Oct 4 2010
- FY 2010 sales increase to $56.2 million from $52.9 million
- FY 2010 continuing operations net income of $2.3 million or $0.10 per share increased from FY 2009's breakeven performance
- Q4 FY 2010 net income of $1.2 million, or $0.05 per share, on sales of $13.4 million
Del Global Technologies Corp. (OTCBB: DGTC) ("Del Global" or "the Company") today announced financial results for its fiscal 2010 fourth quarter and year ended July 31, 2010.
Consolidated net sales of $13.4 million for the fiscal 2010 fourth quarter reflect an increase of $2.2 million, or approximately 19.8% from fiscal 2009 fourth quarter net sales of $11.2 million. The Medical Systems Group's fourth quarter fiscal 2010 sales of $9.4 million were $1.5 million, or 19.6%, higher than the prior year's fourth quarter. Sales at the Power Conversion Group during the fourth quarter of fiscal 2010 were $4.0 million, approximately $0.7 million, or 20.3%, higher than the prior year's fourth quarter sales, due to increased volume and in part to the timing of shipment approvals from our customers.
Consolidated gross margin as a percent of sales was 26.5% for the fourth quarter of fiscal 2010, compared to 27.5% in the fourth quarter of fiscal 2009. The Medical Systems Group fourth quarter of fiscal 2010 gross margin of 23.0% was higher than the gross margin of 17.6% in the fourth quarter of fiscal 2009 primarily due to increased volume. The Power Conversion Group's gross margin for the fourth quarter of fiscal 2010 was 34.6%, versus 51.1% in the prior year fourth quarter, attributable to an unfavorable sales mix and start up costs with a new customer program.
Operating expenses for the fourth quarter of fiscal 2010 were $2.3 million, or 17.1% of total sales, compared to $2.2 million, or 19.9% of total sales, in the prior year's fourth quarter.
Operating income for the fiscal 2010 fourth quarter was $1.3 million, as compared to operating income of $0.9 million in the fourth quarter of fiscal 2009. The Medical Systems Group generated an operating income of $0.7 million in the fiscal 2010 fourth quarter compared to operating loss of $0.1 million for the fourth quarter of fiscal 2009. The Power Conversion Group posted an operating profit of $0.8 million in the fiscal 2010 fourth quarter as compared to $1.2 million in the comparable period last year. Unallocated corporate expenses for the fourth quarter of fiscal 2010 totaled $0.2 million approximately the same as in the prior year.
For the fourth quarter of fiscal 2010, the Company reported a net income of $1.2 million, or $0.05 per diluted share, compared to net loss of $0.9 million, or $0.04 per diluted share, in the fourth quarter of fiscal 2009.
FISCAL YEAR 2010 OVERVIEW
Consolidated net sales increased by 6.2% to $56.2 million from $52.9 million for fiscal year 2009, primarily the result of higher sales at the Medical Systems Group. Sales at the Medical Systems Group for fiscal year 2010 of $43.7 million reflect an increase of $2.8 million, or 6.8%, from the prior year, primarily due to a modest increase in customer demand. The Power Conversion Group's sales for fiscal year 2010 of $12.5 million were $0.5 more than prior year's sales.
Consolidated gross margin was 25.0% in fiscal 2010, compared to 25.8% in fiscal 2009. This reduction was due to unfavorable product mix, particularly at the Power Conversion Group.
The operating income for fiscal 2010 was $3.4 million compared with operating income of $1.0 million last year. The prior year operating income included $2.5 million in litigation settlement costs.
The net loss for fiscal 2010 was $0.8 million, or $0.04 per diluted share based upon approximately 22.7 million shares outstanding, compared to net loss of $4.1 million, or $0.18 per diluted share, based upon approximately 22.7 million shares outstanding, in fiscal 2009.
BACKLOG
Consolidated backlog at July 31, 2010 increased by $1.3 million to $11.9 million from $10.6 million at August 1, 2009. Backlog at the Medical Systems Group at July 31, 2010 totaled $7.7 million, an increase of approximately $1.6 million from August 1,2009. Backlog at the Power Conversion Group totaled $4.2 million at July 31, 2010, a decrease of $0.3 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 July 31, 2010 reflected working capital of $17.4 million, which included $4.0 million of cash and cash equivalents. Cash net of debt, increased $5.3 million for the full year. At the end of the fiscal 2010 fourth quarter, Del Global had outstanding borrowings of $0.1 million under its Italian revolving credit facilities. In the aggregate, the Company had approximately $9.1 million of borrowing availability under its Italian revolving credit facility. On September 1, 2010, the Company completed a mortgage financing on the Bay Shore, New York property for $2.5 million at an annual rate of 4.9% payable over ten years.
COMMENTS
John J. Quicke, Del Global's President and Chief Executive Officer, commented, "We ended fiscal 2010 with sales and profitability improvements over the prior fiscal year as well as the completion of the Del Medical U.S. divestiture. Our balance sheet has been strengthened considerably. However, we are not satisfied with our current performance and are focused on accelerating our growth through strategy deployment initiatives, new product development and strategic acquisitions. While we acknowledge the challenges inherent in our industries and the general world wide economy we look forward to our future with confidence."
Source:
Del Global Technologies Corp.