Del Global Technologies Reports Fiscal 2007 Fourth Quarter and Year-End Financial Results.Q4 FY 2007 Highlights Versus Q4 FY 2006 * 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 29.2% to $31.0 million * Net income rose to $2.2 million from $710,000 * Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $0.09 * Consolidated backlog at July 28, 2007 increased 26.8% to $28.4 million 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. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). : DGTC) ("Del Global" or "the Company") today announced financial results for its fiscal 2007 fourth quarter and year ended July 28, 2007. Consolidated net sales for the fourth quarter of fiscal 2007 increased 29.2% to $31.0 million from $24.0 million in the fourth quarter of fiscal 2006, due to higher sales at the Medical Systems Group and the Power Conversion Group ("RFI (Radio Frequency Interference) High-frequency electromagnetic waves that emanate from electronic devices such as chips. RFI - Radio Frequency Interference "). Net sales at the Medical Systems Group rose 29.4% to $27.3 million from $21.9 million in the comparable prior year period. Sales were favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impacted by growth in international markets for Del Global's Apollo product line. Sales at RFI rose 19.0% to $3.7 million from $3.1 million in the prior year period due to increased customer demand during the period. Consolidated gross margin improved to 26.6% of sales during the fourth quarter of fiscal 2007 from 24.6% of sales in the fourth quarter of fiscal 2006, due to the impact of higher sales volume and better plant utilization. Gross margin at the Medical Systems Group during the fourth quarter of fiscal 2007 improved to 24.1% from 20.9% in the prior year's fourth quarter. Gross margin at RFI increased to 44.8% in the fiscal 2007 fourth quarter from 42.4% in the fiscal 2006 fourth 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 15.0% of net sales from 17.4% of net sales in the same period one year ago. Selling, general and administrative expenses ("SG&A") for the fourth quarter of fiscal 2007 declined as a percentage of net sales to 13.3% from 14.8% of net sales in the prior year's fourth quarter, the result of an improved cost structure and leverage from the growth in the business. Research and development expenses in the fourth quarter of fiscal 2007 rose to $0.5 million from $0.4 million, reflecting continued investment in new product development. 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 the fourth quarter of fiscal 2007 rose 107.9% to $3.6 million from $1.7 million in the comparable period last year. Operating income at the Medical Systems Group rose to $3.0 million from $1.5 million in the fourth quarter of fiscal 2006. RFI generated operating income of $0.9 million as compared to $0.8 million in the same period one year ago. Unallocated corporate expenses for the fourth quarter of fiscal 2007 totaled $0.3 million as compared to $0.7 million in the same period last year. Del Global reported net income in the fourth quarter of fiscal 2007 of $2.2 million, or $.09 per diluted share on approximately 24.5 million weighted average common shares outstanding ("shares outstanding"), as compared to a net income of $0.7 million, or $.06 per diluted share, on approximately 12.2 million shares outstanding, in the fourth quarter of fiscal 2006. The higher number of outstanding shares in the fiscal 2007 fourth quarter was due primarily to the impact of shares issued in connection with Del Global's Rights Offering, which was completed on March 12, 2007. The Company sold approximately 12.0 million shares of its common stock at $1.05 per share, generating total net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of $12.4 million. BACKLOG Consolidated backlog at July 28, 2007 rose 26.8% to approximately $28.4 million from approximately $22.4 million at July 29, 2006. Backlog at the Medical Systems Group increased by $5.7 million, reflecting a strong ramp up Ramp Up To increase a company's operations in anticipation of increased demand. Notes: A company might 'ramp up' operations if they just signed a contract creating substantially more demand for their product. See also: Demand, Economies of Scale in orders from international markets, while backlog at RFI increased $0.3 million from the beginning of the fiscal year. Substantially all of the backlog should result in shipments within the next twelve months. FINANCIAL CONDITION Del Global's balance sheet at July 28, 2007 reflected working capital of $25.0 million, which included $7.9 million of cash and cash equivalents. As of July 28, 2007, Del Global had approximately $9.0 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 $1.0 million at July 29, 2006. In addition, as of July 28, 2007, Del Global's Villa subsidiary had an aggregate of approximately $11.0 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. COMMENTS James A. Risher, Del Global's President and Chief Executive Officer commented, "Del Global generated more than $100 million in annual sales, due in large part to our success in implementing steps to strengthen our management team and overall organization, investments in our operating infrastructure, increased efficiencies, and reinvigorated re·in·vig·o·rate tr.v. re·in·vig·o·rat·ed, re·in·vig·o·rat·ing, re·in·vig·o·rates To give new life or energy to. re relationships with distributors and customers worldwide. During the year we introduced new digital systems for medical, veterinary, and chiropractic chiropractic (kīrəprăk`tĭk) [Gr.,=doing by hand], medical practice based on the theory that all disease results from a disruption of the functions of the nerves. applications. Our ongoing investments in the digital arena expanded Del Global's portfolio of medical and dental systems which provide greater value, operating efficiencies and diagnostic quality for the customer. We ended a record year for the Company with a strong fourth quarter, highlighted by increases in sales, margins, and net income. Del Global's financial position at July 28, 2007 was among the strongest in its history, highlighted by positive operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. for the fiscal 2007 year, a fortified fortified (fôrt  ´fīd),adj containing additives more potent than the principal ingredient. cash position, improved debt profile, and increased backlog. Based on our improved operating results and strong investor support for our Rights Offering we currently have the financing capacity to supplement our internal growth plans with potential external opportunities. While 2007 represented a positive improvement in the overall business we recognize this coming year will offer many new challenges as the economy appears to be slowing and new domestic policies such as the Deficit Reduction Act potentially adversely impact radiologic radiologic Radiological adjective Referring to radiology exam reimbursements. Nonetheless, we remain confident in our ability to continue to make progress in repositioning repositioning Laparoscopic surgery The changing of a Pt's position during a procedure to improve access or visualization of the operative field, which may be linked to complications, as it changes anatomic planes of operation. Cf Laparoscopic surgery. the Company." FISCAL 2007 OVERVIEW Consolidated net sales increased by 25.5% to $104.2 million for fiscal year 2007 from $83.0 million in fiscal 2006, due to increased revenues at the Medical Systems Group and RFI. Sales at the Medical Systems Group rose 29.5% to $91.0 million from $70.3 million last year, due to higher international sales, strong dental sales and increased sales of higher priced digital products. Sales at RFI rose by 3.6% to $13.2 million from $12.7 million in fiscal 2006, primarily the result of improved sales in the transformer transformer, electrical device used to transfer an alternating current or voltage from one electric circuit to another by means of electromagnetic induction. business. Consolidated gross margin improved to 24.0% in fiscal 2007 from 23.3% in fiscal 2006. Gross margin at the Medical Systems Group rose to 22.1% from 21.1% in fiscal 2006, due to the reversal of warranty reserves as the warranty period on several items expired, offset by lower margins associated with increased sales of digital products. Generally digital products have a higher selling price and a higher cost than non-digital product offerings, resulting in lower gross margins. Higher sales at RFI resulted in a gross margin of 37.3% in fiscal 2007 as compared to 35.5% in fiscal 2006. SG&A as a percentage of sales declined to 14.0% in fiscal 2007 from 16.4% in fiscal 2006. Operating income for fiscal 2007 was $8.4 million, an increase of 141.9% from operating income of $3.5 million in fiscal 2006. The Medical Systems Group generated operating income of $7.5 million in fiscal 2007 as compared to $3.6 million in fiscal 2006, while 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. at RFI remained stable at $2.4 million. Unallocated Corporate costs were $1.5 million for fiscal 2007, a decrease of 40.0% from $2.5 million in fiscal 2006. Net income for fiscal 2007 was $3.8 million, or $0.23 per diluted share, on approximately 16.5 million shares outstanding, as compared to net income of $0.1 million, or $0.01 per diluted share, on approximately 12.1 million shares outstanding, last year. INVESTOR CONFERENCE CALL Del Global will host a conference call on October 10, 2007 at 11:30 AM Eastern Time / 10:30 AM Central Time to discuss these results. The telephone number to join this conference call is (888) 737-9832 (Domestic) or (706) 679-0770 (International). 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 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 (rā´dēōgraf´ik), adj relating to the process of radiography, the finished product, or its use. , 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 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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