EXHIBIT 99.01
FOR IMMEDIATE RELEASE
DEL GLOBAL TECHNOLOGIES' BOARD OF DIRECTORS
TERMINATES SHAREHOLDER RIGHTS PLAN AND AMENDS COMPANY BY-LAWS
COMPANY PROVIDES FOURTH QUARTER OUTLOOK
VALHALLA, NY - July 29, 2003 -- Del Global Technologies Corp. (DGTC)
("Del Global" or "the Company") today announced that its Board of Directors
voted to terminate the Company's current shareholder rights plan. The plan will
be terminated by changing its 2011 expiration date to September 30, 2003, while
the Board retains the right to adopt a new plan at a future date in the event of
changed circumstances. In addition, the Board has amended the Company's By-laws,
reinstating the right of stockholders to call a special meeting. This amendment
allows stockholders who own 25% of Del Global's stock to call a special meeting,
which must be held within 60 days of notice. This By-law amendment may not be
changed again without stockholder approval.
Gerald M. Czarnecki, Del Global's Chairman of the Board, stated, "We
believe that the termination of the shareholder rights plan -- or, what is
commonly referred to as the `poison pill' -- and the amendment of Del Global's
By-laws reflect the Board's commitment to good corporate governance and is
consistent with the platform upon which this Board was elected".
The Company noted that the termination of the shareholder rights
plan was not in response to any current discussions regarding the sale of Del
Global or its businesses.
In addition, the Board has approved the reimbursement of
approximately $368,000 in expenses incurred by Steel Partners II, L.P., Henry
Partners and Matthew Partners (and their affiliates) in connection with the
solicitation of proxies related to the recent successful effort by these
entities to elect Steel's nominees to Del Global's Board of Directors. The
intention of these entities to seek such reimbursement was included in the Proxy
Statement that Steel sent to Del Global's shareholders. Del Global will record a
charge in the current fourth quarter of fiscal 2003 to reflect this
reimbursement. In addition to the Steel reimbursement, the Company expects to
recognize a total of up to approximately $500,000 of costs in connection with
the proxy solicitation and shareholder meeting, approximately $300,000 of which
were incurred in the third quarter of fiscal 2003, and the balance of which it
expects to recognize in the current fourth quarter of fiscal 2003.
Q4 OUTLOOK
Del Global expects sales of approximately $24 million for the fiscal
fourth quarter ending August 1, 2003 versus sales of $27.4 million in the fourth
quarter of fiscal 2002; expected sales for the 2003 fourth quarter also
represent a decline versus previous sales expectations. Sales for fiscal 2003
are now expected to approximate fiscal 2002 sales of $98 million.
The decline in fourth quarter sales versus previous expectations is
due primarily to the delay of previously scheduled releases under certain
purchase orders from Power Conversion Group customers. This expected sales
decline is also due to the previously announced decision of a large Power
Conversion Group customer to shift to in-house production. The loss of this
customer's contract assembly business is a factor that will also impact fiscal
year 2004 sales in general, but Del Global's Power Conversion Group has been
developing a stronger base of proprietary business. In addition, the Company is
experiencing moderately lower sales at the Medical Systems Group, with both
continued sales sluggishness in the overseas markets and some softness in
domestic sales.
Although the Company had expected to return to operating
profitability in the fourth quarter of fiscal 2003 (absent certain unbudgeted
expenses), as a result of this sales shortfall and the recognition of proxy and
related costs, Del Global now expects to report an operating loss in the fourth
quarter of fiscal 2003.
Del Global Technologies Corp. is primarily engaged in the design,
manufacture and marketing of cost-effective medical imaging and diagnostic
systems consisting of stationary and portable x-ray 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
instrumentation, semiconductor capital equipment and energy exploration.
Statements about future results made in this release may constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements are based on current
expectations and the current economic environment. The Company cautions that
these statements are not guarantees of future performance. They involve a number
of risks and uncertainties that are difficult to predict including, but not
limited to, the ability of the Company 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, including a
settlement of the Department of Defense investigation on terms that the Company
can afford and that does not include a debarment from doing business with the US
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.
CONTACT: INVESTOR RELATIONS:
Del Global Technologies Corp. The Equity Group Inc.
Samuel E. Park, President & Chief Executive Officer Devin Sullivan (212) 836-9608
Thomas V. Gilboy, Chief Financial Officer Adam Prior (212) 836-9606
(914) 686-3600
