FORM 10-K
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                            ANNUAL REPORT PURSUANT TO
                           SECTION 13 OR 15 (d)OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                     FOR THE FISCAL YEAR ENDED AUGUST 1,1998
                          COMMISSION FILE NUMBER 0-3319

                          DEL GLOBAL TECHNOLOGIES CORP.
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             (Exact name of registrant as specified in its charter)



            New  York                                      13-1784308   
 -----------------------------------           ---------------------------------
(State  or  other  jurisdiction  of           (IRS Employer Identification No.)
 incorporation or organization)





1 Commerce Park, Valhalla, New York                          10595       
----------------------------------------                   ---------- 
(Address of principal executive offices)                   (Zip Code)


Registrant's  telephone  number,  including area code:  914-686-3600
Securities registered  pursuant to Section  12(b) of the Act:  None
Securities  registered pursuant to Section 12(g) of the Act:


Title of each class                    Name of each exchange on which registered
  Common Stock,                                The Nasdaq Stock Market
 $.10 Par Value

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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 by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. X

The  aggregate  market value of the voting stock held by  non-affiliates  of the
registrant amounted to $44,578,013 at the close of business on October 30, 1998.

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the close of business on October 30, 1998.

                            Common Stock - 7,642,871


<PAGE>
                                     PART I

ITEM 1.     BUSINESS

            The  Company  is  comprised  of (i) Del  Global  Technologies  Corp.
("Del"),  a New York  corporation  which  was  incorporated  in  1954;  (ii) RFI
Corporation ("RFI"), a Delaware  corporation and wholly-owned  subsidiary of the
Company;   (iii)  Dynarad  Corp.   ("Dynarad"),   a  New  York  corporation  and
wholly-owned   subsidiary  of  the  Company;  (iv)  Bertan  High  Voltage  Corp.
("Bertan"),  a New York corporation and wholly-owned  subsidiary of the Company;
(v) Del Medical  Systems  Corp.  ("Del  Medical"),  a New York  corporation  and
wholly-owned subsidiary of the Company and (vi) Gendex-Del Medical Imaging Corp.
("Gendex-Del"),  a Delaware  corporation  and a  wholly-owned  subsidiary of the
Company (formerly known as the Gendex Medical Division of Dentsply International
Inc. ("Gendex").

            Del Global  Technologies  Corp. is primarily  engaged in the design,
manufacture  and marketing of medical  imaging  systems and critical  electronic
subsystems for medical imaging and diagnostic  products.  The Company's products
are designed to provide  cost-effective,  high-quality solutions to the needs of
its  customers.  The  Company's  medical  imaging  systems  include  mammography
systems,  neo-natal mobile imaging systems,  high frequency x-ray generators and
x-ray systems (both  stationary and portable) sold under both its tradenames and
private  labels.  The  Company's  critical  electronic   subsystems  are  custom
engineered  to complex  customer  performance  specifications  and include  high
voltage power components, such as power supplies,  capacitors,  transformers and
pulse  forming  networks.  These  products  are  utilized by original  equipment
manufacturers  ("OEMs") for medical  imaging and  diagnostic  products  having a
broad range of  applications  such as  computerized  tomography  (CT),  magnetic
resonance imaging (MRI), bone densitometry, radiography, blood analysis, medical
laser  surgery and nuclear  medicine.  As a result of its record for quality and
reliability,  the Company has developed close working relationships with its OEM
customers.  These  relationships  often result in the Company's selection as the
sole source  provider  of these  critical  electronic  subsystems  to OEMs.  The
Company  also  designs,  manufactures  and markets  precision  power  conversion
products for non-medical  applications and electronic noise suppression  systems
for telecommunications equipment.

            The Company's medical systems and critical electronic subsystems are
designed to meet the needs of the healthcare  industry to reduce medical imaging
and diagnostic  costs. The Company focuses its sales,  marketing and development
efforts primarily on medical imaging systems and critical electronic  subsystems
priced at under $100,000 per unit. The Company's  medical imaging systems have a
list price of  approximately  $9,000 to $70,000 per unit;  however,  the Company
believes that its products offer  comparable  performance to competing  products
typically priced higher.  The Company's  cost-effective  medical imaging systems
and subsystems also meet the increasing international demand for such products.

            OEMs  are  also   attempting  to  lower  their  cost  structures  by
outsourcing  their  requirements for certain critical  electronic  subsystems to
lower cost  manufacturers  such as the  Company.  The Company  has  successfully
utilized its engineering and manufacturing  skills to provide such subsystems on
a  cost-effective  basis.  In  addition,  the  Company's  longstanding  customer
relationships  have  provided  the Company  with  substantial  opportunities  to
demonstrate its expertise and expand its sales to OEMs.

            During  the past five years the  Company  has grown  internally  and
through  acquisitions into a company whose  predominant  business is serving the
medical imaging and diagnostic markets.  Most significantly,  in March, 1996 the
Company  completed the  acquisition of certain  assets of Gendex.  The Company's
sales of medical imaging products  increased from  approximately $9.4 million or
approximately  39% of total  net  sales in fiscal  1994 to  approximately  $43.9
million  or  approximately  71% of total net sales in  fiscal  1998.  Reflecting
worldwide demand for its products and increased international sales efforts, the
Company has  increased  export sales from  approximately  $6.8 million in fiscal
1994 to  approximately  $28.3  million in fiscal 1998.  Export sales  consist of
direct  sales  of the  Company's  products  and  sales  of  subsystems  that are
incorporated into OEM's products for export.

Industry Background

            Medical  Imaging  Systems.  Medical  imaging  systems  of the  types
manufactured  by the Company use x-ray  technology  to produce  images of matter
beneath an opaque  surface.  An imaging  system  principally  consists of a high
voltage  power supply,  an x-ray tube and an image  recording  system,  which is
usually film. X-rays are

                                        2
<PAGE>
generated  as a result of high  voltage  being  applied to the x-ray  tube.  The
performance of the x-ray system, including image resolution,  is directly linked
to the precision  performance of the high voltage power supply. The object to be
imaged is placed  between  the x-ray  tube and the film.  X-rays,  which are not
reflected  by opaque  surfaces,  pass  through  the  object and expose the film.
However,  if the object is comprised  of areas of varying  densities or chemical
compositions,  x-rays will be  absorbed by the denser  areas or areas of certain
chemical  compositions  in proportion to the density or chemical  composition of
the matter. As a result,  the film will be exposed to a varying degree,  thereby
producing an image of the density or chemical  variation within the object.  For
example,  since bone has a greater  density than the  surrounding  tissue in the
body, x-rays can be used to produce an image of a skeleton.

            X-ray systems are differentiated by a number of key  characteristics
such as image resolution, accuracy, portability, size and cost. The design of an
x-ray system  requires  complex  engineering  which  determines the  performance
factors required of the various components of the system.

            Critical Electronic  Subsystems.  Critical electronic subsystems for
medical  imaging and non-medical  applications of the types  manufactured by the
Company  consist  of high  voltage  power  conversion  components  such as power
supplies,  capacitors and transformers.  High voltage power supplies are used to
transform  commercially  generated  electric  power  from  low  voltage  to high
voltage.  High voltage power supplies raise the input voltage from the available
level to the  significantly  higher  level  required to operate  the  customer's
electronic  equipment.  They must be designed to meet specific  requirements and
involve  complex   engineering   including  specialty  high  voltage  magnetics,
specialty engineering materials and unique manufacturing  processes,  as well as
special testing and evaluation techniques.

            Noise Suppression  Products.  Noise suppression products are used to
reduce or  eliminate  interfering  signals  generated  by  internal  or external
electronic  components and equipment  which  otherwise  could interfere with the
normal  operation  of  electronic  equipment  and systems.  A noise  suppression
product may range in size from the  miniature  type,  which  utilizes  discoidal
ceramic monolithic  capacitors  (miniature capacitors made of ceramic material),
to  multi-circuit  subsystems  handling  high power  requirements  and  weighing
thousands  of pounds.  Poor  transmission  reception in  electronic  devices can
result from the proximate  operation of other electronic  devices which generate
unwanted  electrical  signals.  This  problem  is  severely  compounded  in many
communications environments where there are a large number of electronic devices
in a  confined  area,  such as in voice  or data  communications  systems  in an
airplane or ship.  Noise  suppression  products are required by various types of
equipment  manufacturers  in order to comply  with  government  regulations  and
specifications and commercial standards. These products may be integrated within
the  electronic  equipment  for which they have been designed or, in the case of
large noise suppression products,  connected externally to such equipment, or to
an external power source which may power an entire facility.

Medical Imaging Products

            Medical Imaging Systems.  The Company's  medical imaging systems are
sold under the GENDEX,  UNIVERSAL, XTek and Dynarad brand names. The list prices
of the  Company's  medical  x-ray  systems  range from  approximately  $9,000 to
$70,000 per unit.

            Mammography  Systems.  The  Company's   mammography  systems  permit
imaging  of the  breast  for  both  screening  and  diagnostic  procedures.  The
MAMEX(TM) high frequency  mammography  system uses a microprocessor  controlled,
constant  potential,  high frequency  generator for greater energy efficiency at
lower kV  outputs,  resulting  in images  with  higher  contrast.  The  system's
sophisticated  "Autocomp"  automatic kV program  ensures proper  selection of kV
within the first 50 milliseconds of exposure,  regardless of breast tissue type.
The NOVA SC mammography system features "PNEUFLO" pneumatic,  patient controlled
breast compression to reduce procedural  discomfort,  increase x-ray penetration
and produce  superior  image  resolution.  The NOVA SC  Mammography  System also
features a fully integrated micro-processor driven data management system.

            Neo-Natal  Imaging  Systems.  The Company markets and manufactures a
Neo-Natal  mobile  imaging  system  designed  to address  the  critical  imaging
requirements of a hospital's  Neo-Natal  department.  This mobile imaging system
provides a high frequency,  high resolution  image over a 40-70 kVp range and is
specifically designed for imaging of pediatric patients.

                                        3
<PAGE>
            Stationary  Medical X-ray Systems.  Under the GENDEX brand name, the
Company produces a full product line of high frequency medical x-ray generators,
such as the GENDEX GX-30,  which  economically  provide  superior  quality x-ray
generation associated with high frequency technology, resulting in lower patient
dosage, extended tube life and less blurring due to patient motion when compared
to single phase  generators.  The GX-30  generator  was  developed  for both the
replacement and new installation markets.

            The Company also produces a broad line of single phase  radiographic
generators,  floor and wall tube  mounts,  tables and film  holders.  The EV-200
elevating x-ray table has a four-way float top and adjustable height features to
ease the positioning of  non-ambulatory  and casted  patients.  The Company also
markets a floor rotating tubestand.

            The  Company's  premium  x-ray  products,  the ATC  725/525  line of
products, are anatomically programmed high frequency generators.  The technician
needs  only to input the body  region to be  imaged,  the  desired  view of that
region  and  patient   thickness.   The   generators,   through   microprocessor
controllers,  will then automatically select the proper exposure parameters from
the  database  of  2,400  possible  combinations.   A  total  of  120  different
examinations  covering  eight body  regions and up to 15 views per region can be
preprogrammed into the unit's Anatomically  Programmed Radiology ("APR") memory.
These controls assure the production of consistent films for a given examination
regardless of the technician performing the examination.

            Portable Medical X-Ray Systems.  The Company is also a leader in the
portable  x-ray  market  with its HF-110A  and  PHANTOM  systems.  Both of these
portable systems utilize high frequency, microprocessor controlled technology to
produce  consistent  quality x-rays with the added  advantages of being smaller,
lighter in weight and more  cost-effective  than stationary x-ray systems.  Both
systems are FDA  certified,  UL  recognized  and meet  international  safety and
quality standards.

            Critical  Electronic  Subsystems  for  Medical   Applications.   The
Company's  research and  development  program is often  conducted in conjunction
with its customers in order to obtain custom solutions for end use requirements.
As a result, the Company is often the sole source provider to its OEM customers.
The Company's high voltage power supplies  deliver  precisely  regulated  output
power  while  operating  over a very  wide  range  of  temperatures,  altitudes,
humidity,  shock and  vibration  conditions.  The  Company  has  designed  power
supplies  that deliver  power over a range from several watts up to 60 kilowatts
with  output  voltage  ranging  from  hundreds  of volts up to  several  hundred
thousand volts. Operating frequencies range from 60 hertz up to 100 kilohertz.

Non-Medical Products

            Critical  Electronic  Subsystems  for High Voltage Power  Industrial
Applications.  The Company's  critical  electronic  subsystems  for high voltage
power conversion  applications  consist of high voltage DC power supplies,  high
and low voltage power supplies and high voltage transformers.  Such products are
used in many leading-edge high technology scientific and industrial applications
by OEMs,  universities and private research  laboratories.  The Company has also
been a supplier of miniature  HV power  supplies  used in detection  systems for
hazardous materials, serving this market for approximately 20 years.

            The Company has developed  state-of-the-art,  multi-channel critical
electronic subsystems for industrial laser machining,  ion implantation,  energy
exploration,   electrostatic  deposition,   photomultiplier  tube,  x-ray  tube,
travelling  wave  tube,  cathode  ray  tube  and  ion  pump  applications,  food
processing and steel rolling. In addition,  critical subsystems of the Company's
high voltage DC power supplies are included in analytical and material  research
equipment,  nuclear instrumentation,  process control equipment,  automatic test
equipment,   scanning  electron  microscopes  and  semi-conductor  manufacturing
equipment.

            Noise   Suppression   Products.   Certain  of  the  Company's  noise
suppression  products are  designed to assure that  equipment  manufactured  for
government  applications  meets rigid standards for interference  generation and
susceptibility.  In addition,  these products are designed to prevent classified
cryptographic  and data signals used in government and  industrial  applications
from   accidentally   emanating  and   compromising   government  or  industrial
intelligence.  The Company's noise suppression product designs are listed on the
United States  Government's  Qualified Products Lists. Such products are used on
satellites,  space  applications  and other critical  applications  that require
approved high reliability products.
                                        4
<PAGE>
                  The Company's noise suppression products are used in voice and
data communications equipment,  computer equipment and government communications
systems, cellular telephone relay sites (cells) and other state-of-the-art voice
and data transmission  modalities.  The Company's filtering equipment allows the
major suppliers of telephone and cellular services to isolate subscribers' calls
and markedly improve overall system performance.

Marketing, Sales and Distribution

            The Company's  medical imaging systems are distributed in the United
States and certain foreign countries, by a network of approximately 250 dealers.
Medical  imaging  systems  dealers  are  supported  by  the  Company's  regional
managers,  product line managers and technical support groups,  who train dealer
sales  personnel and  participate in customer  calls.  Technical  support in the
selection,  use and maintenance of the Company's products is provided to dealers
and  professionals  by  customer  service  representatives.   The  Company  also
maintains  telephone  hotlines to provide  technical  assistance  to dealers and
professionals.  Additional  product  and  dealer  support  is  provided  through
participation  in  medical  equipment  exhibitions  and trade  advertising.  The
Company  exhibits  its  products  at the  American  College of  Surgeons  Annual
Meetings,  at the Radiological  Society of North American Conferences in Chicago
and at the MEDICA Medical Conference in Dusseldorf, Germany.

            The Company  markets its  critical  electronic  subsystems  for both
medical  and  non-medical   products   through  27  in-house  sales   personnel,
approximately  60  exclusive  independent  sales  representatives  in the United
States and  approximately  45  exclusive  international  agents  principally  in
Europe,   Asia,   the  Middle  East,   Canada,   Australia   and  India.   Sales
representatives   are  compensated   primarily  on  a  commission   basis;   the
international  agents are  compensated  either on a  commission  basis or act as
independent distributors.  The Company's marketing efforts emphasize its ability
to custom  engineer  products  to  optimal  performance  specifications  and the
Company's  record for  quality and  reliability.  The  Company  emphasizes  team
selling  where  a  sales  representative,  a  Company  engineer  and  management
personnel  work  together to market the  Company's  products.  The Company  also
markets  its  products  through its  catalogs  and through  trade  journals  and
participation in industry shows.

Product Development

            The  Company  has an  extensive  ongoing  research  and  development
program.  As of August 1, 1998, the Company  employed 66 persons in research and
development,  who are engaged both in the design of  customized  products and in
the  Company's  ongoing  research  and  development  activities.  The  Company's
expenditures  for research and development  were  approximately  $5.9 million in
fiscal  1998,  $4.5  million in fiscal  1997 and $3.4  million  in fiscal  1996.
Approximately  80% of all new  critical  electronic  subsystems  produced by the
Company  are  designed  and  developed  to  customer  specifications  for use as
components of the customer's  equipment.  For example, the Company has developed
precision  high-voltage  power  supplies  for CT  scanners  used  in  explosives
detection,  cost-effective precision power supplies for mobile CT scanners and a
"ruggedized"  miniature HV oil exploration  probe. The Company generally retains
all custom  technology  developed to meet customer  specifications in connection
with new electronic subsystems.

            Certain  new  products  are  developed  by the  Company as  standard
products for industry at large after the Company has evaluated their  potential.
Such  products  include  standardized  HV, high  frequency  rack  mounted  power
supplies  and  associated  modules  for  use  as  precision  test  equipment  by
industrial laboratories, universities and research facilities. In addition, many
new custom designed noise suppression  products are eventually made available as
standard products in the Company's catalog.

            The Company has computer-assisted design (CAD) systems to facilitate
the design of printed  circuit boards for its power  conversion  products and to
assist in the  mechanical  design of its  products,  thereby  enhancing  product
development and customized design services. The Company utilizes the CAD systems
in the mechanical design of its noise suppression  products in order to optimize
the miniaturization and packaging of such products.

            The Company's long term customer  relationships have facilitated and
enhanced  product  development.  Many  customers have consulted with the Company
concerning their product  development  programs,  enabling the Company to custom
design critical  electronic  subsystems and noise  suppression  products for new
generations of customer products.

                                        5
<PAGE>
Manufacturing

            The Company manufactures its HV power conversion components in three
facilities,  one in Valhalla, New York, one in Hicksville,  New York and a third
in Deer Park, New York.  The Company  manufactures  all of its electronic  noise
suppression  filters and capacitor  components at its facility in Bay Shore, New
York. The Company  manufactures  its cost effective  medical imaging products at
its facilities in Deer Park, New York,  Franklin Park, Illinois and Lincolnwood,
Illinois.

            The Company maintains a complete engineering  laboratory for quality
control and environmental  testing. In particular,  the Company has an extensive
environmental  testing  department  for  the  testing  of its  products  against
temperature fluctuations, vibration, shock, humidity, electro-magnetic pulse and
other adverse environmental conditions.

            All of the raw materials  used by the Company in the  manufacture of
its products  are  purchased  from  various  suppliers  and are  available  from
numerous sources.  No single supplier  accounts for a significant  percentage of
the Company's raw material  requirements.  The Company has not  encountered  any
difficulty in obtaining such supplies and believes that if any current source of
supply for a particular  material or  component  became  unavailable,  alternate
sources of supply would be available at comparable price and delivery schedules.

Export Sales

            During the three fiscal  years ended August 1, 1998,  August 2, 1997
and August 3, 1996, export sales accounted for approximately  45%, 40%, and 40%,
respectively,  of the Company's  revenues.  Export sales are made principally in
Europe,  the Far East,  North  America and the Middle  East.  During the current
fiscal year,  the  Company's  export sales have  increased,  despite the current
global economic climate.

Backlog

            The  Company's  backlog  at August 1, 1998 was  approximately  $35.9
million compared to a backlog of approximately  $23.9 million at August 2, 1997,
and  approximately  $23.0  million at August 3, 1996.  Substantially  all of the
backlog will result in shipments within the next 12 months.

Competition

            The markets for the Company's  products are highly  competitive  and
subject  to  technological   change  and  evolving  industry   requirements  and
standards.  The  Company  believes  that these  trends  will  continue  into the
foreseeable future. Many of the Company's current and potential competitors have
substantially greater financial, marketing and other resources than the Company.
As a  result,  they  may be  able  to  adapt  more  quickly  to new or  emerging
technologies  and  changes  in  customer  requirements,  or  to  devote  greater
resources  to the  promotion  and  sale of  their  products  than  the  Company.
Competition  could  increase  if new  companies  enter the market or if existing
competitors  expand their product  lines or intensify  efforts  within  existing
product  lines.  Although  the  Company  believes  that  its  products  are more
cost-effective than those of its primary competitors, certain competing products
may have other advantages which may limit the Company's market.  There can be no
assurance that continuing  improvements in current or new products will not make
them technically equivalent or superior to the Company's products in addition to
providing cost or other advantages. There can be no assurance that the Company's
current  products,  products  under  development  or  ability to  introduce  new
products will enable it to compete effectively.

Trademarks and Patents

            The  Company's  trademark  properties  contribute  to the  Company's
marketing  position.  To  safeguard  these  properties,  the  Company  maintains
trademark  registrations  in the United States and in significant  international
markets  for its  products.  As part of its  acquisition  of  certain  assets of
Gendex,  the Company  acquired the  UNIVERSAL  tradename  and has been granted a
license to use, in conjunction with the word "medical," the GENDEX tradename for
medical  imaging  systems for five years from March 1996.  The Company  owns the
FILTRON(R)  trademark  for noise  suppression  products.  The  Company  does not
consider that its business is materially dependent on patent protection.

                                        6
<PAGE>
Government Regulation

            The  Company's  medical  imaging  systems are subject to  regulation
under both the Federal Food,  Drug, and Cosmetics Act and the Radiation  Control
for Health and Safety Act.  These  statutes,  in combination  and  individually,
impose  strict  requirements  dealing with the safety,  effectiveness  and other
properties of the products to which they apply and address elements  relating to
the  testing,  manufacturing  standards  and  procedures,  distribution,  record
keeping, report making, labeling,  promotion and radiation emitting qualities of
these  products.  Failure  to comply  can result in,  among  other  things,  the
imposition  of fines,  criminal  prosecution,  recall and  seizure of  products,
injunctions restricting or precluding production or distribution,  the denial of
new product approvals and the withdrawal of existing product approvals.

            Prior to commercial  distribution in the United States, most medical
products, including the Company's, must be filed with the FDA and the facilities
in which they are  manufactured  must be registered with the FDA.  Additionally,
prior to  distribution,  the  products  are required to be subjected to a review
process by the FDA to assess whether they qualify for marketing under a "510(k)"
Premarket Notification Process as substantially equivalent to a product marketed
before May 28, 1976 or whether an  application  for  Premarket  Approval must be
favorably  acted  upon  before  they may be  distributed.  All of the  Company's
products to date have met the appropriate FDA requirement for marketing.

            The Company is also subject to certain other FDA regulations and the
Company's  manufacturing  processes  and  facilities  are subject to  continuing
review by the FDA.  The Company  must also comply with  current GMP  regulations
promulgated by the FDA. These regulations require,  among other things, that (i)
the  manufacturing  process be regulated  and  controlled  by the use of written
procedures  and  (ii)  the  production  of  medical  products,  which  meet  the
manufacturer's specifications, be validated by extensive and detailed testing of
every aspect of the process. They also require investigation of any deficiencies
in the  manufacturing  process or in the products  produced and detailed  record
keeping.  Manufacturing facilities are therefore subject to FDA inspection on an
unscheduled basis to monitor compliance with GMP requirements.  If violations of
the  applicable  regulations  are noted during FDA  inspections of the Company's
manufacturing  facilities,  there  may  be a  material  adverse  effect  on  the
continued  marketing  of  the  Company's  products  through  the  imposition  of
penalties or withdrawal  of  approvals.  The Company is required to expend time,
resources  and effort in product  manufacturing  and  quality  control to ensure
compliance.   The  Company  is  in  substantial   compliance  with  current  GMP
requirements, as well as other applicable FDA regulations.

            The Company's  marketing of its products in several  foreign markets
is subject to qualification and regulation by applicable foreign governments. In
certain foreign markets,  it may be necessary or advantageous to obtain ISO 9001
certification, which is analogous to compliance with the FDA's GMP requirements.
The Company has obtained ISO 9001  certification  for all of its medical systems
manufacturing  facilities.  The Company is in the process of obtaining  ISO 9001
certification for its other manufacturing  facilities;  however, there can be no
assurance that such facilities will receive ISO 9001  certification  or that the
Company  will  be  able  to  continue  to meet  the  requirements  for ISO  9001
certification. The Federal government, most states and certain foreign countries
monitor and require  licensing of x-ray devices and the handling of  radioactive
material.  Failure to comply  with such laws could  subject the Company to fines
and penalties.  The Company has obtained the requisite  regulatory  approval for
its  systems  where  it  markets  its  products.   Federal,  state  and  foreign
regulations regarding the manufacture and sale of medical devices are subject to
future  change.  The Company  cannot  predict what impact,  if any, such changes
might have on its business.

            No  assurance  can be  given  that  the  FDA or  foreign  regulatory
agencies  will  give  the  requisite  approvals  or  clearances  for  any of the
Company's  medical  imaging  systems and other products  under  development on a
timely basis, if at all. Moreover, after clearance is given, both in the case of
the Company's  existing  products and any future  products,  these  agencies can
later  withdraw the clearance or require the Company to change the system or its
manufacturing  process or labeling, to supply additional proof of its safety and
effectiveness, or to withdraw, recall, repair, replace or refund the cost of the
medical system, if it is shown to be hazardous or defective.

            The  Company  is  subject  to  various   United  States   government
guidelines and  regulations  relating to the  qualification  of its  non-medical
products for  inclusion in  Government  Qualified  Product  Lists in order to be
eligible to receive purchase orders from a government agency or for inclusion of
a product in a system which will  ultimately be used by a  governmental  agency.
The Company has had many years of experience in designing, testing and

                                        7
<PAGE>
qualifying its products for sale to governmental  agencies.  Certain  government
contracts are subject to  cancellation  rights.  The Company has  experienced no
material  termination  of a government  contract and is not aware of any pending
terminations of government contracts.

            The  Company  has not  experienced  in  fiscal  1998,  and  does not
anticipate,  any material  expenditures  in connection  with its compliance with
Federal, state or local environmental laws or regulations.

Employees

            As of August 1, 1998, the Company had  approximately  466 employees,
including 7 executive officers, 32 persons in general administration, 27 persons
in  marketing,  334  persons in  manufacturing  and 66 persons in  research  and
development.  The Company believes that its employee relations are good. None of
the Company's employees are represented by a labor union.


ITEM 2.     PROPERTIES

            The Company's  executive  headquarters  are located in a facility in
Valhalla,  New York in which the Company leases approximately 37,000 square feet
and where it designs and manufactures  some of its power conversion  components.
The facility is held under a lease expiring on July 31, 2002. The current annual
base rent for such premises is approximately  $307,000. RFI owns a 55,000 square
foot facility  located on four acres in Bay Shore, New York, where it engages in
electronic filter design and manufacturing.  Dynarad Corp. leases  approximately
24,000  square  feet of its  facility  in Deer  Park,  New  York,  under a lease
expiring August 31, 2002, where it designs and manufactures  some of its medical
imaging   products.   The  current   annual  base  rent  for  such  premises  is
approximately  $258,000.  Bertan leases  approximately 38,000 square feet of its
facility in  Hicksville,  New York under a lease  expiring May 31, 2004 where it
designs  and  manufactures  some of its power  conversion  devices.  The current
annual base rent for such premises is approximately $399,000.  Gendex-Del leases
approximately  68,000  square feet of its  facility in Franklin  Park,  Illinois
under a lease which was  extended  through  January  2003,  where it designs and
manufactures some of its medical imaging products.  The current annual base rent
for  such   premises  is   approximately   $282,000.   Gendex-Del   also  leases
approximately 12,000 square feet of its facility in Lincolnwood,  Illinois under
a lease which can be extended  through  January 31,  2003,  where it designs and
manufactures some of its medical imaging products.  The current annual base rent
for such  premises  is  approximately  $86,000.  The Company  believes  that its
current facilities are sufficient for its present requirements.


ITEM 3.     LEGAL PROCEEDINGS

            RFI is a defendant in an action  pending in the Supreme Court of the
State of New York,  Kings County which  commenced July 25, 1994. The plaintiffs,
Mark Palmer Hansen and the other individuals  named in the pleading,  claim that
while they were employed by Unisys, they were injured as a result of exposure to
an allegedly  toxic  substance  contained  in certain  filters  manufactured  by
Filtron Co., Inc. The principal  defendants in the action are Filtron Co., Inc.,
RFI and Paramax Systems  Corporation.  Plaintiff's exposure to the alleged toxic
substance occurred prior to the Company's purchase of selected assets of Filtron
Co.,  Inc.  from ARX,  Inc.  Furthermore,  Filtron Co.,  Inc. and ARX,  Inc. are
contractually  obligated to indemnify the Company in connection with this claim.
The Company's  product  liability  insurance  carrier has  appointed  counsel to
defend  this  action.  On the advice of  counsel,  the  Company  believes it has
meritorious defenses to the claim.

            Management  does not believe that the  resolution of the above legal
proceeding will have a material effect on the Company's  consolidated  financial
condition, results of operations and cash flows.


ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

            None.

                                        8
<PAGE>
                                     PART II

ITEM 5.     MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
            MATTERS 

            As of June 10,  1996 the  common  stock of Del  Global  Technologies
Corp. began trading on the Nasdaq Stock Market under the symbol DGTC. From April
18, 1990 to June 10, 1996 the common stock of Del Global  Technologies Corp. was
traded on the American Stock Exchange under the symbol DEL. The following  table
shows the high and low closing  sales  prices per share of common  stock for the
past twelve quarters.

                     Year Ending        Year Ending         Year Ending
                    August 1, 1998     August 2, 1997      August 3, 1996
                     High     Low       High     Low        High     Low
                     ----     ---       ----     ---        ----     ---

 First Quarter     10 7/16  9 13/16    10       7 3/4      6 7/16  5  5/16
 Second Quarter    10 3/16 10          10       7 3/8      7 3/4   5  3/4
 Third Quarter     12 7/8  12 1/16      9 5/8   7          8 5/16  7  1/8
 Fourth Quarter     9 7/8   9 1/2      10 1/4   7 1/4     18 7/8   6 13/16

The above  prices  have been  restated  to give  retroactive  effect to 3% stock
dividends declared in November, 1996, June, 1996 and November, 1995.

The number of holders of record of the Company's  common stock $.10 par value as
of August 1, 1998 was 1,102.

Due to the restrictions of its borrowing agreement, the Company has not paid any
cash  dividends,  except for the payment of cash in lieu of  fractional  shares,
since 1983.

                                        9
<PAGE>
ITEM 6.         SELECTED CONSOLIDATED FINANCIAL DATA  

The  selected  statements  of income data  presented  for the fiscal years ended
August 1, 1998,  August 2, 1997 and August 3, 1996 and the balance sheet data as
of August 1,  1998 and  August 2,  1997,  have  been  derived  from the  audited
financial  statements included elsewhere in this Annual Report on Form 10-K. The
selected  statements of income data for the fiscal years ended July 29, 1995 and
July 30, 1994 and the balance sheet data as of August 3, 1996, July 29, 1995 and
July 30, 1994 have been derived from audited  financial  statements not included
herein. This selected consolidated  financial data should be read in conjunction
with the  Company's  Consolidated  Financial  Statements  and Notes  thereto and
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations" appearing elsewhere herein.

DEL GLOBAL TECHNOLOGIES CORP.  AND SUBSIDIARIES

<TABLE>
<CAPTION>
                                                                         Fiscal Year Ended     
                                           --------------------------------------------------------------------------
                                              August 1,       August 2,       August 3,      July 29,       July 30,
INCOME STATEMENT DATA:                         1998(b)         1997(b)         1996(b)        1995(b)        1994(b) 
----------------------                        --------        --------        --------       --------       -------- 
<S>                                        <C>             <C>             <C>            <C>            <C>         
Net sales                                  $ 62,304,878    $ 54,685,289    $ 43,745,454   $ 32,596,312   $ 24,327,015

Cost and expenses:
   Cost of sales                             36,908,317      32,854,825      27,355,262     19,177,999     15,179,081
   Research and development                   5,863,343       4,548,487       3,429,331      2,861,844      2,253,412
   Selling, general and
     administrative                          11,273,059      10,193,244       7,503,689      6,622,690      4,862,519
   Interest (income) expense - net             (167,926)        (54,470)      1,148,639      1,191,142        576,832
                                           ------------    ------------    ------------   ------------   ------------
                                             53,876,793      47,542,086      39,436,921     29,853,675     22,871,844
                                           ------------    ------------    ------------   ------------   ------------  
Income before provision
   for income taxes                           8,428,085       7,143,203       4,308,533      2,742,637      1,455,171

Provision for income taxes                    2,639,497       2,231,649       1,393,111        837,428        341,525
Cumulative effect of change in
   method for accounting for
   income taxes                                    --              --              --             --           76,363
                                           ------------    ------------    ------------   ------------   ------------
Net income                                 $  5,788,588    $  4,911,554    $  2,915,422   $  1,905,209   $  1,190,009
                                           ============    ============    ============   ============   ============
Basic earnings per share                   $        .77    $        .66    $        .59   $        .43   $        .28(d)
                                           ============    ============    ============   ============   ============  
Diluted earnings per share                 $        .71    $        .61    $        .48   $        .35   $        .23(d)
                                           ============    ============    ============   ============   ============
Number of shares used in computation
   of basic earnings per share (a) (c)        7,518,945       7,399,575       4,936,938      4,449,952      4,238,868
                                           ============    ============    ============   ============   ============      
Number of shares used in computation
   of diluted earnings per share (a) (c)      8,206,121       8,070,199       6,112,248      5,374,066      5,195,108
                                           ============    ============    ============   ============   ============
</TABLE>
<TABLE>
<CAPTION>

                                                                               As of
                                           --------------------------------------------------------------------------
                                              August 1,       August 2,       August 3,      July 29,       July 30,
BALANCE SHEET DATA:                            1998(b)         1997(b)         1996(b)        1995(b)        1994(b) 
-------------------                           --------        --------        --------       --------       --------   
<S>                                        <C>             <C>             <C>            <C>            <C>         
  Working capital                          $ 41,747,326    $ 37,007,412    $ 32,552,295   $ 20,648,281   $ 18,530,176
                                           ============    ============    ============   ============   ============
  Total assets                             $ 72,356,627    $ 64,129,810    $ 57,729,752   $ 39,054,634   $ 36,198,373
                                           ============    ============    ============   ============   ============
  Long-term debt                           $    240,273    $    411,127    $    499,852   $ 11,902,951   $ 11,485,722
                                           ============    ============    ============   ============   ============
  Shareholders' equity                     $ 59,455,804    $ 52,530,230    $ 47,069,528   $ 19,525,073   $ 17,698,507
                                           ============    ============    ============   ============   ============
  Common shares outstanding (a) (c)           7,518,945       7,399,575       4,936,938      4,449,952      4,238,868
                                           ============    ============    ============   ============   ============
</TABLE>

        (a) Net income per common share and common share  equivalents  have been
        restated to give effect to stock  dividends in fiscal years 1997,  1996,
        1995  and  1994.  See  Note 1 of  Notes  to the  Consolidated  Financial
        Statements for computation of earnings per share.

        (b)  The fiscal years ended August 1, 1998, August 2, 1997 and August 3,
        1996 include the operations of Gendex-Del which was purchased on March 6
        1996.

        (c) Common shares  outstanding for 1998,  1997,  1996, 1995 and 1994 are
        reduced by  269,246,  104,255,  58,255,  55,165,  and  16,656  shares of
        treasury stock, respectively.

        (d) Includes a $.02 per share  cumulative  effect of change in method of
        accounting for income taxes.

                                       10
<PAGE>
ITEM 7.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS                  


This  Management  Discussion and Analysis of Financial  Condition and Results of
Operations contains forward looking statements.  Such statements involve various
risks that may cause actual results to differ  materially.  These risks include,
but are not  limited to, the  ability of the  Company to grow  internally  or by
acquisition  and  to  integrate  acquired   businesses,   changing  industry  or
competitive   conditions,   and  other  risks   referred  to  in  the  Company's
registration  statements  and periodic  reports  filed with the  Securities  and
Exchange Commission.

Overview

                  The  Company's  net sales have  increased  as a result of both
internal growth and acquisitions. The Company has completed four acquisitions in
the past six years:  Dynarad (a designer  and  manufacturer  of medical  imaging
systems and critical  electronic  subsystems) in fiscal 1993; Bertan (a designer
and  manufacturer  of precision high voltage power supplies and  instrumentation
for medical and industrial  applications) in fiscal 1994; Gendex-Del (a designer
and   manufacturer  of  medical  imaging  systems)  in  fiscal  1997  and  X-Ray
Technologies,  Inc. (a designer and  manufacturer of medical imaging systems) in
fiscal 1998.  The Company's net sales have increased  from  approximately  $24.3
million  in  fiscal  1994 to  approximately  $62.3  million  in fiscal  1998,  a
compounded annual growth rate of 26.5%.

                  During the past five years the  Company  has grown  internally
and through  acquisitions into a company whose  predominant  business is serving
the medical imaging and diagnostic markets. The Company's net sales attributable
to medical imaging  products have increased from  approximately  $9.4 million or
38.7% of total net sales in fiscal 1994 to approximately $35.6 million or 65% of
total net sales and  approximately  $43.9  million  or 71% of total net sales in
fiscal years 1997 and 1998, respectively.

                  Management believes that recent cost containment trends in the
healthcare  industry have created  opportunities for its cost-effective  medical
imaging products in domestic and international markets. Some of these trends are
increased  demand for lower cost medical  equipment,  outsourcing of systems and
critical  electronic  subsystems by leading OEMs,  increased  demand for certain
diagnostic procedures and lower cost medical services in the global marketplace.

General

                  The  following  discussion  and  analysis  examines  the major
factors  contributing  to the  Company's  financial  condition  and  results  of
operations  for the three years ended August 1, 1998,  August 2, 1997 and August
3, 1996.  The following  discussion  and analysis  should be read in conjunction
with the Company's Consolidated Financial Statements and Notes thereto appearing
elsewhere in this document.

                  For segment reporting purposes,  the Company has organized its
operations based upon its manufacturing capabilities into two segments: Critical
Electronic  Subsystems and Medical Systems.  The Critical Electronic  Subsystems
segment   includes   sales  of  critical   electronic   subsystems  for  medical
applications  which are classified as medical  imaging  products,  but which are
manufactured within this segment, of approximately $14.1 million,  $13.2 million
and $11.7 million,  respectively,  for fiscal years ended August 1, 1998, August
2,  1997  and  August  3,  1996.   Aggregate  sales  of  medical  products  were
approximately $43.9 million, $35.6 million and $25.7 million,  respectively, for
fiscal years ended August 1, 1998, August 2, 1997 and August 3, 1996.

Results of Operations

                  The following table sets forth, for the years  indicated,  the
percentage  of net  sales  represented  by  items  as  shown  in  the  Company's
Consolidated Statements of Income.

                                       11
<PAGE>
                                                      Fiscal Years Ended  
                                               --------------------------------
                                               August 1,   August 2,   August 3,
                                                1998         1997        1996 
                                                ----         ----        ---- 

Net sales                                      100.0%       100.0%      100.0%
Costs and expenses:
Cost of sales                                   59.2         60.1        62.5
Research and development                         9.4          8.3         7.8
Selling, general
   and administrative                           18.0         18.6        17.2
Interest (income) expense - net                  (.1)         (.1)        2.6
                                               -----        -----       -----  
                                                86.5         86.9        90.1
                                               -----        -----       ----- 
Income before provision for       
   income taxes                                 13.5         13.1         9.9
Provision for income taxes                       4.2          4.1         3.2 
                                               -----        -----       ----- 
Net income                                       9.3%         9.0%        6.7%
                                               =====        =====       =====

Fiscal Years 1998, 1997 and 1996

                  Net sales for the Critical  Electronic  Subsystems segment for
fiscal 1998 were  approximately  $32.4 million compared to  approximately  $32.3
million  for  fiscal  1997,  an  increase  of .3%.  Net sales  for the  Critical
Electronic  Subsystems segment for fiscal 1997 were approximately  $32.3 million
compared to  approximately  $29.4  million for fiscal 1996, an increase of 9.9%.
Net sales for the Medical Systems segment were  approximately  $29.9 million for
fiscal 1998 compared to approximately $22.4 million for fiscal 1997, an increase
of  33.6%.  The  level  sales in  Critical  Electronic  Subsystems  was due to a
decrease  in  sales  for  high-voltage  power  supplies  used in  semi-conductor
equipment  manufacturing  and oil  exploration  which was offset by an  increase
sales of precision  high-voltage  power supplies for medical  applications.  The
increase  in the  Medical  Systems  sales  was  due to the  acceleration  of the
outsourcing trend by major medical equipment  companies and increased demand for
the Company's Medical System products. Net sales for the Medical Systems segment
were  approximately  $22.4 million for fiscal 1997 as compared to  approximately
$14.3  million for fiscal 1996,  an increase of 56.6%.  This increase was due to
the inclusion of Gendex-Del for the whole year, which contributed an increase of
approximately  $9.5  million,  which was  partially  offset by reduced  sales of
portable x-ray systems of approximately $1.4 million. Fiscal 1997 included large
initial  orders for portable x-ray systems into the State of Michigan and to the
United States Marine Corps.

                   Cost of sales for the Critical Electronic  Subsystems segment
decreased to 51.3% of net sales in fiscal 1998 from 52.6% of net sales in fiscal
1997. Cost of sales for the Critical Electronic  Subsystems segment decreased to
52.6% of net sales in fiscal  1997 from 53.6% of net sales in fiscal  1996.  The
decreases in cost of sales as a percentage of net sales in fiscal years 1998 and
1997 were  primarily  due to  improved  operating  efficiencies  and a favorable
product  mix.  Cost of sales in  fiscal  1998 for the  Medical  Systems  segment
decreased to 67.9% of net sales from 70.8% of net sales in fiscal 1997.  Cost of
sales in fiscal 1997 for the Medical Systems  segment  decreased to 70.8% of net
sales  from  73.8%  of net  sales  in  fiscal  1996.  The  fiscal  1998 and 1997
improvements  in margins  from fiscal 1996 are due to the reduced  manufacturing
costs from  efficiencies  implemented in this segment in both the Gendex-Del and
Dynarad  subsidiaries  and to the  transfer of  manufacturing  of certain of the
Dynarad systems to Gendex-Del.

                  Research and  development  costs for the  Critical  Electronic
Subsystems  segment increased 28.1% to approximately $4.3 million in fiscal 1998
from approximately  $3.3 million in fiscal 1997.  Research and development costs
for the Critical Electronic  Subsystems segment increased 17.2% to approximately
$3.3  million in fiscal 1997 from  approximately  $2.9  million in fiscal  1996.
These  increases  were due to new  products  being  developed  in this  segment.
Research and development costs in the Medical Systems segment increased 31.2% to
approximately  $1.6  million in fiscal 1998 from  approximately  $1.2 million in
fiscal 1997. Research and

                                       12
<PAGE>
development costs in the Medical Systems segment increased 107% to approximately
$1.2 million in fiscal 1997 from  approximately  $583,000 in fiscal 1996.  These
increases were attributable to increased research and development at Dynarad and
to the inclusion of the research and  development of the  Gendex-Del  subsidiary
for all of fiscal 1997 as compared to four months of fiscal 1996.

                   Selling, general and administrative expenses, as a percentage
of sales, in the Critical Electronic Subsystems segment, were approximately $6.3
million or 19.3% of net sales in fiscal 1998 as compared to  approximately  $6.1
million  or  18.9%  of  net  sales  in  fiscal   1997.   Selling,   general  and
administrative  expenses,  as a percentage of sales, in the Critical  Electronic
Subsystems  segment,  were  approximately  $6.1 million or 18.9% of net sales in
fiscal 1997 as compared to  approximately  $5.0 million or 16.9% of net sales in
fiscal 1996.  These increases in selling,  general and  administrative  expenses
were primarily due to the addition of several new regional  marketing  managers,
higher levels of  advertising,  trade show  attendance,  marketing  expenses and
increased amortization of deferred charges.  Selling, general and administrative
expenses,  for the Medical Systems segment,  were  approximately $5.0 million or
16.8% of net sales in fiscal 1998 as compared to  approximately  $4.1 million or
18.3% of net sales in fiscal 1997. Selling, general and administrative expenses,
for the Medical Systems segment, were approximately $4.1 million or 18.3% of net
sales in fiscal 1997 as compared to  approximately  $2.5 million or 17.7% of net
sales in fiscal 1996.  These increases were due to higher levels of advertising,
trade show  attendance  and an increase in  amortization  of certain  intangible
assets.

                  Interest  income for fiscal 1998 was  approximately  $168,000,
net of interest expense of approximately  $130,000 which included  approximately
$59,000 of bank commitment fees on unused balances.  There were no interest rate
protection agreements in effect for fiscal 1998. Interest income for fiscal 1997
was approximately  $54,000,  net of interest expense of approximately  $239,000.
Interest  expense for fiscal 1997  included the  amortization  of the  Company's
interest rate protection  agreements of approximately  $43,000 and approximately
$76,000 of bank commitment fees on unused  balances.  Interest  expense,  net of
interest  income,  for fiscal  1996 was  approximately  $1.1  million.  Interest
expense  decreased in fiscal 1996 as the result of the  completion  of an equity
offering in July 1996 and subsequent debt repayments.

                  Income tax  expense  decreased  to 31.3% of pre-tax  income in
fiscal 1998 from 31.2% of pre-tax  income in fiscal 1997,  primarily  due to the
tax savings from the increase in foreign sales.  Income tax expense decreased to
31.2% of pre-tax  income in fiscal  1997 from 32.3% of pre-tax  income in fiscal
1996,  primarily due to the effect of lower research and development tax credits
available  in fiscal  1996 due to the  timing of the  reinstatement  of this tax
credit.  Fiscal 1996  includes  only one month of this tax credit as compared to
fiscal 1997 and fiscal 1998, which have full years of this tax credit.

                  Net income for fiscal 1998 was approximately $5.8 million,  an
increase of approximately  18.4% from approximately $4.9 million in fiscal 1997.
Net income for fiscal  1997 was  approximately  $4.9  million,  an  increase  of
approximately 69% from approximately $2.9 million in fiscal 1996. Basic earnings
per share for  fiscal  1998  were  $.77,  an  increase  of $.11 per share  which
represents  a 16.7%  increase  from basic  earnings  per share of $.66 in fiscal
1997.  Diluted earnings per share for fiscal 1998 were $.71, an increase of $.10
per share which  represents a 16.4% increase from diluted  earnings per share of
$.61 in fiscal  1997.  Basic  earnings  per share for fiscal 1997 were $.66,  an
increase  of $.07 per  share  which  represents  an 11.9%  increase  from  basic
earnings per share of $.59 in fiscal 1996. Diluted earnings per share for fiscal
1997 were $.61, an increase of $.13 per share which  represents a 27.1% increase
from  diluted  earnings  per  share  of $.48  in  fiscal  1996.  The  number  of
outstanding shares and common share equivalents increased from approximately 8.1
million shares in fiscal 1997 to approximately 8.2 million shares in fiscal 1998
or  approximately  1%.  The  number  of  outstanding  shares  and  common  share
equivalents  increased from  approximately  6.1 million shares in fiscal 1996 to
approximately  8.1 million shares in fiscal 1997 or 32.0%,  primarily due to the
results of the public offering of 2,275,000  shares  completed in July 1996. The
increases  in net income and  earnings  per share for fiscal 1998 as compared to
fiscal  1997 were due to  internal  growth and  improved  gross  margins  due to
operating  efficiencies.  The increases in net income and earnings per share for
fiscal  1997 as  compared  to fiscal  1996 were due to  internal  growth and the
addition of the  Gendex-Del  subsidiary  in March  1996,  the  inclusion  of the
operations of the  Gendex-Del  subsidiary for a full year in fiscal 1997 and the
repayment of bank borrowings in the fourth quarter of fiscal 1996.

                                       13
<PAGE>
Analysis of Financial Condition

Liquidity  and Capital  Resources.  The Company  has funded its  operations  and
acquisitions through a combination of cash flow from operations,  bank borrowing
and the issuance of common stock. Cash flows from operations were  approximately
$1.9 million, $3.3 million and $3.8 million for the fiscal years ended August 1,
1998,  August 2, 1997 and  August 3, 1996,  respectively.  At August 1, 1998 the
Company had a current ratio of approximately 4.88 to 1.0 and the availability of
approximately $23.5 million of bank borrowings under its lines of credit.

Working  Capital.  At August 1, 1998 and August 2, 1997,  the Company's  working
capital was approximately $41.7 million and $37.0 million, respectively. At such
dates the Company had approximately $3.4 million and $6.1 million, respectively,
in cash and cash equivalents.

                  Trade  receivables at August 1, 1998  increased  approximately
$3.1  million as compared  to August 2, 1997  primarily  due to higher  shipping
levels  during the  Company's  fourth  quarter in fiscal 1998 compared to fiscal
1997. Trade receivables at August 2, 1997 increased  approximately  $2.0 million
as compared to August 3, 1996  primarily  as the result of the  inclusion of the
Gendex-Del receivables of approximately $3.1 million in fiscal year 1996.

                  Cost  and   estimated   earnings  in  excess  of  billings  on
uncompleted contracts at August 1, 1998 increased  approximately $1.4 million as
compared to August 2, 1997 due to  increases in contracts  being  accounted  for
under the percentage of completion method of accounting. At August 3, 1996 there
were no long term  contracts  which  were  accounted  for under  this  method of
accounting.

                  Inventory at August 1, 1998  increased by  approximately  $4.5
million as compared to August 2, 1997,  primarily  due to the  expansion  of the
Gendex-Del  Medical  Imaging  operations.  Inventory at August 2, 1997 increased
approximately $861,000 as compared to August 3, 1996, primarily at Gendex-Del.

                  Prepaid   expenses   and  other   current   assets   decreased
approximately  $450,000 at August 1, 1998 as  compared  to August 2, 1997.  This
decrease was primarily  attributable to the deferred tax effects of self-funding
health  insurance  and  the  increase  in  contracts  accounted  for  under  the
percentage  of  completion  method of  accounting.  Prepaid  expenses  and other
current assets increased approximately $134,000 at August 2, 1997 as compared to
August 3, 1996. This increase was primarily  attributable  to prepaid  insurance
and other items.

                  Fixed assets increased approximately $3.0 million at August 1,
1998 from August 2, 1997 and increased  approximately  $2.7 million at August 2,
1997  from  August  3,  1996.  These  increases  are  primarily  due to  capital
expenditures for manufacturing  equipment to improve operating  efficiencies and
the upgrade of computer equipment.

                  Goodwill  increased  approximately  $674,000 at August 1, 1998
from August 2, 1997. The increase is due to the acquisition of certain assets of
X-Ray  Technologies,  Inc. of  approximately  $883,000 offset by amortization of
approximately $ 209,000.  Goodwill decreased approximately $176,000 at August 2,
1997 from August 3, 1996 due to amortization.

                  Accounts  payable  - trade  increased  by  approximately  $1.5
million  at August  1, 1998 as  compared  to  August  2, 1997 and  increased  by
approximately  $243,000 at August 2, 1997 as  compared  to August 3, 1996.  This
increase was attributable to higher levels of inventory required for fiscal 1998
and 1997 shipments, respectively.

                  Deferred  compensation  liability  increased by  approximately
$190,000  at August 1, 1998 as  compared  to August 2,  1997.  $125,000  of this
increase  relates  to the  fiscal  1998  funding of  deferred  compensation  and
approximately  $65,000  relates  to  recognized  and  unrealized  gains  on  the
underlying   investments.   Deferred   compensation   liability   increased   by
approximately $177,000 at August 2, 1997 as compared to August 3, 1996. $125,000
of this increase relates to the fiscal 1997 funding of deferred compensation and
approximately  $52,000  relates  to  recognized  and  unrealized  gains  on  the
underlying investments. Gains and losses, either recognized or unrealized, inure
to the benefit or detriment of the  President  under a  contractual  arrangement
between the President and the Company.

                                       14
<PAGE>
Credit  Facility  and  Borrowing.  On  March 5,  1996,  in  connection  with the
acquisition of Gendex,  the Company and its lending bank entered into an Amended
and Restated Credit  Agreement  wherein the bank increased the Company's line of
credit to $24.0 million, consisting of a five year $10.0 million term loan and a
four year  revolving  line of credit of $14.0  million.  On August 2, 1996,  the
Company and its lending bank amended their Credit  Agreement to allow for a five
year $10.0 million  acquisition  credit line to replace the five year term loan.
Borrowings under the Company's  Amended Credit Agreement are now on an unsecured
basis. On August 1, 1997, the Company and its lending bank further amended their
Credit Agreement to increase the provision for letters of credit from $2,000,000
to $4,000,000,  to eliminate the requirement to provide interest rate protection
contracts unless the Company's  borrowings on term loans exceed  $5,000,000,  to
eliminate the requirement to prepare monthly borrowing base  certificates  until
the Company's borrowings and letters of credit outstanding exceed $5,000,000, to
increase the amount that the Company can invest in other entities  without prior
bank  approval  from  $250,000  to  $1,000,000  and to provide  for a fixed rate
interest option,  at the Company's  request.  At August 1, 1998, the Company had
approximately $13.8 million available under its revolving line of credit,  after
deducting   letters  of  credit   outstanding  of  approximately   $289,000  and
approximately  $9.7 million available under its acquisition credit line. On July
31,  1998,  the  Company and its  lending  bank  further  amended  their  Credit
Agreement to allow for additional  stock  repurchases in an amount of $2,000,000
for fiscal 1998 and 80% of net income for future years.

Capital  Expenditures.  The Company  continues  to invest in capital  equipment,
principally  for  its  manufacturing   operations,   in  order  to  improve  its
manufacturing  capabilities and capacity. The Company has expended approximately
$2.9 million, $2.7 million and $2.0 million, respectively, for capital equipment
expenditures in fiscal years 1998, 1997 and 1996, respectively.

Shareholders'  Equity.  Shareholders'  equity increased to  approximately  $59.5
million at August 1, 1998 from  approximately  $52.5  million at August 2, 1997,
primarily  due to the results of  operations.  Additionally,  during fiscal 1998
approximately  468,000 stock options and warrants were exercised,  with proceeds
of  approximately   $2.0  million  and  164,991  shares  of  common  stock  were
repurchased at a cost of approximately $1.9 million.

Year 2000.  The Company has  initiated a  company-wide  program and  developed a
formal plan to identify,  evaluate and implement  changes to products,  computer
systems,  applications and infrastructure  necessary to achieve a year 2000 date
conversion  with no effect on customers or  disruption  to business  operations.
These actions are necessary to ensure that all systems and business applications
will recognize and process the year 2000 and beyond.

The  Company  uses  purchased  software  programs  for a variety  of  functions,
including   drafting   and  design,   general   accounting   and   manufacturing
applications.  Currently,  all of the Company's products and software for design
and drafting applications are fully compliant. The Company's systems for general
accounting and manufacturing have been evaluated and steps to achieve compliance
are being  implemented  and are expected to be fully compliant by July 31, 1999,
although  there can be no  assurance  that it will.  At this time,  the  Company
believes  that it does not have any internal  mission  critical year 2000 issues
that it cannot remedy.

As part of the year  2000  readiness  process,  significant  customers,  service
providers,  vendors and  suppliers  that are believed to be critical to business
operations  after January 1, 2000 have been identified and steps are underway in
an attempt to  reasonably  ascertain  their stage of  readiness.  The Company is
surveying them primarily through written correspondence. With respect to mission
critical  third  parties  the  Company  intends to create  contingency  plans to
mitigate its exposure to such third parties that are not year 2000 compliant. In
the event any mission critical third parties do not achieve full compliance, the
Company  believes it has  sufficient  alternative  resources upon which to rely.
Despite its efforts to ascertain the readiness of its  customers,  suppliers and
service  providers  the  Company  cannot be certain  as to the actual  year 2000
readiness of these third parties or the impact their  non-compliance may have on
the Company's  future financial  position,  the results of its operations or its
cash flows.

With respect to the Company's internal year 2000 compliance, the Company expects
to incur  internal  staff costs,  as well as consulting  and other  expenses and
believes  that the  total  costs to be  incurred  for all year  2000  compliance
related  projects  will not  have a  material  effect  on the  Company's  future
financial position, results of its operations or its cash flows.

The Company expects to achieve full compliance no later than September 30, 1999.

                                       15
<PAGE>
Effects of New Accounting Pronouncements

Disclosure  of  Information  About  Capital  Structure.  In February  1997,  the
Financial  Accounting  Standards  Board ("FASB")  issued  Statement of Financial
Accounting  Standard ("SFAS") No. 129,  "Disclosure of Information About Capital
Structure."  This  statement  is effective  for years ending after  December 15,
1997.  Management  has evaluated  the effect of this  statement on its financial
reporting and, as it contains no change in disclosure  requirements for entities
that were previously subject to the requirements of Accounting  Principles Board
("APB") Opinions 10, 15 and SFAS No. 47, no further disclosures are needed.

Reporting of Comprehensive  Income.  In June 1997, the FASB issued SFAS No. 130,
"Reporting  of  Comprehensive  Income."  This  statement is effective  for years
beginning  after December 15, 1997.  Management has evaluated the effect of this
statement on its financial reporting from the adoption of this statement and has
found that no further disclosures are needed.

Disclosures  About  Segments of an Enterprise and Related  Information.  In June
1997, the FASB issued SFAS No. 131, "Disclosures About Segments of an Enterprise
and Related  Information."  SFAS No. 131  requires  the  reporting of profit and
loss, specific revenue and expense items, and assets for reportable segments. It
also requires the reconciliation of total segment revenues, total segment profit
and loss,  total segment assets and other amounts  disclosed for segments to the
corresponding  amounts  in  the  general  purpose  financial  statements.   This
statement is effective for fiscal years  commencing after December 15, 1997. The
Company has not yet determined  what  additional  disclosures may be required in
connection with adopting SFAS No. 131.

Disclosures about Pensions and Other Postretirement  Benefits. In February 1998,
the FASB issued SFAS No. 132,  "Employers  Disclosures  about Pensions and Other
Postretirement  Benefits." This statement revises  employers'  disclosures about
pensions and other  postretirement  benefit plans. SFAS No. 132 is effective for
fiscal years beginning  after December 15, 1997.  Management does not anticipate
that this statement will have a significant effect on the Company's consolidated
financial statements.

Disclosures about Derivative  Instruments and Hedging Activities.  In June 1998,
the FASB issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities."  SFAS No. 133  establishes  accounting and reporting  standards for
derivative instruments and hedging activities. SFAS No. 133 is effective for all
fiscal years beginning  after December 15, 1999.  Management does not anticipate
that this statement will have any effect on the Company's consolidated financial
statements.

ITEM 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

           Not applicable.

ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

           Reference  is made to Financial  Statements  and  Supplementary  Data
attached hereto and made a part hereof.

ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
            ACCOUNTING AND FINANCIAL DISCLOSURE

           None

                                       16
<PAGE>
                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

            Name                       Age             Position
            ----                       ---             --------

Leonard A. Trugman (1)..................60   Chairman of the Board, Chief
                                             Executive Officer and President

David Engel.............................49   President Del Medical Systems Group

Louis J. Farin, Sr......................55   Vice President and General Manager
                                             of Del Power Conversion Division

Paul J. Liesman.........................37   Vice President and General Manager
                                             of Bertan High Voltage Corp.

John Mankowich..........................54   Vice President and General Manager
                                             of Gendex-Del Medical Imaging Corp.

Seymour Rubin...........................68   Vice President and President of RFI
                                             Corporation, Director

Michael H. Taber........................53   Chief Financial Officer, Vice 
                                             President of Finance and Secretary

Natan V. Bertman  (1)(2)................69   Director


David Michael (1)(2)(3).................61   Director


James Tiernan (3).......................74   Director

(1)  Member of the Audit Committee
(2)  Member of the Compensation Committee
(3)  Member of the Stock Option Committee

            The officers of the Company,  with the exception of Mr. Trugman, are
elected or  appointed by the Board of Directors to hold office until the meeting
of the Board of Directors  following  the next annual  meeting of  shareholders.
Subject to the right of the Company to remove officers  pursuant to its By-Laws,
officers serve until their successors are chosen and have qualified. Mr. Trugman
holds his position pursuant to an employment agreement which expires on July 31,
2005.

            Leonard A. Trugman has been Chairman of the Board,  Chief  Executive
Officer and President from  September 1985 to the present.  Mr. Trugman was Vice
President  of  Operations  at  General  Microwave  Corporation,  an AMEX  traded
microwave  components  company from 1981 to 1985.  Mr. Trugman holds a Master of
Science  degree  in  Mechanical  Engineering  and a Masters  degree in  Business
Administration.

            David  Engel  became  President  of Del  Medical  Systems  Group  on
September 1, 1998. Mr. Engel was Executive  Vice  President and Chief  Financial
Officer  from January 1996 through  August 1998.  Mr. Engel was  Executive  Vice
President of Bertan High Voltage Corp.  from November 1994 to January 1996.  Mr.
Engel was Vice  President - Finance and  Administration  at Bertan High  Voltage
Corp. from March 1981 to November 1994.
 
                                       17
<PAGE>
            Louis J. Farin,  Sr. has been Vice President and General  Manager of
Del Power  Conversion  Division  from August 1994 to the present.  Mr. Farin had
been Senior Vice President-Operations of the Company since December 1986.

            Paul J.  Liesman  has been Vice  President  and Vice  President  and
General Manager of Bertan High Voltage Corp.  since May 1996. From March 1996 to
May 1996,  Mr.  Liesman was Vice  President - Operations  of Bertan High Voltage
Corp.  From January 1995 to March 1996, he was  Operations  Manager at Del Power
Conversion.  Mr. Liesman was Chief  Mechanical  Engineer at Del Power Conversion
from March 1990 to January 1995.  Mr. Liesman holds a Masters degree in Business
Administration and a Bachelor of Science degree in Mechanical Engineering.

            John  Mankowich  has been  Vice  President  and Vice  President  and
General  Manager of  Gendex-Del  Medical  Imaging Corp.  since April 1997.  From
November  1994 to April 1997,  Mr.  Mankowich  was a Director  of  International
Operations  for Lorad Corp.,  a Division of Trex Medical.  From November 1993 to
November  1994, he was Director of Business  Development of E-MED, a Division of
E-Systems  Corp.  From September 1990 to November 1993, he was President and CEO
of Norland Corporation. Mr. Mankowich holds a Masters degree in Bio-Chemistry.

            Seymour Rubin has been Vice  President of the Company since December
1989 and was elected a director of the Company in February 1990. Mr. Rubin was a
co-founder of RFI Corporation. Mr. Rubin was the Executive Vice President of RFI
Corporation  from  1968 to  February  1990  and has been  the  President  of RFI
Corporation  since February 1990. Mr. Rubin holds a Masters of Science degree in
Engineering.

            Michael H. Taber became Chief Financial  Officer,  Vice President of
Finance and  Secretary  on September  1, 1998.  Mr.  Taber was Vice  President -
Finance, Secretary and Chief Accounting Officer of the Company from January 1996
through  August 1998.  Mr. Taber was appointed  Secretary in October  1994.  Mr.
Taber was Chief  Financial  Officer of the Company from January 1993 to December
31, 1995. Mr. Taber was the Assistant  General Manager of RFI  Corporation  from
October 1991 to April 1992.  Mr. Taber was  President of Filtron Co.,  Inc. from
August 1990 to October 1992. Mr. Taber holds a Masters  degree in Accounting,  a
Bachelor of Science degree in Mechanical  Engineering and is a Certified  Public
Accountant.

            Natan V. Bertman has served as a director of the Company since 1985.
He is a partner in the law firm of Bertman & Levine.

            David Michael has served as a director of the Company since 1985. He
is President of David Michael & Co., PC and is a Certified Public Accountant.

            James Tiernan has served as a director of the Company since 1985. He
is a former Senior Vice President of Chase Manhattan Bank, New York, NY.

            Dr.  Raymond  Kaufman,  the former  Chairman and  Co-founder  of the
Company,  resigned  from the  Company's  Board in April  1997.  At such time Dr.
Kaufman was named  Director  Emeritus of the  Company.  He holds a Doctorate  in
Physics.

Section 16(a) Beneficial Ownership Reporting Compliance

            Section 16(a) of the Exchange Act requires the Company's  directors,
executive   officers  and  persons  holding  more  than  10%  of  the  Company's
outstanding common stock to file with the Securities and Exchange Commission and
the Nasdaq Stock Market  initial  reports of ownership,  or changes in ownership
and annual  reports of ownership of common stock and other equity  securities of
the Company.  Specific due dates for these reports have been established and the
Company  is  required  to report  any  failure to file by these due dates in the
fiscal year ended August 1, 1998. Based solely upon review of the copies of such
reports furnished to the Company or written representations that no reports were
required,  the Company  believes that during  fiscal 1998 all of its  directors,
executive   officers  and  persons  holding  more  than  10%  of  the  Company's
outstanding common stock are in full compliance with the requirements of Section
16(a).
                                       18
<PAGE>
ITEM 11.          EXECUTIVE COMPENSATION

       The following  table sets forth,  for the three fiscal years ended August
       1, 1998, certain  compensation  information with respect to the Company's
       Chief  Executive   Officer  and  each  of  the  four  other  most  highly
       compensated  executive  officers,  based upon salary and bonus  earned by
       such executive officers in the fiscal year ended August 1, 1998.
<TABLE>
<CAPTION>

                                                         SUMMARY COMPENSATION TABLE

                                                                                    Long-term Compensation
                                                Annual Compensation                         Awards                
                              ---------------------------------------------------  ---------------------------   
                                                                                                    Securities
                                                                                   Restricted       Underlying     All Other
Name and Principal                                                Other Annual       Stock           Options/    Compensation
    Position                  Year      Salary($)     Bonus($)    Compensation($)    Awards($)        SARS (#)      ($) (1)
    --------                  ----      ---------     --------    ---------------    ---------        --------      -------

    <S>                      <C>        <C>          <C>           <C>                     <C>       <C>            <C>   
    Leonard A. Trugman        1998       319,070      552,739(2)    1,361,858(3)            -         75,000         38,240
      Chairman, CEO           1997       303,876      488,541(2)              -             -              -         43,313
      and President           1996       289,406      343,318(2)              -             -              -         39,708

    David Engel               1998       135,000      107,148          68,856(3)            -         15,000          2,062
       President of Del       1997       125,000       44,535                 -             -          7,725          2,062
       Medical Systems        1996       109,423        7,500                 -             -         10,609          1,496

    Seymour Rubin             1998       230,000       78,500                 -             -          5,000          8,514
      Vice President          1997       225,000       50,000                 -             -          5,150         14,124
      and President of        1996       223,379       32,284                 -             -         10,609          7,274
      RFI Corporation

    Michael H. Taber          1998       110,000       20,000          32,691(3)            -          5,000         12,407
       CFO, V.P. Finance,     1997       104,000       15,000          62,821(3)            -          5,150          9,655
       and Secretary          1996       100,000       12,500                 -             -          7,957          3,002

    Louis J. Farin, Sr.       1998       115,000       12,500                 -             -          5,000          9,183
      Sr. Vice President,     1997       110,000       15,000                 -             -          5,150          9,183
      V.P. & Genl. Mgr. -     1996       105,000       20,815                 -             -         10,609          1,532
      Del Power Conversion
</TABLE>

(1)  Includes   insurance   premiums   where   families  of  the   officers  are
     beneficiaries  and automobile  expense  allowances.  
(2)  Includes deferred  compensation in the amount of $125,000 for each of 1998,
     1997 and 1996 fiscal years, respectively.  
(3)  Earnings related to exercise of nonqualified stock options.

                                       19
<PAGE>
 Stock Options Granted to Certain Executive Officers During the Last Fiscal Year

            The following table sets forth certain information regarding options
for the  purchase  of the  Company's  common  stock  that  were  awarded  to the
Company's  Chief  Executive  Officer  and each of the  four  other  most  highly
compensated  executive  officers,  based upon  salary  and bonus  earned by such
executive officers and individuals in the fiscal year ended August 1, 1998.
<TABLE>
<CAPTION>
                                                                                                     Potential Realizable
  Individual Grants(1)                                                                                    % of Total
                                                                                                       Value at Assumed
                                                                                                        Annual Rates of 
                                                 Options                                           Stock Price Appreciation     
                                                Granted to         Exercise or                         for Option Term 
                                Options         Employees          Base Price     Expiration       -------------------------
            Name               Granted(#)     In Fiscal Year         ($)(Sh)         Date          5%($)(1)        10%($)(1)
     -------------------       ----------     --------------       -----------    ----------       --------        ---------
<S>                             <C>               <C>                <C>           <C>            <C>            <C>       
     Leonard A.Trugman           75,000            35%                $9.63         8/18/12        $779,256       $2,294,767

     David Engel                 15,000             7%                $9.63         8/18/12        $155,851         $458,953

     Seymour Rubin                5,000             2%                $9.63         8/18/12         $51,950         $152,984

     Michael Taber                5,000             2%                $9.63         8/18/12         $51,950         $152,984

     Louis J. Farin, Sr.          5,000             2%                $9.63         8/18/12         $51,950         $152,984
                 ----------------------
</TABLE>
    (1) Fair  market  value of stock on grant date  compounded  annually at rate
shown in column heading, for the option term, less exercise price.

                AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
                       AND FISCAL YEAR-END OPTION VALUES

         The following table sets forth certain  information  regarding  options
for the purchase of the Company's  common stock that were  exercised and or held
by the Company's Chief Executive  Officer and each of the four other most highly
compensated  executive  officers,  based upon  salary  and bonus  earned by such
executive officers in the fiscal year ended August 1, 1998.

<TABLE>
<CAPTION>
                                                                                                 Value of Unexercised
                                 Shares                              Number of Unexercised       In-the-Money Options
                               Acquired on           Value        Options at Fiscal Year-End   at Fiscal Year-End ($)(2)
      Name                     Exercise(#)       Realized($)(1)    Exercisable/Unexercisable   Exercisable/Unexercisable
-------------------            -----------       --------------    -------------------------   -------------------------
<S>                             <C>               <C>                    <C>     <C>             <C>         <C>    
Leonard A. Trugman               163,440           $1,361,858             572,789/89,069          $ 4,201,960/$94,840

David Engel                       15,804              $68,856               1,449/27,505          $     6,658/$40,411

Seymour Rubin                        -                  -                 136,687/16,980          $   768,019/$42,418

Michael H. Taber                   6,221              $32,691                   0/14,248          $         0/$29,875

Louis J. Farin, Sr.                  -                  -                  42,748/14,166          $   228,286/$27,124

----------------------
</TABLE>

(1) Difference  between the fair market value of the common stock  purchased and
the exercise price on the date of exercise.

(2) Difference  between the fair market value of the underlying common stock and
the exercise price for in-the-money options on August 1, 1998 ($9.875).

            Directors  of the  Company did not  receive  compensation  for their
services  as such  except a fee of  $1,000  for  each  meeting  of the  Board of
Directors which they attend.  Messrs.  Trugman and Rubin have waived their right
to receive such compensation.

Employment Agreements

            Mr. Leonard Trugman has an amended and restated employment agreement
with the Company,  effective as of August 1, 1992 which was subsequently amended
on July 20,  1994,  September  1, 1994 and April 29,  1998,  which ends July 31,
2005, pursuant to which he has agreed to serve as Chairman,  President and Chief
Executive Officer of the Company.  Mr. Trugman's annual base salary was $319,070
for the fiscal year ended August 1, 1998.  His annual base salary for the fiscal
year August 2, 1998 through July 31, 1999 is determined by multiplying  $319,070
by the greater of five percent or the increase in the Consumer Price Index as of
August 1, 1998 over the amount of such index as of August 1, 1997.  Mr.  Trugman
also receives a bonus each year equal to five (5%) percent of the Company's

                                       20
<PAGE>
pre-tax net income for such year.  Mr.  Trugman's  contract  also provides for a
deferred  compensation  account  whereby the Company  shall deposit (a) $100,000
annually and (b) after receipt of the  Company's  audited  financial  statements
with respect to each fiscal  year,  an amount equal to the lesser of (x) $25,000
or (y) five (5%)  percent of the  Company's  pre-tax  net income for such fiscal
year less  $100,000.  Also  included  in Mr.  Trugman's  agreement  are  certain
benefits in the event of a change of control. Either upon completion of the term
of the  agreement  or upon request at any time,  Mr.  Trugman may opt for a five
year extension in the form of a consulting  contract at a rate specified  within
the agreement.  The employment  agreement contains standard  confidentiality and
non-compete provisions.

         Mr. Leonard  Michaels,  who joined the Company as of September 1, 1992,
with the  acquisition  of Dynarad  Corp.,  has an employment  agreement with the
Company  wherein he is employed as a technical  consultant  to the Company  from
April 1, 1997 until July 29, 2002. Upon execution of such employment  agreement,
Mr. Michaels  received a signing bonus of $250,000 in the fiscal year ended July
31, 1993.  During fiscal 1997, due to a reduction in job  responsibilities,  the
Company wrote off the unamortized  balance of such signing bonus, and the charge
to fiscal 1997 earnings was $158,854.  Under  provisions of the consulting phase
of the employment  agreement,  Mr. Michaels' consulting fees for the fiscal year
ended August 1, 1998 were $107,131.  In consideration of Mr. Michaels'  covenant
not-to-compete  for ten  years as set  forth  in his  employment  agreement,  he
received  upon  execution  thereof a payment of $257,400  during the fiscal year
ended July 31, 1993, and during the ten year term thereof,  shall receive annual
non-compete payments of $52,000.

         Mr. Howard Bertan, former President of Bertan High Voltage Corp., has a
non-compete  agreement  for a  period  of ten  years,  wherein  he will  receive
$500,000 payable in equal quarterly payments, which commenced June 1, 1997 for a
period of ten years.  Such  payments  are subject to  adjustment  to reflect the
greater of (i) 5% or  (ii)increases  in the Consumer  Price Index for the United
States.

         Mr. Lester Bertan, former Chairman and part owner of Bertan Associates,
Inc.,  has a non-compete  agreement  for a period of ten years,  wherein he will
receive  $500,000 payable in equal quarterly  payments,  which commenced June 1,
1994 for a period of ten years.  Such  payments  are  subject to  adjustment  to
reflect the greater of (i) 5% or (ii)  increases in the Consumer Price Index for
the United States.

Stock Option Plans

Nonqualified Stock Option Plan

         The  Company's  Nonqualified  Stock Option Plan provides for a total of
3,124,293  shares of common stock  authorized to be granted under such plan. For
the year ended  August 1, 1998,  options to purchase an  aggregate  of 1,562,246
shares were outstanding at an average exercise price of $4.45 per share,  having
a range of  expiration  dates from  September  2000 to July 2013.  During fiscal
1998, the Company granted options to purchase  214,500 shares of common stock at
an  average  exercise  price of $9.50 per share.  During  fiscal  1998,  415,666
options were exercised and 17,833  options were cancelled or expired.  At August
1, 1998,  463,958  shares were  available for future grant under such plan.  The
Company's  Nonqualified  Stock Option Plan  provides for the grant of options to
its key employees,  directors and  consultants in order to give such employees a
greater  personal  interest in the success of the Company and an added incentive
to continue and advance in their employment.  The Company's  Nonqualified  Stock
Option  Plan  provides  for a fifteen  year  expiration  period for each  option
granted  thereunder  and allows for the  exercise  of options by delivery by the
optionee of  previously  owned common stock of the Company  having a fair market
value equal to the option price, or by a combination of cash and common stock.

         As of October 30,  1998,  the  Company had granted  options to purchase
1,001,975  shares to Leonard A. Trugman,  64,758 shares to David Engel,  158,667
shares to Seymour Rubin,  51,218 shares to Michael Taber, 72,790 shares to Louis
J. Farin, Sr., 25,007 shares to Paul Liesman and 10,000 shares to John Mankowich
at an average exercise price of $3.62 per share. Mr. Trugman  exercised  163,440
options,  Mr.  Engel  exercised  15,804  options and Mr. Taber  exercised  6,221
options during the fiscal year ended August 1, 1998.

Stock Purchase Plan

Employee Stock Purchase Plan

         The  Company  has an employee  stock  purchase  plan which is funded by
payroll  deductions.  Shares acquired  pursuant to such plan by employees of the
Company are purchased in the open market by the custodian of the plan.

                                       21
<PAGE>
All shares so purchased are held in street name until either June 30 or December
31,  whereupon  the shares to which the  employee is entitled  are issued.  With
respect to the officers, the following shares have been issued under the plan:

                                                Fiscal     Fiscal    Fiscal
                                                 Year       Year      Year
                                                Ended      Ended     Ended
                 Officer                         1998       1997      1996 
                 -------                        -----      -----     ----- 

        Leonard A. Trugman                        --       1,013     2,048

        Seymour Rubin                             --       1,299     2,625

        Michael H. Taber                           14        168       419

        David Engel                               --         162       199

        Paul Liesman                              --          94        77

        Howard Bertan                             --         149       350

        George Solomon                            --         305       691


Employee Benefit Plans

Defined Benefit Plan

         The  Company  has  a  defined   benefit  pension  plan  which  provides
retirement benefits for some employees  ("Participants").  Pursuant to the plan,
Participants will receive a benefit,  computed by an actuary at retirement based
upon  their  number  of years of  credited  service  and  average  total  annual
compensation  during  five  consecutive  years of their  service,  reduced  by a
portion of the benefits  received under social security.  Effective  February 1,
1986, the plan was frozen so that future salary  increases are not considered in
determining a Participant's  pension benefit,  contributions by Participants are
no  longer  permitted  and  participation  in  the  plan  is  limited  to  those
Participants  as of August 1, 1984. The Company  continues to fund the plan with
contributions determined on an actuarial basis.

         The following  table  illustrates,  for  representative  average annual
covered  compensation  and  years  of  credited  service  classifications,   the
estimated annual  retirement  benefits payable to employees under this plan upon
retirement  at age 65 based on the  plan's  normal  form of  benefit  and social
security  benefits  frozen  as of August 1,  1984.  Benefits  under the plan are
limited to the extent required by the Employee Retirement Income Security Act of
1974.

                              PENSION PLAN TABLE
                              ------------------

                   Average Annual      Years of Credited Service
               Covered Compensation           15 or more
               --------------------    -------------------------

                     $ 40,000                   $13,000
                     $ 50,000                   $17,000
                     $ 75,000                   $27,000
                     $100,000                   $37,000

The  executive  officers  named  in  the  Summary   Compensation  Table  do  not
participate  in the plan,  except for Louis  Farin,  Sr.  During the fiscal year
ended July 29,  1995,  the Pension Plan was  submitted  to the Internal  Revenue
Service and a favorable determination letter was received.

401(k) Plan

         The Company has a 401(k) plan under which  employees may elect to defer
a portion of their annual compensation.  Merrill Lynch,  Pierce,  Fenner & Smith
Inc.  ("Merrill  Lynch") is the plan  administrator.  All employees with over 90
days of  service  and  over the age of 21 may  elect to defer  from 2% to 15% of
their annual salary. The

                                       22
<PAGE>
modified  plan is  administered  by Merrill  Lynch and employees may elect where
their deferred salary will be invested.  Highly  compensated  employees'  salary
deferrals  are  limited  by  the  contribution  levels  of  all  other  eligible
participants.  Distributions  are  made at  retirement  or upon  termination  of
employment.  During the fiscal year ended August 3, 1996, the plan was submitted
to the  Internal  Revenue  Service  and a  favorable  determination  letter  was
received.

         On February 1, 1986 the Company initiated a profit sharing plan as part
of the 401(k) plan which allows  substantially all of the Company's employees to
participate  in the  profits of the  Company,  regardless  of whether or not the
employee  elected to contribute to the 401(k) plan in any year. Since the profit
sharing plan is part of the 401(k) plan,  eligibility,  participation  and other
requirements are governed by the provisions of the 401(k) plan. Contributions to
the plan  are  determined  based  upon a  calculation  directly  related  to the
Company's sales volume and pre-tax profits. The Company's Compensation Committee
approved  $65,000,  $52,500 and $40,000  profit  sharing  contributions  for the
periods ended August 1, 1998, August 2, 1997 and August 3, 1996.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
             The table  below sets forth  information  concerning  the shares of
common stock  beneficially  owned as of October 30, 1998 by the Directors and by
all  Directors,  Officers  and  significant  employees of the Company as a group
without  naming  them and each  person  who is  known by the  Company  to be the
beneficial  owner of more than five (5%)  percent of the common stock as of such
date.

                                       Shares of Common
                                      Stock Beneficially
   Name and Address of                   Owned as of                   Percent
   Beneficial Owner                   October 30, 1998 (1)             of Class
----------------------                --------------------             --------

OFFICERS AND DIRECTORS
----------------------

LEONARD A. TRUGMAN                          836,137 (2)                  10.1%  
c/o Del Global Technologies Corp. 
One Commerce Park
Valhalla, NY 10595

NATAN BERTMAN                               101,667 (3)                   1.3%
c/o Bertman & Levine
945 Manhattan Avenue
Brooklyn, NY 11222

DAVID MICHAEL                               157,505 (4)                   2.0%
c/o David Michael & Co., P.C 
Seven Penn Plaza
New York, NY  10001

SEYMOUR RUBIN                               166,684 (5)                   2.1%
c/o RFI Corporation
100 Pine Aire Drive
Bay Shore, NY  11706

JAMES TIERNAN                                 8,733 (6)                    *
c/o Del Global Technologies Corp. 
One Commerce Park
Valhalla, NY 10595

DAVID ENGEL                                  11,912 (7)                    *
c/o Del Global Technologies Corp. 
One Commerce Park
Valhalla, NY 10595

                                       23
<PAGE>
LOUIS J. FARIN, SR                           57,065(8)                     *
c/o Del Global Technologies Corp. 
One Commerce Park
Valhalla, NY 10595

PAUL J. LIESMAN                              11,241(9)                     *
c/o Bertan High Voltage Corp. 
121 New South Road
Hicksville, NY  11801

JOHN MANKOWICH                                2,500(10)                    *
c/o Gendex-Del Medical Imaging Corp. 
11550 West King Street
Franklin Park, IL  60634

MICHAEL H. TABER                              6,956(11)                    *
c/o Del Global Technologies Corp. 
One Commerce Park
Valhalla, NY 10595

All Officers and Directors                ---------
(10) as a Group                           1,360,400(12)                  15.7% 
                                          =========                            

OTHERS

MORGAN STANLEY ASSET MANAGEMENT, INC.       651,800                       8.5%
One Tower Bridge                          =========
Conshoken, PA  19428-2899

1838 INVESTMENT ADVISORS FUND               476,360                       6.2%
5 Radnor Corporate Center - Suite 320     =========
100 Matsonford Road
Radnor, PA  19087

DIMENSIONAL FUND ADVISORS                   399,323                       5.2%
1299 Ocean Avenue - 11th Floor            =========
Santa Monica, CA  90401

*      Represents less than 1% of the outstanding  shares of common stock of the
       Company  including  shares  issuable  under  options  which are presently
       exercisable  or will  become  exercisable  within 60 days of October  30,
       1998.

  (1)     Unless otherwise indicated, each person has sole voting and investment
          power with respect to the shares shown as  beneficially  owned by such
          person.

  (2)     Includes 605,607 shares,  options for which are presently  exercisable
          or will become exercisable within 60 days of October 30, 1998.

  (3)     Includes 74,445 shares, options for which are presently exercisable or
          will become exercisable within 60 days of October 30, 1998.

  (4)     Includes 122,230 shares,  options for which are presently  exercisable
          or will become exercisable within 60 days of October 30, 1998.

  (5)     Includes 144,691 shares,  options for which are presently  exercisable
          or will become exercisable within 60 days of October 30, 1998.

  (6)     Includes 4,733 shares,  options for which are presently exercisable or
          will become exercisable within 60 days of October 30, 1998.

                                       24
<PAGE>
  (7)     Includes 11,189 shares, options for which are presently exercisable or
          will become exercisable within 60 days of October 30, 1998.

  (8)     Includes 47,938 shares, options for which are presently exercisable or
          will become exercisable within 60 days of October 30, 1998.

  (9)     Includes 10,857 shares, options for which are presently exercisable or
          will become exercisable within 60 days of October 30, 1998.

 (10)     Includes 2,500 shares,  options for which are presently exercisable or
          will become exercisable within 60 days of October 30, 1998.

 (11)     Includes 6,220 shares,  options for which are presently exercisable or
          will become exercisable within 60 days of October 30, 1998.

 (12)     Includes 1,133,107 shares, options for which are presently exercisable
          or will become exercisable within 60 days of October 30, 1998.


ITEM 13.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

           Under the Company's Stock Buy-Back Program, which was approved by the
Board of Directors,  the Company repurchased 70,000 shares of common stock owned
by Mr.  Leonard A.  Trugman at an average fair market value of $11.00 per share.
The amounts  paid to Mr.  Trugman were  associated  with the exercise of 163,440
shares of Del  Global  Technologies  Corp.  common  stock  under  the  Company's
Employee Stock Option Plan. Such funds were used to pay the payroll  withholding
taxes  due  relating  to  the  gains   realized   upon  the  exercise  of  these
non-qualified  stock  options.  During the fiscal  year,  Mr.  Trugman's  direct
holdings of Del Global  Technologies  Corp.  common  stock  increased  by 60,826
shares.

                                       25
<PAGE>
                                     PART IV


ITEM 14.    EXHIBITS,  FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
            -----------------------------------------------------------------

(a)   1.    Financial Statements                                    Page Number
            -----------------                                       ----------- 

            CONSOLIDATED FINANCIAL STATEMENTS OF
            DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES:

            Independent Auditors' Report                                 F1

            Consolidated Balance Sheets as of August 1, 1998 and
            August 2, 1997                                               F2

            Consolidated Statements of Income for the Fiscal Years
            Ended August 1, 1998, August 2, 1997 and August 3, 1996      F3

            Consolidated Statements of Shareholders' Equity for the
            Fiscal Years Ended August 1, 1998, August 2, 1997 and 
            August 3, 1996                                               F4

            Consolidated Statements of Cash Flows for the Fiscal 
            Years Ended August 1, 1998, August 2, 1997 and August 3,
            1996                                                      F5 - F6

            Notes to Consolidated Financial Statements for the 
            Fiscal Years Ended August 1, 1998,  August 2, 1997 and
            August 3, 1996                                            F7 - F19

      2.    Supplemental Financial Information

            Unaudited Selected Quarterly Financial Data                    F20

      3.    Exhibits


            Exhibit
            Number        Description of Document                     Footnotes
            -------       --------------------------------            ---------

              3.1      Certificate of Incorporation dated 
                       October 25, 1954                                     (1)

              3.2      Certificate of Amendment of Certificate of
                       Incorporation dated January 28, 1957                 (1)

              3.3      Certificate of Amendment of Certificate of
                       Incorporation dated July 12, 1960                    (1)

              3.4      Certificate of Amendment of Certificate of 
                       Incorporation dated March 15, 1989                   (2)

              3.5      Certificate of Amendment of Certificate of
                       Incorporation dated January 19, 1989                 (3)

              3.6      Certificate of Amendment of the Certificate
                       of Incorporation of Del Electronics Corp.
                       dated February 14, 1996                              (4)

                                       26
<PAGE>
              3.7      By-Laws of Del Global Technologies Corp.             (1)

              4.1      Warrant Agreement between Del Electronics Corp.
                       and Chase Manhattan  Investment  Holdings,  
                       Inc., dated January 27, 1995                         (5)

              4.2      Amendment to Warrant Agreement between Del 
                       Electronics Corp. and Chase Manhattan Investment
                       Holdings, Inc., dated January 27, 1995               (6)

              4.3      Warrant Agreement and Warrant Certificate of 
                       The Chase Manhattan Bank, N.A.                       (7)

             *4.4      Warrant Certificate of Porter, LeVay and Rose,
                       Inc.

             *4.5      Warrant Certificate of Michael Porter

             *4.6      Warrant Certificate of Jonathan Gordon

              4.7      Copy of Del Global Technologies Corp. Amended
                       and Restated Stock Option Plan (the "Plan")          (8)

              4.8      Stock Purchase Plan                                  (9)

              4.9      Option  Agreement, substantially in the form
                       used in connection with options granted under
                       the Plan                                            (10)

             10.1      Amended and Restated Executive Employment
                       Agreement of Leonard A. Trugman                     (11)

             10.2      Amendment No. 1 to Amended and Restated 
                       Employment Agreement of Leonard A. Trugman          (12)

             10.3      Amendment No. 2 to Amended and Restated 
                       Employment Agreement of Leonard A. Trugman          (13)

            *10.4      Amendment No. 3 to Amended and Restated 
                       Employment Agreement of Leonard A. Trugman          

             10.5      Amended and Restated Credit Agreement dated 
                       as of March 6, 1996 among Del Global  Tech-
                       nologies Corp., RFI Corporation, Dynarad 
                       Corp., Bertan High Voltage Corp., Del Medical
                       Systems Corp. and The Chase Manhattan Bank,
                       N.A.                                                (14)

             10.6      First Amendment to Amended and Restated Credit  
                       Agreement dated as of August 2, 1996                (15)

             10.7      Second Amendment to Amended and Restated Credit 
                       Agreement dated as of August 1, 1997                (16)

                                       27
<PAGE>
            *10.8      Third Amendment to Amended and Restated Credit  
                       Agreement dated as of July 31, 1998

             10.9      Lease Agreement dated April 7, 1992 between 
                       Messenger Realty and the Company                    (17)

             10.10     Lease Agreement dated September 1, 1992 
                       between Arleigh Construction and Del Acqui-
                       sition Corp.                                        (18)

             10.11     Lease and Guaranty of Lease dated May 25, 
                       1994 between Leshow Enterprises and Bertan 
                       High Voltage Corp.                                  (19)

             10.12     Lease dated January 4, 1993 between Curto 
                       Reynolds Oelerich Inc. and Gendex-Del Medical
                       Imaging Corp.                                       (20)

             10.13     Consulting Agreement by and between Del 
                       Acquisition Corp. and Harvey Schechter              (21)

             10.14     Consulting Agreement by and between Del 
                       Acquisition Corp. and Mark Weiss                    (22)

            *11        Computation of Earnings per Common Share and 
                       Common Share Equivalents for year ended 
                       August 1, 1998  

            *21        Subsidiaries of Del Global Technologies Corp.

            *23.1      Consent of Deloitte & Touche LLP

            *27        Financial Data Schedule

* Filed herewith

       (1)        Filed  as  Exhibit  to  Del  Electronics  Corp.   Registration
                  Statement on Form S-1 (No. 2-16839) and incorporated herein by
                  reference.

       (2)        Filed as Exhibit 3.5 to Del Electronics Corp. Annual Report on
                  Form 10-K for the year ended  August 2, 1986 and  incorporated
                  herein by reference.

       (3)        Filed as Exhibit 4.5 to Del  Electronics  Corp.  Form S-3 (No.
                  33-30446)  filed  August 10, 1989 and  incorporated  herein by
                  reference.

       (4)        Filed as Exhibit 3.6 to Del Global  Technologies  Corp. Annual
                  Report  on Form  10-K for the year  ended  August  2, 1997 and
                  incorporated herein by reference.

       (5)        Filed as Exhibit  4.5 to Del  Electronics  Corp.  Registration
                  Statement on Form S-3 (No.  33-61025) and incorporated  herein
                  by reference.

       (6)        Filed as Exhibit  4.6 to Del  Electronics  Corp.  Registration
                  Statement on Form S-3 (No.  33-61025) and incorporated  herein
                  by reference.

       (7)        Filed as Exhibits 4.1 and 4.2 to Del Global Technologies Corp.
                  Registration   Statement  on  Form  S-3  (No.  333-09131)  and
                  incorporated herein by reference.

       (8)        Filed as Exhibit A to Del  Electronics  Corp.  Proxy Statement
                  dated January 26, 1994 and incorporated herein by reference.

       (9)        Filed as Exhibit 4.9 to Del Electronics Corp. Annual Report on
                  Form 10-K for the year  ended July 29,  1989 and  incorporated
                  herein by reference.

      (10)        Filed as Exhibit 4.8 to Del Electronics Corp. Annual Report on
                  Form 10-K for the year  ended July 30,  1994 and  incorporated
                  herein by reference.

                                       28
<PAGE>
      (11)        Filed as Exhibit 10.1 to Del Electronics  Corp.  Annual Report
                  on Form 10-K for the year ended July 31, 1993 and incorporated
                  herein by reference.

      (12)        Filed as Exhibit 10.2 to Del Electronics  Corp.  Annual Report
                  on Form 10-K for the year ended July 30, 1994 and incorporated
                  herein by reference.

      (13)        Filed as Exhibit 10.3 to Del Electronics  Corp.  Annual Report
                  on Form 10-K for the year ended July 30, 1994 and incorporated
                  herein by reference.

      (14)        Filed as  Exhibit  2.6 to the Del  Global  Technologies  Corp.
                  Current   Report  on  Form  8-K  dated   March  21,  1996  and
                  incorporated herein by reference.

      (15)        Filed as  Exhibit  10.8 to the Del Global  Technologies  Corp.
                  Annual  Report on Form 10-K for the year ended  August 3, 1996
                  and incorporated herein by reference.

      (16)        Filed as  Exhibit  10.8 to the Del Global  Technologies  Corp.
                  Annual  Report on Form 10-K for the year ended  August 2, 1997
                  and incorporated herein by reference.

      (17)        Filed  as  Exhibit  6(a) to Del  Electronics  Corp.  Quarterly
                  Report  on Form  10-Q for the  quarter  ended  May 2, 1992 and
                  incorporated herein by reference.

      (18)        Filed as Exhibit 28.6 to Del Electronics Corp.  Current Report
                  on Form 8-K dated November 9, 1992 and incorporated  herein by
                  reference.

      (19)        Filed as Exhibit 2.5 to Del Electronics  Corp.  Current Report
                  on Form 8-K dated  June 10,  1994 and  incorporated  herein by
                  reference.

      (20)        Filed as Exhibit  10.21 to the Del Global  Technologies  Corp.
                  Registration  Statement on Form S-2 (No. 333-2991) dated April
                  30, 1997 and incorporated herein by reference.

      (21)        Filed as Exhibit 28.4 to Del Electronics Corp.  Current Report
                  on Form 8-K dated November 9, 1992 and incorporated  herein by
                  reference.

      (22)        Filed as Exhibit 28.5 to Del Electronics Corp.  Current Report
                  on Form 8-K dated November 9, 1992 and incorporated herein by
                  reference.


(b)      Reports on Form 8-K - No reports on Form 8-K have been filed during the
         last quarter of the period covered by this report

                                       29
<PAGE>
INDEPENDENT  AUDITORS'  REPORT


To the Board of Directors and Shareholders of
Del Global Technologies Corp. and Subsidiaries
Valhalla, New York

We have  audited  the  accompanying  consolidated  balance  sheets of Del Global
Technologies  Corp. and subsidiaries as of August 1, 1998 and August 2, 1997 and
the related  consolidated  statements of income,  shareholders'  equity and cash
flows for each of the three  fiscal  years in the period  ended  August 1, 1998.
These financial  statements are the responsibility of the Company's  management.
Our responsibility is to express an opinion on these financial  statements based
on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our  opinion,  such  financial  statements  present  fairly,  in all material
respects,   the  financial  position  of  Del  Global   Technologies  Corp.  and
subsidiaries  at  August 1, 1998 and  August  2, 1997 and the  results  of their
operations  and their  cash flows for each of three  fiscal  years in the period
ended  August  1,  1998,  in  conformity  with  generally  accepted   accounting
principles.


/S/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP

New York, New York
October 16, 1998

                                       F1
<PAGE>
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS 


                                                       August 1,       August 2,
                                                         1998            1997 
                                                     -----------     -----------
ASSETS

CURRENT ASSETS:

Cash and cash equivalents (Note 1)                   $ 3,401,697     $ 6,070,608

Investments available-for-sale
  (Notes 1, 2 and 10)                                    913,125         722,566

Trade receivables (net of allowance
   for doubtful accounts of $206,524 at
  August 1, 1998 and $60,407
   at August 2, 1997)                                 14,341,744      11,211,357

Cost and estimated earnings in
   excess of billings on uncompleted
   contracts (Notes 1 and 3)                           3,306,673       1,868,002


Inventory (Notes 1 and 4)                             29,195,262      24,681,348

Prepaid expenses and other current
   assets (Note 9)                                     1,358,847       1,808,762
                                                     -----------     -----------
     Total current assets                             52,517,348      46,362,643
                                                     -----------     -----------
FIXED ASSETS - At cost (Notes 1
   and 5)                                             19,229,901      16,245,279

Less accumulated depreciation and
   amortization                                        6,490,392       5,086,269
                                                     -----------     -----------
                                                      12,739,509      11,159,010
                                                     -----------     -----------

INTANGIBLES (net of accumulated
  amortization of $413,557 at
  August 1, 1998 and $242,009
  at August 2, 1997) (Note 1)                            941,443       1,112,991


GOODWILL (net of accumulated
   amortization of $770,655 at August 1,
   1998 and $561,082 at August 2,
   1997) (Notes 1 and 11)                              4,809,255       4,135,409

DEFERRED CHARGES                                         387,044         507,933

OTHER ASSETS (Notes 7 and 9)                             962,028         851,824
                                                     -----------     -----------
TOTAL                                                $72,356,627     $64,129,810
                                                     ===========     ===========

                                                       August 1,       August 2,
                                                         1998            1997   
                                                     -----------     -----------
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

Current portion of long-term debt (Note 6)           $   120,410     $   127,999

Accounts payable - trade                               5,403,403       3,936,529

Accrued liabilities                                    3,938,623       3,699,188

Deferred compensation liability (Notes 2
      and 10)                                            913,046         722,566

Income taxes (Notes 1 and 9)                             394,540         868,949
                                                     -----------     -----------
      Total current liabilities                       10,770,022       9,355,231
                                                     -----------     -----------

LONG-TERM LIABILITIES:

LONG-TERM DEBT (Less current
   portion included above) (Note 6)                      240,273         411,127

OTHER (Note 10)                                          484,366         725,258

DEFERRED INCOME TAXES
   (Notes 1 and 9)                                     1,406,162       1,107,964
                                                     -----------     -----------
     Total liabilities                                12,900,823      11,599,580
                                                     -----------     -----------
COMMITMENTS AND
CONTINGENCIES (Notes 6,
  7,8,10 and 11)


SHAREHOLDERS' EQUITY (Notes 1, 7 and 8):
  Common stock - $.10 par value;
     Authorized  -  20,000,000  shares;
     Issued and outstanding - 7,988,993
     shares at August 1, 1998 and
     7,516,234 at August 2, 1997                         798,898         751,622
  Additional paid-in capital                          49,124,456      45,909,517
  Retained earnings                                   12,360,906       6,572,318
                                                     -----------     -----------
                                                      62,284,260      53,233,457
                                                     -----------     -----------
 Less common stock in treasury -
    269,246 at August 1, 1998 and
    104,255 at August 2, 1997                          2,828,456         703,227
                                                     -----------     -----------
Total shareholders' equity                            59,455,804      52,530,230
                                                     -----------     -----------
TOTAL                                                $72,356,627     $64,129,810
                                                     ===========     ===========
See notes to consolidated financial statements.

                                       F2
<PAGE>
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME  

                                                 Fiscal Year Ended 
                                    --------------------------------------------
                                      August 1,        August 2,       August 3,
                                        1998             1997            1996   
                                    ------------    ------------    ------------

NET SALES (Notes 1, 3 and 12)       $ 62,304,878    $ 54,685,289    $ 43,745,454
                                    ------------    ------------    ------------

COSTS AND EXPENSES:
Cost of sales                         36,908,317      32,854,825      27,355,262
Research and development (Note 1)      5,863,343       4,548,487       3,429,331
Selling, general and administrativ    11,273,059      10,193,244       7,503,689
Interest (income) expense - net of
 interest expense of $129,654 in
 1998, $238,679 in 1997 and interest
 income of $34,777 in 1996              (167,926)        (54,470)      1,148,639
                                    ------------    ------------    ------------
                                      53,876,793      47,542,086      39,436,921
                                    ------------    ------------    ------------
INCOME BEFORE PROVISION FOR
  INCOME TAXES                         8,428,085       7,143,203       4,308,533

PROVISION FOR INCOME TAXES
  (Notes 1 and 9)                      2,639,497       2,231,649       1,393,111
                                    ------------    ------------    ------------
NET INCOME                          $  5,788,588    $  4,911,554    $  2,915,422
                                    ============    ============    ============
PER SHARE AMOUNTS (Note 1):


NET INCOME PER COMMON SHARE AND
  COMMON SHARE EQUIVALENTS:

        BASIC                       $        .77    $        .66    $        .59
                                    ============    ============    ============

        DILUTED                     $        .71    $        .61    $        .48
                                    ============    ============    ============


See notes to consolidated financial statements.

                                       F3
<PAGE>
DEL GLOBAL TECHNOLOGIES  CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY 
<TABLE>
<CAPTION>
                                                                                           
                                      Common Stock Issued         Treasury Stock           Additional          
                                     --------------------       -------------------         Paid-in       Retained
                                       Shares     Amount        Shares      Amount          Capital       Earnings        Total   
                                       ------     ------        ------      ------         ----------     --------     -----------
                                                                         

<S>                                  <C>       <C>               <C>    <C>               <C>           <C>            <C>        
BALANCE - July 29, 1995              4,129,599  $ 412,960        55,165 $  (316,915)      $16,239,784    $ 3,189,244   $19,525,073

Stock dividends - 3%
December 1995 and
July 1996 (Note 8)                     331,726     33,173                                   2,650,875     (2,693,506)       (9,458)

Exercise of stock options
and warrants (Note 8)                  487,081     48,707                                   2,566,716                    2,615,423

Shares repurchased (Note 8)                                       3,090     (19,770)                                       (19,770)

Tax benefit related to
exercise of stock options
& warrants (Note 8)                                                                           458,324                      458,324

Net proceeds from sale
of 2,275,000 shares through
Public Offering (Note 8)             2,275,000    227,500                                  21,357,014                   21,584,514

Net Income                                                                                                 2,915,422     2,915,422
                                     ---------  ---------      -------- -----------       -----------    -----------   -----------
BALANCE - August 3, 1996             7,223,406    722,340        58,255    (336,685)       43,272,713      3,411,160    47,069,528


Stock dividend - 3%
November 1997 (Note 8)                 215,301     21,528                                   1,724,075     (1,750,396)       (4,793)

Exercise of stock options
and warrants (Note 8)                   73,370      7,338                                     415,122                      422,460

Shares repurchased (Note 8)                                      46,000    (366,542)                                      (366,542)

Tax benefit related to
exercise of stock options
& warrants (Note 8)                                                                           458,023                      458,023

Contribution to Profit
Sharing Plan (Note 7)                    4,157        416                                      39,584                       40,000

Net Income                                                                                                 4,911,554     4,911,554
                                     ---------  ---------      -------- -----------       -----------    -----------   -----------
BALANCE - August 2, 1997             7,516,234    751,622       104,255    (703,227)       45,909,517      6,572,318    52,530,230

Exercise of stock options
and warrants (Note 8)                  467,573     46,757        36,091    (268,047)        1,950,146                    1,728,856

Shares repurchased (Note 8)                                     128,900  (1,857,182)                                    (1,857,182)

Tax benefit related to
exercise of stock options
& warrants (Note 8)                                                                         1,074,582                    1,074,582

Compensation cost of
warrants issued (Note 8)                                                                      142,949                      142,949

Contribution to Profit
Sharing Plan (Note 7)                    5,186        519                                      51,981                       52,500

Other                                                                                          (4,719)                      (4,719)

Net Income                                                                                                 5,788,588     5,788,588
                                     ---------  ---------      -------- -----------       -----------    -----------   -----------
BALANCE - August 1, 1998             7,988,993  $ 798,898       269,246 $(2,828,456)      $49,124,456    $12,360,906   $59,455,804
                                     =========  =========      ======== ===========       ===========    ===========   ===========
</TABLE>

See notes to consolidated financial statements.

                                       F4
<PAGE>
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS                                 
<TABLE>
<CAPTION>
                                                                            Fiscal Year Ended                     
                                                                ------------------------------------------        
                                                                  August 1,      August 2,       August 3,
                                                                    1998           1997            1996   
                                                                -----------    -----------    ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                             <C>            <C>             <C>        
  Net income                                                    $ 5,788,588    $ 4,911,554     $ 2,915,422
  Adjustments to reconcile net income to
         net cash provided by operating activities
         net of effects from purchase of Gendex:
      Imputed interest                                               48,568         68,309          66,986
      Depreciation                                                1,402,833      1,038,960         740,777
      Amortization                                                  695,655        772,148         455,534
      Deferred income tax provision (benefit)                       569,970        147,981         (56,609)
      Tax benefit from exercise of stock options and
          warrants                                                1,074,582        458,023         458,324
      Amortization of stock-based compensation                       99,444         43,505            --
  Changes in assets and liabilities:
      Increase in trade receivables                              (3,130,387)    (1,990,029)     (2,764,475)
      (Increase) decrease in cost and estimated
        earnings in excess of billings
        on uncompleted contracts                                 (1,438,671)    (1,868,002)        395,847
      Increase in inventory                                      (4,380,754)      (861,466)     (1,144,987)
      Increase in prepaid and
        other current assets                                       (126,749)      (256,109)       (355,086)
      Decrease (increase) in other assets                             3,277        (10,535)        (49,136)
      Increase in accounts payable - trade                        1,466,874        242,949       1,153,965
      Increase in accrued liabilities                               110,701        130,959       1,418,461
      Increase in deferred compensation liability                   190,480        177,090         167,305
      (Decrease) increase in income taxes payable                  (474,410)       225,404         365,715
                                                                -----------    -----------    ------------        
           Net cash provided by operating activities              1,900,001      3,230,741       3,768,043
                                                                -----------    -----------    ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Net cash paid on acquisition of
        subsidiaries                                             (1,103,377)       (15,000)     (8,149,085)
  Payments to former shareholders of
        subsidiary acquired                                        (117,219)      (132,640)        (52,938)
  Expenditures for fixed assets                                  (2,896,532)    (2,659,481)     (1,968,070)
  Investment in marketable securities                              (190,559)      (177,090)       (167,117)
                                                                -----------    -----------    ------------
           Net cash used in investing activities                 (4,307,687)    (2,984,211)    (10,337,210)
                                                                -----------    -----------    ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Net proceeds from public offering                                    --             --        21,584,514
  Repayment of bank borrowing                                      (178,443)       (80,804)    (12,226,404)
  Cost of debt restructuring                                         (2,237)        (4,043)        (63,327)
  Payment for repurchase of shares                               (1,857,182)      (366,542)        (19,770)
  Proceeds from exercise of stock options & warrants              1,728,856        422,460       2,615,423
  Other                                                              47,781         35,207          (9,458)
                                                                -----------    -----------    ------------
           Net cash (used in) provided by financing activities     (261,225)         6,278      11,880,978
                                                                -----------    -----------    ------------
</TABLE>

  See notes to consolidated financial statements.                    (Continued)

                                       F5
<PAGE>
DEL GLOBAL TECHNOLOGIES  CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS                            
<TABLE>
<CAPTION>
                                                                            Fiscal Year Ended                     
                                                                ------------------------------------------        
                                                                  August 1,      August 2,       August 3,
                                                                    1998           1997            1996   
                                                                -----------    -----------    ------------
<S>                                                             <C>             <C>             <C>       
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS           $(2,668,911)    $  252,808      $5,311,811

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                      6,070,608      5,817,800         505,989
                                                                -----------    -----------    ------------
CASH AND CASH EQUIVALENTS, END OF YEAR                          $ 3,401,697     $6,070,608      $5,817,800
                                                                ===========    ===========    ============  
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
  INFORMATION:

  Interest paid                                                 $   127,980     $   86,679      $1,051,327
                                                                ===========    ===========    ============

  Income taxes paid                                             $ 1,464,597     $1,400,240      $  625,682
                                                                ===========    ===========    ============
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
  AND FINANCING ACTIVITIES:

  ACQUISITION OF SUBSIDIARIES                                   $ 1,103,377     $   15,000      $8,152,185
                                                                -----------    -----------    ------------
  Cash acquired in acquisition                                         --             --            (3,100)
                                                                -----------    -----------    ------------
                                                                       --             --            (3,100)
                                                                -----------    -----------    ------------
  Cash paid to acquire subsidiaries                             $ 1,103,377     $   15,000      $8,149,085
                                                                ===========    ===========    ============
</TABLE>

See notes to consolidated financial statements.

                                       F6
<PAGE>
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FISCAL YEARS ENDED August 1, 1998, August 2, 1997, and August 3, 1996


1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         a.  Description of Business  Activities - Del Global Technologies Corp.
             ("Del")   together   with  its   wholly-owned   subsidiaries,   RFI
             Corporation ("RFI"), Dynarad Corp. ("Dynarad"), Bertan High Voltage
             Corp. ("Bertan"),  Gendex-Del Medical Imaging Corp.  ("Gendex-Del),
             and Del Medical  Systems Corp.  ("Del Medical")  (collectively  the
             "Company"),  are engaged in two major lines of business.  Del, RFI,
             Bertan and to a lesser  extent  Dynarad,  are engaged in the design
             and  manufacture  of critical  electronic  subsystems  for medical,
             industrial  and military  applications.  Dynarad and Gendex-Del are
             engaged in the design and  manufacture  of  cost-efficient  medical
             imaging  systems  including high frequency  portable x-ray systems,
             stationary  x-ray systems and  mammography  units which are used in
             the medical diagnostic industry. Del Medical is also engaged in the
             distribution of cost-effective, medical diagnostic products.

         b.  Principles of Consolidation - The consolidated financial statements
             include the accounts of Del, RFI, Dynarad,  Bertan,  Gendex-Del and
             Del Medical.  All material  intercompany  accounts and transactions
             have been  eliminated.  Del  purchased  all of the common  stock of
             Dynarad on September 1, 1992, the assets of Bertan on April 1, 1994
             and  certain  assets of  Gendex-Del  on March 6, 1996.  Del Medical
             Systems was formed on June 1, 1994.

         c.  Use of  Estimates - The  preparation  of  financial  statements  in
             conformity with generally accepted  accounting  principles requires
             management  to make  estimates  and  assumptions  that  affect  the
             reported  amounts  of assets  and  liabilities  and  disclosure  of
             contingent  assets  and  liabilities  at the date of the  financial
             statements and the reported amounts of revenues and expenses during
             the  reporting  period.  Actual  results  could  differ  from those
             estimates.

         d.  Accounting  Period - The  Company's  fiscal  year-end is based on a
             52/53-week cycle ending on the Saturday nearest to July 31.

         e.  Revenue Recognition - The Company recognizes revenues upon shipment
             of its products  except for certain  products  which have long-term
             production  cycles  and  high  dollar  value.  Revenues  for  these
             products are recognized  using the percentage of completion  method
             of accounting in proportion to costs incurred. The Company provides
             for returned products on an estimated basis.

         f.  Inventory  Valuation  -  Inventory  is  stated at the lower of cost
             (first-in, first-out) or market.

         g.  Depreciation  and  Amortization - Depreciation and amortization are
             computed by the straight-line  method at rates adequate to allocate
             the cost of  applicable  assets over their  expected  useful lives,
             which range from 3 to 40 years.

         h.  Research and Development Costs - Research and development costs are
             charged to expense in the year incurred.

         i.  Net Income per Common Share and Common Share  Equivalents  - During
             the year ended  August 1, 1998 the  Company  adopted  Statement  of
             Financial Accounting Standard "SFAS" No. 128, "Earnings Per Share."
             This  statement is effective  for financial  statements  issued for
             periods ending after December 15, 1997.  Basic and diluted earnings
             per share have been  restated for fiscal years ended August 2, 1997
             and August 3, 1996 to reflect the adoption of SFAS No. 128.

         j.  Income  Taxes - The  Company  accounts  for income  taxes under the
             provisions of SFAS No. 109, "Accounting for Income Taxes." SFAS No.
             109 establishes  financial  accounting and reporting  standards for
             the effect of income taxes that result from  activities  during the
             current and  preceding  years.  SFAS No. 109  requires an asset and
             liability approach for financial reporting for income taxes.

                                       F7
<PAGE>
         k.  Cash  and  Cash  Equivalents  -  The  Company  generally  considers
             short-term  instruments with original maturities of three months or
             less  measured  from  their  acquisition  date  and  highly  liquid
             instruments readily convertible to known amounts of cash to be cash
             equivalents.

         l.  Investments  - During  the year ended July 30,  1994,  the  Company
             adopted SFAS No. 115,  "Accounting for Certain  Investments in Debt
             and Equity  Securities."  SFAS No. 115  requires an  enterprise  to
             classify debt and equity  securities into one of three  categories:
             held-to-maturity,   available-for-sale,   or  trading.  Investments
             classified  as  available  for sale  are  measured  at fair  value.
             Investments,  which are classified as available-for-sale,  are used
             to fund a deferred  compensation  plan  established  for one of the
             Company's  key  employees.  Gains and losses on these  investments,
             either recognized or unrealized,  inure to the benefit or detriment
             of this employee's deferred compensation,  based upon a contractual
             arrangement between the employee and the Company.

        m.   Intangibles   -   Intangible   assets  are   patents,   trademarks,
             manufacturing  rights and customer lists acquired with the purchase
             of certain assets of Gendex.  Intangibles  are being amortized on a
             straight-line  basis over their estimated useful lives, which range
             from 5 to 10 years.

        n.   Goodwill - Cost in excess of the net assets of  companies  acquired
             is being amortized on a straight-line basis over twenty-five years.
             The carrying value of intangible assets is reviewed annually by the
             Company and impairments  will be recognized  when the  undiscounted
             expected  future  cash  flows are less than their  carrying  value.
             Based  upon  its  review,  the  Company  does not  believe  that an
             impairment of its goodwill has occurred.

         o.  Stock-Based   Compensation   -  In  October  1995,   the  Financial
             Accounting  Standards Board ("FASB") issued  Statement of Financial
             Accounting  Standard ("SFAS") No. 123,  "Accounting for Stock-Based
             Compen-  sation."  SFAS  No.  123 is  effective  for  fiscal  years
             beginning  after  December  15, 1995 and  requires  adoption of the
             measurement   and   recognition    provisions   for    non-employee
             transactions  for fiscal years  beginning  after December 15, 1995.
             SFAS No. 123  defines a fair  value  method of  accounting  for the
             issuance of stock options and other equity  instruments.  Under the
             fair value method,  compensation cost is measured at the grant date
             based on the fair  value of the  award and is  recognized  over the
             service  period  which is usually the vesting  period.  Pursuant to
             SFAS No. 123, companies are encouraged,  but not required, to adopt
             the fair  value  method  of  accounting  for  employee  stock-based
             transactions.  Companies are also  permitted to continue to account
             for such  transactions  under  Accounting  Principles Board Opinion
             ("APB") No. 25, "Accounting for Stock Issued to Employees," but are
             required  to  disclose in a note to the  financial  statements  pro
             forma net  income,  and per share  amounts  as if the  company  had
             applied the new method of  accounting.  SFAS No. 123 also  requires
             increased disclosures for stock-based  arrangements,  regardless of
             the  method  chosen,  to measure  and  recognize  compensation  for
             employee  stock-based  arrangements.  The  Company  has  elected to
             continue to account for such  transactions  under APB No. 25 and is
             disclosing the required pro forma effect on net income and earnings
             per share (Note 8).

        p.   Effects of Recently Issued Accounting Standards - In February 1997,
             the FASB  issued  SFAS No. 129  "Disclosure  of  Information  about
             Capital  Structure."  This  statement  is effective  for  financial
             statements  issued for periods  beginning  after December 15, 1997.
             Management  has  evaluated  the  effect  of this  statement  on its
             financial  reporting  and, as it  contains no change in  disclosure
             requirements  for  entities  that were  previously  subject  to the
             requirements  of APB  Opinions  10, 15 and SFAS No.  47, no further
             disclosures are needed.

             In June 1997, the FASB issued SFAS No. 130 "Reporting Comprehensive
             Income."  This  statement is  effective  for  financial  statements
             issued for periods ending after  December 15, 1997.  Management has
             evaluated the effect of this  statement on its financial  reporting
             from the adoption of this  statement  and has found that no further
             disclosures are needed.

             In June  1997,  The FASB  issued  SFAS No.  131  "Disclosure  About
             Segments of an Enterprise  and Related  Information."  SFAS No. 131
             requires  the  reporting of profit and loss,  specific  revenue and
             expense items, and assets for reportable segments. It also requires
             the reconciliation of total segment revenues,  total segment profit
             or loss,  total  segment  assets and other  amounts  disclosed  for
             segments  to  the  corresponding  amounts  in the  general  purpose
             financial statements.  This statement is effective for fiscal years
             commencing  after  December  15,  1997.  The  Company  has  not yet
             determined what additional disclosures

                                       F8
<PAGE>
             may be required in connection with adopting SFAS No. 131.

             In  February  1998,  the  FASB  issued  SFAS  No.  132,  "Employers
             Disclosures about Pensions and Other Postretirement Benefits." This
             statement revises  employers'  disclosures about pensions and other
             postretirement  benefit plans. SFAS No. 132 is effective for fiscal
             years  beginning  after  December  15,  1997.  Management  does not
             anticipate  that this statement  will have a significant  effect on
             the Company's consolidated financial statements.

             In June  1998,  the FASB  issued  SFAS  No.  133,  "Accounting  for
             Derivative  Instruments  and  Hedging  Activities."  SFAS  No.  133
             establishes  accounting  and  reporting  standards  for  derivative
             instruments and hedging  activities.  SFAS No. 133 is effective for
             all fiscal years beginning after December 15, 1999. Management does
             not  anticipate  that this  statement  will have any  effect on the
             Company's consolidated financial statements.

        q.   Certain  reclassifications  have  been  made  in the  prior  year's
             financial   statements  to   correspond   to  the  current   year's
             presentation.

2.     INVESTMENTS

       At August 1, 1998  investments  consist of corporate debt  securities and
       equity securities classified as available-for-sale.

       At August 1, 1998 the cost and fair value of  investments  classified  as
       available-for-sale based on maturity dates, are as follows:

                    Maturity                           Fair
                      Dates             Cost           Value         Difference
                      -----             ----           -----         ----------
       Corporate debt securities
                      1999            $ 25,257        $ 25,100         $   (157)
                      2000-2004        544,727         560,216           15,489
                                      --------        --------         --------
                Subtotal               569,984         585,316           15,332
                                      --------        --------         --------
       Equity securities               217,052         327,809          110,757
                                      --------        --------         --------
                Total                 $787,036        $913,125         $126,089
                                      ========        ========         ========

       Investments at August 1, 1998 and August 2, 1997,  consisted of $913,046,
       and  $722,566,  respectively,  for  the  Company's  President's  deferred
       compensation, pursuant to the terms of his employment contract. At August
       1, 1998  $24,841 was  classified  as cash and  $888,205  was  recorded as
       investments.  The  liability of $913,046 and $722,566,  respectively,  is
       recorded as deferred  compensation  liability.  Gains and losses,  either
       recognized  or  unrealized,  inure to the  benefit  or  detriment  of the
       President's deferred compensation,  based upon a contractual  arrangement
       between the President and the Company.

3.     PERCENTAGE OF COMPLETION ACCOUNTING
                                                          Year          Year
                                                          Ended         Ended
                                                         August 1,     August 2,
                                                           1998          1997 
                                                       -----------   -----------

       Costs incurred on uncompleted contracts         $ 6,804,554   $ 3,086,020

       Estimated earnings                                4,178,103     1,578,126
                                                       -----------   -----------
                                                        10,982,657     4,664,146
       Less:  Billings to date                           7,675,984     2,796,144
                                                       -----------   -----------
       Costs and estimated earnings in excess
            of billings on uncompleted contracts       $ 3,306,673   $ 1,868,002
                                                       ===========   ===========

       The  backlog  of  unshipped  contracts  being  accounted  for  under  the
       percentage  of  completion   method  of  accounting   was   approximately
       $5,186,000 at August 1, 1998.

                                       F9
<PAGE>
4.     INVENTORY

       Inventory consists of the following:
                                                         August 2,     August 1,
                                                           1997          1998
                                                       -----------   -----------
              Finished goods                           $ 4,848,572   $ 3,859,842
              Work-in-process                           11,333,936     9,770,789
              Raw materials and purchased parts         13,012,754    11,050,717
                                                       -----------   -----------
                                                       $29,195,262   $24,681,348
                                                       ===========   ===========
5.     FIXED ASSETS

              Fixed assets consist of the following:
                                                         August 2,     August 1,
                                                           1997          1998
                                                       -----------   -----------

              Land                                     $   694,046   $   694,046
              Buildings                                  2,146,025     2,146,025
              Machinery and equipment                   13,261,534    10,865,897
              Furniture and fixtures                     1,484,310     1,280,216
              Leasehold improvements                     1,613,883     1,228,992
              Transportation equipment                      30,103        30,103
                                                       -----------   -----------
                                                        19,229,901    16,245,279
              Less accumulated depreciation and
                 amortization                            6,490,392     5,086,269
                                                       -----------   -----------
              Net Fixed Assets                         $12,739,509   $11,159,010
                                                       ===========   ===========

6.     DEBT

       Long-term debt is summarized as follows:

                                         August 1, 1998        August 2, 1997
                                      --------------------  --------------------
                                      Due Within Due After  Due Within Due After
                                       One Year   One Year   One Year   One Year
                                      ---------- ---------  ---------- ---------
       Acquisition credit line         $105,263   $184,215   $105,263   $289,476

       Revolving line of credit                     50,000               100,000

       Other Loans                       15,147      6,058     22,736     21,651
                                       --------   --------   --------   --------
                                       $120,410   $240,273   $127,999   $411,127
                                       ========   ========   ========   ========

       The  Company's  credit  facility  with its lending bank is composed of an
       acquisition  credit line of $10,000,000 and a revolving line of credit of
       $14,000,000, with a letter of credit sublimit of $4,000,000. At August 1,
       1998 there were  outstanding  balances  of  $289,478  on the  acquisition
       credit line,  $50,000 on the  revolving  line of credit,  and $139,329 of
       letters outstanding. As of August 1, 1998, there was $9,710,522 available
       under the acquisition credit line and $13,810,671 available for borrowing
       under the revolving  credit line.  The  acquisition  credit line is to be
       repaid in 11 equal quarterly  installments of $26,315.  Borrowings  under
       this facility are on an unsecured basis;  however, the Company has agreed
       that its assets cannot be used to secure other borrowings.

       Interest under all facilities are at prime,  or at the Company's  option,
       at a rate  either  tied to LIBOR or at a fixed  rate based upon the prime
       rate. The Company fixed its interest rate on the acquisition  credit line
       at 6.69% from  January 26, 1998 until the loan matures on April 30, 2001.
       The interest rate on the  revolving  line of credit is at prime which was
       8.5% at August 1, 1998. Both credit  facilities are subject to commitment
       fees of 1/4 percent on the daily unused portion of the facility,  payable
       quarterly.  The Credit  Agreement  also  requires the Company to maintain
       minimum annual net worth and working  capital ratios,  limits  additional
       indebtedness  and  the  payment  of cash  dividends  and  contains  other
       restrictive covenants. Under the most

                                       F10
<PAGE>
       restrictive  terms,  as of August 1, 1998,  $25,000 is available for such
       cash dividends.  The Company was in compliance with its debt covenants at
       August 1, 1998.  Management believes that its debt obligations are stated
       at fair value, because the interest rates on its credit lines are indexed
       with either the Prime Rate or LIBOR.

       The weighted average  interest rate on the Company's  borrowing under its
       credit  facility  was 7.17% and 7.27% for the years ended  August 1, 1998
       and August 2, 1997, respectively.

         Long-term debt matures as follows:

                    Fiscal Year Ending
                    1999 (included in current portion)    $  120,410
                    2000                                     111,321
                    2001                                     128,952
                                                          ----------
                                                          $  360,683
                                                          ==========    
7.     EMPLOYEE BENEFITS

       The Company has employee benefit plans for eligible  employees.  Included
       in the plans is a profit sharing plan which provides for contributions as
       determined by the Board of Directors.  The  contributions  can be paid to
       the plan in cash or common stock of the Company. Contribution expense for
       the fiscal years ended in 1998,  1997 and 1996 was  $65,000,  $52,500 and
       $40,000,  respectively.  The plan also  incorporates a 401(k)  Retirement
       Plan that is available to substantially  all employees,  allowing them to
       defer a portion of their salary.  The Company also has a defined  benefit
       plan frozen effective February 1, 1986.

8.     SHAREHOLDERS' EQUITY

       a.      Public  Offering  - On June 6,  1996 the  Company  completed  the
               public offering of 2,275,000 shares of its common stock including
               275,000 shares of the over-allotment  option. The net proceeds of
               this offering were $21,584,514 after deducting  underwriting fees
               and expenses, and were used to repay revolving credit loans, long
               term   debt  and  the   subordinated   term   note  to   Dentsply
               International Inc., with the balance added to working capital.

               Had the  public  offering  of  2,275,000  shares of common  stock
               occurred as of the beginning of fiscal 1996, and a portion of the
               proceeds  therefrom been used to repay a portion of the long term
               debt,  basic and diluted  earnings per share would have been $.52
               and $.45.

       b.      Stock Dividends - On November 19, 1996, the Company  declared a 3
               percent  stock  dividend to holders of record on December 4, 1996
               and was paid on December 23, 1996. On June 19, 1996,  the Company
               declared a three percent  stock  dividend to holders of record on
               July 12,  1996 and was paid on July 23,  1996.  On  November  20,
               1995,  the Company  declared a three  percent  stock  dividend to
               holders of record on  December  5, 1995 and was paid on  December
               21, 1995.

       c.      Stock  Buy-Back  Program - In April 1997,  the Board of Directors
               adopted a program to  repurchase  $1.5  million of the  Company's
               common stock.  In April 1998, the Board of Directors  approved an
               additional  repurchase of $1.5  million.  During the fiscal years
               ended  August 1, 1998 and August 2, 1997 the Company  repurchased
               128,900  and  37,000   shares  for   $1,857,182   and   $319,885,
               respectively.  As of  August 1,  1998,  there  remained  $823,000
               available in the program to repurchase additional shares.

       d.      Nonqualified  Stock Option Plan - The Company has a  nonqualified
               stock  option  plan under which a total of  3,124,293  options to
               purchase  common stock may be granted.  As of August 1, 1998, the
               Company has granted  options to  purchase  951,975  shares to the
               current president,  240,723 shares to former officers, 322,439 to
               current   officers  and   1,367,619  to  various   employees  and
               consultants. Current officers exercised 185,465 options, a former
               officer  exercised  11,876  options  and  various  employees  and
               consultants  exercised  218,325  options  during the fiscal  year
               ended August 1, 1998.  Current officers  exercised 15,749 options
               and various  employees and consultants  exercised  17,895 options
               during the fiscal year ended August 2, 1997. Substantially all of
               the options  granted  under this plan provide for graded  vesting
               and vest at a rate of 25% per year, beginning one year from the

                                       F11
<PAGE>
               date of  grant,  expiring  fifteen  years  from the date they are
               granted. The option price per share is determined by the Board of
               Directors,  but  cannot be less than 85  percent  of fair  market
               value of a share at the date of grant.  All  options to date have
               been granted at the fair market value of the  Company's  stock at
               the date of grant.  No  options  can be  granted  under this plan
               subsequent to December 31, 2009.

               The following stock option information is as of:

                                            August 1,    August 2,     August 3,
               Options                        1998         1997          1996   
                                            ---------    ---------    ----------

               Granted and outstanding
               at beginning of year         1,781,245    1,712,568    1,646,607

               Granted                        214,500      131,842      297,052
               Expired                        (17,833)     (29,521)     (22,266)
               Exercised                     (415,666)     (33,644)    (208,825)
                                            ---------    ---------    ---------
               Outstanding at end of year   1,562,246    1,781,245    1,712,568
                                            =========    =========    =========

               Exercisable at end of year   1,203,676    1,506,962    1,481,025
                                            =========    =========    =========

               Exercise prices            $.93-$11.00   $.93-$8.48   $.93-$8.48
                                            =========    =========    =========

               The Company  has chosen to  continue  to account for  stock-based
               compensation  using the intrinsic value method  prescribed in APB
               No.  25,  "Accounting  for Stock  Issued to  Employees,"  and its
               related interpretations. Accordingly, no compensation expense was
               recorded for the Company's stock option and stock purchase plans.
               However,   under  SFAS  No.  123,   "Accounting  for  Stock-Based
               Compensation,"  the  Company  has  determined  the pro  forma net
               income and net income per share  amounts for fiscal 1998,  fiscal
               1997 and fiscal  1996,  as if the  compensation  expense had been
               recorded  for options  granted  during those years under the fair
               value method.  Under SFAS No. 123, for options granted,  the fair
               value at the date of grant was estimated using the  Black-Scholes
               option pricing model. The following weighted average  assumptions
               were used in calculating the fair value of the options granted in
               the fiscal years ended August 1, 1998,  August 2, 1997 and August
               3, 1996:  risk free  interest  rates of 4.79% to 7.65%,  expected
               life of the options are between eight and thirteen years, average
               volatility   of  between   40.31%  and  44.87%,   and  a  maximum
               contractual life of fifteen years.

               Had the Company  adopted SFAS No. 123 for employee stock options,
               the pro forma effect on net income and net income per share would
               be:

                                               For Year    For Year   For Year
                                                Ended       Ended      Ended 
                                               August 1,   August 2,  August 3,
                                                 1998        1997       1996    
                                              ----------  ----------  ----------
               Net income
                   As reported                $5,788,588  $4,911,554  $2,915,422
                                              ==========  ==========  ==========
                   Pro forma                  $5,640,083  $4,794,017  $2,862,726
                                              ==========  ==========  ==========

               Net income per common share:
                   As reported                $      .71  $      .61  $      .48
                                              ==========  ==========  ==========
                   Pro forma                  $      .69  $      .59  $      .45
                                              ==========  ==========  ==========
               Weighted average number of
                   shares outstanding          8,206,121   8,070,199   6,250,313
                                              ==========  ==========  ==========

       e.      There were  warrants  outstanding  aggregating  77,813  shares at
               August 1, 1998,  all of which were  granted at fair market  value
               (the  closing  stock  value  at the date of  grant).  They are as
               follows:

                     1.   In connection with the Company's debt restructuring on
                          March 5, 1996 the Company granted additional  warrants
                          to  purchase  17,510  shares  of  common  stock to its
                          lending

                                       F12
<PAGE>
                          bank at an exercise price of $6.80. In connection with
                          an  amendment  to a bank  financing  completed in May,
                          1994, the Company issued  warrants to purchase  30,000
                          shares of common stock at an exercise  price of $7.16.
                          In  connection  with its incentive  pricing  amendment
                          with the same bank,  the Company  reduced the exercise
                          price to  $5.50.  At  August  1,  1998,  the bank held
                          warrants  for 34,778  shares at an  exercise  price of
                          $4.74 and  warrants  for 18,035  shares at an exercise
                          price of $6.60. As these warrants were issued prior to
                          the  effective  date of SFAS No. 123, no  compensation
                          expense was recorded in fiscal 1998.

                     2.   In  connection  with  an  extension  of  a  consulting
                          agreement,  the Company had issued  15,000  additional
                          warrants  to  purchase  shares of  common  stock at an
                          exercise  price of $10.00 to a consultant,  which were
                          still  outstanding at August 1, 1998.  During the year
                          ended August 2, 1997, the Company granted  warrants to
                          purchase  25,000 shares of common stock at an exercise
                          price of $8.50.  During  fiscal 1998,  the  consultant
                          exercised  25,000  warrants  at an  exercise  price of
                          $8.50 and at August 1, 1998,  there  were no  warrants
                          outstanding  from this grant.  In accordance with SFAS
                          No.  123,   $79,244  and  $43,505  was  recognized  as
                          compensation  expense  for this  warrant for the years
                          ended August 1, 1998 and August 2, 1997, respectively.
                          The consulting agreement terminated during the current
                          fiscal year and accordingly,  all future  compensation
                          expense was  recognized  for the year ended  August 1,
                          1998.

                     3.   In  connection  with a consulting  agreement  with the
                          Company's  investor relations firm, the Company issued
                          10,000  warrants to purchase shares of common stock at
                          an  exercise  price of $11.00.  All of these  warrants
                          were outstanding as of August 1, 1998. During the year
                          ended August 1, 1998,  $5,608 of compensation cost was
                          recognized in connection as a result of this grant.


9.     INCOME TAXES

       Provision for income taxes consists of the following:


                                                     Fiscal Year Ended
                                            ----------------------------------- 
                                             August 1,   August 2,    August 3,
                                               1998        1997         1996  
                                            ----------  ----------   ----------
       Current:
           Federal                          $1,802,856  $1,889,377   $1,266,044
           State                               261,913     194,290      183,676
                                            ----------  ----------   ----------
                                             2,064,769   2,083,667    1,449,720
       Deferred:
           Federal and state                   569,970     147,982      (56,609)
                                            ----------  ----------   ----------
                                            $2,634,739  $2,231,649   $1,393,111
                                            ==========  ==========   ==========

       The  difference  between the income tax provision of  $2,634,739  and the
       income tax  expense of  $2,639,497  of $4,758  represents  Virgin  Island
       Franchise taxes incurred by the Company's Foreign Sales Corporation.

       Deferred tax liabilities (assets) are comprised of the following:

                                       F13
<PAGE>
                                                       August 1,      August 2,
                                                         1998           1997   
                                                     -----------    ----------- 

       Depreciation                                  $ 1,374,853    $ 1,030,628
       Pension                                            98,025         97,870
       Federal effect of New York
          State tax credits                              162,127        118,783
       Difference in basis of fixed assets                84,322         92,684
       Revenue recognition                               444,640        245,978
                                                     -----------    -----------
       Gross deferred tax liabilities                  2,163,967      1,585,943
                                                     -----------    -----------

       Warranty reserve                                  (45,649)       (38,154)
       Amortization                                     (118,761)      (133,893)
       Inventory                                         (49,315)      (154,594)
       Bad debt reserve                                  (77,962)       (13,549)
       Deferred compensation                            (644,392)      (501,726)
       NYS tax credits                                  (476,231)      (349,359)
       Self-funded health insurance                         --         (213,591)
                                                     -----------    -----------
       Gross deferred tax assets                      (1,412,310)    (1,404,866)
                                                     -----------    -----------
       Net deferred tax liabilities                  $   751,657    $   181,077
                                                     ===========    ===========

       Deferred  tax  liabilities  and assets are  recorded in the  consolidated
       balance sheets as follows:

                                                       August 1,      August 2,
                                                         1998           1997 
                                                     -----------    -----------
       Liabilities:
           Deferred income taxes                     $ 1,406,162    $ 1,107,964
       Assets:
           Prepaid expenses and other
               current assets                            (36,550)      (425,540)
           Other assets                                 (617,955)      (501,347)
                                                     -----------    -----------
                                                     $   751,657    $   181,077
                                                     ===========    ===========

       The New York State tax credits expire at various dates through 2003.

       The following is a reconciliation  of the statutory Federal and effective
       income tax rates:

                                                        Fiscal Year Ended   
                                                   -----------------------------
                                                   August 1, August 2, August 3,
                                                     1998       1997     1996   
                                                   --------- --------- ---------
                                                     % of       % of     % of
                                                    Pretax     Pretax   Pretax
                                                    Income     Income   Income
                                                   --------- --------- ---------
       Statutory Federal income tax  expense rate    34.0%      34.0%    34.0%
       State taxes, less Federal tax effect           1.8        1.6      1.5
       Permanent differences                           .4         .5       .6
       Tax benefits on foreign sales corp            (3.0)      (2.5)    (3.3)
       Federal tax credits and other                 (1.9)      (2.4)     (.5)
                                                     ----       ----     ----
                                                     31.3%      31.2%    32.3%
                                                     ====       ====     ====  

10.    COMMITMENTS AND CONTINGENCIES

          a. The Company  entered into an operating lease  commencing  August 1,
             1992 and  expiring  July 31, 2002 for Del's  offices and  operating
             facility in Valhalla,  NY. This lease includes escalations for real
             estate taxes and operating expenses.  In September 1992 the Company
             entered into an operating lease for

                                       F14
<PAGE>
             Dynarad's facility in Deer Park, NY. This lease provides escalation
             for real  estate  taxes.  In May 1994 the Company  entered  into an
             operating lease for Bertan's facility in Hicksville, NY. This lease
             provides  escalation for real estate taxes. On January 31, 1998 the
             Company  renewed an operating  lease  expiring on January 31, 2003,
             for its Gendex-Del  Medical Imaging  facility in Franklin Park, IL.
             This lease provides escalations for real estate taxes and operating
             expenses.  On March 6, 1998 the Company  entered  into an operating
             lease for its Gendex-Del  Medical Imaging  facility in Lincolnwood,
             IL. In addition,  the Company has various auto leases accounted for
             as operating leases. The future minimum annual lease commitments as
             of August 1, 1998 are as follows:

                        Fiscal Year Ended                Amount  
                        -----------------              ----------

                               1999                    $1,417,891
                               2000                     1,409,279
                               2001                     1,364,176
                               2002                     1,051,935
                               2003                       808,591
                              Thereafter                  298,451
                                                       ----------
                                                       $6,350,323
                                                       ==========

             Rent  expense  was  $1,384,952  in  1998,  $1,285,877  in 1997  and
             $1,117,068 in 1996, which includes real estate taxes of $361,943 in
             1998, $289,105 in 1997 and $286,118 in 1996.

       b.    The Company has an employment  agreement with its President through
             July 31,  2005.  The  agreement  provides  for minimum base salary,
             deferred  compensation  and bonuses as defined.  Under the terms of
             the agreement with the President,  the Company will accrue deferred
             compensation  at a rate of five  percent  of pretax  income  with a
             minimum of  $100,000  and a maximum of  $125,000.  The  accumulated
             amount at August 1, 1998 was $913,046.  Such liability is funded by
             the   Company's    investments    of   $913,046,    classified   as
             available-for-sale.   Gains  and  losses,   either   recognized  or
             unrealized,  inure to the benefit or detriment  of this  employee's
             deferred compensation, based upon a contractual arrangement between
             the President and the Company. Bonus will accrue at five percent of
             pretax  income.  Also  included in the  President's  agreement  are
             certain  benefits in the event of death or  disability,  as well as
             certain  benefits  in  the  event  of a  change  of  control.  Upon
             completion of the term of the agreement,  the President may opt for
             a five year  extension  in the form of a  consulting  contract at a
             rate specified within the agreement.

             In connection with the  acquisition of Dynarad,  the Company had an
             employment  agreement with one Vice  President  through 1998. As of
             April 1, 1997,  the Vice  President  opted for an  extension in the
             form  of a  consulting  contract  at a rate  specified  within  the
             agreement.

             In connection with the acquisition of Dynarad,  the Company entered
             into an employment  agreement  with a key employee.  As of July 30,
             1994,  the  employee  has been  engaged as a  consultant  at a rate
             specified within the agreement.

             The Company  entered into ten year  consulting  agreements  through
             2002  with  three  of  the  former  shareholders  of  Dynarad.  The
             agreements  call  for  annual  payments  of  $52,000,  $28,000  and
             $21,000, respectively.

       c.    As of May 28,  1997,  the  former  President  of  Bertan  became  a
             technical  consultant  to the  Company.  On April  23,  1998,  upon
             completion of the employment  phase of the  agreement,  the Company
             and the employee have agreed to a ten year non-compete agreement at
             a minimum  annual  rate of $50,000 as  adjusted  for the greater of
             five  percent  per  annum  or  increases  in the  cost  of  living.
             Additionally,  the Company has entered into a ten year  non-compete
             agreement  with the former  Chairman of Bertan at a minimum  annual
             rate of $50,000 as  adjusted  for the  greater of five  percent per
             annum or  increases  in the cost of  living.  At August 1, 1998 and
             August 2, 1997 the amounts  recorded  for the net present  value of
             future obligations relating to the Bertan acquisition were $607,952
             and $842,236, respectively.

                                       F15
<PAGE>
       d.    The Company is a defendant in several  legal  actions  arising from
             the  normal  course  of  business.  Management,  on the  advice  of
             counsel,  believes  the  Company has  meritorious  defenses to such
             actions and that the outcomes will not be material to the Company's
             consolidated  financial  condition,  results of operations and cash
             flows.

11.     ACQUISITIONS

             As of March 6, 1998, the Company's Gendex-Del Medical Imaging Corp.
       subsidiary  acquired  selected  assets  of  X-Ray   Technologies,   Inc.,
       consisting  of  inventory,  fixed  assets,  designs  and  technology  for
       approximately  $1,100,000  including  transaction costs. The newly formed
       XTek division is a manufacturer of cost-effective medical imaging systems
       for  physicians,   chiropractors   and   veterinarians   operating  under
       Gendex-Del Medical Imaging, Corp.

             The   acquisition   has  been  accounted  for  as  a  purchase  and
       accordingly  the  original  purchase  price was  allocated  to the assets
       acquired  based on the estimated  fair value at the date of  acquisition.
       The  transaction  resulted  in an excess  of cost over fair  value of net
       assets acquired of $883,419,  which is included in goodwill.  Such excess
       is being amortized over a 15 year period.

12.    MAJOR CUSTOMERS AND EXPORT SALES

             During fiscal years 1998,  1997 and 1996 no one customer  accounted
       for more than ten percent of the Company's consolidated net sales.

             Export  sales were 45  percent,  40 percent and 40 percent of total
       sales in 1998, 1997 and 1996, respectively.

             For the years  ended  August 1, 1998,  August 2, 1997 and August 3,
       1996, export sales by geographic areas were:

                              1998               1997              1996
                          -----------        -----------       -----------

       Europe             $ 8,178,548   29%  $ 6,709,380  31%  $ 5,460,305   31%
       Far East             7,277,981   26%    6,285,606  28%    5,446,443   31%
       North America        5,687,305   20%    4,817,555  22%    2,979,653   17%
       Middle East          4,063,918   14%    3,521,101  16%    3,374,581   20%
       South America        2,955,010   10%      455,241   2%      143,601    1%
       Africa                  96,802    1%      160,726   1%       38,359   --
                          -----------  ---   ----------- ---   -----------  --- 
       Total export sales $28,259,564  100%  $21,949,609 100%  $17,442,942  100%
                          ===========  ===   =========== ===   ===========  === 

13.     SEGMENT REPORTING

               The following  analysis provides segment  information for the two
         industries in which the Company operates (see Note 1):

                                       F16
<PAGE>
                                          Critical
                                         Electronic     Medical
           1998                          Subsystems     Systems        Total
          ------                        -----------   -----------   -----------
       Net Sales (a)                    $32,430,364   $29,874,514   $62,304,878

       Operating expenses                27,164,968    26,879,751    54,044,719
                                        -----------   -----------   -----------
       Operating profit                 $ 5,265,396   $ 2,994,763     8,260,159

       Interest income - net                                            167,926

       Provision for income taxes                                     2,639,497
                                                                    -----------
       Net income                                                   $ 5,788,588
                                                                    ===========

       Identifiable assets              $43,914,175   $28,442,452   $72,356,627
                                        ===========   ===========   ===========

       Capital expenditures             $ 1,787,592   $ 1,108,940   $ 2,896,532
                                        ===========   ===========   ===========

       Depreciation and amortization    $ 1,388,122   $   710,366   $ 2,098,488
                                        ===========   ===========   ===========

         (a)   For the fiscal year ended  August 1, 1998,  sales of the Critical
               Electronic  Subsystems  segment  included sales of  approximately
               $14,064,000  to  customers  for medical  imaging  and  diagnostic
               applications.  Aggregate  medical sales for the fiscal year ended
               August  1, 1998 were  approximately  $43,939,000  or 71% of total
               sales.
                                          Critical
                                         Electronic     Medical
           1997                          Subsystems     Systems        Total
          ------                        -----------   -----------   ----------- 
       Net Sales (a)                    $32,326,668   $22,358,621   $54,685,289

       Operating expenses                26,471,966    21,124,590    47,596,556
                                        -----------   -----------   -----------
       Operating profit                 $ 5,854,702   $ 1,234,031     7,088,733

       Interest income - net                                             54,470

       Provision for income taxes                                     2,231,649
                                                                    -----------
       Net income                                                   $ 4,911,554
                                                                    =========== 

       Identifiable assets              $45,422,755   $18,862,218   $64,284,973
                                        ===========   ===========   ===========

       Capital expenditures             $ 1,837,219   $   822,262   $ 2,659,481
                                        ===========   ===========   ===========

       Depreciation and amortization    $ 1,119,327   $   691,781   $ 1,811,108
                                        ===========   ===========   ===========

         (a)   For the fiscal year ended  August 2, 1997,  sales of the Critical
               Electronic  Subsystems  segment  included sales of  approximately
               $13,240,000  to  customers  for medical  imaging  and  diagnostic
               applications.  Aggregate  medical sales for the fiscal year ended
               August  2, 1997 were  approximately  $35,599,000  or 65% of total
               sales.

                                       F17
<PAGE>
                                          Critical
                                         Electronic     Medical
           1996                          Subsystems     Systems        Total
          ------                        -----------   -----------   -----------
       Net Sales (a)                   $29,445,362    $14,300,092   $43,745,454

       Operating expenses               24,606,511     13,681,771    38,288,282
                                        -----------   -----------   -----------
       Operating profit                $ 4,838,851    $   618,321     5,457,172

       Interest expense - net                                        (1,148,639)

       Provision for income taxes                                     1,393,111
                                                                    -----------
       Net income                                                   $ 2,915,422
                                                                    ===========

       Identifiable assets             $54,763,918    $ 2,965,834   $57,729,752
                                        ===========   ===========   ===========

       Capital expenditures            $ 1,579,674    $   388,396   $ 1,968,070
                                        ===========   ===========   ===========

       Depreciation and amortization   $   856,261    $   340,050   $ 1,196,311
                                        ===========   ===========   ===========

         (a)      For the  fiscal  year  ended  August  3,  1996,  sales  of the
                  Critical  Electronic  Subsystems  segment  included  sales  of
                  approximately $11,657,000 to customers for medical imaging and
                  diagnostic  applications.  Aggregate  medical  sales  for  the
                  fiscal   year   ended   August  3,  1996  were   approximately
                  $25,709,000 or 59% of total sales.

                                       F18
<PAGE>
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES

SUPPLEMENTAL FINANCIAL INFORMATION

UNAUDITED SELECTED QUARTERLY FINANCIAL DATA

                                                   QUARTER 
                              --------------------------------------------------
                                 First        Second       Third        Fourth
                              -----------  -----------  -----------  -----------
YEAR ENDED August 1, 1998:

  Net sales                   $13,480,069  $14,403,182  $16,682,726  $17,738,901
                              ===========  ===========  ===========  ===========
   
  Gross profit                $ 5,432,524  $ 5,900,167  $ 6,687,147  $ 7,376,723
                              ===========  ===========  ===========  ===========

  Net income                  $ 1,256,987  $ 1,362,480  $ 1,444,741  $ 1,724,380
                              ===========  ===========  ===========  ===========

  Diluted earnings per share  $       .15  $       .17  $       .18  $       .21
                              ===========  ===========  ===========  ===========



                                                  QUARTER        
                              --------------------------------------------------
                                 First        Second       Third        Fourth
                              -----------  -----------  -----------  -----------
YEAR ENDED August 2, 1997:

  Net sales                   $12,311,384  $12,691,871  $14,317,165  $15,364,869
                              ===========  ===========  ===========  ===========

  Gross profit                $ 4,805,146  $ 5,133,272  $ 5,372,545  $ 6,519,501
                              ===========  ===========  ===========  ===========

  Net income                  $   988,454  $ 1,119,848  $ 1,283,682  $ 1,519,570
                              ===========  ===========  ===========  ===========

  Diluted earnings per share  $       .12  $       .14  $       .16  $       .19
                              ===========  ===========  ===========  ===========

                                       F19
<PAGE>


                                   SIGNATURES


Pursuant to the requirements of Section 13 or 15 (d) of the Securities  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.


                                              By:  /S/Leonard Trugman
                                                   ------------------
                                                   Leonard A.Trugman
                                                   Chairman of the Board,
                                                   Chief Executive Officer and
                                                   President


                                               By: /S/Michael H. Taber
                                                   -------------------
                                                   Michael Taber
                                                   Chief Financial Officer, Vice
                                                   President of Finance and
                                                   Secretary


Dated:  October 30, 1998

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  Registrant and
in the capacities and on the dates indicated.


/S/Natan Bertman              October 30, 1998
----------------------- 
Natan Bertman, Director


/S/David Michael              October 30, 1998
-----------------------
David Michael, Director


/S/Seymour Rubin              October 30, 1998
-----------------------
Seymour Rubin, Director


/S/James Tiernan              October 30, 1998
-----------------------
James Tiernan, Director


/S/Leonard A. Trugman         October 30, 1998
-----------------------
Leonard A. Trugman
Chairman of the Board,
Chief Executive Officer and
President