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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
DEL GLOBAL TECHNOLOGIES ANNOUNCES FISCAL 2006 FIRST QUARTER RESULTS
VALHALLA, NY - December 14, 2005 -- DEL GLOBAL TECHNOLOGIES CORP. (DGTC) ("Del
Global" or "the Company") today announced operating results for its fiscal 2006
first quarter ended October 29, 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, sold on October 1, 2004. DHV
results are treated as discontinued operations.
FISCAL 2006 FIRST QUARTER RESULTS
Consolidated net sales for the first quarter of fiscal 2006 were $16.2 million
versus the $18.8 million in the same period last year. Sales at the Medical
Systems Group decreased to $12.8 million from $15.4 million in the same period
last year. Prior year sales reflect international shipments of $4.3 million
under a Romanian tender order. Lower sales were partially offset by a favorable
currency exchange rate difference of $700,000. Fiscal 2006 first quarter sales
at the Power Conversion Group ("RFI") were stable at $3.5 million from the first
quarter of fiscal 2005.
Consolidated gross margin decreased to 23% in the fiscal 2006 first quarter from
24.3% in same period last year. Gross margin declined at the Medical Systems
Group to 20% from 23% in the prior year period due to unfavorable product mix.
Conversely, gross margin at RFI improved due to better procurement practices,
lower materials costs as a percentage of sales and lower waste levels.
Selling, general and administrative expenses ("SG&A") during the first quarter
of fiscal 2006 declined to $3 million from $3.3 million in the same period last
year due to reduced legal and accounting expenses.
The Medical Systems Group posted operating income of $260,000 in the first
quarter of fiscal 2006 compared to operating income of $1.2 million in the same
period last year. This decline was attributable to lower overall sales and
increased material costs related to the introduction of digital products.
Operating income at RFI during the fiscal 2006 first quarter improved to
$553,000 from $448,000 in the same period last year. The consolidated operating
loss of $117,000 reflected $930,000 in corporate expenses comprised of $500,000
litigation settlement costs and $430,000 related to unallocated administrative
and professional costs.
The net loss for the first quarter of fiscal 2006 was $483,000 or $0.05 per
diluted share, as compared to net income of $247,000, or $0.02 per diluted
share, in the same period last year. The net loss for the first quarter of
fiscal 2006 included a $500,000 litigation settlement expense versus no such
expense in the fiscal 2005 first quarter. Net income for the fiscal 2005 first
quarter included $199,000 in income from discontinued operations versus no such
income in the fiscal 2006 first quarter.
Del Global Technologies Page 2
December 14, 2005
Walter F. Schneider, President and Chief Executive Officer of Del Global
commented, "Excluding the $500,000 in litigation settlement expenses, and
despite lower sales at the Medical Systems Group, we operated on an approximate
break-even basis during the first quarter of fiscal 2006. We remain pleased with
the performance at RFI. As recently announced, RFI was recommended to be ISO
9001:2000 certified. This is an important designation, and one that we believe
will allow RFI to expand its industry presence."
"We are also focused on gaining revenue momentum at Medical Systems Group. At
the recent RSNA (Radiological Society of North America) show in Chicago, we
introduced a number of new systems, including the Apollo R/F and OTC3 Hospital
Systems. These products were well received and we believe will generate new
orders that we expect to fill in FY 2006. Under the leadership of Christopher
Japp, the President of Del Medical Systems Group, we have also launched a new
global strategy to improve this segment's penetration in the global marketplace,
increase overall product revenues, broaden product applications, and strengthen
customer service. Over the next 12 months we will hire a VP of Global Sales and
regional managers to cultivate sales opportunities in areas of the world that we
believe hold significant promise, including establishing Del Global's first-ever
presence in the large and growing Asian market."
BACKLOG
Consolidated backlog at October 29, 2005 was $17.5 million versus backlog at
July 30, 2005 of approximately $14.6 million. The backlog in the Power
Conversion Group decreased $0.9 million from levels at beginning of the fiscal
year, reflecting lower bookings earlier in the quarter. There was a $3.7 million
increase in the backlog at our Medical Systems Segment from July 30, 2005
levels, reflecting strong bookings during the quarter. Substantially all of the
backlog should result in shipments within the next 12 months.
FINANCIAL CONDITION
Del Global's balance sheet at October 29, 2005 reflected working capital of
$11.3 million, shareholders' equity of $8.8 million and a stated book value of
$.83 per share. As of October 29, 2005, the Company had approximately $1.1
million of excess borrowing capacity under its domestic revolving line of credit
compared to $0.5 million at July 30, 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 Thursday, December
15, 2005 at 12:30 P.M. Eastern Time to discuss these results. 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 Tuesday, December 20, 2005. Please dial (800) 642-1687
(Domestic) or (706) 645-9291 (International) and enter the number 3395828 to
listen to the replay. In addition, the conference call will be broadcast live
over the Internet under the "Investor Relations" section of Del Global's web
site at WWW.DELQLOBAL.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.
Del Global Technologies Page 3
December 14, 2005
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
December 14, 2005
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Three Months Ended
------------------
October 29, October 30,
2005 2004
---- ----
NET SALES $ 16,239 $ 18,758
COST OF SALES 12,504 14,205
---------- ----------
GROSS MARGIN 3,735 4,553
---------- ----------
Selling, general and administrative 2,999 3,276
Research and development 353 373
Litigation settlement costs 500 -
---------- ----------
Total operating expenses 3,852 3649
---------- ----------
OPERATING (LOSS) INCOME (117) 904
Interest expense 210 422
Other income (13) (14)
---------- ----------
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE
INCOME TAX PROVISION AND MINORITY INTEREST (314) 496
INCOME TAX PROVISION 172 377
---------- ----------
INCOME (LOSS) FROM CONTINUING OPERATIONS (486) 119
BEFORE MINORITY INTEREST
MINORITY INTEREST (3) 71
---------- ----------
INCOME (LOSS) FROM CONTINUING OPERATIONS (483) 48
DISCONTINUED OPERATION - 199
NET INCOME(LOSS) $ (483) $ 247
========== ==========
INCOME(LOSS)PER COMMON SHARE(BASIC AND DILUTED)
Continuing operations $ (0.05) $ -
Discontinued operation - 0.02
Net income(loss) per basic and diluted share $ (0.05) 0.02
========== ==========
Weighted average number of common
shares outstanding:
Basic 10,630 10,352
Diluted 10,630 11,398
========== ==========
Del Global Technologies Page 5
December 14, 2005
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
CONSOLIDATED SUMMARY BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
October 29, 2005 July 30, 2005
---------------- -------------
Current Assets $ 29,738 $ 31,260
Total Assets $ 39,291 $ 40,776
Current Liabilities $ 18,464 $ 21,138
Total Liabilities $ 29,247 $ 30,275
Minority Interest in Subsidiary $ 1,264 $ 1,273
Shareholders' Equity $ 8,780 $ 9,228
Common Shares Outstanding End of Period 10,630 10,630
Book Value Per Share $ 0.83 $ 0.87
