SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended January 29, 2000
Commission File Number 0-3319
DEL GLOBAL TECHNOLOGIES CORP.
------------------------------
(Exact name of registrant as specified in its charter)
New York 13-1784308
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Commerce Park, Valhalla, NY 10595
- ------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
(914) 686-3600
--------------
(Registrant's telephone number including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
-------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the business on March 10, 2000.
Common Stock - 7,814,494
PART I
Item 1. Financial Statements
Consolidated Balance Sheets - January 29, 2000 and July 31, 1999
Consolidated Statements of Income for the Three Months and Six
Months Ended January 29, 2000 and January 30, 1999
Consolidated Statements of Cash Flows for the Six Months Ended
January 29, 2000 and January 30, 1999
Notes to Consolidated Financial Statements
-1-
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
ASSETS
January 29, July 31,
2000 1999
----------- -----------
CURRENT ASSETS
Cash and cash equivalents $ 244,762 $ 320,742
Investments available-for-sale 1,290,418 1,292,852
Trade receivables - net 15,906,168 15,624,433
Cost and estimated earnings
in excess of billings
on uncompleted contracts 8,788,171 6,402,532
Inventory 37,693,356 36,599,587
Prepaid expenses and other
current assets 1,878,514 1,216,145
----------- -----------
Total current assets 65,801,389 61,456,291
----------- -----------
FIXED ASSETS - Net 15,137,511 14,668,060
INVESTMENT IN AFFILIATE 1,451,348 --
INTANGIBLES - Net 788,483 879,898
GOODWILL - Net 5,091,200 5,236,965
DEFERRED CHARGES 199,281 264,464
OTHER ASSETS 1,625,251 1,598,279
----------- -----------
TOTAL $90,094,463 $84,103,957
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $ 594,740 $ 516,654
Accounts payable - trade 5,709,684 6,295,586
Accrued liabilities 4,269,911 4,468,521
Deferred compensation liability 1,301,296 1,201,065
Income taxes 1,339,958 1,224,451
----------- -----------
Total current liabilities 13,215,589 13,706,277
----------- -----------
LONG-TERM LIABILITIES
Long-term debt (less current portion) 4,729,976 1,832,287
Other 532,771 594,272
Deferred income taxes 1,936,467 1,620,417
----------- -----------
Total liabilities 20,414,803 17,753,253
----------- -----------
SHAREHOLDERS' EQUITY
Common stock, $.10 par value;
Authorized 20,000,000 shares;
Issued and outstanding - 8,383,840
shares at January 29, 2000 and
8,278,646 shares at July 31, 1999 838,385 827,866
Additional paid-in capital 51,446,645 50,798,502
Retained earnings 22,326,647 19,032,506
----------- -----------
74,611,677 70,658,874
Less common stock in treasury -
567,846 shares at January 29, 2000
and 490,393 shares at July 31, 1999 4,932,017 4,308,170
----------- -----------
Total shareholders' equity 69,679,660 66,350,704
----------- -----------
TOTAL $90,094,463 $84,103,957
=========== ===========
See notes to consolidated financial statements
-2-
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Six Months Ended
------------------------- -------------------------
January 29, January 30, January 29, January 30,
2000 1999 2000 1999
----------- ----------- ----------- -----------
NET SALES $17,450,349 $15,921,952 $33,162,373 $30,731,618
----------- ----------- ----------- -----------
COSTS AND EXPENSES:
Cost of sales 10,419,466 9,308,253 19,730,199 17,987,421
Research and development 1,706,689 1,522,929 3,249,843 2,954,243
Selling, general and
administrative 2,700,789 2,749,659 5,303,963 5,370,821
Interest expense - net 83,095 15,831 145,132 22,712
----------- ----------- ----------- -----------
14,910,039 13,596,672 28,429,137 26,335,197
----------- ----------- ----------- -----------
INCOME BEFORE PROVISION
FOR INCOME TAXES 2,540,310 2,325,280 4,733,236 4,396,421
PROVISION FOR INCOME TAXES 772,147 720,836 1,439,095 1,362,890
----------- ----------- ----------- -----------
NET INCOME $ 1,768,163 $ 1,604,444 $ 3,294,141 $ 3,033,531
=========== =========== =========== ===========
NET INCOME PER COMMON
SHARE AND COMMON
SHARE EQUIVALENTS:
BASIC $ .23 $ .21 $ .42 $ .40
=========== =========== =========== ===========
DILUTED $ .22 $ .20 $ .40 $ .37
=========== =========== =========== ===========
Weighted average number
of commons shares
outstanding 7,813,017 7,648,308 7,799,511 7,648,361
=========== =========== =========== ===========
Weighted average number
of common shares
outstanding and common
share equivalents 8,163,980 8,205,600 8,167,878 8,174,078
=========== =========== =========== ===========
See notes to consolidated financial statements
-3-
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
--------------------------
January 29, January 30,
2000 1999
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 3,294,141 $ 3,033,531
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation 1,146,461 843,725
Amortization 368,873 322,676
Imputed interest 22,541 10,973
Deferred income tax provision 294,990 184,374
Tax benefit from exercise of stock
options and warrants 238,518 131,391
Amortization of stock-based compensation 17,518 11,215
Changes in assets and liabilities:
Increase in trade receivables (281,735) (1,011,876)
Increase in cost and estimated earnings in
excess of billings on uncompleted contracts (2,385,639) (1,454,565)
Increase in inventory (1,093,769) (4,013,448)
Increase in prepaid and other current assets (728,879) (869,686)
Increase in other assets (5,912) (9,983)
(Decrease) increase in accounts payable - trade (585,902) 1,262,347
(Decrease) increase in accrued liabilities (360,308) 170,749
Increase in deferred compensation liability 100,231 212,006
Increase in income taxes payable 115,507 627,041
----------- -----------
Net cash provided by (used in) operating activities 156,636 (549,530)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash invested in affiliate (1,080,040) --
Net cash paid to acquire selected assets -- (509,219)
Expenditures for fixed assets (1,615,912) (1,502,770)
Investment in marketable securities 2,434 (170,963)
Payments to former shareholders of
subsidiary acquired (35,770) (60,186)
----------- -----------
Net cash used in investing activities (2,729,288) (2,243,138)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from bank borrowing 2,975,775 583,701
Payment for repurchase of shares (623,847) (692,474)
Proceeds from exercise of stock options
and warrants 133,924 328,500
Other 10,820 54,543
----------- -----------
Net cash provided by financing activities 2,496,672 274,270
----------- -----------
NET DECREASE IN CASH AND CASH EQUIVALENTS (75,980) (2,518,398)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 320,742 3,401,697
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 244,762 $ 883,299
=========== ===========
See notes to consolidated financial statements
-4-
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
---------------------------
January 29, January 30,
2000 1999
----------- -----------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Interest paid $ 109,321 $ 75,698
============ ============
Income taxes paid $ 832,360 $ 419,469
============ ============
SUPPLEMENTAL SCHEDULE OF INVESTING AND
FINANCING ACTIVITIES:
Investment in affiliate $ 1,451,348
Compensation cost of warrant issued (218,702)
Investment costs in accrued expense (152,606)
------------
Net cash invested in affiliate $ 1,080,040
============
Acquisition of selected assets $ 1,309,219
Payment due under acquisition term note (800,000)
------------
Net cash paid to acquire selected assets $ 509,219
============
See notes to consolidated financial statements
-5-
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 In the opinion of management, the accompanying unaudited
consolidated financial statements contain all adjustments
(consisting of only normal recurring adjustments) necessary to
present fairly the results of the Company's financial position as
of January 29, 2000 and the results of its operations and its
cash flows for the six months ended January 29, 2000 and January
30, 1999.
The accounting policies followed by the Company are set forth in
Note 1 to the Company's financial statements as of July 31, 1999.
The consolidated financial statements should be read in
conjunction with the notes to the financial statements as of July
31, 1999.
Certain reclassifications have been made in the prior period's
financial statements to correspond to the current period's
presentation.
NOTE 2 The results of operations for the three and six-month periods
ended January 29, 2000 are not necessarily indicative of the
results to be expected for the full year.
NOTE 3 INVESTMENTS
Investments available-for-sale at January 29, 2000 and July 31,
1999 include $1,301,296 and $1,201,065,respectively, for the
Company's President's deferred compensation and certain key
executives. At January 29, 2000 and July 31, 1999, $45,085 and
$213,411, respectively, were classified as cash and $1,256,211
and $1,146,009, respectively, were recorded as investments. The
liabilities of $1,301,296 and $1,201,065, respectively, are
recorded as deferred compensation liability. Gains and losses on
the investments held to fund the deferred compensation, either
recognized or unrealized, inure to the benefit or detriment of
the President's or key executives' deferred compensation. At
January 29, 2000 and July 31, 1999, the balance of investments
available-for-sale of $34,207 and $146,843, respectively, are
equity securities held by the Company for its own account.
Realized and unrealized gains and losses on these securities for
the periods ended January 29, 2000 and January 30, 1999 were not
material and are recorded in the financial statements.
NOTE 4 PERCENTAGE OF COMPLETION ACCOUNTING
January 29, July 31,
2000 1999
----------- -----------
Costs incurred on
uncompleted contracts $17,331,810 $15,012,158
Estimated earnings 10,939,263 9,329,220
----------- -----------
28,271,073 24,341,378
Less billings to date 19,482,902 17,938,846
----------- -----------
Costs and estimated
earnings in excess of billings
on uncompleted contracts $ 8,788,171 $ 6,402,532
=========== ===========
The backlog of unshipped contracts being accounted for under the
percentage of completion method of accounting was approximately
$3.6 million at January 29, 2000.
-6-
NOTE 5 INVENTORY
Inventory is stated at the lower of cost (first-in, first-out) or
market.
Inventories and their effect on cost of sales are determined by
physical count for annual reporting purposes and are estimated by
management for interim reporting purposes.
Inventory consists of the following:
January 29, July 31,
2000 1999
----------- -----------
Finished goods $ 7,921,344 $ 5,414,095
Work-in-process 17,245,195 14,814,766
Raw material and purchased parts 12,526,817 16,370,726
----------- -----------
Total $37,693,356 $36,599,587
=========== ===========
NOTE 6 FIXED ASSETS
Fixed assets consist of the following:
January 29, July 31,
2000 1999
----------- ----------
Land $ 694,046 $ 694,046
Building 2,200,742 2,161,025
Machinery and equipment 17,696,398 16,446,086
Furniture and fixtures 1,569,579 1,435,929
Leasehold improvements 2,373,106 2,180,873
Transportation equipment 30,103 30,103
----------- -----------
24,563,974 22,948,062
Less accumulated depreciation
and amortization 9,426,463 8,280,002
----------- -----------
Net fixed assets $15,137,511 $14,668,060
=========== ===========
NOTE 7 INVESTMENT IN AFFILIATE
On December 28, 1999, the Company obtained a 19% interest in
Villa Sistemi Medicali S.p.A. ("Villa") located in Milan, Italy,
for a six-year warrant to purchase 50,000 shares of Del Global
Technologies Corp. common stock at the fair market price on the
date of issuance. This warrant is valued at approximately
$219,000 using the Black-Scholes method as prescribed by SFAS No.
123, "Accounting for Stock-Based Compensation." In addition, the
associated transaction costs of this investment are approximately
$340,000. The investment is accounted for at cost. Further, Villa
management has granted to the Company an exclusive irrevocable
option to purchase an additional 61% of the shares of Villa
within 60 days after the Company receives certified financial
statements of Villa for the year ended December 31, 1999.
On January 3, 2000, the Company contributed $892,000 to the
charter capital of Villa in consideration for a pledge by the
Villa management of their majority ownership of the outstanding
shares of Villa. On the same date, Villa management collectively
contributed $108,000 to the charter capital of Villa.
NOTE 8 SEGMENTS
The Company adopted SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information", during the fourth quarter
of the year ended July 31, 1999. SFAS No. 131 establishes
standards for reporting information about operating segments in
annual financial statements and requires selected information
about operating segments in interim financial statements. It also
establishes standards for related disclosures about products and
services, major customers and geographic areas. Operating
segments are defined as components of an
-7-
enterprise about which separate financial information is
available that is evaluated regularly by the chief decision
maker, or decision making group, in deciding how to allocate
resources and in assessing performance. The Company's chief
operating decision making group is comprised of the Chief
Executive Officer and the senior executives of the Company's
operating segments.
The Company has two reportable segments which are Medical Imaging
Systems and Critical Electronic Subsystems. The Medical Imaging
Systems Segment designs, manufactures and markets
state-of-the-art, cost-effective medical imaging and diagnostic
systems consisting of stationary and portable imaging systems,
radiographic/fluoroscopic systems, mammography systems a neo-
natal imaging system and dental imaging systems. The Critical
Electronic Subsystems Segment designs, manufactures and markets
proprietary precision power conversion and electronic noise
suppression subsystems for medical as well as critical industrial
applications.
Selected financial data of these segments is as follows:
Medical Critical
Imaging Electronic
Systems Subsystems Total
----------- ----------- -----------
For the Six Months Ended January 29, 2000:
Net sales to external customers $17,532,787 $15,629,586 $33,162,373
=========== =========== ===========
Income before provision for income taxes $ 1,597,431 $ 3,135,805 $ 4,733,236
=========== =========== ===========
Segment assets $12,635,506 $77,458,957 $90,094,463
=========== =========== ===========
Medical Critical
Imaging Electronic
Systems Subsystems Total
----------- ----------- -----------
For the Six Months Ended January 30, 1999:
Net sales to external customers $16,179,691 $14,551,927 $30,731,618
=========== =========== ===========
Income before provision for income taxes $ 1,684,027 $ 2,712,394 $ 4,396,421
=========== =========== ===========
Segment assets $10,848,887 $68,166,063 $79,014,950
=========== =========== ===========
-8-
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
This Management Discussion and Analysis of Financial Condition and Results of
Operations contains forward looking statements. Such statements involve various
risks that may cause actual results to differ materially. These risks include,
but are not limited to, the ability of the Company to grow internally or by
acquisition and to integrate acquired businesses, changing industry or
competitive conditions, and other risks referred to in the Company's
registration statements and periodic reports filed with the Securities and
Exchange Commission.
OVERVIEW
The Company's net sales have increased as a result of both
internal growth and acquisitions. The Company has completed five acquisitions in
the past six years: Dynarad (a designer and manufacturer of medical imaging
systems and critical electronic subsystems) in fiscal 1993; Bertan (a designer
and manufacturer of precision high voltage power supplies and instrumentation
for medical and industrial applications) in fiscal 1994; Gendex-Del (a
manufacturer of medical imaging systems) in fiscal 1996; X-Ray Technologies,
Inc. (a manufacturer of medical imaging systems) in fiscal 1998 and Acoma
Medical Imaging Inc. (a designer and manufacturer of medical imaging systems) in
fiscal 1999.
During the past five years the Company has grown internally and
through acquisitions into a company whose predominant business is serving the
medical imaging and diagnostic markets. The Company's net sales attributable to
medical imaging products have increased from approximately $14.4 million or 44%
of total net sales in fiscal 1995 to approximately $49.2 million or 72% of total
net sales in fiscal 1999.
Management believes that recent cost containment trends in the
healthcare industry have created opportunities for its cost-effective medical
imaging products in domestic and international markets. Some of these trends are
increased demand for lower cost medical equipment, the outsourcing of systems
and critical electronic subsystems by leading original equipment manufacturers
("OEMs"), increased demand for certain diagnostic procedures and lower cost
medical services in the global marketplace.
RESULTS OF OPERATIONS
Net sales for the three months ended January 29, 2000 were
approximately $17.5 million as compared to approximately $15.9 million for the
three months ended January 29, 1999, an increase of approximately 10%. Net sales
for the six months ended January 29, 2000 were approximately $33.2 million as
compared to approximately $30.7 million for the six months ended January 30,
1999, an increase of approximately 8%. These increases are due to internal
growth from existing operations.
Cost of sales, as a percentage of net sales for the three
months ended January 29, 2000, was 59.7% compared to 58.5% for the prior
corresponding period. Cost of sales, as a percentage of net sales for the six
months ended January 29, 2000, was 59.5% compared to 58.5% for the prior
corresponding period. These increases are due to a change in product mix in both
periods.
Research and development expenses were $1.7 million and $1.5
million for the three-month periods ended January 29, 2000 and January 30, 1999,
respectively, an increase of 12%. Research and development expenses increased to
approximately $3.3 million for the six months ended January 29, 2000 from
approximately $3.0 million for the six months ended January 30, 1999, an
increase of 10%. The increase was primarily due to new product development. The
Company continues to invest in research and development in order to introduce
new state-of-the-art products for its medical and industrial markets.
Selling, general and administrative expenses were approximately
$2.7 million for three-month periods ended January 29, 2000 and January 30,
1999, respectively, or 15.5% and 17.3% of net sales, a decrease of 1.8%.
Selling, general and administrative expenses were approximately $5.3 million, or
16% of
-9-
net sales, for the six months ended January 29, 2000 as compared to
approximately $5.4 million, or 17.5% of net sales, for the same period in the
prior year, a decrease of 1.2%.
Net interest expense was approximately $83,000 for the three
months ended January 29, 2000 as compared to approximately $16,000 for the
corresponding period in the prior year. Net interest expense was approximately
$145,000 for the six months ended January 29, 2000 as compared to approximately
$23,000 for the corresponding period in the prior year. This increase is due to
both higher interest rates and higher levels of long-term debt for both periods.
Income tax expense was 30.4% of pretax income for the three and
six months ended January 29, 2000 and 31% for the three and six months ended
January 30, 1999. The decrease from statutory rates is primarily due to sales
being made through the Company's Foreign Sales Corporation, research and
development and other tax credits.
Net income increased to approximately $1.8 million for the
three months ended January 29, 2000, an increase of 10.2% from approximately
$1.6 million for the prior corresponding period. Basic earnings per share at
January 29, 2000 increased to $.23 from $.21 at January 30, 1999, an increase of
9.5%. Diluted earnings per share increased to $.22 at January 29, 2000 from $.20
at January 30, 1999, an increase of 10.0%. The weighted number of common shares
outstanding increased to 7,813,017 at January 29, 2000 from 7,648,308 at January
30, 1999 and the number of common shares and common share equivalents
outstanding decreased to 8,163,980 at January 29, 2000 from 8,205,600 at January
30, 1999. Net income increased to approximately $3.3 million for the six months
ended January 29, 2000, an increase of 8.6% from approximately $3.0 million for
the prior corresponding period. Basic earnings per share at January 29, 2000
increased to $.42 from $.40 at January 30, 1999, an increase of 5.0%. Diluted
earnings per share increased to $.40 at January 29, 2000 from $.37 at January
30, 1999, an increase of 8.1%. The weighted number of common shares outstanding
increased to 7,799,511 at January 29, 2000 from 7,648,361 at January 30, 1999
and the number of common shares and common share equivalents outstanding
decreased to 8,167,878 at January 29, 2000 from 8,174,078 at January 30, 1999.
These increases in net income for the three and six-month periods ended January
29, 2000 were primarily due to higher sales.
The backlog of unshipped orders at January 29, 2000 was
approximately $45 million.
LIQUIDITY AND CAPITAL RESOURCES
The Company has funded its operations and acquisitions through
a combination of cash flow from operations, bank borrowings and the issuance of
the Company's common stock.
Working Capital. At January 29, 2000 and July 31, 1999, the
Company's working capital was approximately $52.6 million and $47.8 million,
respectively. At such dates the Company had approximately $245,000 and $321,000,
respectively, in cash and cash equivalents.
Cost and estimated earnings in excess of billings on
uncompleted contracts increased to approximately $8.8 million at January 29,
2000 from approximately $6.4 million at July 31, 1999 due to additional work
performed in the six-month period on long-term contracts accounted for under the
percentage of completion method of accounting.
Inventory at January 29, 2000 increased approximately $1.1
million as compared to July 31, 1999 primarily because of higher sales levels of
major medical OEM contracts.
Prepaid expenses and other current assets at January 29, 2000
increased approximately $662,000 as compared to July 31, 1999 were primarily due
to additional expenses related to increased acquisition activity, prepaid
advertising and show expenses and prepaid insurance.
On December 28, 1999, the Company obtained a 19% interest in
Villa Sistemi Medicali S.p.A. ("Villa") located in Milan, Italy for a six-year
warrant to purchase 50,000 shares of Del Global Technologies Corp. common stock
at the fair market price on the date of issuance. This warrant is valued at
approximately
-10-
$219,000 using the Black-Scholes method as prescribed by SFAS No. 123,
"Accounting for Stock-Based Compensation." In addition, the associated
transaction costs of this investment are approximately $340,000. Further, Villa
management has granted to the Company an exclusive irrevocable option to
purchase an additional 61% of the shares of Villa within 60 days after the
Company receives certified financial statements of Villa for the year ended
December 31, 1999.
Credit Facility and Borrowing. At January 29, 2000 the Company
had a $14.0 million revolving credit line and a $10.0 million acquisition credit
line. The available portion of the revolving credit line was approximately $10.8
million, after deducting outstanding letters of credit of approximately $24,000
and $7.5 million was available under its acquisition credit line.
Long-term debt increased approximately $2.9 million as compared
to July 31, 1999, primarily due to the investment in Villa, annual payment for
the selected assets purchased in December 1998, additional investments in
capital equipment and additional working capital requirements.
The Company anticipates that cash generated from operations and
amounts available under its bank lending facilities will be sufficient to
satisfy its currently projected operating cash needs.
Capital Expenditures. The Company continues to invest in
capital equipment, principally for its manufacturing operations, in order to
improve its manufacturing capability and capacity. The Company has expended
approximately $1.6 for capital equipment for the six-month period ended January
29, 2000.
Shareholders' Equity. Shareholders' equity increased to
approximately $69.7 million at January 29, 2000 from approximately $66.4 million
at July 31, 1999, primarily due to the results of operations. Additionally,
during the period 99,333 stock options were exercised, with proceeds of $133,925
and 79,453 shares of common stock were repurchased at a cost of approximately
$624,000.
Year 2000. To date, the Company has not encountered any
significant effects of the year 2000 issue either internally or with third
parties. The Company cannot guarantee that problems will not occur in the future
or have not yet been detected.
EFFECTS OF NEW ACCOUNTING PRONOUNCEMENTS
Disclosures about Derivative Instruments and Hedging
Activities. In June 1998, the FASB issued SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities." SFAS No. 133 establishes
accounting and reporting standards for derivative instruments and hedging
activities. SFAS No. 133 is effective for all fiscal years beginning after
December 15, 1999. Management does not anticipate that this statement will have
any effect on the Company's consolidated financial statements.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
----------------------------------------------------------
Not applicable.
-11-
PART II
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults on Senior Securities
None
Item 4. Submission to a Vote of Security Holders
At the annual meeting of stockholders of the Company held on
February 10, 2000, the stockholders:
(a) Elected the following directors: Natan V. Bertman,
David Michael, Seymour Rubin, James Tiernan, Leonard A.
Trugman and Roger J. Winston.
Election of Directors For Withheld
--------------------- --------- --------
Leonard A. Trugman 7,199,865 261,550
Natan V. Bertman 7,207,930 253,485
David Michael 7,210,756 250,659
Seymour Rubin 7,209,209 252,206
James Tiernan 7,206,724 254,691
Roger J. Winston 7,229,474 231,941
(b) Approved the proposal to increase by 750,000 the number
of shares of common stock reserved for issuance under
the Company's Amended and Restated Stock Option Plan.
For Against Abstain
--------- --------- -------
4,494,801 1,464,268 40,761
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: Exhibit 4.1 - Warrant Certificate of Laurence
Hirschhorn
Exhibit 4.2 - Warrant Certificate of Steven
Anreder
Exhibit 4.3 - Warrant Agreement and Warrant
Certificate of USB Capital S.p.A
Exhibit 11 - Computation of Earnings per Common
Share
Exhibit 27 - Financial Data Schedule
(b) Report on Form 8-K: None
-12-
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
DEL GLOBAL TECHNOLOGIES CORP.
/S/LEONARD A. TRUGMAN
---------------------
Leonard A. Trugman
Chairman of the Board,
Chief Executive Officer
and President
/S/MICHAEL H. TABER
---------------------
Michael H. Taber
Chief Financial Officer,
Vice President of Finance
and Secretary
Dated: March 13, 2000
-13-