EXHIBIT 99.01
DEL GLOBAL TECHNOLOGIES CORP.
FOR IMMEDIATE RELEASE
DEL GLOBAL TECHNOLOGIES ANNOUNCES
FISCAL 2004 THIRD QUARTER AND NINE MONTHS OPERATING RESULTS
Q3 FY 2004 HIGHLIGHTS
o Net Sales Up 6% to $24.4 Million
o Consolidated Gross Margins Increase to 24.7% from 22.3%
o Operating Income of $1.7 Million Versus Operating Loss of $3.4 Million
o 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.
o Consolidated Backlog Increases 35% to $35.5 Million from Levels at the
Beginning of the 2004 Fiscal Year.
VALHALLA, NY - June 15, 2004 -- 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 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 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
("EDS") business and the previously announced shift to in-house 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
Del Global Technologies Corp. Page 2
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Conversion Group rose to 28.2% from 22.4% in the prior year third quarter, due
primarily to improved procurement 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 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 $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:
o a $600,000 increase in interest expense, reflecting one time
fees associated with the previously announced Waiver and Fourth
Amendment to the Company's U.S. Credit Facility recently
executed with its domestic lender, and
o 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.
Del Global Technologies Corp. Page 3
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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 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.
INVESTOR CONFERENCE CALL
Suzanne M. Hopgood, Walter F. Schneider and Thomas 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 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 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 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. 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 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.
CONTACT: INVESTOR RELATIONS:
Del Global Technologies Corp. The Equity Group Inc.
Walter F. Schneider, President Devin Sullivan (212) 836-9608
& Chief Executive Officer Adam Prior (212) 836-9606
Thomas V. Gilboy, Chief Financial Officer
(914) 686-3600
Del Global Technologies Corp. Page 4
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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, 2004 MAY 3, 2003 MAY 1, 2004 MAY 3, 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 Page 5
March 15, 2004
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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
