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 May 2, 1998
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 June 12, 1998.
Common Stock - 7,602,802
<PAGE>
PART I
Item 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets - May 2, 1998 and August 2, 1997
Consolidated Statements of Income for the Three Months and Nine
Months ended May 2, 1998 and May 3, 1997
Consolidated Statements of Cash Flows for the Nine Months ended
May 2, 1998 and May 3, 1997
Notes to Consolidated Financial Statements
-1-
<PAGE>
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
ASSETS
May 2, August 2,
1998 1997
----------- -----------
CURRENT ASSETS
Cash and cash equivalents $ 5,942,419 $ 6,070,608
Investments available-for-sale 883,103 722,566
Trade receivables - net 13,047,854 11,211,357
Cost and estimated earnings
in excess of billings on
uncompleted contracts 2,886,233 1,868,002
Inventory 27,344,733 24,681,348
Prepaid expenses and other
current assets 2,360,024 1,808,762
----------- -----------
Total current assets 52,464,366 46,362,643
----------- -----------
FIXED ASSETS - Net 11,936,275 11,159,010
INTANGIBLES - Net 984,330 1,112,991
GOODWILL - Net 4,772,291 4,135,409
DEFERRED CHARGES 418,052 507,933
OTHER ASSETS 863,695 851,824
----------- -----------
TOTAL $71,439,009 $64,129,810
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $ 123,977 $ 127,999
Accounts payable - trade 5,513,939 3,936,529
Accrued liabilities 4,684,655 3,699,188
Deferred compensation liability 859,076 722,566
Income taxes 705,045 868,949
----------- -----------
Total current liabilities 11,886,692 9,355,231
----------- -----------
LONG-TERM LIABILITIES
LONG-TERM DEBT (less current
portion included above) 267,877 411,127
OTHER 731,237 725,258
DEFERRED INCOME TAXES 1,290,122 1,107,964
----------- -----------
Total liabilities 14,175,928 11,599,580
----------- -----------
SHAREHOLDERS' EQUITY
Common stock, $.10 par value;
Authorized 20,000,000
shares; Issued and
outstanding - 7,832,412
shares at May 2, 1998
and 7,516,234 shares at
August 2, 1997 783,240 751,622
Additional paid-in capital 47,977,393 45,909,517
Retained earnings 10,636,527 6,572,318
----------- -----------
59,397,160 53,233,457
----------- -----------
Less common stock in treasury -
244,155 shares at May 2, 1998
and 104,255 at August 2, 1997 2,134,079 703,227
----------- -----------
Total shareholders' equity 57,263,081 52,530,230
----------- -----------
TOTAL $71,439,009 $64,129,810
=========== ===========
See notes to consolidated financial statements
-2-
<PAGE>
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
---------------------------- ----------------------------
May 2, May 3, May 2, May 3,
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
NET SALES $ 16,682,726 $ 14,317,165 $ 44,565,977 $ 39,320,420
------------ ------------ ------------ ------------
COSTS AND EXPENSES:
Cost of sales 9,995,579 8,944,620 26,546,139 24,009,457
Research and development 1,548,915 1,190,800 4,249,161 3,383,239
Selling, general and
administrative 3,019,143 2,365,075 7,897,980 7,124,822
Interest income - net (5,530) (30,355) (104,080) (77,651)
------------ ------------ ------------ ------------
14,558,107 12,470,140 38,589,200 34,439,867
------------ ------------ ------------ ------------
INCOME BEFORE PROVISION
FOR INCOME TAXES 2,124,619 1,847,025 5,976,777 4,880,553
PROVISION FOR INCOME TAXES 679,878 563,343 1,912,569 1,488,569
------------ ------------ ------------ ------------
NET INCOME $ 1,444,741 $ 1,283,682 $ 4,064,208 $ 3,391,984
============ ============ ============ ============
Per share amounts:
Basic earnings per share $ .19 $ .17 $ .54 $ .46
============ ============ ============ ============
Diluted earnings per share $ .18 $ .16 $ .50 $ .42
============ ============ ============ ============
Weighted average number of
common shares outstanding 7,541,988 7,402,899 7,484,513 7,400,921
============ ============ ============ ============
Weighted average number of
common shares outstanding
and common share equivalents 8,228,828 8,067,904 8,191,038 8,070,042
============ ============ ============ ============
</TABLE>
See notes to consolidated financial statements
-3-
<PAGE>
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
--------------------------
May 2, May 3,
1998 1997
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 4,064,208 $ 3,391,984
Adjustments to reconcile net income
to net cash provided by operating
activities:
Imputed interest 62,751 51,045
Depreciation 1,026,803 722,227
Amortization 405,290 390,621
Deferred income tax provision 115,602 195,337
Tax benefit from exercise of
stock options and warrants 780,959 277,955
Changes in assets and liabilities:
Increase in trade receivables (1,836,497) (634,698)
Increase in cost and estimated
earnings in excess of billings
on uncompleted contracts (1,018,231) (1,301,173)
Increase in inventory (2,530,225) (1,264,248)
Increase in prepaid and other
current assets (530,755) (383,702)
Decrease (increase) in other assets 1,285 (6,124)
Increase in accounts payable - trade 1,577,410 970,824
Increase (decrease) in accrued
liabilities 890,941 (549,418)
Increase in deferred compensation
liability 136,510 126,106
Decrease in income taxes payable (163,904) (38,417)
----------- -----------
Net cash provided by operating
activities excluding acquisition 2,982,147 1,948,319
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for fixed assets (1,731,275) (1,760,338)
Investment in marketable securities (160,537) (170,364)
Cash paid to acquire selected assets
or subsidiary (899,926) (15,000)
Payments to former shareholders of
subsidiary acquired (56,772) (41,775)
----------- -----------
Net cash used in investing activities (2,848,510) (1,987,477)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net repayment of bank borrowing (147,272) (38,927)
Payment for repurchase of shares (1,430,852) (178,950)
Proceeds from exercise of stock options
and warrants 1,275,801 175,338
Other 40,497 21,666
----------- -----------
Net cash used in financing activities (261,826) (20,873)
----------- -----------
(Continued)
See notes to consolidated financial statements
-4-
<PAGE>
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
--------------------------
May 2, May 3,
1998 1997
----------- -----------
NET DECREASE IN CASH AND CASH EQUIVALENTS $ (128,189) $ (60,031)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 6,070,608 5,817,800
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 5,942,419 $ 5,757,769
=========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Interest paid $ 62,923 $ 36,109
=========== ===========
Income taxes paid $ 1,166,967 $ 1,091,188
=========== ===========
SUPPLEMENTAL SCHEDULE OF INVESTING AND
FINANCING ACTIVITIES:
Acquisition of subsidiary $ -- $ 15,000
Acquisition of selected assets 994,455 --
Acquisition costs in accrued expenses (94,529) --
----------- -----------
Cash paid to acquire selected assets
or subsidiary $ 899,926 $ 15,000
=========== ===========
See notes to consolidated financial statements
-5-
<PAGE>
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 In the opinion of the Company's 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
May 2, 1998 and the results of its operations and its cash flows for
the nine months ended May 2, 1998 and May 3, 1997, respectively.
The accounting policies followed by the Company are set forth in
Note 1 to the Company's financial statements as of August 2, 1997,
except as stated below.
The Company adopted Statement of Financial Accounting Standard 128
("SFAS 128"), "Earnings Per Share" effective August 3, 1997. The
effect of the adoption of SFAS 128 on the three months ended May 3,
1997 was to decrease the weighted average common shares from
8,467,700 to 7,402,899 and the common share equivalents from
8,400,984 to 8,067,904. The effect of the adoption for the nine
months ended May 3, 1997 was to decrease the weighted average common
shares from 8,504,848 to 7,400,921 and the common share equivalents
from 8,507,759 to 8,070,042. Diluted earnings per share were $.16
and $.42 as compared to fully diluted earnings per share of $.15 and
$.40 for the three and nine month periods ended May 3, 1997,
respectively.
The consolidated financial statements should be read in conjunction
with the notes to the financial statements as of August 2, 1997.
NOTE 2 The results of operations for the three and nine month periods ended
May 2, 1998 are not necessarily indicative of the results to be
expected for the full year.
NOTE 3 INVESTMENTS
Investments available-for-sale at May 2, 1998 and August 2, 1997
include $827,163 and $722,566, respectively, for the Company's
President's deferred compensation, pursuant to the terms of his
employment contract. The liabilities of $859,076 and $722,566,
respectively, are recorded as deferred compensation liability. The
difference of $31,913 between investments available-for-sale and the
deferred compensation liability were cash assets at May 2, 1998 and
were classified as such in the financial statements. Gains and
losses, either recognized or unrealized, inure to the benefit or
detriment of the President's deferred compensation, based upon a
contractual arrangement between the President and the Company. At
May 2, 1998, the balance of investments available-for-sale of
$55,940 are equity securities held by the Company for its own
account. Realized and unrealized gains and losses on these
securities for the period ended May 2, 1998 were not material and
are recorded in the financial statements.
NOTE 4 PERCENTAGE OF COMPLETION ACCOUNTING
Nine Months
Ended
May 2, August 2, May 2,
1998 1997 1998
---------- ---------- ----------
Costs incurred on
uncompleted contracts $5,612,951 $3,086,020 $2,526,931
Estimated earnings 3,453,381 1,578,126 1,875,255
---------- ---------- ----------
9,066,332 4,664,146 4,402,186
Less: Billings to date 6,180,099 2,796,144 3,383,955
---------- ---------- ----------
Costs and estimated
earnings in excess of
billings on uncompleted
contracts $2,886,233 $1,868,002 $1,018,231
========== ========== ==========
-6-
<PAGE>
The backlog of unshipped contracts being accounted for under the
percentage of completion method of accounting was approximately
$5,421,000 at May 2, 1998.
NOTE 5 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.
Inventory consists of the following:
May 2, August 2,
1998 1997
----------- -----------
Finished goods $ 4,276,363 $ 3,859,842
Work-in-process 10,825,167 9,770,789
Raw material and purchased parts 12,243,203 11,050,717
----------- -----------
Total $27,344,733 $24,681,348
=========== ===========
NOTE 6 FIXED ASSETS
Fixed assets consist of the following:
May 2, August 2,
1998 1997
----------- -----------
Land $ 694,046 $ 694,046
Building 2,146,025 2,146,025
Machinery and equipment 12,443,767 10,865,897
Furniture and fixtures 1,459,339 1,280,216
Leasehold improvements 1,276,067 1,228,992
Transportation equipment 30,103 30,103
----------- -----------
18,049,347 16,245,279
Less accumulated depreciation and
amortization 6,113,072 5,086,269
----------- -----------
Net fixed assets $11,936,275 $11,159,010
=========== ===========
NOTE 7 ACQUISITION
On March 6, 1998 the Company's Gendex-Del Medical Imaging Corp.
subsidiary acquired selected assets of X-Ray Technologies, Inc.,
consisting principally of inventory, fixed assets and designs and
technology for approximately $995,000. The newly formed XTek
division is a manufacturer of cost-effective medical imaging systems
for physicians, chiropractors and veterinarians.
-7-
<PAGE>
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 four acquisitions in
the past five 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; and X-ray Technologies,
Inc (a manufacturer of medical imaging systems) in fiscal 1998. The Company's
net sales have increased from approximately $18.9 million in fiscal 1992 to
approximately $54.7 million in fiscal 1997, a compounded annual growth rate of
23.6%.
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 $3.4 million or 17.7%
of total net sales in fiscal 1992 to approximately $25.7 million or 59% of total
net sales and approximately $35.6 million or 65.1% of total net sales in fiscal
years 1996 and 1997, respectively.
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, 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 May 2, 1998 were
approximately $16.7 million as compared to approximately $14.3 million for the
three months ended May 3, 1997, an increase of 16.5%. Net sales for the nine
months ended May 2, 1998 were approximately $44.6 million as compared to
approximately $39.3 million for the nine months ended May 3, 1997, an increase
of 13.3%. These increases are primarily due to internal growth from existing
operations.
Cost of sales, as a percentage of net sales, for the three
months ended May 2, 1998 was 59.9% compared to 62.5% for the prior corresponding
period. Cost of sales, as a percentage of net sales, for the nine months ended
May 2, 1998 was 59.6% compared to 61.1% for the prior corresponding period.
These improvements in gross margins are due to reduced manufacturing costs from
efficiencies implemented in existing operations.
Research and development expenses increased to approximately
$1.5 million for the three months ended May 2, 1998 from approximately $1.2
million for the three months ended May 3, 1997, an increase of 30%. Research and
development expenses increased to approximately $4.2 million for the nine months
ended May 2, 1998 from approximately $3.4 million for the nine months ended May
3, 1997, an increase of 25.6%. These increases were 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.
-8-
<PAGE>
Selling, general and administrative expenses were approximately
$3,019,000, or 18.1% of net sales, for the three months ended May 2, 1998 as
compared to approximately $2,365,000, or 16.5% of net sales, for the same period
in the prior year, an increase of 27.7%. Selling, general and administrative
expenses increased to approximately $7,898,000, or 17.7% of net sales for the
nine months ended May 2, 1998 from approximately $7,125,000, or 18.1% of net
sales over the corresponding period in the prior year, an increase of 10.9%.
These increases were due to higher marketing costs, higher investor relations
costs and an increase in the allowance for doubtful accounts receivable.
Net interest income was approximately $5,500 for the three
months ended May 2, 1998 as compared to approximately $30,000 for the
corresponding period in the prior year, a decrease of 81.8%. This change was due
principally to bank commitment fees on the unused portion of credit lines
charged during the quarter. Net interest income was approximately $104,000 for
the nine months ended May 2, 1998 as compared to approximately $78,000 for the
nine months ended May 3, 1997, an increase of 34%.
Income tax expense was 32% of pre-tax income for the three
months and nine months ended May 2, 1998. 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 $1.4 million for the
three months ended May 2, 1998, an increase of approximately 12.5% from
approximately $1.3 million for the prior corresponding period. Net income per
common share for the three months ended May 2, 1998 increased to $.19 from $.17
for the three months ended May 3, 1997, an increase of 11.8%. Net income per
common share and common share equivalents rose to $.18 from $.16 for the three
months ended May 2, 1998 and May 3, 1997, respectively, an increase of 12.5%.
The number of common shares outstanding at May 2, 1998 were 7,541,988 as
compared to 7,402,899 at May 3, 1997. The number of common shares and common
share equivalents at May 2, 1998 increased to 8,228,828 from 8,067,904 at May 3,
1997. Net income increased to approximately $4.1 million for the nine months
ended May 2, 1998, an increase of 19.8% from approximately $3.4 million for the
prior corresponding period. Net income per common share for the nine months
ended May 2, 1998 increased to $.54 from $.46 for the nine months ended May 3,
1997, an increase of 17.4%. Net income per common share and common share
equivalents rose to $.50 from $.42 for the nine months ended May 2, 1998 and May
3, 1997, respectively, an increase of 19%. The number of common shares
outstanding at May 2, 1998 were 7,484,513 as compared to 7,400,921 at May 3,
1997. The number of common shares and common share equivalents at May 2, 1998
increased to 8,191,038 from 8,070,042 at May 3, 1997. The increase in net income
for the three and nine month periods ended May 2, 1998 is due to internal growth
and improved gross margins.
The backlog of unshipped orders at May 2, 1998 was
approximately $34.5 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
the Company's common stock.
Working Capital. At May 2, 1998 and August 2, 1997, the
Company's working capital was approximately $40.6 million and $37.0 million,
respectively. At such dates the Company had approximately $5.9 million and $6.1
million, respectively, in cash and cash equivalents. 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.
Trade receivables at May 2, 1998 increased approximately $1.8
million as compared to August 2, 1997 primarily due to increased sales levels,
principally of medical imaging products.
-9-
<PAGE>
Cost and estimated earnings in excess of billings on
uncompleted contracts increased to approximately $2.9 million at May 2, 1998
from approximately $1.9 million at August 2, 1997 due to new contracts and
additional work performed in the nine month period on long term contracts, which
are accounted for under the percentage of completion method of accounting.
Inventory at May 2, 1998 increased approximately $2.7 million
as compared to August 2, 1997, primarily because of additional production
requirements of new OEM contracts which commenced in the third quarter of fiscal
1998, the inclusion of XTek inventory and to support higher levels of medical
imaging systems sales.
Prepaid expenses and other current assets increased
approximately $551,000 at May 2, 1998 from August 2, 1997 primarily because of
higher levels of prepaid insurance, trade show deposits, printing and catalogue
costs.
Trade accounts payable increased approximately $1.6 million at
May 2, 1998 from August 2, 1997, primarily because of the increased inventory
requirements of new OEM contracts and to support higher levels of shipments of
medical imaging products.
Accrued liabilities increased approximately $985,000 at May 2,
1998 from August 2, 1997, because of the accrual of the annual general liability
insurance renewal, funds due for unsettled stock transactions under the stock
"Buy- back" program, accrued legal fees associated with the X-ray Technologies,
Inc. asset acquisition and accrued compensation cost related to a change in
accounting required by the adoption of SFAS 123, "Accounting for Stock-Based
Compensation," for non-employee stock options and warrants.
Credit Facility and Borrowing. At May 2, 1998, the Company had
a $14 million revolving credit line and a $10 million acquisition credit line.
The available portions of the revolving credit line and the acquisition credit
line were approximately $13.8 and $9.5 million, respectively, after deducting
outstanding letters of credit of approximately $200,000.
Capital Expenditures. The Company continues to invest in
capital equipment, principally for its manufacturing operations and inventory
management systems, in order to improve its manufacturing capability and to
increase capacity and inventory turns. The Company has expended approximately
$1.7 million for capital equipment for the nine month period ended May 2, 1998.
Shareholders' Equity. Shareholders' equity increased to
approximately $57.3 million at May 2, 1998 from approximately $52.5 million at
August 2, 1997, primarily due to the results of operations. Additionally, during
the period 310,992 stock options and warrants were exercised, with proceeds of
approximately $1.3 million and 139,900 shares of common stock were repurchased
at a cost of approximately $1.4 million. Under its extended stock "Buy-back"
program since April, 1997 the Company has repurchased 176,900 shares of its
common stock for $1,750,737 at prices ranging from $7.88 to $12.25. The average
repurchase price was $9.90.
Year 2000 Compliance
The Company relies on computer technology throughout its
business to effectively carry out its day-to-day operations. As the millennium
approaches, the Company is assessing all of its computer systems to ensure that
they are "Year 2000" compliant. In this process the Company may replace or
upgrade certain systems which are not Year 2000 compliant in order to meet its
internal needs and those of its customers. The Company expects its Year 2000
project to be completed on a timely basis. However, there can be no assurance
that the systems of other companies on which the Company may rely will also be
timely converted or that such failure to convert by other companies would not
have an adverse effect on the Company's systems. The cost to the Company of such
changes are difficult to estimate but are not expected to have a material
financial impact.
-10-
<PAGE>
Effects of New Accounting Pronouncements
Earnings Per Share. The Company adopted Statement of Financial
Accounting Standard 128 ("SFAS 128"), "Earnings Per Share" effective August 3,
1997. The effect of the adoption of SFAS 128 on the three months ended May 3,
1997 was to decrease the weighted average common shares from 8,467,700 to
7,402,899 and the common share equivalents from 8,400,984 to 8,067,904. The
effect of the adoption for the nine months ended May 3, 1997 was to decrease the
weighted average common shares from 8,504,848 to 7,400,921 and the common share
equivalents from 8,507,759 to 8,070,042. Diluted earnings per share were $.16
and $.42 as compared to fully diluted earnings per share of $.15 and $.40 for
the three and nine month periods ended May 3, 1997, respectively.
Disclosures About Segments of an Enterprise and Related
Information. In June 1997, the FASB issued SFAS 131, "Disclosures About Segments
of an Enterprise and Related Information." SFAS 131 requires the reporting of
profit and loss, specific revenue and expense items, and assets for reportable
segments. It also requires the reconciliation of total segment revenues, total
segment profit and loss, total segment assets and other amounts disclosed for
segments to the corresponding amounts in the general purpose financial
statements. This statement is effective for financial statements issued for
periods beginning after December 15, 1997. The Company has not yet determined
what additional disclosures may be required in connection with adopting SFAS
131.
-11-
<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
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: Exhibit 11 - Computation of Earnings per
Common Share
Exhibit 27 - Financial Data Schedule
(b) Report on Form 8-K: None
-12-
<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,
Secretary and Chief
Accounting Officer
Dated: June 15, 1998
-13-
EXHIBIT 11
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
THREE MONTHS AND NINE MONTHS ENDED MAY 2, 1998
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
May 2, 1998 May 2, 1998
------------------------------- -------------------------------
Per Share Per Share
Net Income Shares Amount Net Income Shares Amount
---------- ------ --------- ---------- ------ ---------
<S> <C> <C> <C> <C> <C> <C>
Basic Earnings Per Share:
Income available to common
shareholders $1,444,741 7,541,988 $.19 $4,064,208 7,484,513 $.54
==== ====
Effect of Dilutive Securities:
Warrants 18,946 19,461
Options 667,894 687,064
---------- --------- ---------- ---------
Diluted Earnings Per Share $1,444,741 8,228,828 $.18 $4,064,208 8,191,038 $.50
========== ========= ==== ========== ========= ====
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
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<NAME> DEL GLOBAL TECHNOLOGIES CORP.
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