very pleased with higher sales and improved operating income at the Medical Systems Group. At last week's RSNA RSNA Radiological Society of North America, Inc. RSNA Robust Security Network Association 2006 Show in Chicago, the Medical Systems Group displayed several exciting new digital radiographic radiographic (rā´dēōgraf´ik), adj relating to the process of radiography, the finished product, or its use. offerings. We received very positive comments from both our international and domestic dealers and customers. While RFI generated lower sales, gross margin remained stable and this segment of our business remained profitable. We are also pleased that Del Global generated approximately $2.0 million of cash from operations during the fiscal 2007 first quarter, compared to a use of cash of $1.5 million in the prior fiscal year period." FINANCIAL CONDITION Del Global's balance sheet at October 28, 2006 reflected working capital of $6.3 million, 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 $12.2 million, and a net book value of $1.05 per share. As of October 28, 2006, Del Global had approximately $2.6 million of excess borrowing availability under its domestic revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility compared to $0.5 million at July 29, 2006. In addition, as of October 28, 2006, Del Global's Villa subsidiary had an aggregate of approximately $6.9 million of excess borrowing availability under its various short-term credit facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities . Terms of the Italian credit facilities do not permit the use of borrowing availability to directly finance operating activities at Del Global's U.S. subsidiaries. INVESTOR CONFERENCE CALL Del Global will host a conference call on Monday, December 18, 2006 at 11:00 AM. Eastern Time to discuss these results. The telephone number to join this conference call is (888) 737-9832 (Domestic) or (706) 679-0770 (International). A taped replay of the call will be available through 11:59 P.M. Eastern Time on December 25, 2006. Please dial (800) 642-1687 (Domestic) or (706) 645-9291(International) and enter the number 3282565 to listen to the replay. In addition, the conference call will be broadcast live over the Internet under the "Investor Relations Investor relations The process by which the corporation communicates with its investors. " section of Del Global's web site at www.delglobal.com; click on "Presentations & Webcasts." 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. ABOUT DEL GLOBAL TECHNOLOGIES Del Global Technologies Corp. is primarily engaged in the design, manufacture and marketing of high performance diagnostic imaging systems for medical, dental and veterinary applications through the Del Medical Systems Group. Through its U.S. based Del Medical Imaging Corp. and Milan, Italy based Villa Sistemi Medicali S.p.A. subsidiaries the Company offers a broad portfolio of general radiographic, radiographic/fluoroscopic, portable x-ray and digital radiographic systems to the global marketplace. Through its RFI subsidiary, Del Global manufactures proprietary high-voltage power conversion subsystems including electronic filters, 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 capacitors, pulse modulators, transformers and reactors, and a variety of other products designed for industrial, medical, military and other commercial applications. The company's web site is www.delglobal.com. 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 fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. determinations in various legal matters; market and operating risks Operating risk The inherent or fundamental risk of a firm, without regard to financial risk. The risk that is created by operating leverage. Also called business risk. from foreign currency exchange exposures; 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. [TABLE OMITTED] [TABLE OMITTED] |
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