Del Global Technologies has reported a decrease in net sales and income for its financial results for the fiscal 2008 third quarter and nine months, which ended April 26.
For the quarter, the company reported that consolidated net sales for the fiscal 2008 third quarter decreased by approximately 9.9 percent to $24.4 million from $27.1 million in the third quarter of fiscal 2007, due primarily to lower sales in Del Global’s Medical Systems Group, where net sales decreased 9.8 percent to $20.9 million from $23.2 million in the prior year’s third quarter.
The sales decrease reflected a decline in international sales volume and reduced sales of the domestic digital product line, the Franklin Park, Ill.-based Del Global said.
For the third quarter of fiscal 2008, Del Global reported a net loss of $1.6 million, compared to net income of $1.1 million, in the third quarter of fiscal 2007. The $1.9 million of goodwill impairment charges negatively impacted fiscal 2008 third quarter earnings by $0.08 per diluted share. The increase in weighted average common shares outstanding for the third quarter of fiscal 2008 was due to shares issued in connection with the March 2007 Rights Offering, the company said.
Primarily as a result of non-cash goodwill impairment charges, the company also reported an operating loss of $1.2 million for the third quarter of fiscal 2008 as compared to operating income of $2 million in the comparable period last year.
Total operating expenses increased to 28.3 percent of net sales from 14.8 percent of net sales in the same period one year ago, the result of higher selling, general and administrative expenses (SG &A) and increased research and development (R &D) spending.
The company said the $3.1 million increase in SG &A expense is primarily attributable to: $1.9 million of one-time, non-cash goodwill impairment charges related to the Medical Systems Group’s U.S. medical business; $500,000 of increased acquisition exploration expenses; expenses associated with a previously disclosed legal matter; increased stock based compensation charges related to an increased volume of stock options issued during the quarter; and increased professional services fees. A $200,000 rise in R &D expenditures was due to increased international development efforts compared to the previous year’s third quarter, as well as continued investment in product development, Del Global said.
“While we were not satisfied with our sales performance during the third quarter, we continued to position the company to capitalize on new opportunities and future growth prospects. We will continue to consider future strategic agreements and partnerships as a method for increasing Del’s exposure in a broader range of therapeutic marketplaces, as well as expanding our reach into new geographic regions both inside and outside the United States,” said James A. Risher, Del Global’s president and CEO.