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 April 27, 1996
Commission File Number 1-10512
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 Identification No.)
incorporation or organization)
One Commerce Park, Valhalla, NY 10595
(Address of principal executive offices)
(Zip Code)
(914) 686-3600
(Registrant's telephone number including area code)
.
(Former name, former address and former fiscal year, if changed since last
report)
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 period covered by this report.
Common Stock - 4,399,385 shares
<PAGE>
PART I
Item 1. Financial Statements
Consolidated Balance Sheets - April 27, 1996 and July 29,
1995.
Consolidated Statements of Income for the Three Months and
Nine months ended April 27, 1996 and April 29, 1995.
Consolidated Statements of Cash Flows for the Nine Months
ended April 27, 1996 and April 29, 1995.
Notes to Consolidated Financial Statements
1
<PAGE>
DEL GLOBAL TECHNOLOGIES CORP. & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
ASSETS
April 27, July 29,
1996 1995
---- ----
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents ................. $ 257,612 $ 505,989
Investments available-for-sale ............ 521,178 378,534
Trade receivables ......................... 9,097,940 6,456,853
Cost and estimated earnings in excess of
billings on uncompleted contracts ...... 404,030 395,847
Inventory ................................. 24,801,227 18,038,358
Prepaid expenses and other current assets . 1,831,172 1,117,963
--------- ---------
Total current assets ................... 36,913,159 26,893,544
---------- ----------
Fixed assets - net ................................ 8,910,532 7,752,781
Goodwill - net .................................... 2,770,322 2,865,408
Intangibles and other assets ...................... 3,284,419 1,542,901
--------- ---------
TOTAL ............................................. $51,878,432 $39,054,634
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt ......... $ 1,514,815 $ 943,383
Accounts payable - trade .................. 3,686,868 2,539,615
Accrued liabilities ....................... 3,940,388 2,484,435
Income taxes .............................. 649,639 277,830
------- -------
Total current liabilities .............. 9,791,710 6,245,263
--------- ---------
LONG-TERM LIABILITIES
Long-term debt (less current portion
included above) ........................ 17,935,091 11,902,951
Other ..................................... 785,971 775,541
Deferred income taxes ..................... 678,463 605,806
------- -------
Total liabilities ...................... 29,191,235 19,529,561
---------- ----------
SHAREHOLDERS' EQUITY
Common stock, $.10 par value;
Authorized - 10,000,000 shares;
Issued and outstanding -
April 27, 1996 - 4,457,610
July 29, 1995 - 4,253,486 ......... 445,761 412,960
Additional paid-in capital ................ 18,231,405 16,239,784
Retained earnings ......................... 4,346,716 3,189,244
--------- ---------
23,023,882 19,841,988
---------- ----------
Less common shares in treasury -
April 27, 1996 - 58,225
July 29, 1995 - 55,165 ......... 336,685 316,915
------- -------
Total shareholders' equity ................ 22,687,197 19,525,073
---------- ----------
TOTAL ............................................. $51,878,432 $39,054,634
=========== ===========
</TABLE>
See notes to consolidated financial statements
2
<PAGE>
DEL GLOBAL TECHNOLOGIES CORP. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------ -----------------
Apr. 27, Apr. 29, Apr. 27, Apr. 29,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales .............................................. $12,555,138 $ 8,945,910 $29,355,757 $22,661,332
----------- ----------- ----------- -----------
Costs and expenses:
Cost of sales ..................................... 7,973,306 5,356,021 17,717,858 12,855,964
Research and development .......................... 869,886 725,535 2,301,780 1,934,585
Selling, general and administrative .............. 2,232,346 1,822,568 5,588,463 4,877,374
Interest expense - net ............................ 353,298 289,891 948,509 866,184
------- ------- ------- -------
11,428,836 8,194,015 26,556,610 20,534,107
---------- --------- ---------- ----------
Income before provision
for income taxes .................................. 1,126,302 751,895 2,799,147 2,127,225
Provision for income taxes: ............................ 343,482 229,979 853,700 649,479
------- ------- ------- -------
Net income ............................................. $ 782,820 $ 521,916 $ 1,945,447 $ 1,477,746
=========== =========== =========== ===========
Per share amounts:
Net income per common share
and common share equivalents,
primary and fully diluted ......................... $ .14 $ .11 $ .37 $ .30
=========== =========== =========== ===========
Weighted average number of
common shares outstanding
and common share equivalents ...................... 5,449,672 4,977,356 5,393,007 4,999,239
========= ========= ========= =========
</TABLE>
See notes to consolidated financial statements
3
<PAGE>
DEL GLOBAL TECHNOLOGIES CORP. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
-----------------
Apr. 27, Apr. 29,
1996 1995
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income .................................... $ 1,945,447 $ 1,477,746
Adjustments to reconcile net income to net
cash provided by operating activities
net of effects from purchase of subsidiary:
Imputed interest .......................... 49,852 18,991
Depreciation .............................. 539,637 592,379
Amortization .............................. 307,647 301,047
Deferred income tax provision ............. 72,657
Changes in assets and liabilities:
(Increase) decrease in trade receivables .. (2,641,087) 599,933
(Increase) decrease in cost and estimated
earnings in excess of billings on
uncompleted contracts .................. (8,183) 125,482
Increase in inventory ..................... (846,861) (2,462,300)
Increase in prepaid and other
current assets ......................... (771,883) (169,370)
Decrease (increase) in other assets ....... 54,142 (25,266)
Increase (decrease) in accounts payable -
trade .................................. 1,147,253 (221,096)
Increase in accrued liabilities ........... 863,578 224,021
Increase in income taxes payable .......... 371,809 261,527
------- -------
Net cash provided by operating activities . 1,084,008 723,094
--------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash paid on acquisition of subsidiaries .. (5,815,540)
Expenditures for fixed assets ................. (1,082,601) (736,396)
(Investment in) sale of marketable
securities - net ....................... (142,644) 7,314
Payments to former shareholders of subsidiary
acquired ............................... (39,422) (207,876)
------- --------
Net cash used in investing activities ..... (7,080,207) (936,958)
---------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from bank borrowing .............. 4,803,572 42,609
Payment for repurchase of shares .............. (19,770) (133,234)
Proceeds from exercise of stock options
& warrants ............................. 1,059,099 111,864
Other ......................................... (95,079) (18,955)
------- -------
Net cash provided by financing activities . 5,747,822 2,284
--------- -----
</TABLE>
(continued)
See notes to consolidated financial statements
4
<PAGE>
DEL GLOBAL TECHNOLOGIES CORP. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
-----------------
Apr. 27, Apr. 29,
1996 1995
---- ----
<S> <C> <C>
Net decrease in cash and cash equivalents ........ $ (248,377) $ (211,580)
Cash and cash equivalents, beginning of period ... 505,989 445,597
------- -------
Cash and cash equivalents, end of period ......... $ 257,612 $ 234,017
=========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Interest paid ............................... $ 662,421 $ 645,341
=========== ===========
Income taxes paid ........................... $ 434,405 $ 167,852
=========== ===========
SUPPLEMENTAL SCHEDULE OF INVESTING AND
FINANCING ACTIVITIES:
Acquisition of subsidiary ................... $ 7,707,915
-----------
Subordinated note payable for acquisition ... 1,800,000
Acquisition costs in accrued expenses ....... 92,375
------
1,892,375
---------
Cash paid to acquire subsidiary ............. $ 5,815,540
===========
Tax benefit related to exercise of stock
options and warrants .............. $ 139,397
===========
</TABLE>
(concluded)
See notes to consolidated financial statements
5
<PAGE>
DEL GLOBAL TECHNOLOGIES CORP. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 In the opinion of the Company, 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 April 27, 1996 and July 29, 1995 and the results of its
operations and its cash flows for the nine months ended April
27, 1996 and April 29, 1995.
The accounting policies followed by the Company are set forth
in Note 1 to the Company's consolidated financial statements
as of July 29, 1995.
The consolidated financial statements should be read in
conjunction with the notes to the consolidated financial
statements as of July 29, 1995.
NOTE 2 The results of operations for the three and nine month periods
ended April 27, 1996 are not necessarily indicative of the
results to be expected for the full year.
NOTE 3 PERCENTAGE OF COMPLETION ACCOUNTING
<TABLE>
<CAPTION>
Balance at
April 27, 1996
--------------
<S> <C>
Costs incurred on uncompleted
contracts .............................. $344,309
Estimated earnings ........................ 94,921
------
439,230
Less: Billings to-date ................... 35,200
------
Costs and estimated earnings in
excess of billings
on uncompleted contracts ............... $404,030
========
</TABLE>
The backlog of unshipped contracts being accounted for under
the percentage of completion method of accounting was $625,570
at April 27, 1996.
6
<PAGE>
NOTE 4 INVENTORY
Inventory is stated at a 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 based
on estimated gross margins.
<TABLE>
<CAPTION>
Inventory consists of the following:
April 27, July 29,
1996 1995
---- ----
<S> <C> <C>
Finished goods ................. $ 5,952,294 $ 4,398,096
Work in process ................ 10,416,515 7,642,588
Raw material and purchased parts 8,432,418 5,997,674
--------- ---------
Total .......................... $24,801,227 $18,038,358
=========== ===========
</TABLE>
NOTE 5 FIXED ASSETS
<TABLE>
<CAPTION>
Fixed assets consist of the following:
April 27, July 29,
1996 1995
---- ----
<S> <C> <C>
Land ........................... $ 694,046 $ 694,046
Building ....................... 2,146,025 2,146,025
Machinery and equipment ........ 7,819,787 6,624,296
Furniture and fixtures ......... 816,319 773,694
Leasehold improvements ......... 1,034,997 790,226
Construction in progress ....... 239,102 76,023
Transportation equipment ....... 11,425 10,987
------ ------
12,761,701 11,115,297
---------- ----------
Less accumulated depreciation
and amortization ............. 3,851,169 3,362,516
--------- ---------
$ 8,910,532 $ 7,752,781
=========== ===========
</TABLE>
Construction in progress relates to computer equipment and the
computerization of certain of the Company's manufacturing and
accounting systems.
NOTE 6 NET INCOME PER COMMON SHARE
Net income per common share was computed using the modified
treasury stock method. This method was utilized since the
number of shares of common stock obtainable upon the assumed
exercise of outstanding options and warrants in the aggregate
exceeded 20 percent of the number of common shares outstanding
at the end of the period. The weighted average number of
common shares and common share equivalents for the period and
for all periods presented includes the effect of the 3 percent
stock dividend declared on November 20, 1995 (see Note 7).
7
<PAGE>
NOTE 7 STOCK DIVIDEND
On November 20, 1995, the Company declared a 3 percent stock
dividend to holders of record on December 5, 1995, which was
paid on December 21, 1995.
NOTE 8 LONG-TERM DEBT
On March 5, 1996 the Company and its lending bank entered into
an Amended and Restated Credit Agreement wherein the bank
increased the Company's line of credit to $24,000,000,
consisting of a $10,000,000 five-year term loan and a
four-year revolving credit line of $14,000,000. Initial
borrowings made under this credit line on March 6, 1996 were
used to pay off existing term loans, the existing revolving
credit loan balance and to fund the acquisition of certain
assets of the Gendex Medical Division ("Gendex") of Dentsply
International Inc. Borrowing under the revolving credit loan
is based upon a formula based on 80 percent of eligible
accounts receivable and 50 percent of inventory with a
$2,000,000 maximum sublimit for letters of credit. Interest
will be computed at prime, or at the Company's option, at a
rate tied to the London Interbank Borrowing Rate ("LIBOR").
NOTE 9 ACQUISITION
On March 6, 1996, the Company and its newly-formed
wholly-owned subsidiary, Gendex-Del Medical Imaging Corp.
("Gendex-Del") acquired certain assets, including inventories,
fixed assets, intangibles and the use of the Gendex trade
name, of the Gendex Medical Division of Dentsply International
Inc. ("Gendex acquisition"), for $5,700,000 in cash and a
subordinated term note of $1,800,000. The subordinated term
note bears interest at 7.75 percent, which is payable
quarterly, with principal payments beginning three years after
closing. The Company assumed the lease for the Gendex facility
in Franklin Park, Illinois and will operate the business under
the Gendex-Del name. The Company entered into a supply
agreement with Dentsply International Inc. for certain
components and parts used in the manufacture of medical x-ray
equipment and systems of Gendex.
The acquisition has been accounted for as a purchase and
accordingly, the original purchase price was allocated to
assets and liabilities acquired based upon a preliminary
estimate of fair value at the date of acquisition and is
subject to modification as more information becomes available.
Unaudited pro forma financial infomation for the nine month
periods ended April 27, 1996 and April 29, 1995, as if the
acquisition occurred at the beginning of the respective fiscal
period, is as follows:
8
<PAGE>
<TABLE>
<CAPTION>
Nine Months Ended
Apr. 27, Apr. 29,
1996 1995
---- ----
<S> <C> <C>
Net sales .................... $39,498,635 $38,363,199
=========== ===========
Income before provision for
income taxes ............... $ 2,294,947 $ 1,758,484
=========== ===========
Net Income ................... $ 1,589,028 $ 1,221,471
=========== ===========
Net income per common share
and common share equivalents
primary and fully diluted .. $ .30 $ .25
=========== ===========
</TABLE>
The pro forma financial information presented above is not
necessarily indicative of the operating results which would
have been achieved had the Company acquired Gendex-Del at the
beginning of the respective periods or of results to be
achieved in the future.
NOTE 10 SUBSEQUENT EVENT
On June 6, 1996, the Company completed the public offering of
2,000,000 shares of its common stock. The net proceeds of this
offering were approximately $19,190,000 after deducting
underwriting fees and estimated expenses, and were used to
repay revolving credit loans, long term debt and the
subordinated term note to Dentsply International Inc., with
the balance added to working capital.
9
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net sales for the three months ended April 27, 1996 were approximately
$12.6 million as compared to approximately $8.9 million, an increase of
approximately 40.3 percent over the corresponding period in the prior year. Net
sales for the nine months ended April 27, 1996 were approximately $29.4 million
compared to approximately $22.7 million, an increase of approximately 29.5
percent over the corresponding period in the prior year. These increases are due
to net sales from the newly formed Gendex-Del subsidiary, since its inception on
March 6, 1996 and internal growth from existing operations.
Due to the Company's 52/53 week reporting period, the 1996 three month
period was only 12 weeks as compared to 13 weeks in the corresponding prior
period. Despite the effect of less days in this year's three month period, for
the nine months ended April 27, 1996, net sales for the on-going operations
increased approximately $3.8 million over last year's nine month period.
Cost of sales, as a percentage of net sales for the three months ended
April 27, 1996, was 63.5 percent compared to 59.9 percent for the prior
corresponding period. Cost of sales, as a percentage of net sales for the nine
months ended April 27, 1996, was 60.4 percent compared to 56.7 percent for the
prior corresponding period. These changes were due to the change in product mix
in the periods. The current year periods include the gross margins of medical
imaging systems manufactured by Gendex-Del which are presently lower than the
margins of the Company's other products.
Research and development expenses increased to approximately $870,000 for
the three months ended April 27, 1996 from approximately $726,000 for the three
months ended April 29, 1995. Research and development expenses increased to
approximately $2.3 million for the nine months ended April 27, 1996 from
approximately $1.9 million for the nine months ended April 29, 1995. 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 $2.2
million in the three months ended April 27, 1996 as compared to approximately
$1.8 million in the same period in the prior year. Selling, general, and
administrative expenses increased to approximately $5.6 million for the nine
months ended April 27, 1996 from approximately $4.9 million for the same period
in the prior year. These increases were primarily attributable to increased
selling and international marketing expenses, advertising and sales commissions
due to increased sales levels in the respective periods. The 1996 periods
include the selling, general and administrative expenses of Gendex-Del.
Net interest expense was approximately $353,000 for the three months ended
April 27, 1996 compared to approximately $290,000 for the corresponding prior
period. This increase was attributable to the increase in long term debt
incurred to finance the Gendex acquisition. Net interest expense was
approximately $949,000 for the nine months ended April 27, 1996 compared to
approximately $866,000 for the corresponding prior period. This increase is due
to higher average credit balances outstanding in the nine months ended April 27,
1996 due to the Gendex acquisition, partly offset by lower interest rates.
Income tax expense was 30.5 percent of pre-tax income in the nine months
ended April 27, 1996 and the nine months ended April 29, 1995. The decrease from
statutory rates is primarily due to sales being made through the Company's
10
<PAGE>
Foreign Sales Corporation, research and development and other tax credits.
Net income increased to approximately $783,000 for the three months ended
April 27, 1996, an increase of approximately 50.0 percent from $522,000 for the
prior corresponding period. Net income per common share increased to $.14 from
$.11 even though the weighted number of common shares outstanding and common
share equivalents increased approximately 9.5 percent to 5,449,672 from
4,977,356. Net income increased to approximately $1.9 million for the nine
months ended April 27, 1996, an increase of approximately 31.6 percent from
approximately $1.5 million for the prior corresponding period. For the nine
months ended April 27, 1996 primary and fully diluted net income per share was
$.37 as compared to $.30 for the nine months ended April 29, 1995. The number of
outstanding shares and common share equivalents increased 12.1 percent from the
nine month period ended April 29, 1995. The increases in net income for the
three and nine month periods ended April 27, 1996 are primarily due to higher
sales levels to the Company's medical imaging and diagnostic and industrial
product customers.
The backlog of unshipped orders at April 27, 1996 was approximately $23.8
million.
LIQUIDITY AND CAPITAL RESOURCES
The Company has funded its operations and acquisitions through a
combination of cash flow from operations, bank borrowing and the issuance of
Common Stock.
Working Capital. At April 27, 1996 and July 29, 1995, the Company's working
capital was approximately $27.1 million and $20.6 million, respectively. At such
dates the Company had approximately $258,000 and $506,000, respectively, in cash
and cash equivalents.
Trade receivables at April 27, 1996 increased approximately $2.6 million as
compared to July 29, 1995, primarily as the result of the inclusion of the
Gendex-Del accounts receivable for the quarter ended April 27, 1996.
Inventory at April 27, 1996 increased approximately $6.8 million as
compared to July 29, 1995, of which approximately $5.0 million is attributable
to the inclusion of Gendex-Del inventory as of April 27,1996. Major new orders
received in the nine months ended April 27, 1996 resulted in the additional
increase in inventory levels.
Prepaid expenses and other current assets increased approximately $713,000
at April 27, 1996 as compared to July 29, 1995. This increase was primarily
attributable to advanced payments for inventory for Del Medical Systems under
its exclusive distribution agreement for diagnostic medical image enhancers,
annual insurance policy premiums and additional costs incurred relating to the
Gendex acquisition.
Intangible assets of $1.7 million were acquired as part of the assets
purchased from Dentsply International Inc., in connection with the Gendex
acquisition. They include certain patents and trademarks as well as the use of
the Gendex and Universal trade names.
Credit Facility and Borrowing. On March 5, 1996, in conjunction with the
Gendex acquisition, the Company and its lending bank entered into an Amended and
Restated Credit Agreement wherein the bank increased the Company's line of
11
<PAGE>
credit to $24.0 million, consisting of a five-year $10.0 million term loan and a
four-year revolving line of credit of $14.0 million. Borrowings under the
revolving line of credit are based on 80 percent of eligible accounts receivable
and 50 percent of inventory, with a $2.0 million maximum sub-limit for letters
of credit. Borrowings under this credit line were used to pay off the existing
term loans and the existing revolving credit loan balance. Interest will be
computed at prime, or at the Company's option, at a rate tied to LIBOR.
Approximately $5.8 million of this credit line was used to purchase certain
assets of the Gendex Medical Division from Dentsply International Inc., on March
6, 1996. In connection with such purchase, the Company delivered a seven-year
$1.8 million subordinated note to Dentsply with interest at 7.75 percent,
payable quarterly. At April 27, 1996, the Company had outstanding borrowings of
$10.0 million under the term loan and approximately $7.6 million under the
revolving credit loan. The unused and available portion of the line of credit
was approximately $5.8 million, after deducting outstanding letters of credit of
approximately $542,000.
On June 12, 1996, as the result of the sale of 2.0 million shares of common
stock, the Company repaid $9.5 million of its $10.0 million term note, $5.0
million of its revolving credit loan and its $1.8 million subordinated note to
Dentsply International Inc. The Company had $13.9 million of available credit
under its revolving credit loan and was in discussions with its primary lending
bank regarding the conversion of its $10.0 million term note into a 5 year $10.0
million credit line designated for acquisitions.
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
$1.1 million for capital equipment for the nine month period ended April 27,
1996. Fixed Assets, representing principally manufacturing equipment of
approximately $617,000 were purchased in connection with the Gendex acquisition.
At April 27, 1996, the Company had commitments totalling $150,000 to improve the
manufacturing control systems and computer systems at certain of its
manufacturing operations. The funds for capital improvements were derived from
operations and short-term borrowings.
The Company may expand its technical and marketing capabilities and product
lines through the acquisition of other companies, businesses or technologies
that are complementary to the Company's current business.
The Company anticipates that cash generated from operations and amounts
available under its bank lending facilities will be sufficient to satisfy its
current operating cash needs.
12
<PAGE>
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 - None
Item 5. Other Information
(a) Exhibits:
Exhibit 11 - Computation of Earnings per Common Share
Exhibit 27 - Financial Data Schedule
(b) Report on Form 8-K:
A report on Form 8-K was filed with the Commission by
the Company on March 21, 1996 in connection with the
acquisition of certain assets of the Gendex Medical
division of Dentsply International Inc. A report on
Form 8-K/A was filed with the Commission by the
Company on May 6, 1996 containing condensed
consolidated pro forma financial information relating
to such acquisition.
13
<PAGE>
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
Vice President Finance and Secretary,
Chief Accounting Officer
Dated: June 17, 1996
14
Exhibit 11
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
THREE AND NINE MONTHS ENDED APRIL 27, 1996
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
Apr. 27, 1996 Apr. 27, 1996
------------- -------------
Fully Fully
Primary Diluted Primary Diluted
------- ------- ------- -------
<S> <C> <C> <C> <C>
Reconciliation of net income per
statement of income to amount
used in earnings per share computation:
Net Income ............................................. $ 782,820 $ 782,820 $1,945,447 $1,945,447
Assumed reduction of -
Interest on short-term debt,
net of tax effect on
application of assumed
proceeds from exercise of
options subject to
limitations under the Modified
Treasury Stock method ............................. 7,358 6,217 45,808 28,843
----- ----- ------ ------
Net income, as adjusted ................................ $ 790,178 $ 789,037 $1,991,255 $1,974,290
========== ========== ========== ==========
Reconciliation of weighted average
number of shares outstanding to
amount used in earnings per share
computation:
Weighted average number of shares
outstanding: .................................... 4,349,517 4,349,517 4,278,380 4,278,380
Add - shares issuable from assumed
exercise of options subject to
limitations under the Modified
Treasury Stock method ........................... 1,100,155 1,100,155 1,114,627 1,114,627
--------- --------- --------- ---------
Weighted average number of shares
outstanding as adjusted ......................... 5,449,672 5,449,672 5,393,007 5,393,007
========= ========= ========= =========
Net income per common share ............................ $ .14 $ .14 $ .37 $ .37
========== ========== ========== ==========
</TABLE>
The Company utilized the Modified Treasury Stock method for computing net income
per common share. Under this method, the funds obtained by the assumed exercise
of all options and warrants were applied to repurchase common stock at the
average market price but limited to an amount of repurchased shares to not
greater than 20 percent of the then outstanding actual common shares. Any
assumed funds still available after the repurchase of 20 percent of outstanding
actual common shares were assumed to be utilized to reduce the existing
short-term debt. The adjustment to net income has been shown net of tax effect.
<PAGE>
<TABLE> <S> <C>
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<CIK> 0000027748
<NAME> DEL GLOBAL TECHNOLOGIES CORP.
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<S> <C>
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<PERIOD-START> JUL-30-1995
<PERIOD-END> APR-27-1996
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0
0
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