SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q/A
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended October 30, 1999
Commission File Number 0-3319
DEL GLOBAL TECHNOLOGIES CORP.
-----------------------------
(Exact name of registrant as specified in its charter)
New York 13-1784308
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(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
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(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 December 8,1999.
Common Stock - 7,814,916
<PAGE>
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
ASSETS
October 30, July 31,
1999 1999
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CURRENT ASSETS
Cash and cash equivalents $ 626,113 $ 320,742
Investments available-for-sale 1,139,370 1,292,852
Trade receivables - net 14,912,641 15,624,433
Cost and estimated earnings in excess of
billings on uncompleted contracts 7,759,094 6,402,532
Inventory 37,212,350 36,599,587
Prepaid expenses and other current assets 1,576,066 1,216,145
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Total current assets 63,225,634 61,456,291
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FIXED ASSETS - Net 14,975,212 14,668,060
INTANGIBLES - Net 834,191 879,898
GOODWILL - Net 5,164,082 5,236,965
DEFERRED CHARGES 231,873 264,464
OTHER ASSETS 1,613,763 1,598,279
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TOTAL $86,044,755 $84,103,957
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $ 784,467 $ 516,654
Accounts payable - trade 6,255,667 6,295,586
Accrued liabilities 4,556,690 4,468,521
Deferred compensation liability 1,209,321 1,201,065
Income taxes 1,114,894 1,224,451
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Total current liabilities 13,921,039 13,706,277
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LONG-TERM LIABILITIES
LONG-TERM DEBT (less current portion
included above) 2,078,832 1,832,287
OTHER 573,505 594,272
DEFERRED INCOME TAXES 1,778,442 1,620,417
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Total liabilities 18,351,818 17,753,253
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SHAREHOLDERS' EQUITY
Common stock, $.10 par value;
Authorized 20,000,000 shares;
Issued and outstanding 8,354,316
shares at October 30, 1999 and
8,278,646 shares at July 31, 1999 835,433 827,866
Additional paid-in capital 51,058,863 50,798,502
Retained earnings 20,558,485 19,032,506
----------- -----------
72,452,781 70,658,874
Less common stock in treasury -
546,261 shares at October 30, 1999
and 490,393 shares at July 31, 1999 4,759,844 4,308,170
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Total shareholders' equity 67,692,937 66,350,704
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TOTAL $86,044,755 $84,103,957
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See notes to consolidated financial statements
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<PAGE>
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
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October 30, October 31,
1999 1998
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NET SALES $15,712,024 $14,809,666
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COSTS AND EXPENSES:
Cost of sales 9,310,733 8,679,168
Research and development 1,543,154 1,431,314
Selling, general and administrative 2,603,174 2,621,162
Interest expense - net 62,037
----------- -----------
6,881
13,519,098 12,738,525
INCOME BEFORE PROVISION
FOR INCOME TAXES 2,192,926 2,071,141
PROVISION FOR INCOME TAXES 666,948 642,054
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NET INCOME $ 1,525,978 $ 1,429,087
=========== ===========
NET INCOME PER COMMON SHARE AND
COMMON SHARE EQUIVALENTS:
BASIC $ .20 $ .19
=========== ===========
DILUTED $ .19 $ .18
=========== ===========
Weighted number of common
shares outstanding 7,786,004 7,648,413
=========== ===========
Weighted number of common
shares and common share
equivalents outstanding 8,171,777 8,142,557
=========== ===========
See notes to consolidated financial statements
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<PAGE>
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
--------------------------
October 30, October 31,
1999 1998
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 1,525,978 $ 1,429,087
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 555,560 413,419
Amortization 187,462 157,944
Imputed interest 19,706 10,974
Deferred income tax provision 147,495 94,745
Tax benefit from exercise of stock options
and warrants 188,849 18,019
Amortization of stock-based compensation 7,833 5,508
Changes in assets and liabilities:
Decrease (increase) in trade receivables 711,792 (869,725)
Increase in cost and estimated earnings in
excess of billings on uncompleted contracts (1,356,562) (908,225)
Increase in inventory (612,763) (2,072,986)
Increase in prepaid and other current assets (396,202) (539,657)
Increase in other assets (4,954) (6,776)
(Decrease) increase in accounts payable - trade (39,919) 1,170,993
Increase in accrued liabilities 85,072 145,842
Increase in deferred compensation liability 8,256 69,902
(Decrease) increase in income taxes payable (109,557) 378,790
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Net cash provided by (used in) operating activities 918,046 (502,146)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for fixed assets (862,712) (692,266)
Investment in marketable securities 153,482 (73,026)
Payments to former shareholders of subsidiary
acquired (17,707) (29,796)
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Net cash used in investing activities (726,937) (795,088)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from bank borrowing 514,358 498,737
Payment for repurchase of shares (451,674) (682,404)
Proceeds from exercise of stock options and
warrants 71,247 42,548
Other (19,669) (5,784)
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Net cash provided by (used in) financing activities 114,262 (146,903)
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 305,371 (1,444,137)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 320,742 3,401,697
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CASH AND CASH EQUIVALENTS, END OF PERIOD $ 626,113 $ 1,957,560
=========== ===========
See notes to consolidated financial statements
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<PAGE>
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
--------------------------
October 30, October 31,
1999 1998
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SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Interest paid $ 6,359 $ 33,724
=========== ==========
Income taxes paid $ 482,440 $ 150,500
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See notes to consolidated financial statements
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<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 October 30, 1999 and
the results of its operations and its cash flows for the three months
ended October 30, 1999 and October 31, 1998.
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-month period ended October 30,
1999 are not necessarily indicative of the results to be expected for
the full year.
NOTE 3 INVESTMENTS
Investments available-for-sale at October 30, 1999 and July 31, 1999
include $1,209,321and $1,201,065, respectively, for the Company's
President's deferred compensation and certain key executives. At
October 30, 1999 and July 31, 1999, $118,514 and $213,411,
respectively, were classified as cash and $1,090,808 and $987,654,
respectively, were recorded as investments. The liabilities of
$1,209,321 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 October 30, 1999, the balance of investments
available-for-sale of $48,562 are equity securities held by the Company
for its own account. Realized and unrealized gains and losses on these
securities for the period ended October 30, 1999 were not material and
are recorded in the financial statements.
NOTE 4 PERCENTAGE OF COMPLETION ACCOUNTING
October 30, July 31,
1999 1999
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Costs incurred on uncompleted
contracts $15,206,728 $15,012,158
Estimated earnings 9,906,018 9,329,220
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25,112,746 24,341,378
Less billings to date 17,353,652 17,938,846
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Costs and estimated earnings
in excess of billings on
uncompleted contracts $ 7,759,094 $ 6,402,532
=========== ===========
The backlog of unshipped contracts being accounted for under the
percentage of completion method of accounting was approximately $4.7
million at October 30, 1999.
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<PAGE>
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:
October 30, July 31,
1999 1999
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Finished goods $ 7,820,260 $ 5,414,095
Work-in-process 17,246,575 14,814,766
Raw material and purchased parts 12,145,515 16,370,726
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Total $37,212,350 $36,599,587
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NOTE 6 FIXED ASSETS
Fixed assets consist of the following:
October 30, July 31,
1999 1999
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Land $ 694,046 $ 694,046
Building 2,178,025 2,161,025
Machinery and equipment 16,520,067 15,967,619
Furniture and fixtures 2,021,237 1,914,396
Leasehold improvements 2,367,296 2,180,873
Transportation equipment 30,103 30,103
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23,810,774 22,948,062
Less accumulated depreciation and amortization 8,835,562 8,280,002
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Net fixed assets $14,975,212 $14,668,060
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NOTE 7 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
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 and a neo-natal imaging system. The
Critical Electronic Subsystems Segment designs, manufactures and
markets proprietary precision power conversion and noise suppression
subsystems for medical as well as critical industrial applications.
Selected financial data of these segments is as follows:
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<PAGE>
<TABLE>
<CAPTION>
Medical Critical
Imaging Electronic
Systems Subsystems Total
------------ ----------- -----------
For the Three Months Ended October 30, 1999:
<S> <C> <C> <C>
Net sales to external customers $ 7,883,898 $ 7,828,126 $15,712,024
============ =========== ===========
Income before provision for income taxes $ 614,991 $ 1,577,935 $ 2,192,926
============ =========== ===========
Segment assets $ 38,919,996 $47,124,759 $86,044,755
============ =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Medical Critical
Imaging Electronic
Systems Subsystems Total
------------ ----------- -----------
For the Three Months Ended October 31, 1998:
<S> <C> <C> <C>
Net sales to external customers $ 7,345,710 $ 7,463,956 $14,809,666
============ =========== ===========
Income before provision for income taxes $ 611,836 $ 1,459,305 $ 2,071,141
============ =========== ===========
Segment assets $ 31,156,009 $44,347,779 $75,503,788
============ =========== ===========
</TABLE>
-8-
<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
Chief Financial Officer,
Vice President of Finance
and Secretary
Dated: March 28, 2000
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