Exhibit 99.01
[GRAPHIC OMITTED]
FOR IMMEDIATE RELEASE
DEL GLOBAL TECHNOLOGIES ANNOUNCES OPERATING RESULTS AND SUMMARY
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BALANCE SHEET DATA FOR FISCAL 2004 FIRST QUARTER ENDED NOVEMBER 1, 2003
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FY 2004 Q1 Highlights vs. FY 2003 Q1
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o Net Sales Decline To $21.6 Million From $25.7 Million, Principally Due
To Last Year's EDS Sales In The Power Conversion Group Not Repeating
o Consolidated Gross Margin Increases Slightly From 20.3% To 20.7%, In
Spite Of Sales Decline
o SG&A Declines In Both Dollars And As Percentage Of Net Sales
o Operating Loss Narrows To $114,000
o Net Loss Unchanged At $(0.06) Per Diluted Share
o Also Signs Consent Agreement With SEC In Connection With Previously
Announced Agreement In Principle
VALHALLA, NY - December 15, 2003 -- DEL GLOBAL TECHNOLOGIES CORP. (DGTC) ("Del
Global") today announced operating results for its fiscal 2004 first quarter
ended November 1, 2003, as well as summary balance sheet data as of November 1,
2003 (see attached tables).
Walter F. Schneider, President and Chief Executive Officer of Del Global,
commented, "Higher sales and gross margin at the Medical Systems Group during
the first quarter of fiscal 2004 were offset by lower sales and gross margin at
the Power Conversion Group. Despite lower sales at the Power Conversion Group,
we did begin to realize some benefits during the first quarter of fiscal 2004
from our previously announced facilities consolidation. This Power Conversion
Group consolidation should continue to produce cost efficiencies throughout
fiscal 2004. As a complement to these efforts, we have converted our domestic
Medical Systems Group facilities to "lean manufacturing" practices, and expect
to convert our Villa facility in Italy during fiscal 2004."
FISCAL 2004 FIRST QUARTER RESULTS
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Net sales for the first quarter of fiscal 2004 declined 15.9% to $21.6 million
versus $25.7 million in the same period one year ago. Sales at the Medical
Systems Group increased 13.5% from the prior year to $13.7 million, with
increases at the Company's international and domestic locations. Sales at the
Medical Systems Group also benefited from favorable exchange rates on the
translation of the operating results of Villa Sistemi Medicali, the Company's
Italian subsidiary. Power Conversion Group sales declined 41.9% from the prior
year to $7.9 million, due to a decrease in sales of Explosive Detection Systems
("EDS") power supplies, and the impact of the previously announced shift to
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December 15, 2003
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in-house production of power supplies formerly purchased from us by a large
customer.
Consolidated gross margin for the fiscal 2004 first quarter increased to 20.7%
from 20.3% in the same period last year, due to improved gross margin at the
Medical Systems Group. Gross margin at the Medical Systems Group improved to
24.0% from 21.0% for the same period last year, due to higher sales and
favorable product mix. Margins at the Power Conversion Group declined to 15.0%
from 19.6% in the same period last year, due to lower volume and the inclusion
in the first quarter of fiscal 2003 of higher EDS sales, partly offset by
improved materials costs. The consolidation of the Hicksville facility
positively affected gross margin at the Power Conversion Group (despite lower
total gross margin at this segment) as a result of a reduction in fixed overhead
costs.
Selling, general and administrative (SG&A) expense was reduced by $1.1 million
to 19.8% of total net sales from 21.0% of total net sales in the first quarter
of fiscal 2003, due primarily to a reduction in corporate, legal and accounting
costs. In addition, last year's first quarter had a charge of $245,000
associated with the separation of the former President of Villa Sistemi
Medicali, Del Global's Italian subsidiary.
The operating loss for the first quarter of fiscal 2004 narrowed to $114,000
from $739,000 in the same period last year. This improvement was due to
increased overall gross margin, lower SG&A costs, and $-0- in facilities
reorganization costs versus $234,000 of such costs in the prior year period.
The net loss for the fiscal 2004 first quarter was $609,000, or $0.06 per
diluted share, versus a net loss of $606,000, or $0.06 per diluted share, for
the same period last year.
LITIGATION UPDATE
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Del Global has signed a consent decree with the SEC Staff for a settlement of
previously announced claims against the Company in connection with the
restatement of financial statements filed by former management for the fiscal
years 1997 through the third quarter of fiscal 2000. The terms of the settlement
include a previously announced penalty of $400,000 and an injunction against
future violations of the antifraud, periodic reporting, books and records and
internal accounting control provisions of the federal securities law. The
settlement is subject to, amongst other things, final approval by the Commission
and court approval. There can be no assurance that this settlement will receive
final Commission approval or court approval. In connection with this matter, the
Company had previously recorded a charge of $685,000 in the fourth quarter of
fiscal 2002, which included associated legal costs.
The Company is continuing its discussions with the US Government in connection
with the Department of Defense investigation at its RFI Corp. subsidiary, as
previously disclosed in the Del Global's Form 10-K for the year ended August 1,
2003.
On November 17, 2003, the Company filed a complaint against Samuel Park, the
prior Chief Executive Officer, seeking a declaratory judgment that no change in
control payment was or is due to Mr. Park as a result of the change in the Board
of Directors on May 29, 2003. In addition, this action seeks a declaratory
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December 15, 2003
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judgment that an amendment to the employment contract with Mr. Park regarding
advancement and reimbursement of legal fees is invalid and unenforceable. In the
event Mr. Park seeks to assert a claim for these payments, it is not possible to
predict the outcome of any such claim.
BACKLOG
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Consolidated backlog at November 1, 2003 was $24.6 million versus a backlog at
August 2, 2003 of $26.3 million. Since the beginning of the 2004 fiscal year,
backlog at the Power Conversion Group declined by $2.8 million to $14.9 million,
while backlog at the Medical Systems Group increased by $1.1 million to $9.7
million.
FINANCIAL CONDITION
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Del Global's balance sheet at November 1, 2003 reflected working capital of
$13.5 million, shareholders' equity of $22.5 million and a stated book value of
$2.17 per share.
INVESTOR CONFERENCE CALL
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Suzanne M. Hopgood, Walter F. Schneider and Thomas V. Gilboy will host a
conference call on Tuesday, December 16, 2003 at 2:30 P.M. Eastern Time to
discuss this news release. The telephone number to join this conference call is
(973) 582-2783. A taped replay of the call will be available through 5:00 P.M.
Eastern Time, Friday, December 19, 2003. Please dial (973) 341-3080 and enter
the number 4370654 to hear the taped replay. In addition, the conference call
will be broadcast live over the Internet 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 and install any
necessary 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 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. Del Global 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 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, including a
settlement of the Department of Defense investigation on terms that Del Global
can afford and that does not include a debarment from doing business with the US
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December 15, 2003
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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.
Walter F. Schneider, President & Chief Executive Officer Devin Sullivan (212) 836-9608
Thomas V. Gilboy, Chief Financial Officer Adam Prior (212) 836-9606
(914) 686-3600
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December 15, 2003
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DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands, except per share data)
(Unaudited)
Three Months Ended
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November 1, November 2,
2003 2002
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NET SALES $ 21,642 $ 25,733
COST OF SALES 17,163 20,517
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GROSS MARGIN 4,479 5,216
Selling, general and administrative 4,287 5,409
Research and development 306 312
Facilities reorganization costs -- 234
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Total Operating Expenses 4,593 5,955
OPERATING LOSS (114) (739)
Interest expense 316 356
Other income 71 503
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LOSS BEFORE INCOME TAX PROVISION
AND MINORITY INTEREST (359) (592)
INCOME TAX PROVISION 183 27
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NET LOSS BEFORE MINORITY INTEREST (542) (619)
MINORITY INTEREST 67 (13)
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NET LOSS $ (609) $ (606)
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LOSS PER SHARE, BASIC AND DILUTED $ (0.06) $ (0.06)
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Weighted average number of common shares
outstanding, basic and diluted 10,333,548 10,347,515
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December 15, 2003
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DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands, except per share data)
(Unaudited)
November 1, 2003 August 2, 2003
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Current Assets $ 39,738 $ 40,213
Total Assets $ 59,519 $ 60,492
Current Liabilities $ 26,240 $ 26,615
Total Liabilities $ 35,724 $ 36,260
Minority Interest in Subsidiary $ 1,339 $ 1,253
Shareholders' Equity $ 22,456 $ 22,979
Common Shares Outstanding End of Period 10,333,548 10,347,515
Book Value Per Share $ 2.17 $ 2.22
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