UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q





(Mark
One)





ý QUARTERLY REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the
quarterly period ended October 31,
2009





or





 ̈ TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the
transition period from 
to





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 incorporation or
              organization)
            (I.R.S.
      Employer Identification No.)





100
      PINE AIRE DRIVE, BAY SHORE, NY
            11706(Address
      of principal executive offices)
            (Zip
      Code)





631-231-6400(Registrant’s
      telephone number, including area code)50B
      GARY AVENUE, ROSELLE, IL 60172(Former
      name, former address and former fiscal year, if changed since last
      report)





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 ý     No
 ̈





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such
files).


Yes  ̈     No
 ̈





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.  (Check one):





Large
      accelerated filer  ̈
            Accelerated
      filer  ̈Non-accelerated
      filer  ̈ (Do
      not check if a smaller reporting company)
            Smaller
      reporting company ý





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).     Yes  ̈     No
ý





The number
of shares of Registrant’s common stock outstanding as of December 5, 2009 was
22,718,306.













DEL
GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES




Table
of Contents




Page
      No.PART
      I
              FINANCIAL
      INFORMATIONITEM
      1  FINANCIAL
      STATEMENTS
              3Consolidated
      Statements of Operations for the Three Months ended October 31, 2009 and
      November 1, 2008
              3Consolidated
      Balance Sheets - October 31, 2009 and August 1, 2009
              4-5Consolidated
      Statements of Cash Flows for the Three Months ended October 31, 2009 and
      November 1, 2008
              6Notes
      to Consolidated Financial
      Statements
              7-13Item
      2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
      AND RESULTS OF OPERATIONS
              14-19Item
      3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
      RISK
              19Item
      4.  CONTROLS AND
      PROCEDURES
              19PART
      II -
              OTHER
      INFORMATIONItem
      1.  LEGAL
      PROCEEDINGS
              19Item
      1A.  RISK
      FACTORS
              20Item
      6.  EXHIBITS
              20SIGNATURES
              21EX-31.1
      (EX-31.1):  CertificationEX-31.2
      (EX-31.2):  CertificationEX-32.1
      (EX-32.1):  CertificationEX-32.2
      (EX-32.2):  Certification






2





PART
I                      FINANCIAL
INFORMATION




ITEM
1 FINANCIAL STATEMENTS




DEL GLOBAL
TECHNOLOGIES CORP. AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF OPERATIONS


(DOLLARS
IN THOUSANDS EXCEPT PER SHARE AMOUNTS)


(UNAUDITED)




Three
      Months EndedOctober
      31,
                2009
            
            
            November
                1,
      2008NET
      SALES
            
            $
            11,582
            
            
            $
            14,220COST
      OF SALES
            
            
            9,007
            
            
            
            10,512GROSS
      MARGIN
            
            
            2,575
            
            
            
            3,708Selling,
      general and administrative
            
            
            2,228
            
            
            
            2,287Research
      and development
            
            
            443
            
            
            
            489Total
      operating expenses
            
            
            2,671
            
            
            
            2,776OPERATING
      INCOME (LOSS)
            
            
            (96
            )
            
            
            932Interest
      expense, net of interest income of $3 and $25 in 2009 and 2008,
      respectively
            
            
            (154
            )
            
            
            (55
            )Other
      income (expense)
            
            
            (23
            )
            
            
            67INCOME(LOSS) FROM CONTINUING
      OPERATIONS BEFOREINCOME
      TAX PROVISION
            
            
            (273
            )
            
            
            944INCOME
      TAX PROVISION
            
            
            126
            
            
            
            396INCOME
      (LOSS) FROM CONTINUING OPERATIONS
            
            
            (399
            )
            
            
            548LOSS
      FROM DISCONTINUED OPERATIONS
            
            
            (3,103
            )
            
            
            (1,157
            )NET
      LOSS
            
            $
            (3,502
            )
            
            $
            (609
            )NET
      INCOME (LOSS) PER SHARE – BASICIncome
      (loss) from continuing operations
            
            $
            (0.02
            )
            
            $
            0.02Loss
      from discontinued operations
            
            
            (0.13
            )
            
            
            (0.05
            )Net
      Loss
            
            $
            (0.15
            )
            
            $
            (0.03
            )Weighted
      average shares outstanding
            
            
            22,718,306
            
            
            
            24,243,259NET
      INCOME (LOSS) PER SHARE – DILUTEDIncome
      (loss) from continuing operations
            
            $
            (0.02
            )
            
            $
            0.02Loss
      from discontinued operations
            
            
            (0.13
            )
            
            
            (0.05
            )Net
      Loss
            
            $
            (0.15
            )
            
            $
            (0.03
            )Weighted
      average shares outstanding
            
            
            22,718,306
            
            
            
            24,300,277





See notes
to consolidated financial statements.






3




DEL GLOBAL
TECHNOLOGIES CORP. AND SUBSIDIARIES


CONSOLIDATED
BALANCE SHEETS


(DOLLARS
IN THOUSANDS EXCEPT PAR VALUE)


(UNAUDITED)




ASSETS




October
                31,
      2009
            
            
            August
                1,
      2009CURRENT
      ASSETS:Cash
      and cash equivalents
            
            $
            4,749
            
            
            $
            7,983Trade
      receivables (net of allowance for doubtful accounts of $2,255 and $1,648
      at October 31, 2009 and August 1, 2009, respectively)
            
            
            15,751
            
            
            
            18,043Inventories
      (net of allowance for excess and obsolete of $5,402 and $4,496 at October
      31, 2009 and August 2, 2008, respectively)
            
            
            13,619
            
            
            
            16,004Prepaid
      expenses and other current assets
            
            
            1,625
            
            
            
            1,719Total
      current assets
            
            
            35,744
            
            
            
            43,749NON-CURRENT
      ASSETS:Property
      plant and equipment, net
            
            
            5,975
            
            
            
            6,305Deferred
      income taxes
            
            
            613
            
            
            
            611Goodwill
            
            
            4,526
            
            
            
            4,526Other
      assets
            
            
            60
            
            
            
            71Total
      non-current assets
            
            
            11,174
            
            
            
            11,513TOTAL
      ASSETS
            
            $
            46,918
            
            
            $
            55,262





See notes
to consolidated financial statements.






4




DEL GLOBAL
TECHNOLOGIES CORP. AND SUBSIDIARIES


CONSOLIDATED
BALANCE SHEETS


(DOLLARS
IN THOUSANDS EXCEPT PAR VALUE)


(UNAUDITED)




LIABILITIES
AND SHAREHOLDERS’ EQUITY




October
      31,
                2009
            
            
            August
      1,
                2009CURRENT
      LIABILITIES:Revolving
      loan
            
            $
            2,514
            
            
            $
            7,492Current
      portion of long-term debt
            
            
            1,729
            
            
            
            1,653Accounts
      payable – trade
            
            
            6,424
            
            
            
            7,304Accrued
      expenses
            
            
            5,910
            
            
            
            5,239Total
      current liabilities
            
            
            16,577
            
            
            
            21,688NON-CURRENT
      LIABILITIES:Long-term
      debt, less current portion
            
            
            1,948
            
            
            
            2,385Other
      long-term liabilities
            
            
            2,614
            
            
            
            2,561Total
      non-current liabilities
            
            
            4,562
            
            
            
            4,946Total
      liabilities
            
            
            21,139
            
            
            
            26,634COMMITMENTS
      AND CONTINGENCIESSHAREHOLDERS'
      EQUITY:Common
      stock, $.10 par value;Authorized
      50,000,000; issued-24,900,629 at October 31, 2009 and August 1,
      2009
            
            
            2,490
            
            
            
            2,490Additional
      paid-in capital
            
            
            80,816
            
            
            
            80,739Treasury
      shares – 2,182,323 shares, at cost at October 31, 2009 and August 1,
      2009
            
            
            (7,176
            )
            
            
            (7,176
            )Accumulated
      other comprehensive income
            
            
            2,641
            
            
            
            2,065Accumulated
      deficit
            
            
            (52,992
            )
            
            
            (49,490
            )Total
      shareholders' equity
            
            
            25,779
            
            
            
            28,628TOTAL
      LIABILITIES AND SHAREHOLDERS' EQUITY
            
            $
            46,918
            
            
            $
            55,262





See notes
to consolidated financial statements.






5




DEL GLOBAL
TECHNOLOGIES CORP. AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF CASH FLOWS


(DOLLARS
IN THOUSANDS)


(UNAUDITED)




Three
      Months EndedOctober 31,
                2009
            
            
            November 1,
                2008CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
            
            $
            (3,502
            )
            
            $
            (609
            )Adjustments
      to reconcile net loss to net cash provided by operating
      activities:Depreciation
      and amortization
            
            
            296
            
            
            
            283Deferred
      income tax provision
            
            
            20
            
            
            
            41Stock
      based compensation expense
            
            
            78
            
            
            
            53Write-down
      of assets and additional accruals for discontinued
    operations
            
            
            1,820
            
            
            
            -Changes
      in operating assets and liabilities:Trade
      receivables
            
            
            2,065
            
            
            
            2,401Inventories
            
            
            2,038
            
            
            
            (308
            )Prepaid
      expenses and other current assets
            
            
            126
            
            
            
            216Other
      assets
            
            
            11
            
            
            
            12Accounts
      payable – trade
            
            
            (1,033
            )
            
            
            (543
            )Accrued
      expenses
            
            
            477
            
            
            
            1,589Payment
      of accrued litigation settlement costs
            
            
            -
            
            
            
            (60
            )Other
      long-term liabilities
            
            
            (27
            )
            
            
            (266
            )Net
      cash provided by operating activities
            
            
            2,369
            
            
            
            2,809CASH
      FLOWS FROM INVESTING ACTIVITIES:Property
      plant and equipment purchases
            
            
            (196
            )
            
            
            (98
            )Net
      cash used in investing activities
            
            
            (196
            )
            
            
            (98
            )CASH
      FLOWS FROM FINANCING ACTIVITIES:Repayment
      of revolving loan
            
            
            (4,982
            )
            
            
            -Repayment
      of long-term debt
            
            
            (495
            )
            
            
            (506
            )Net
      cash used in financing activities
            
            
            (5,477
            )
            
            
            (506
            )EFFECT
      OF EXCHANGE RATE CHANGES ON CASH
            
            
            70
            
            
            
            (450
            )CASH
      AND CASH EQUIVALENTS INCREASE (DECREASE) FOR THE PERIOD
            
            
            (3,234
            )
            
            
            1,755CASH
      AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD
            
            
            7,983
            
            
            
            7,828CASH
      AND CASH EQUIVALENTS, END OF THE PERIOD
            
            $
            4,749
            
            
            $
            9,583SUPPLEMENTAL
      DISCLOSURE OF CASH FLOW INFORMATION:Cash
      paid forInterest
            
            $
            158
            
            
            $
            81Taxes
            
            
            126
            
            
            
            396





See notes
to consolidated financial statements.




6




DEL
GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


(Dollars
in thousands, except per share data)


(Unaudited)




NOTE
1 – BASIS OF PRESENTATION




The
accompanying unaudited consolidated financial statements of Del Global
Technologies Corp. and its subsidiaries (the “Company”) have been prepared in
accordance with accounting principles generally accepted in the United States
for interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X.  Accordingly, they do not include all of
the information and footnotes required by accounting principles generally
accepted in the United States of America for complete financial
statements.  In the opinion of management, all adjustments (consisting
only of normal recurring adjustments) considered necessary for a fair
presentation of the results for the interim periods have been
included.  Results of operations for the interim periods are not
necessarily indicative of the results that may be expected for the full
year.  These consolidated financial statements should be read in
conjunction with the financial statements and the notes thereto included in the
Company’s annual report on Form 10-K filed with the Securities and Exchange
Commission (the “SEC”) for the fiscal year ended August 1, 2009.  The
Company evaluated subsequent events through December 14, 2009.




Certain
prior year’s amounts have been reclassified to conform to the current period
presentation, which excludes the Company’s Del Medical Imaging subsidiary from
continuing operations.




NEW
ACCOUNTING PRONOUNCEMENTS




In June
2009, the Financial Accounting Standards Board issued ASU 2009-01, “Amendments
based on Statement of Financial Accounting Standards No. 168 – The FASB
Accounting Standards Codification and the Hierarchy of Generally Accepted
Accounting Principles.” It establishes the Codification as the sole source of
authoritative U.S. GAAP.  The Codification categorizes all U.S. GAAP
as either authoritative or nonauthoritative, and all guidance contained in the
Codification carries on equal level of authority.




ASC 105 is
effective for financial statements issued for interim and annual periods ending
after September 15, 2009.  Adoption of the provisions of ASC 105 did
not have a material impact on the Company’s consolidated financial
statements.  The Company has revised its references to
pre-Codification GAAP in its financial statements for the quarters ended October
31, 2009 and November 1, 2008.




Other
accounting standards that have been issued by the FASB or other
standards-setting bodies that do not require adoption until a future date are
not expected to have a material impact on the consolidated financial statements
upon adoption.




7




NOTE
2 – DISCONTINUED OPERATIONS




On
November 24, 2009, the Company consummated the sale of certain of the assets and
product lines of its Del Medical Imaging Corp. wholly-owned subsidiary (“DMI”),
to an affiliate of U.M.G. Inc. (“UMG or the Acquirer”).




Pursuant
to the agreement, the Acquirer (i) assumed all of the Company’s and DMI’s
post-closing obligations in connection with the Company’s lease of its
facilities in Roselle, Illinois, (the Company remains secondarily liable on the
lease obligations), (ii) accepted all of DMI’s inventory related to the DMI
business on a consignment basis, (iii) hired select DMI employees, (iv)
indemnified the Company for potential employee severance obligations and (v)
assumed certain other liabilities of the business, including outstanding
warranty obligations.




The
Company’s discontinued operations loss for the first quarter of fiscal 2010
is:




Three
                Months
                Ended
            
            
            Three
                Months
                EndedOctober 31,
                2009
            
            
            November
      1,
                2008Net
      sales
            
            $
            3,517
            
            
            $
            8,071Loss
      from operations
            
            $
            (1,263
            )
            
            $
            (1,157
            )Asset
      writedowns to fair value
            
            
            (1,820
            )
            
            
            -Accrued
      expenses
            
            
            (20
            )
            
            
            -Total
      Loss
            
            $
            (3,103
            )
            
            $
            (1,157
            )Loss
      per share – Basic and Diluted:
              From
      operations
            
            $
            (0.05
            )
            
            $
            (0.05
            )Loss
      on sale of operations
            
            
            (0.08
            )
            
            
            -Loss
      per share – discontinued operations
            
            $
            (0.13
            )
            
            $
            (0.05
            )







The
Company will report additional losses in subsequent periods of approximately
$1.4 million related to activity to complete the business disposition, including
severance, legal and corporate relocation expenses.




NOTE
3 – INVENTORIES




Inventories
are 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 evaluated using
perpetual inventory records for interim reporting periods.  For
certain subsidiaries during interim periods, the Company estimates the amount of
labor and overhead costs related to finished goods inventories.  As of
October 31, 2009, finished goods represented approximately 24.5% of the gross
carrying value of our total gross inventory.  The Company believes the
estimation methodologies used to be appropriate and are consistently
applied.




8




October
      31,
                2009
            
            
            August
                1,
      2009Raw
      materials and purchased parts
            
            $
            12,431
            
            
            $
            13,294Work-in-process
            
            
            1,928
            
            
            
            1,929Finished
      goods
            
            
            4,662
            
            
            
            5,27719,021
            
            
            
            20,500Less
      allowance for  excess and obsolete inventories
            
            
            (5,402
            )
            
            
            (4,496
            )Total
      inventories
            
            $
            13,619
            
            
            $
            16,004





NOTE
4 – PRODUCT WARRANTIES




The
Company’s products are covered primarily by one-year warranty plans and in some
cases optional extended contracts may be offered covering products for periods
up to five years, depending upon the product and contractual terms of
sale.  The Company establishes allowances for warranties on an
aggregate basis for specifically identified, as well as anticipated, warranty
claims based on contractual terms, product conditions and actual warranty
experience by product line.




The
activity in the warranty reserve accounts in the first quarters of fiscal 2010
and 2009 is as follows:




Three
      Months EndedOctober
      31,
                2009
            
            
            November
      1,
                2008Balance
      at beginning of period
            
            $
            704
            
            
            $
            1,077Provision
      for anticipated warranty claims
            
            
            18
            
            
            
            69Costs
      incurred related to warranty claims
            
            
            (39
            )
            
            
            (157
            )Liability
      related to discontinued operations
            
            
            (106
            )
            
            
            -Effect
      of foreign currency fluctuation
            
            
            20
            
            
            
            (87
            )Balance
      at end of period
            
            $
            597
            
            
            $
            902





The
liability related to warranties is included in accrued expenses on the
accompanying Consolidated Balance Sheets.




NOTE
5 – COMPREHENSIVE INCOME (LOSS)




Comprehensive
income for the Company includes foreign currency translation adjustments and net
income reported in the Company’s Consolidated Statements of
Operations.




Comprehensive
income for the fiscal 2010 and 2009 periods presented is as
follows:




Three
      Months EndedOctober
      31,
                2009
            
            
            November
      1,
                2008Net
      loss
            
            $
            (3,502
            )
            
            $
            (609
            )Foreign
      currency translation adjustments
            
            
            577
            
            
            
            (1,740
            )Comprehensive
      loss
            
            $
            (2,925
            )
            
            $
            (2,349
            )




9




NOTE
6 – INCOME (LOSS) PER SHARE




Common
shares outstanding exclude 2,182,323 and 654,464 shares of treasury stock for
the periods ended October 31, 2009 and November 1, 2008,
respectively.  The computation of dilutive securities includes the
assumed conversion of warrants and employee stock options to purchase Company
stock if such conversion is dilutive.




Three
      Months EndedOctober
      31,
                2009
            
            
            November
      1,
                2008Numerator:Net
      Loss
            
            $
            (3,502
            )
            
            $
            (609
            )Denominator:
      (shares in thousands)Weighted
      average number of common shares outstanding used for basic income per
      share
            
            
            22,718
            
            
            
            24,243Effect
      of dilutive securities
            
            
            -
            
            
            
            57Denominator
      for diluted income per share
            
            
            22,718
            
            
            
            24,300Loss
      per common share:Basic
            
            $
            (0.15
            )
            
            $
            (0.03
            )Diluted
            
            $
            (0.15
            )
            
            $
            (0.03
            )





Antidilutive
securities excluded from above computations:




Three
      Months EndedOctober
      31,
                2009
            
            
            November
      1,
                2008Employee
      stock options
            
            
            2,336
            
            
            
            1,792Warrants
            
            
            -
            
            
            
            513





NOTE
7 – SHORT-TERM CREDIT FACILITIES AND LONG-TERM DEBT




Short-term
credit facilities are summarized as follows:




Revolving
      lines of credit:
            
            October
      31,
                2009
            
            
            August
      1,
                2009Domestic
            
            $
            2,399
            
            
            $
            7,400Foreign
            
            
            115
            
            
            
            92Total
            
            $
            2,514
            
            
            $
            7,492




10





Long term
debt at October 31, 2009 and August 1, 2009 is summarized as
follows:




October
      31,
                2009
            
            
            August
      1,
                2009Foreign
      capital lease obligations
            
            $
            1,883
            
            
            $
            1,931Foreign
      credit facilities
            
            
            1,424
            
            
            
            1,585Foreign
      Italian government loans
            
            
            370
            
            
            
            522Total
      long term debt
            
            
            3,677
            
            
            
            4,038Less
      current portion of long-term bank debt
            
            
            (1,729
            )
            
            
            (1,653
            )Long
      term debt, less current portion
            
            $
            1,948
            
            
            $
            2,385





As of
October 31, 2009 and August 1, 2009, the Company had approximately $601 and
$1,600 of availability under the Capital One Facility.




There are
certain covenants that the Company must meet.  As of the end of the
fourth quarter of fiscal 2009, the Company was non-compliant with the following
covenants: the Senior U.S. Debt Ratio and Fixed Charge Coverage Ratio covenants
under the Capital One Credit facility, due to lower than anticipated performance
during fiscal 2009.  On October 30, Capital One Leverage Finance Corp.
waived the non-compliance with these covenants for the fourth quarter of fiscal
2009 and amended future covenants through May 24, 2010, the credit facility’s
maturity date.




On October
30, 2009, the Capital One Facility was amended and restated.  As
restated, the Capital One Facility provides for a $3.0 million formula based
revolving credit facility based on the Company’s RFI division’s eligible
accounts receivable, inventory and real estate as defined in the credit
agreement.  Interest on the revolving credit and capital expenditure
borrowings is payable at prime plus 2.0% or alternatively, at a LIBOR rate plus
4.5%.  Other changes to the terms and conditions of the original loan
agreement include the modification of covenants and the addition of monthly
collateral reporting.




In
addition, the Company requested and was granted consent by Capital One to
relocate the chief executive office and principal place of business to the
Company’s Bay Shore, New York facility.




Management
believes that if additional financing is needed once the U.S. revolving credit
facility matures on May 24, 2010, they would be able to obtain new asset based
financing on the remaining U.S. subsidiary, secure a mortgage on the building
owned by the U.S. subsidiary or dividend necessary funds from the foreign
subsidiary.  The Company can make no assurances that it will be able
to obtain additional financing in the future on terms favorable to the Company
or at all.




The
Company’s Villa subsidiary maintains short term credit facilities which are
renewed annually with Italian banks.  The current balance due on these
credit facilities at October 31, 2009 and August 1, 2009 is $115 and $92,
respectively.  Available borrowing under the credit facilities is
$11,500 and variable interest rates currently range from 3.7% -
14.25%.




In October
2006, Villa entered into a 1.0 million Euro loan for financing of R&D
projects, which were completed in April 2008.  Interest, is payable at
Euribor plus 1.04 points, currently 2.308%.  The note is repayable
over a 5 year term. Repayment began in September 2008 and will be completed in
September 2011.  The note contains a financial covenant which provides
that the net equity of Villa cannot fall below 5.0 million
Euros.  Villa’s net equity at October 31, 2009 was 11.4 million
Euro.




11




In
December 2006, Villa entered into a 1.0 million Euro loan with interest payable
at Euribor 3 months plus 0.95 points, currently 1.7%.  The loan is
repayable over a 4 year period ending in December 2010.




Villa is
also a party to two Italian government long-term loans with a fixed interest
rate of 3.425% with principal payable annually through maturity in February and
September 2010.  At October 31, 2009, total principal due is
0.3 million Euro.  Villa’s manufacturing facility is subject to a
capital lease obligation which matures in March 2011 with an option to
purchase.  Villa is in compliance with all related financial covenants
under these short and long-term financings.




NOTE
8 – SEGMENT INFORMATION




The
Company has three reportable segments: Medical Systems Group, Power Conversion
Group and Other.  The “Other” segment includes unallocated corporate
costs.  Interim segment information is as follows:




For
      three months ended
              October
      31, 2009
            
            Medical
                Systems
                Group
            
            
            Power
                Conversion
                Group
            
            
            Other
            
            
            TotalNet
      Sales to External Customers
            
            $
            9,495
            
            
            $
            2,087
            
            
            
            -
            
            
            $
            11,582Cost
      of sales
            
            
            7,568
            
            
            
            1,439
            
            
            
            -
            
            
            
            9,007Gross
      margin
            
            
            1,927
            
            
            
            648
            
            
            
            
            
            
            
            2,575Operating
      expenses
            
            
            1,736
            
            
            
            577
            
            
            
            358
            
            
            
            2,671Operating
      income (loss)
            
            $
            191
            
            
            $
            71
            
            
            $
            (358
            )
            
            $
            (96
            )





For
      three months ended
              November
      1, 2008
            
            Medical
                Systems
                Group
            
            
            Power
                Conversion
                Group
            
            
            Other
            
            
            TotalNet
      Sales to External Customers
            
            $
            11,487
            
            
            $
            2,733
            
            
            $
            -
            
            
            $
            14,220Cost
      of sales
            
            
            8,767
            
            
            
            1,745
            
            
            
            -
            
            
            
            10,512Gross
      margin
            
            
            2,720
            
            
            
            988
            
            
            
            -
            
            
            
            3,708Operating
      expenses
            
            
            1,898
            
            
            
            613
            
            
            
            265
            
            
            
            2,776Operating
      income (loss)
            
            $
            822
            
            
            $
            375
            
            
            $
            (265
            )
            
            $
            932





NOTE
9 – STOCK OPTION PLAN AND WARRANTS




During the
first quarter of fiscal year 2010, the Company granted options to purchase
100,000 common shares under the 2007 Incentive Stock Plan at a weighted average
exercise price of $0.51 per share.  The options under these grants
vest 25% immediately and 25% per year over the next three years.  The
aggregate fair value of these options was $34. The fair values of the grants
awarded were determined using the following assumptions in the Black-Scholes
model: an estimated life of seven years, volatility of approximately 69%, risk
free interest rate of 3.2% and the assumption that no dividends will be
paid.




In the
first quarter of fiscal 2010 and 2009, the Company recorded $78 and $52,
respectively, of compensation expense related to stock options.  There
were no exercises of stock options during the first quarter of fiscal 2010 or
2009.




As of
November 1, 2008, 512,500 warrants to purchase common stock were
outstanding.  These warrants expired on March 28,
2009.  There were no warrant exercises during the first quarter of
fiscal 2009.




12




NOTE
10 – CONTINGENCIES




The
information set forth under Part II, Item 1 contained in the “Legal Proceedings”
is incorporated herein by reference.














SUBSEQUENT
EVENTS




As
described in Note 2, the Company consummated the sale of its Del Medical Imaging
business on November 24, 2009.




13




DEL
GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES




Item
      2.
            MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS




This
Management’s Discussion and Analysis of Financial Condition and Results of
Operations contains forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995.  These statements are based
on current expectations and the current economic environment and are not
guarantees of future performance.  They involve a number of risks and
uncertainties that are difficult to predict including, but not limited to, our
ability to implement our business plan, retention of management, changing
industry and competitive conditions, obtaining anticipated operating
efficiencies, securing necessary capital facilities and favorable determinations
in various legal and regulatory matters.  Actual results could differ
materially from those expressed or implied in the forward-looking
statements.  Important assumptions and other important factors that
could cause actual results to differ materially from those in the
forward-looking statements are specified in the Company’s filings with the
Securities and Exchange Commission including our Annual Report on Form 10-K for
the fiscal year ended August 1, 2009, our Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K.




OVERVIEW




The
Company is primarily engaged in the design, manufacture and marketing of
cost-effective medical and dental diagnostic imaging systems consisting of
stationary and portable imaging systems, radiographic/fluoroscopic systems,
dental imaging systems and digital radiography systems.  The Company
also manufactures electronic filters, high voltage capacitors, pulse modulators,
transformers and reactors, and a variety of other products designed for
industrial, medical, military and other commercial applications.  The
Company manages its business in two operating segments: the Medical Systems
Group and the Power Conversion Group.  In addition, the Company has a
third reporting segment, Other, comprised of certain unallocated corporate
General and Administrative expenses.  See “Segment Information” in
Part I, Item 1 of this Quarterly Report on Form 10-Q for the fiscal quarter
ended October 31, 2009 (this “Quarterly Report”) for discussions of the
Company’s segments.




Effective
November 24, 2009, the Company sold the Del Medical Imaging
business.  It is reflected as a discontinued operation in the
financial statements of the Company and prior periods have been
restated.  See Note 2 of Notes to Consolidated Financial Statements
included in Part I Item 1.




CRITICAL
ACCOUNTING POLICIES




Complete
descriptions of significant accounting policies are outlined in Note 1 of the
Notes to Consolidated Financial Statements included in our Annual Report on Form
10-K for the fiscal year ended August 1, 2009.  Within these policies,
the Company has identified the accounting for revenue recognition, deferred tax
assets and the allowance for excess and obsolete inventory as being critical
accounting policies due to the significant amount of estimates
involved.  In addition, for interim periods, the Company has
identified the valuation of finished goods inventory as being critical due to
the amount of estimates involved.




14




Revenue
Recognition




The
Company recognizes revenue upon shipment, provided there is persuasive evidence
of an arrangement, there are no uncertainties concerning acceptance, the sale
price is fixed, collection of the receivable is probable and only perfunctory
obligations related to the arrangement need to be completed.  The
Company maintains a sales return allowance, based upon historical patterns, to
cover estimated normal course of business returns, including defective or out of
specification product.  The Company’s products are covered primarily
by one-year warranty plans and in some cases optional extended warranties for up
to five years are offered.  The Company establishes allowances for
warranties on an aggregate basis for specifically identified, as well as
anticipated, warranty claims based on contractual terms, product conditions and
actual warranty experience by product line.  The Company recognizes
service revenue when repairs or out of warranty repairs are
completed.  The Company has an FDA obligation to continue to provide
repair service for certain medical systems for up to seven years past the
warranty period.  These repairs are billed to the customers at market
rates.




Deferred
Income Taxes




The
Company accounts for deferred income taxes in accordance with Statement of
Financial Accounting Standards (“SFAS”) ASC 740, “Accounting for Income
Taxes,”  whereby it recognizes deferred income tax assets and
liabilities for temporary differences between financial reporting basis and
income tax reporting basis and for tax credit carryforwards.




The
Company periodically assesses the realization of its net deferred income tax
assets.  This evaluation is primarily based upon current operating
results and expectations of future operating results.  A valuation
allowance is recorded if the Company believes its net deferred income tax assets
will not be realized.  The Company’s determination is based on what it
believes will be the more likely than not result.




For fiscal
year 2009 the Company recorded operating income on a consolidated
basis.  The Company’s foreign tax reporting entity has historically
been profitable, while its U.S. tax reporting entities incurred a taxable
loss.  Based primarily on these results, the Company concluded that it
should maintain a 100% valuation allowance on its net U.S. deferred income tax
assets.  For the quarter ended October 31, 2009, the Company continues
to carry a 100% valuation allowance on its net U.S. deferred income tax
asset.




The
Company recorded a tax expense with respect to its foreign subsidiary’s income
in all periods presented and based on a more likely than not standard, believes
that the foreign subsidiary’s net deferred income tax asset at October 31, 2009
will be realized.




The
Company’s primary income tax jurisdictions are in the United States and
Italy.  The Company is currently not under audit in either
jurisdiction.  Tax years since 2003 are open pursuant to statutes in
Italy and tax years since 2004 are open pursuant to statutes in the United
States.




It is the
Company’s practice to recognize interest and/or penalties related to income tax
matters in tax expense.  As of October 31, 2009, there were no
material interest or penalty amounts to accrue.




Excess
and Obsolete Inventory




The
Company re-evaluates allowance for obsolete inventory once a quarter, and this
allowance comprises the most significant portion of our inventory
reserves.  The re-evaluation of reserves is based on a written policy,
which requires at a minimum that reserves be established based on our analysis
of historical actual usage on a part-by-part basis.




15





In
addition, if management learns of specific obsolescence in addition to this
minimum formula, these additional reserves will be recognized as
well.  Specific obsolescence might arise due to a technological or
market change, or based on cancellation of an order.  As the
Company  typically does not purchase inventory substantially in
advance of production requirements, we do not expect cancellation of an order to
be a material risk.  However, market or technology changes can
occur.




Valuation
of Finished Goods Inventory




In
addition, the Company uses certain estimates in determining interim operating
results.  The most significant estimates in interim reporting relate
to the valuation of finished goods inventories.  For interim periods,
we estimate the amount of labor and overhead costs related to finished goods
inventories.  As of October 31, 2009, finished goods represented
approximately 24.5% of the gross carrying value of our total gross
inventory.  We believe the estimation methodologies used to be
appropriate and are consistently applied.









CONSOLIDATED
RESULTS OF OPERATIONS




Three
Months Ended October 31, 2009 Compared to Three Months Ended November 1,
2008




The
following table summarizes key indicators of consolidated results of
operations:





Three
      Months Ended(Dollars
      in thousands, except per share data)
            
            Oct.
      31,
              2009
            
            
            Nov.
      1,
              2008Sales
            
            $
            11,582
            
            
            $
            14,220Gross
      margin as a percentage of sales
            
            
            22.2
            %
            
            
            26.1
            %Total
      operating expenses
            
            
            2,671
            
            
            
            2,776Net
      earnings (loss) from continuing operations
            
            
            (96
            )
            
            
            932Diluted
      earnings per share—continuing operations
            
            $
            (0.02
            )
            
            $
            0.02





The
following table summarizes sales:





Three
      Months Ended(Dollars
      in thousands, except per share data)
            
            Oct.
      31,
              2009
            
            
            Nov.
      1,
              2008Medical
      System Group
            
            $
            9,495
            
            
            $
            11,487Power
      Conversion Group
            
            
            2,087
            
            
            
            2,733Total
            
            $
            11,582
            
            
            $
            14,220







Consolidated
net sales for the first quarter of fiscal 2010 decreased 18.6% to $11.6 million
from $14.2 million in the first quarter of fiscal 2009, primarily due to
decreased volume at the Medical Systems Group.  Net sales at the
Medical Systems Group declined 17.3% to $9.5 million from the comparable prior
year period, due to decreased international customer orders.  Sales at
the Power Conversion Group during the first quarter of fiscal 2010 were $2.1
million, $0.6 million below the level of sales in the comparable prior year
period.




Consolidated
backlog at October 31, 2009, adjusted for discontinued operations, was $14.7
million compared to $10.6 million at August 1, 2009.




16





Backlog at
the Medical Systems Group increased $2.7 million from August 1,
2009.  Backlog at Power Conversion Group increased $1.4 million to
$5.9 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.




Consolidated
gross margin decreased to 22.2% of sales during the first quarter of fiscal 2010
from 26.1% of sales in the first quarter of fiscal 2009, due to the impact of
lower sales volume.  Gross margin at the Medical Systems Group during
the first quarter of fiscal 2010 declined to 20.3% from 23.7% in the prior
year’s first quarter attributable to the reduced volume. Gross margin at Power
Conversion Group decreased to 31.1% from 36.1% in the first quarter of fiscal
2009.




Total
operating expenses decreased $0.1 million to $2.7 million in the first quarter
of 2010 from $2.8 million in the same period one year ago.




The
operating loss from continuing operations for the first quarter of fiscal 2010
was $0.1 million compared to operating income of $0.9 million in the comparable
prior year period.  Operating income at the Medical Systems Group was
$0.2 million compared to operating income of $0.8 million in the first quarter
of fiscal 2009 due to reduced volume. The Power Conversion Group generated
operating income of $0.1 million, compared to operating income of $0.4 million
in the comparable prior year period.  Unallocated corporate expenses
for the first quarter of fiscal 2010 totaled $0.4 million as compared to $0.3
million in the comparable prior year period.




The
discontinued operations loss of $3.1 million in the first quarter of fiscal 2010
reflects a $1.3 million loss from operations on sales of $3.5 million and $1.8
million from the write-down of assets to net realizable value.  The
discontinued operations in the first quarter of fiscal 2009 incurred a loss from
operations of $1.2 million on sales of $8.1 million.




The net
loss in the first quarter of fiscal 2010 was $3.5 million, or $0.15 per basic
and diluted share, compared to net loss of $0.6 million, or $0.03 per basic and
diluted share in the comparable prior year period.  For the first
quarter of fiscal 2010, there were approximately 22.7 million weighted
average  diluted common shares  outstanding (“shares
outstanding”) as compared to 24.3 million diluted shares outstanding in the
first quarter of fiscal 2009.  The decrease in diluted shares
outstanding was due to the impact of share repurchase program during the second
quarter of fiscal 2009.




FINANCIAL
CONDITION


LIQUIDITY
AND CAPITAL RESOURCES




The
Company funds it’s investing and working capital needs through a combination of
cash flow from operations, short-term credit facilities and the proceeds of the
Rights Offering described below.




Working
Capital — At October 31, 2009 and August 1, 2009, our working capital was
approximately $19.2 million and $22.1 million, respectively.  The
decrease in working capital for the first three months of fiscal 2010 related
primarily to a decrease in revolving loan balance.




At October
31, 2009 and August 1, 2009, the Company had approximately $4.7 million and $8.0
million, respectively, in cash and cash equivalents.  This decrease is
primarily due to repayment of the revolving loan balance.  As of
October 31, 2009, we had approximately $0.6 million of excess borrowing
availability under our domestic revolving credit facility compared to $1.6
million at August 1, 2009.




In
addition, as of October 31, 2009 and August 1, 2009, our Villa subsidiary had
$11.5 million of excess borrowing availability under its various short-term
credit facilities.




17





Terms of
the Italian credit facilities do not permit the use of borrowing availability to
directly finance operating activities at our U.S. subsidiaries.









The
      following is a summary of the Company’s cash flows:
            
            Three
      Months Ended(Dollars
      in thousands, except per share data)
            
            Oct.
      31,
              2009
            
            
            Nov.
      1,
              2008Net
      cash provided by operating activities
            
            
            2,369
            
            
            
            2,809Net
      cash used in investing activities
            
            
            (196
            )
            
            
            (98
            )Net
      cash used in financing activities
            
            
            (5,477
            )
            
            
            (506
            )Effect
      of exchange rate changes on cash
            
            
            70
            
            
            
            (450
            )Net
      increase/(decrease) in cash and cash equivalents
            
            
            (3,234
            )
            
            
            1,755Cash
      and cash equivalents at beginning of year
            
            
            7,983
            
            
            
            7,828Cash
      and cash equivalents at end of period
            
            $
            4,749
            
            
            $
            9,583







Cash Flows
from Operating Activities – For the three months ended October 31, 2009, the
Company generated approximately $2.4 million of cash from operations, compared
to $2.8 million in the comparable prior fiscal year period.




Cash Flows
from Investing Activities — The Company made $0.2 million of facility
improvements and capital equipment expenditures for the three months ended
October 31, 2009, which was comparable to the facility improvements and capital
equipment expenditures for the comparable prior fiscal year period.




Cash Flows
from Financing Activities — During the three-month period ended October 31, 2009
the Company repaid a total of approximately $5.5 million of indebtedness on our
revolving loan agreement, as well as on our Italian borrowings, as compared to
$0.5 million in the comparable prior fiscal year period.




The
Company’s contractual obligations, including debt and operating leases, as
previously disclosed on our Annual Report on Form 10-K for the fiscal year ended
August 1, 2009, have not changed materially at October 31, 2009.  The
Company has a revolving credit facility with Capital One Leverage Finance Corp.
as well as short-term credit facilities and long-term debt, including a capital
lease obligation at the Company’s Villa subsidiary located in
Italy.  The terms of these facilities are more fully described in Note
7 of the “Notes to Consolidated Financial Statements”
and  incorporated herein by reference.




On October
30, 2009, the Capital One Facility was amended and restated.  As
restated, the Capital One Facility provides for a $3.0 million formula based
revolving credit facility based on the Company’s RFI division’s eligible
accounts receivable, inventory and real estate as defined in the credit
agreement.




As of
October 31, 2009 the Company had $2,399 and $115 in borrowings under its
domestic and foreign short-term credit facilities, respectively.  As
of October 31, 2009, the Company had $0.6 of availability under the domestic
credit facility and $11.5 million of excess borrowing availability under its
Italian bank credit facilities.




Management
believes that if additional financing is needed once the U.S. revolving credit
facility matures on May 24, 2010, they would be able to obtain new asset based
financing on the remaining U.S. subsidiary, secure a mortgage on the building
owned by the U.S. subsidiary or dividend necessary funds from the foreign
subsidiary.  The Company can make no assurances that it will be able
to obtain additional financing in the future on terms favorable to the Company
or at all.




18




Contingencies




A
description of our contingencies is set forth above under Note 10 contained in
the “Notes to Consolidated Financial Statements” is incorporated herein by
reference.  Potential settlements required under legal proceedings
could have an adverse impact on financial condition and liquidity.




We
anticipate that cash generated from operations and amounts available from credit
facilities will be sufficient to satisfy currently projected operating cash
needs for at least the next twelve months, and for the foreseeable
future.




OFF
BALANCE SHEET COMMITMENTS AND ARRANGEMENTS




The
Company has not had any investments in unconsolidated variable interest entities
or other off balance sheet arrangements during any of the periods presented in
this Quarterly Report on Form 10-Q.




Item
      3.
            QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK




The
Company does not hold market risk sensitive instruments for trading
purposes.  The Company, however, recognizes market risk from interest
rate and foreign currency exchange exposure.  There have been no
changes in financial market risks as described in the Company’s Annual Report on
Form 10-K for the fiscal year ended August 1, 2009.




Item
      4.
            CONTROLS
      AND PROCEDURES




The
Company, under the supervision and with the participation of the Company’s
management, including John J. Quicke, President and Chief Executive Officer, and
Mark A. Zorko, Chief Financial Officer, has evaluated the effectiveness of the
design and operation of the Company’s “disclosure controls and procedures”, as
such term is defined in Rules 13a-15e and 15d-15e promulgated under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end
of the period covered by this Quarterly Report.  Based upon that
evaluation, the Chief Executive Officer and Chief Financial Officer have
concluded that the Company’s disclosure controls and procedures were effective
as of the end of the period covered by this Quarterly Report to ensure that all
material information required to be disclosed by the Company in reports that it
files or submits under the Exchange Act is accumulated and communicated to
management as appropriate to allow timely decisions regarding required
disclosure and that all such information is recorded, processed, summarized and
reported as specified in the SEC’s rules and forms.




There have
not been any changes in the Company’s internal control over financial reporting
during the fiscal quarter to which this Quarterly Report relates that have
materially affected, or are reasonably likely to materially affect, the
Company’s internal control over financial reporting.




A control
system, no matter how well conceived and operated, can provide only reasonable,
not absolute assurance that the objectives of the control system are
met.  Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, within a company have been
detected.




PART
II – OTHER INFORMATION




Item
      1.
            LEGAL
      PROCEEDINGS




RFI – On
May 24, 2007, the Company’s Power Conversion subsidiary, RFI Corporation
(“RFI”), was served with a subpoena to testify before a grand jury of the United
States District Court of New York and to provide items and records from its Bay
Shore NY offices in connection with U.S. Department of Defense
contracts.




19





A search
warrant from the United States District Court, Eastern District of New York was
issued and executed with respect to such offices.  The Company
believes that it is in full compliance with the quality standards that its
customers require and is fully cooperating with investigators to assist them
with their review.  RFI continues to ship products to the U.S.
Government, as well as to its commercial customers.




APERGIS -
On April 28, 2008, George Apergis (“Apergis”), the former General Manager of
RFI, filed a charge with the EEOC alleging that RFI discriminated against him by
terminating his employment with RFI on December 18, 2007. Apergis alleged three
claims against RFI: (1) violation of Title VII of the Civil Rights Act; (2)
violation of the Age Discrimination in Employment Act and (3) retaliation. 
RFI responded to the EEOC charge with a position statement filed with the EEOC
on June 26, 2008 denying each allegation of the charge.  On December 3,
2009 the EEOC issued a Dismissal and Notice of Rights.  The EEOC made no
finding as to the merits of the claim.  Apergis has ninety (90) days from
the date he receives the notice to file a claim in federal court.  RFI
intends to defend vigorously against Apergis.




OTHER –
From time to time the Company is a defendant in legal actions in various U.S.
and foreign jurisdictions, arising from the normal course of
business.  Management believes the Company has meritorious defenses to
such actions and that the outcomes will not be material to the Company’s
consolidated financial statements.









Item
      1A.
            RISK
      FACTORS




The risk
factors included in our Annual Report on Form 10-K for fiscal year ended August
1, 2009 have not materially changed.




Item
      6.
            EXHIBITS




Exhibits31.1*
            Certification
      of the Principal Executive Officer, John J. Quicke, pursuant to Section
      302 of the Sarbanes-Oxley Act of 2002.31.2*
            Certification
      of the Principal Financial Officer, Mark A. Zorko, pursuant to Section 302
      of the Sarbanes-Oxley Act of 2002.32.1*
            Certification
      of the Principal Executive Officer, John J. Quicke, pursuant to 18 U.S.C.
      Section 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.32.2*
            Certification
      of the Principal Financial Officer, Mark A. Zorko, pursuant to 18 U.S.C.
      Section 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.*
      Filed herewith





20





DEL
GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES




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/
      John J. QuickeJohn
      J. QuickePresident
      and Chief Executive Officer





/s/
      Mark A. ZorkoMark
      A. ZorkoChief
      Financial Officer





Dated:  December
14, 2009






21