Increased sales in its Medical Systems Group powered Del Global Technologies Corp. to greater revenues in its second fiscal quarter, ending Jan. 31.
Net sales increased 14 percent to $29.9 million, compared with $26.1 million in the second quarter of FY03. The net loss was $12.4 million, compared with a net loss of $6.3 million in the year-ago quarter.
For the six-month period, net sales declined slightly to $51.5 million, compared with $51.9 million in the same period of FY03. The operating loss increased to $4.9 million, compared with an operating loss of $1.7 million in the year-ago period.
Second-quarter sales growth was led by Del's Medical Systems Group from deliveries on an $8.5 million order from Instituto Mexicano del Seguro Social for 22 Mercury remote-controlled, digital radiographic/fluoroscopic (R/F) imaging systems. Sales of the Medical Systems Group advanced to $23.8 million in the second quarter, a 56 percent gain over the year-ago quarter.
The second-quarter net loss was due, in part, to a $3.2 million charge to help cover a proposed settlement between Del Global and the U.S. Department of Defense (DoD) in the DoD's investigation into certain past business practices at the company's former RFI subsidiary. The proposed settlement calls for Del Global to pay fines and restitution of as much as $5 million by Sept. 30 and to plead guilty to one criminal count. The amount would be reduced by $400,000, if Del Global pays the U.S. government by June 30.
Del Global has retained investment bank Imperial Capital LLC to - in Del Global's words - "assist the company in exploring all strategic alternatives to raise the additional capital necessary to fund the proposed DoD settlement and to maximize returns to shareholders. In particular, such alternatives include potential financings and asset sales."