Del Global Technologies Reports Fiscal 2009 Fourth Quarter and Full Year Financial Results

http://www.businesswire.com/news/home/20091110006735/en

Conference Call Scheduled for Thursday, November 12th at 12:00 PM ET
ROSELLE, Ill.--(Business Wire)--
Del Global Technologies Corp. (OTCBB: DGTC):

Highlights

* FY 2009 sales declined to $80.4 million from $108.3 million
* FY 2009 net loss of $4.1 million, or $0.18 per share, including $3.7 million
of pre tax legacy litigation settlement expense
* Q4 FY 2009 net loss of $0.9 million, or $0.04 per diluted share, on sales of
$16.3 million
* Del Medical Imaging business to be exited in FY 2010
* U.S. Credit facility amended to reflect reduced U.S. borrowing requirements

Del Global Technologies Corp. (OTCBB: DGTC) ("Del Global" or "the Company")
today announced financial results for its fiscal 2009 fourth quarter and year
ended August 1, 2009.

John J. Quicke, Del Global`s President and Chief Executive Officer, commented,
"We ended fiscal 2009 with sales and profitability impacted by the capital
spending slowdown in the U.S. and our international markets. In addition, our
liquidity and profitability were impacted by legal settlements of $3.7 million
dating to claims made by plaintiffs in the 2002-2003 time frame. In response to
the uncertainty of the economic recovery of the U.S. imaging industry, we`ve
decided to exit the Del Medical U.S. imaging business and focus our attention on
more lucrative international imaging markets through our Villa subsidiary and
our power supply business through our RFI subsidiary. While we acknowledge the
challenges inherent in our industries and the general world wide economy, both
of our continuing businesses were profitable in fiscal 2009, and we look forward
to our future with confidence."

Q4 FY 2009 FINANCIAL RESULTS

Consolidated net sales for the fiscal 2009 fourth quarter declined by
approximately 40.2% to $16.3 million from $27.2 million in the fourth quarter of
fiscal 2008, due primarily to lower sales at Del Global`s Medical Systems Group,
where net sales declined 43.4% to $12.9 million from $22.8 million in the prior
year`s fourth quarter, primarily due to decreased domestic and international
sales volume associated with the global economic slowdown and reductions in
capital expenditures and credit availability for customers. The Medical Systems
Group consists of the Del Medical Imaging Corp. ("Del Medical") and Villa
Sistemi Medicali S.p.A. ("Villa") subsidiaries. Sales at the Power Conversion
Group, which consists of the Company`s RFI Corporation subsidiary ("RFI"), for
the fourth quarter of fiscal 2009 were $3.3 million, approximately $1.1 million,
or 24.9% less than the prior year`s fourth quarter, primarily due to delays
driven by declines in customer order rates in the current period.

Consolidated gross margin for the fiscal 2009 fourth quarter was 16.3% as
compared to 26.2% in the same period last year. The Medical Systems Group`s
fourth quarter 2009 gross margin of 7.4% was lower than the gross margin of
23.9% in the fourth quarter of fiscal 2008 due primarily to lower sales volumes,
plants operating with excess capacity and inventory writeoffs. The Power
Conversion Group`s gross margin for the fourth quarter of fiscal 2009 was 51.0
%, versus 38.6% in the prior year fourth quarter, attributable to a more
favorable sales mix albeit on lower volumes.

Total operating expenses in the fiscal 2009 fourth quarter were $3.6 million, or
22.1% of total sales, compared to $4.4 million, or 16.2% of total sales, in the
prior year`s fourth quarter. The $0.8 million decrease in selling, general and
administrative expenses was due to ongoing cost reduction initiatives.

Operating loss for the fiscal 2009 fourth quarter was $0.9 million, as compared
to operating income of $2.7 million in the fourth quarter of fiscal 2008. The
Medical Systems Group generated an operating loss of $1.9 million in the fiscal
2009 fourth quarter compared to operating income of $2.0 million for the fourth
quarter of fiscal 2008. RFI posted an operating profit of $1.2 million in the
fiscal 2009 fourth quarter as compared to $1.1 million in the comparable period
last year. Unallocated corporate expenses for the fourth quarter of fiscal 2009
totaled $0.2 million.

For the fourth quarter of fiscal 2009, the Company reported a net loss of $0.9
million, or $0.04 per diluted share, compared to net income of $2.1 million, or
$0.09 per diluted share, in the fourth quarter of fiscal 2008.

FISCAL YEAR 2009 OVERVIEW

Consolidated net sales decreased by 25.8% to $80.4 million from $108.3 million
for fiscal year 2008, primarily the result of lower sales at the Medical Systems
Group. Sales at the Medical Systems Group for fiscal year 2009 of $68.4 million
reflect a decrease of $26.6 million, or 28.0%, from the prior year, primarily
due to decreased sales volume in the U.S. and international markets. The Power
Conversion Group`s sales for fiscal year 2009 of $12.0 million were $1.3 less
than prior year`s sales due to reduced customer demand as a result of weak
global economic conditions.

Consolidated gross margin was 20.8% in fiscal 2009, compared to 24.7% in fiscal
2008. This reduction was due to lower sales volumes and plants operating with
excess capacity as discussed above.

The operating loss for fiscal 2009 was $3.0 million compared with operating
income of $6.4 million last year. The current year operating loss included $3.7
million in litigation settlement costs, offset by a $2.1 million decrease in
selling, general and administrative expenses and research and development.
Operating income for fiscal 2008 included $1.9 million of one-time, non-cash
goodwill impairment charges related to the Medical Systems Group`s U.S. medical
business and $0.5 million in litigation settlement costs.

The net loss for fiscal 2009 was $4.1 million, or $0.18 per diluted share based
upon approximately 23.3 million shares outstanding, compared to net income of
$3.0 million, or $0.12 per diluted share, based upon approximately 24.6 million
shares outstanding, in fiscal 2008.

SUBSEQUENT EVENT

Subsequent to our 2009 fiscal year end, the Board of the Company decided to exit
the Del Medical U.S. imaging business. This business is part of the Company`s
Medical Systems Group. This decision does not include or impact the operations
of our Villa subsidiary, which will make up the whole of the Medical Systems
Group going forward.

The options for exiting the Del Medical U.S. imaging business include a sale of
the operations, a sale of certain assets and product lines of the business unit,
or a full shut down. The Company is currently engaged in discussions with
prospective buyers for the operation, product lines, or assets and expects to
make a final decision regarding the business unit in the near future.

The results of this business disposition will be reported as a loss from
discontinued operations in our fiscal 2010 First Quarter Report on Form 10-Q in
accordance with SFAS No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets."

The loss on disposition, under the assumption of a full shut down and including
non cash asset write offs, is estimated to be in the range of $6.0 million to
$6.5 million and will be recorded in the fiscal 2010 first quarter financial
results.

BACKLOG

Consolidated backlog at August 1, 2009 decreased by $9.5 million to $13.2
million from $22.7 million at August 2, 2008. Backlog at the Medical Systems
Group at August 1, 2009 totaled $8.7 million, a decrease of approximately $8.6
million from August 2, 2008, reflecting reduced bookings. At RFI, backlog
totaled $4.5 million at August 1, 2009, a decrease of $0.9 million from levels
at the beginning of the fiscal year. Substantially all of the backlog should
result in shipments within the next 12 to 15 months.

FINANCIAL CONDITION

Del Global`s balance sheet at August 1, 2009 reflected working capital of $22.1
million, which included $8.0 million of cash and cash equivalents. At the end of
the fiscal 2009 fourth quarter, Del Global had outstanding borrowings of $7.5
million under its U.S. and Italian revolving credit facilities. In the
aggregate, the Company had approximately $13.1 million of borrowing availability
under its domestic and Italian revolving credit facilities.

As a result of Del Medical`s losses, the Company`s U.S. credit facility was
amended and reduced. The Company`s U.S. borrowing needs have been reduced
pending the exit of the Del Medical U.S. business change. The current borrowing
availability under its domestic and Italian revolving credit facilities is
approximately $11.8 million.

INVESTOR CONFERENCE CALL

Del Global will host a conference call on Thursday, November 12, 2009 at 12:00
PM Eastern Time / 11:00 AM Central Time to discuss these results. The telephone
number to join this conference call is (877) 466-8988 (Domestic) or (706)
634-0830 (International). The ID is 41179585.

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 30
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 introduce products
as scheduled; obtaining necessary product certification; 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. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

Three Months Ended Twelve Months Ended
August 1, August 2, August 1, August 2,
2009 2008 2009 2008

Net Sales $ 16,269 $ 27,246 $ 80,400 $ 108,306
Cost of Sales 13,611 20,095 63,672 81,519

Gross Margin 2,658 7,151 16,728 26,787

Selling, General and Administrative 3,060 3,735 13,977 15,586
Research and Development 540 675 1,992 2,488
Goodwill Impairment - - - 1,911
Litigation Settlement - - 3,736 450
Total Operating Expenses 3,600 4,410 19,705 20,435

Operating Income (Loss) (942 ) 2,741 (2,977 ) 6,352

Interest Expense, net (102 ) (84 ) (294 ) ( 313 )
Other Income 167 156 266 185

Net Income (Loss) Before Income Tax Provision (877 ) 2,813 (3,005 ) 6,224
Income Tax Provision 27 732 1,123 3,247

Net Income (Loss) $ (904 ) $ 2,081 $ (4,128 ) $ 2,977

Net Income (Loss) Per Basic Share $ (0.04 ) $ 0.08 $ (0.18 ) $ 0.12

Net Income (Loss) Per Diluted Share $ (0.04 ) $ 0.09 $ (0.18 ) $ 0.12

Weighted Average Number of Common Shares
Outstanding:
Basic 22,718 24,243 23,286 24,196
Diluted 22,718 24,438 23,286 24,646

DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
SELECTED BALANCE SHEET DATA
(In thousands)
(Unaudited)

August 1, August 2,
2009 2008
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 7,983 $ 7,828
Trade receivables, net 18,043 25,218
Inventories 16,004 18,439
Prepaid expenses and other current assets 1,719 2,085
Total current assets 43,749 53,570

NON-CURRENT ASSETS:
Property plant and equipment, net 6,305 7,377
Deferred income taxes 611 770
Goodwill 4,526 4,526
Other assets 71 110
Total non-current assets 11,513 12,783
TOTAL ASSETS $ 55,262 $ 66,353

LIABILITIES AND STOCKHOLDERS` EQUITY
CURRENT LIABILITIES:
Revolving loan $ 7,492 $ -
Current portion of long-term debt 1,653 1,797
Accounts payable - trade 7,304 12,191
Accrued expenses 5,239 8,378
Income taxes payable - -
Total current liabilities 21,688 22,366

NON-CURRENT LIABILITIES:
Long-term debt, less current portion 2,385 4,504
Deferred income taxes - -
Other long-term liabilities 2,561 3,320
Total non-current liabilities 4,946 7,824
Total liabilities 26,634 30,190

SHAREHOLDERS' EQUITY:
Total shareholders' equity 28,628 36,163
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 55,262 $ 66,353

Del Global Technologies Corp.
John J. Quicke, 847-288-7065
Chief Executive Officer
or
Mark A. Zorko, 847-288-7003
Chief Financial Officer

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