Exhibit 99.1
PROFORMA FINANCIAL INFORMATION
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
PROFORMA CONSOLIDATED BALANCE SHEET -
UNAUDITED
(DOLLARS IN THOUSANDS)
PRO FORMA
HISTORICAL PRO FORMA CONSOLIDATED
OCTOBER 29, ADJUSTMENT OCTOBER 29,
2005 (a) 2005
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ASSETS
CURRENT ASSETS:
Cash and cash equivalents...................................................$ 232 $ (232) $ --
Trade receivables (net of allowance for doubtful accounts of $1,030)........ 12,969 12,969
Inventories................................................................. 15,616 15,616
Assets attributable to discontinued operation, at net realizable value...... -- --
Prepaid expenses and other current assets................................... 921 921
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Total current assets........................................................ 29,738 (232) 29,506
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NON-CURRENT ASSETS:
Fixed assets, net........................................................... 6,378 6,378
Deferred income tax assets.................................................. 782 782
Goodwill.................................................................... 1,911 4,636 6,547
Other intangible assets, net................................................ 22 22
Other assets................................................................ 460 460
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Total non-current assets.................................................... 9,553 4,636 14,189
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TOTAL ASSETS..................................................................$ 39,291 $ 4,404 $ 43,695
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See notes to unadited proforma consolidated financial statements
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
PROFORMA CONSOLIDATED BALANCE SHEET - UNAUDITED
OCTOBER 29, 2005
DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
HISTORICAL PROFORMA
PROFORMA
OCTOBER 29, ADJUSTMENT OCTOBER 29,
2005 (a) 2005
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term credit facilities.........................................$ 3,825 $ 2,718 $ 6,543
Current portion of long-term debt.................................... 1,022 1,022
Accounts payable - trade............................................. 7,702 7,702
Accrued liabilities.................................................. 4,907 4,907
Litigation settlement reserves....................................... 405 405
Income taxes payable................................................. 603 603
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Total current liabilities............................................ 18,464 2,718 21,182
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NON-CURRENT LIABILITIES:
Long-term debt........................................................ 5,684 5,684
Subordinated note..................................................... 2,223 2,223
Other long-term liabilities........................................... 2,876 2,876
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Total non-current liabilities......................................... 10,783 10,783
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Total liabilities..................................................... 29,247 2,718 31,965
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COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST IN SUBSIDIARY......................................... 1,264 (1,264) --
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SHAREHOLDERS' EQUITY:
Common stock -- $.10 par value; authorized - 20,000,000 shares;
issued - 11,252,958 shares at July 30, 2005 issued - Proforma
- 12,157,630 ........................................................ 1,125 90 1,215
Additional paid-in capital............................................ 64,508 2,860 67,368
Accumulated other comprehensive income................................ 1,425 1,425
Accumulated deficit................................................... (52,732) (52,732)
Less common stock in treasury - 622,770 shares and 643,533 shares
at July 30, 2005..................................................... (5,546) (5,546)
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Total shareholders' equity............................................ 8,780 2,950 11,730
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY..............................$ 39,291 $ 4,404 $ 43,695
========== ======== ===========
See notes to unaudited proforma consolidated financial statements
PRO FORMA FINANCIAL INFORMATION
DEL GLOBAL TECHNOLOGIES CORP AND SUBSIDIARIES
PROFORMA CONSOLIDATED STATEMENT OF OPERATIONS - UNAUDITED
YEAR ENDED JULY 30,2005
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
PRO FORMA
HISTORICAL ADJUSTMENTS PROFORMA
JULY 30, JULY 30, JULY 30,
2005 2005 2005
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NET SALES........................................................................$ 84,872 $ $ 84,872
COST OF SALES.................................................................... 62,591 62,591
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GROSS MARGIN..................................................................... 22,281 22,281
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Selling, general and administrative............................................ 16,452 16,452
Research and development....................................................... 1,636 1,636
Litigation settlement costs.................................................... 300 300
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Total operating expenses..................................................... 18,388 18,388
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OPERATING INCOME (LOSS).......................................................... 3,893 3,893
Interest expense............................................................... (1,350) (83) (a) (1,433)
Other income................................................................... 97 97
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INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
AND MINORITY INTEREST.......................................................... 2,640 (83) 2,557
INCOME TAX PROVISION............................................................. 2,054 (31) (b) 2,023
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INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST................ 586 (52) 534
MINORITY INTEREST................................................................ 393 (393) (c) --
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INCOME (LOSS) FROM CONTINUING OPERATIONS......................................... 193 341 534
DISCONTINUED OPERATION........................................................... 199 199
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NET INCOME (LOSS)................................................................$ 392 $ 341 $ 733
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NET INCOME (LOSS) PER BASIC SHARE
Continuing operations..........................................................$ 0.02 $ 0.04
Discontinued operation......................................................... 0.02 0.02
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Net income (loss) per basic share..............................................$ 0.04 $ 0.06
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NET INCOME (LOSS) PER DILUTED SHARE
Continuing operations..........................................................$ 0.01 $ 0.04
Discontinued operation......................................................... 0.02 0.02
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Net income (loss) per diluted share............................................$ 0.03 $ 0.06
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Weighted average shares outstanding - Basic.................................... 10,490 905 (d) 11,395
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Weighted average shares outstanding - Diluted.................................. 11,465 905 (d) 12,370
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See notes to unaudited consolidated proforma financial statements
PRO FORMA FINANCIAL INFORMATION
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
THREE MONTHS ENDED OCTOBER 29, 2005
CONSOLIDATED STATEMENT OF OPERATIONS - UNAUDITED
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
PRO FORMA
HISTORICAL ADJUSTMENTS PROFORMA
OCTOBER 29, 2005 OCTOBER 29, 2005 OCTOBER 29, 2005
NET SALES...................................................................$ 16,239 $ $ 16,239
COST OF SALES............................................................... 12,504 12,504
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GROSS MARGIN................................................................ 3,735 3,735
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Selling, general and administrative....................................... 2,999 2,999
Research and development.................................................. 353 353
Litigation settlement costs............................................... 500 500
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Total operating expenses................................................ 3,852 3,852
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OPERATING INCOME (LOSS)..................................................... (117) (117)
Interest expense.......................................................... (210) (21) (a) ( 231)
Other income.............................................................. 13 13
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INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
AND MINORITY INTEREST..................................................... (314) (21) (335)
INCOME TAX PROVISION........................................................ 172 (8) (b) 164
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INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST........... (486) (13) (499)
MINORITY INTEREST........................................................... 3 (3) (c) --
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NET INCOME (LOSS)........................................................... (483) (16) (499)
NET INCOME (LOSS) PER BASIC SHARE $ (0.05) $ (0.04)
========= ==========
NET INCOME (LOSS) PER DILUTED SHARE $ (0.05) $ (0.04)
========= ==========
Weighted average shares outstanding - Basic and Diluted................... 10,630 905 (d) 11,535
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See notes to unaudited consolidated proforma financial statements
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
NOTES TO UNAUDITED PROFORMA CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except share data)
The Pro Forma Consolidated Balance Sheet reflects the financial
position of the Company after giving effect to the acquisition of the remaining
20% of Company's Villa Sistemi Medicali subsidiary, discussed in Item 2 as if
the acquisition took place on October 29, 2005. The Pro Forma Consolidated
Statements of Operations for the fiscal year ended July 30, 2005 and the three
months ended October 29, 2005 assume that the acquisition occurred on August 1,
2004 and are based on the operations of the Company for the periods then ended.
Such proforma financial statements reflect the issuance of 904,672 shares of
restricted common stock, the participation in 100% of Villa's earnings, the
elimination of the Villa Minority Interest liability, an increase in borrowings
used to fund the $2.9 million cash portion of the purchase price and the effect
on earnings per share of the additional shares outstanding.
The unaudited pro forma consolidated financial statements have been
prepared by the Company based on adjustments necessary to reflect the
acquisition. The unaudited pro forma consolidated financial statements presented
herein are shown for illustrative purposes only and are not necessarily
indicative of the future financial position or future results of operations of
the Company or the results of operations that would have actually occurred had
the transaction been effective as of the periods presented.
PROFORMA CONSOLIDATED BALANCE SHEET:
a) To record the $5.9 million purchase price, the issuance of 904,782
shares of restricted Company Common Stock, the elimination of the
minority interest liability, the recognition of $4.6 million of
Goodwill, the increase in short term borrowings of $2.7 million to fund
the cash portion of the purchase price, and a reduction in cash of $0.2
million, as if the transaction had occurred as of October 29, 2005.
PROFORMA CONSOLIDATED STATEMENTS OF OPERATIONS:
Year ended July 30, 2005 and Three months ended October 29, 2005:
a) To record the increase in borrowing costs associated with the
additional short term borrowings that funded the cash portion of the
purchase price.
b) To record tax effect of the above transactions at an estimated
effective rate of 37%.
c) Adjustment to remove the minority interest share in Villa's results and
reflect 100% participation by the Company.
d) To reflect shares issued in connection with the acquisition.
