Exhibit 99.1
DEL
GLOBAL
TECHNOLOGIES
CORP.
FOR IMMEDIATE RELEASE
DEL GLOBAL TECHNOLOGIES REPORTS FISCAL 2007
FOURTH QUARTER AND YEAR-END FINANCIAL RESULTS
Q4 FY 2007 HIGHLIGHTS VERSUS Q4 FY 2006
o NET SALES UP 29.2% TO $31.0 MILLION
o NET INCOME ROSE TO $2.2 MILLION FROM $710,000
o DILUTED EARNINGS PER SHARE OF $0.09
o CONSOLIDATED BACKLOG AT JULY 28, 2007 INCREASED 26.8% TO $28.4 MILLION
FRANKLIN PARK, IL - OCTOBER 9, 2007 -- DEL GLOBAL TECHNOLOGIES CORP. (OTCBB:
DGTC) ("Del Global" or "the Company") today announced financial results for its
fiscal 2007 fourth quarter and year ended July 28, 2007.
Consolidated net sales for the fourth quarter of fiscal 2007 increased 29.2% to
$31.0 million from $24.0 million in the fourth quarter of fiscal 2006, due to
higher sales at the Medical Systems Group and the Power Conversion Group
("RFI"). Net sales at the Medical Systems Group rose 29.4% to $27.3 million from
$21.9 million in the comparable prior year period. Sales were favorably impacted
by growth in international markets for Del Global's Apollo product line. Sales
at RFI rose 19.0% to $3.7 million from $3.1 million in the prior year period due
to increased customer demand during the period.
Consolidated gross margin improved to 26.6% of sales during the fourth quarter
of fiscal 2007 from 24.6% of sales in the fourth quarter of fiscal 2006, due to
the impact of higher sales volume and better plant utilization. Gross margin at
the Medical Systems Group during the fourth quarter of fiscal 2007 improved to
24.1% from 20.9% in the prior year's fourth quarter. Gross margin at RFI
increased to 44.8% in the fiscal 2007 fourth quarter from 42.4% in the fiscal
2006 fourth quarter.
Total operating expenses declined to 15.0% of net sales from 17.4% of net sales
in the same period one year ago. Selling, general and administrative expenses
("SG&A") for the fourth quarter of fiscal 2007 declined as a percentage of net
sales to 13.3% from 14.8% of net sales in the prior year's fourth quarter, the
result of an improved cost structure and leverage from the growth in the
business. Research and development expenses in the fourth quarter of fiscal 2007
rose to $0.5 million from $0.4 million, reflecting continued investment in new
product development.
Operating income for the fourth quarter of fiscal 2007 rose 107.9% to $3.6
million from $1.7 million in the comparable period last year. Operating income
at the Medical Systems Group rose to $3.0 million from $1.5 million in the
fourth quarter of fiscal 2006. RFI generated operating income of $0.9 million as
compared to $0.8 million in the same period one year ago. Unallocated corporate
expenses for the fourth quarter of fiscal 2007 totaled $0.3 million as compared
to $0.7 million in the same period last year.
Del Global reported net income in the fourth quarter of fiscal 2007 of $2.2
million, or $.09 per diluted share on approximately 24.5 million weighted
average common shares outstanding ("shares outstanding"), as compared to a net
income of $0.7 million, or $.06 per diluted share, on approximately 12.2 million
shares outstanding, in the fourth quarter of fiscal 2006. The higher number of
outstanding shares in the fiscal 2007 fourth quarter was due primarily to the
impact of shares issued in connection with Del Global's Rights Offering, which
was completed on March 12, 2007. The Company sold approximately 12.0 million
shares of its common stock at $1.05 per share, generating total net proceeds of
$12.4 million.
Del Global Technologies Corp. Page 2
October 9, 2007
BACKLOG
Consolidated backlog at July 28, 2007 rose 26.8% to approximately $28.4 million
from approximately $22.4 million at July 29, 2006. Backlog at the Medical
Systems Group increased by $5.7 million, reflecting a strong ramp up in orders
from international markets, while backlog at RFI increased $0.3 million from the
beginning of the fiscal year. Substantially all of the backlog should result in
shipments within the next twelve months.
FINANCIAL CONDITION
Del Global's balance sheet at July 28, 2007 reflected working capital of $25.0
million, which included $7.9 million of cash and cash equivalents. As of July
28, 2007, Del Global had approximately $9.0 million of excess borrowing
availability under its domestic revolving credit facility compared to $1.0
million at July 29, 2006. In addition, as of July 28, 2007, Del Global's Villa
subsidiary had an aggregate of approximately $11.0 million of excess borrowing
availability under its various short-term credit facilities. Terms of the
Italian credit facilities do not permit the use of borrowing availability to
directly finance operating activities at Del Global's U.S. subsidiaries.
COMMENTS
James A. Risher, Del Global's President and Chief Executive Officer commented,
"Del Global generated more than $100 million in annual sales, due in large part
to our success in implementing steps to strengthen our management team and
overall organization, investments in our operating infrastructure, increased
efficiencies, and reinvigorated relationships with distributors and customers
worldwide. During the year we introduced new digital systems for medical,
veterinary, and chiropractic applications. Our ongoing investments in the
digital arena expanded Del Global's portfolio of medical and dental systems
which provide greater value, operating efficiencies and diagnostic quality for
the customer. We ended a record year for the Company with a strong fourth
quarter, highlighted by increases in sales, margins, and net income. Del
Global's financial position at July 28, 2007 was among the strongest in its
history, highlighted by positive operating cash flow for the fiscal 2007 year, a
fortified cash position, improved debt profile, and increased backlog. Based on
our improved operating results and strong investor support for our Rights
Offering we currently have the financing capacity to supplement our internal
growth plans with potential external opportunities. While 2007 represented a
positive improvement in the overall business we recognize this coming year will
offer many new challenges as the economy appears to be slowing and new domestic
policies such as the Deficit Reduction Act potentially adversely impact
radiologic exam reimbursements. Nonetheless, we remain confident in our ability
to continue to make progress in repositioning the Company."
FISCAL 2007 OVERVIEW
Consolidated net sales increased by 25.5% to $104.2 million for fiscal year 2007
from $83.0 million in fiscal 2006, due to increased revenues at the Medical
Systems Group and RFI. Sales at the Medical Systems Group rose 29.5% to $91.0
million from $70.3 million last year, due to higher international sales, strong
dental sales and increased sales of higher priced digital products. Sales at RFI
rose by 3.6% to $13.2 million from $12.7 million in fiscal 2006, primarily the
result of improved sales in the transformer business.
Consolidated gross margin improved to 24.0% in fiscal 2007 from 23.3% in fiscal
2006. Gross margin at the Medical Systems Group rose to 22.1 % from 21.1 % in
fiscal 2006, due to the reversal of warranty reserves as the warranty period on
several items expired, offset by lower margins associated with increased sales
of digital products. Generally digital products have a higher selling price and
a higher cost than non-digital product offerings, resulting in lower gross
margins. Higher sales at RFI resulted in a gross margin of 37.3% in fiscal 2007
as compared to 35.5% in fiscal 2006.
SG&A as a percentage of sales declined to 14.0% in fiscal 2007 from 16.4% in
fiscal 2006.
Operating income for fiscal 2007 was $8.4 million, an increase of 141.9% from
operating income of $3.5 million in fiscal 2006. The Medical Systems Group
generated operating income of $7.5 million in fiscal 2007 as compared to $3.6
million in fiscal 2006, while operating profit at RFI remained stable at $2.4
million. Unallocated Corporate costs were $1.5 million for fiscal 2007, a
decrease of 40.0% from $2.5 million in fiscal 2006.
Del Global Technologies Corp. Page 3
October 9, 2007
Net income for fiscal 2007 was $3.8 million, or $0.23 per diluted share, on
approximately 16.5 million shares outstanding, as compared to net income of $0.1
million, or $0.01 per diluted share, on approximately 12.1 million shares
outstanding, last year.
INVESTOR CONFERENCE CALL
Del Global will host a conference call on October 10, 2007 at 11:30 AM Eastern
Time / 10:30 AM Central Time to discuss these results. The telephone number to
join this conference call is (888) 737-9832 (Domestic) or (706) 679-0770
(International). 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.DELGLOBAL.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.
ABOUT DEL GLOBAL TECHNOLOGIES
Del Global Technologies Corp. is primarily engaged in the design, manufacture
and marketing of high performance diagnostic imaging systems for medical, dental
and veterinary applications through the Del Medical Systems Group. Through its
U.S. based Del Medical Imaging Corp. and Milan, Italy based Villa Sistemi
Medicali S.p.A. subsidiaries the Company offers a broad portfolio of general
radiographic, radiographic/fluoroscopic, portable x-ray and digital radiographic
systems to the global marketplace. Through its RFI subsidiary, Del Global
manufactures proprietary high-voltage power conversion subsystems including
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. The company's web site is
WWW.DELGLOBAL.COM.
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.: MEDIA RELATIONS: M. Thomas Boon VP
James A. Risher Global Sales and Marketing (847)
Chief Executive Officer 288-7023
(847) 288-7065
Mark A. Zorko THE EQUITY GROUP INC. Devin Sullivan
Chief Financial Officer Senior Vice President (212) 836-9608
(847) 288-7003
Del Global Technologies Corp. Page 4
October 9, 2007
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Three Months Ended Twelve Months Ended
------------------ -------------------
July 28, July 29, July 28, July 29,
--------- --------- --------- ---------
2007 2006 2007 2006
---- ---- ---- ----
Net Sales $ 30,988 $ 23,977 $ 104,167 $ 83,014
Cost of Sales 22,741 18,071 79,150 63,656
--------- --------- --------- ---------
Gross Margin 8,247 5,906 25,017 19,358
--------- --------- --------- ---------
Selling, General and Administrative 4,134 3,547 14,590 13,619
Research and Development 506 371 2,013 1,562
Litigation Settlement Costs -- 252 -- 697
--------- --------- --------- ---------
Total Operating Expenses 4,640 4,171 16,603 15,878
--------- --------- --------- ---------
Operating Income 3,607 1,735 8,414 3,480
Interest Expense (106) (367) (991) (1,311)
Other Income/ (Expense) 7 211 (54) (34)
--------- --------- --------- ---------
Income from Continuing
Operations Before Income Tax
Provision and Minority Interest 3,508 1,579 7,369 2,135
Income Tax Provision 1,343 693 3,553 1,758
--------- --------- --------- ---------
Income From Continuing
Operations Before Minority Interest 2,165 885 3,816 377
Minority Interest -- -- -- 108
--------- --------- --------- ---------
Income From Continuing Operations 2,165 885 3,816 269
Discontinued Operations -- (175) -- (175)
--------- --------- --------- ---------
Net Income $ 2,165 $ 710 $ 3,816 $ 94
========= ========= ========= =========
INCOME (LOSS) PER COMMON SHARE- BASIC
Continuing Operations $ 0.09 $ 0.08 $ 0.24 $ 0.02
Discontinued Operations -- (0.02) -- (0.01)
--------- --------- --------- ---------
Net Income Per Basic Share $ 0.09 $ 0.06 0.24 $ 0.01
========= ========= ========= =========
INCOME (LOSS) PER COMMON SHARE-DILUTED
Continuing Operations $ 0.09 $ 0.07 $ 0.23 $ 0.02
Discontinued Operations -- (0.01) -- (0.01)
--------- --------- --------- ---------
Net Income Per Diluted Share $ 0.09 $ 0.06 $ 0.23 $ 0.01
========= ========= ========= =========
Weighted Average Number of Common
Shares
Outstanding (In Thousands):
Basic 24,090 11,636 16,155 11,244
========= ========= ========= =========
Diluted 24,499 12,209 16,481 12,076
========= ========= ========= =========
Del Global Technologies Corp. Page 5
October 9, 2007
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
SELECTED BALANCE SHEET DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
JULY 28, JULY 29,
2007 2006
------- -------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 7,860 $ 333
Trade receivables 21,221 17,382
Inventories 21,930 16,436
Prepaid expenses and other current assets 1,180 808
------- -------
Total current assets 52,191 34,959
------- -------
NON-CURRENT ASSETS:
Property plant and equipment, net 6,511 6,366
Deferred income taxes 1,011 1,159
Goodwill 6,437 6,437
Other assets 190 232
------- -------
Total non-current assets 14,149 14,194
------- -------
TOTAL ASSETS $66,340 $49,153
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term credit facilities $ -- $ 5,959
Current portion of long-term debt 1,086 3,557
Accounts payable - trade 17,125 11,037
Accrued expenses 7,432 7,444
Income taxes payable 1,570 27
------- -------
Total current liabilities 27,213 28,024
------- -------
NON-CURRENT LIABILITIES:
Long-term debt, less current portion 5,398 5,133
Deferred income taxes 292 302
Other long-term liabilities 3,240 2,880
------- -------
Total non-current liabilities 8,930 8,315
------- -------
Total liabilities 36,017 36,339
------- -------
Total shareholders' equity 30,197 12,814
------- -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $66,340 $49,153
======= =======
