EXHIBIT 99.01
FOR IMMEDIATE RELEASE
DEL GLOBAL TECHNOLOGIES ANNOUNCES PROFITABLE FOURTH QUARTER AND
FISCAL YEAR 2005 FINANCIAL RESULTS
VALHALLA, NY - October 20, 2005 -- DEL GLOBAL TECHNOLOGIES CORP. (DGTC):
Q4 FY 2005 HIGHLIGHTS VERSUS Q4 FY 2004
o Sales rise 6.4% to $20.6 million
o Operating income doubles to $1.7 million
o Net income improves to $808,000, or $0.07 per diluted share
o oShareholders' equity up 18.7% to $9.2 million
Del Global Technologies Corp. (DGTC) ("Del Global" or "the Company") today
announced operating results for its fiscal 2005 fourth quarter and fiscal year
ended July 30, 2005, as well as summary balance sheet data (see attached
tables). These results are for continuing operations and exclude the results of
the Del High Voltage ("DHV") division, which was sold on October 1, 2004. DHV
results are treated as discontinued operations.
FISCAL 2005 FOURTH QUARTER RESULTS
Total net sales for the fourth quarter of fiscal 2005 increased 6.4% to $20.6
million from $19.4 million in the same period last year. Operating income for
the fourth quarter of fiscal 2005 rose 100% to $1.7 million from $841,000 in the
same period one year ago. Net income for the fourth quarter of fiscal 2005
improved to $808,000, or $0.07 per diluted share, from a net loss of $2.6
million, or $0.25 per share, in the fourth quarter of 2004. Results for the
fourth quarter of fiscal 2004 included litigation settlement costs of $453,000
and a loss from discontinued operations of $2.9 million, or $0.28 per share, as
compared to no such costs or losses in the fourth quarter of fiscal 2005.
Walter F. Schneider, President and Chief Executive Officer of Del Global
commented, "We are very pleased with Del Global's return to profitability in the
fourth quarter and profitable operations for fiscal 2005. Higher total sales,
combined with lower selling, general and administrative expenses ("SG&A"), and
an absence of expenses related to reorganization and legal matters, have helped
place Del Global on solid financial footing for fiscal 2006."
"Regarding Del Global's financial position," he continued, "the Company's
balance sheet at July 31, 2005 reflected working capital of $10.1 million, of
which $1.5 million consisted of cash and equivalents, and shareholders' equity
of $9.2 million. In August 2005, Del Global entered into an $8 million credit
facility with North Fork Business Capital. The facility is comprised of a
three-year, $6 million revolving line of credit and a three-year, $2 million
term loan. Proceeds were used to retire the Company's existing credit facility
and for general working capital purposes. "
Del Global Technologies Page 2
Sales at the Medical Systems Group during the fourth quarter of fiscal 2005 rose
8.2% to $17.1 million from $15.8 million in the same period last year, due to
increased sales of digital units. This increase substantially offset a $100,000
decline in sales at the Power Conversion Group ("RFI") to $3.5 million.
Consolidated gross margin in the fourth quarter of fiscal 2005 was 28.9%
compared to 30.9% in the same period one year ago. An increase in gross margin
at RFI, due to decreased material costs as a percent of sales due to improved
procurement practices and lower waste levels, was offset by a decline in gross
margin at the Medical Systems Group, the result of increased engineering costs
related to product certifications.
Consolidated SG&A during the fourth quarter of fiscal 2005 declined to $3.9
million, or 18.9% of sales, from $4.3 million, or 22.0% of sales, in last year's
fiscal fourth quarter. This decrease was due to lower selling expenses at the
Medical Systems Group, partially offset by a $492,000 non-cash writeoff of
pension balances related to a plan termination.
RFI posted operating income of $1.4 million in the fourth quarter of fiscal
2005, a 38.7% increase from operating income of $1.0 million in same period one
year ago. This improvement was the result of manufacturing efficiencies as
described above. Operating income at the Medical Systems Group improved to $1.2
million from $936,000 in the fourth quarter of fiscal 2004, due primarily to
lower selling expense as described above.
FISCAL 2005 FULL YEAR RESULTS OVERVIEW
Consolidated net sales increased 1.3% to $84.9 million in fiscal 2005 from $83.8
million last year. Sales at RFI increased 7.7% to $14.1 million, while sales at
the Medical Systems Group remained stable at $70.8 million from fiscal 2004.
Consolidated gross margins improved to 26.3% for fiscal 2005 from 25.4% in
fiscal 2004. Margins at RFI improved from last year, while gross margins
declined at the Medical Systems Group due to higher costs affiliated with the
increase in digital unit sales in fiscal 2005. Operating income for fiscal 2005
rose to $3.9 million from $194,000 in fiscal 2004. Net income for the year was
$392,000, or $0.03 per diluted share, versus a net loss of $15.8 million, or
$1.53 per share, in fiscal 2004. Results for fiscal 2004 included litigation
settlement costs of $3.7 million (as compared to $300,000 in such costs in
fiscal 2005), a loss from continuing operations of $10.7 million, or $1.04 per
share (as compared to income from continuing operations of $193,000, or $0.01
per diluted share, in fiscal 2005), and a loss from discontinued operations of
$5.1 million, or $0.49 per share (as compared to income from discontinued
operations of $199,000, or $0.02 per diluted share in fiscal 2005).
BACKLOG
Consolidated backlog at July 30, 2005 was $14.6 million versus backlog at July
31, 2004 of approximately $25.9 million. The backlog in the Power Conversion
Group decreased $1.6 million from levels at beginning of the fiscal year due to
a decrease in incoming order rates. Backlog at the Medical Systems Group
declined by $9.6 million due to shipments of approximately $8.8 million under a
large tender order at our international location, as well as a decrease in
incoming order rates during the period. Substantially all of the backlog should
result in shipments within the next 12 months.
Del Global Technologies Page 3
October 20, 2005
INVESTOR CONFERENCE CALL
Walter F. Schneider, President and Chief Executive Officer and Mark A. Koch,
Principal Accounting Officer, will host a conference call on October 21, 2005 at
11:00 A.M. Eastern Time to discuss this news release. 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 5:00 P.M.
Eastern Time on October 28, 2005. Please dial (800) 642-1687 (Domestic) or (706)
645-9291 (International) and enter the number 9665872 to listen to the replay.
In addition, the conference call will be broadcast live over the Internet via
the "Presentations and Webcasts" 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.
ABOUT DEL GLOBAL TECHNOLOGIES
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. Through its
RFI subsidiary, Del Global manufactures electronic filters, high voltage
capacitors, pulse modulators, transformers and reactors, and a variety of other
products designed for industrial, medical, military and other commercial
applications.
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 matters; market
and operating risks 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.
DEL GLOBAL TECHNOLOGIES CORP. INVESTOR RELATIONS:
Walter F. Schneider, President & Chief Executive Officer The Equity Group Inc.
Mark Koch, Principal Accounting Officer Devin Sullivan (212) 836-9608
(914) 686-3650 Maura Gedid (212) 836-9605
Del Global Technologies Page 4
October 20, 2005
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Three Months Ended Year Ended
-------------------- ---------------------
July 30, July 31 July 30 July 31
2005 2004 2005 2004
TOTAL NET SALES $ 20,613 $ 19,382 $ 84,872 $ 83,827
COST OF SALES 14,654 13,402 62,591 62,512
-------- -------- -------- --------
GROSS MARGIN 5,959 5,980 22,281 21,315
Selling, general and administrative 3,906 4,268 16,452 15,907
R&D Expense 368 418 1,636 1,562
Facilities reorganization - - - -
Litigation Settlement Costs - 453 300 3,652
-------- -------- -------- --------
TOTAL OPERATING EXPENSES 4,274 5,139 18,388 21,121
OPERATING INCOME (LOSS) 1,685 841 3,893 194
Interest expense (372) (251) (1,350) (1,796)
Other gain (loss) 63 22 97 123
-------- -------- -------- --------
INCOME (LOSS) FROM CONTINUING
OPERATION BEFORE INCOME
TAXES AND MINORITY INTEREST 1,376 612 2,640 (1,479)
INCOME TAX PROVISION 497 212 2,054 8,691
-------- -------- -------- --------
NET INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE MINORITY INTEREST 879 400 586 (10,170)
MINORITY INTEREST 71 74 393 559
-------- -------- -------- --------
NET INCOME (LOSS) FROM
CONTINUING OPERATIONS 808 326 193 (10,729)
Discontinued operations - (2,897) 199 (5,095)
-------- -------- -------- --------
NET INCOME (LOSS) $ 808 (2,571) $ 392 $(15,824)
======== ====== ======== ========
NET INCOME (LOSS) PER COMMON SHARE-
BASIC
Continued operations $ 0.08 $ 0.03 $ 0.02 $ (1.04)
-------- -------- -------- --------
Discontinued operations $ - $ (0.28) $ 0.02 $ (0.49)
-------- -------- -------- --------
Basic, net $ 0.08 $ (0.25) $ 0.04 $ (1.53)
======== ======== ======== ========
DILUTED
Continued operations $ 0.07 $ 0.03 $ 0.01 $ (1.04)
-------- -------- -------- --------
Discontinued operations $ - $ (0.28) $ 0.02 $ (0.49)
-------- -------- -------- --------
Diluted, net $ 0.07 $ (0.25) $ 0.03 $ (1.53)
======== ======== ======== ========
Weighted average number of common
shares outstanding:
Basic 10,613 10,335 10,490 10,334
======== ======== ======== ========
Diluted 11,504 10,335 11,465 10,334
======== ======== ======== ========
Del Global Technologies Page 5
October 20, 2005
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
CONSOLIDATED SUMMARY BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
July 30, 2005 July 31, 2004
------------- -------------
Current Assets $ 31,260 $ 38,214
Total Assets $ 40,776 $ 49,261
Current Liabilities $ 21,141 $ 30,450
Total Liabilities $ 30,278 $ 40,097
Minority Interest in Subsidiary $ 1,273 $ 1,389
Shareholders' Equity $ 9,226 $ 7,775
Common Shares Outstanding End of Period 10,630 10,335
Book Value Per Share $ 0.87 $ 0.75
