<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

      FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934

                     For the fiscal year ended July 30, 2005

                                       OR

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

      Commission file number 0-3319

    For the transition period from ________________ to ________________

                          DEL GLOBAL TECHNOLOGIES CORP.
             ------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)

             New York                                  13-1784308
 ----------------------------------      -------------------------------------
  (State or Other Jurisdiction of         (I.R.S. Employer Identification No.)
  Incorporation or Organization)

          One Commerce Park, Valhalla, NY                  10595
   --------------------------------------------    -------------------
      (Address of Principal Executive Offices)          (Zip Code)

        Registrant's telephone number, including area code (914) 686-3650

Securities registered pursuant to Section 12(b) of the Act:

       Title of Each Class           Name of Each Exchange on Which Registered
              None                                       None
-------------------------------    ---------------------------------------------

Securities registered pursuant to Section 12(g) of the Act:

                  Common Stock, $.10 par value ("Common Stock")
                  ---------------------------------------------
                                (Title of Class)

      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]

      Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes [ ] No [X]

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

      State the aggregate market value of the voting and non-voting common
equity held by non affiliates computed by reference to the price at which the
common equity was last sold, or the average bid and asked price of such common
equity, as of the last business day of the registrant's most recently completed
second fiscal quarter.

The aggregate market value of the registrant's Common Stock held by
non-affiliates of the Registrant as of January 28, 2005, was $16,223,109
Solely for the purposes of this calculation, shares held by directors and
executive officers of the Registrant have been excluded. Such exclusion should
not be deemed a determination or an admission by the Registrant that such
individuals are, in fact, affiliates of the Registrant.

      Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.

      As of October 27, 2005, there were 10,630,188 shares of the registrant's
common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

      Items 10, 11, 12, 13 and 14 of Part III incorporate by reference
information from the registrant's proxy statement to be filed with the
Securities and Exchange Commission in connection with the solicitation of
proxies for the registrant's 2006 Annual Meeting of Stockholders.

<PAGE>

PART I

ITEM 1. BUSINESS

      Del Global Technologies Corp., a New York corporation, was incorporated in
1954. Unless otherwise specifically indicated, "Del Global", the "Company,"
"we," "our," "ours," and "us" refers to Del Global Technologies Corp. and its
consolidated subsidiaries. We are a leader in developing, manufacturing and
marketing medical imaging equipment and power conversion subsystems and
components worldwide. Our products include stationary and portable medical
diagnostic imaging equipment and electronic systems and components such as
electronic filters, transformers and capacitors.

      The Company is headquartered in Valhalla, NY. The mailing address of our
headquarters is One Commerce Park, Valhalla, NY 10595 and our telephone number
is 914-686-3650. Our Website is www.delglobaltech.com. Through the Investor
Relations section of our Website, we make our filings with the Securities and
Exchange Commission ("SEC") available as soon as practicable after they are
electronically filed with the SEC. These include our Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

      The sale of Del High Voltage Division ("DHV"), which was part of our Power
Conversion Group, was consummated on October 1, 2004 as described in Note 2 of
the Notes to Consolidated Financial Statements in Part II, Item 8 of this Annual
Report. Accordingly, this business is presented as a discontinued operation
throughout this Form 10-K for the fiscal year ended July 30, 2005.

OPERATING SEGMENTS - CONTINUING OPERATIONS

      The operating businesses that we report as segments consist of the Medical
Systems Group and the Power Conversion Group. For fiscal 2005, the Medical
Systems Group segment accounted for approximately 83% of our revenues and the
Power Conversion Group segment accounted for approximately 17% of our revenues.
Our consolidated financial statements include a non-operating segment which
covers unallocated corporate costs. None of our customers, in either the Medical
Systems Group or the Power Conversion Group, accounted for more than 10% of
consolidated revenues nor is either segment dependent upon a single customer or
a few customers, the loss of any one or more of which would have a material
adverse effect on such segment. For further information concerning our operating
segments, see Note 9 of the Notes to Consolidated Financial Statements in Part
II, Item 8 of this Annual Report. Our operating segments and businesses are
summarized in the following table:

<TABLE>
<CAPTION>
              DIVISION                       BRANDS                     SUBSIDIARIES              FACILITIES
----------------------------------   ----------------------        ------------------------    -----------------
<S>                                  <C>                           <C>                         <C>
MEDICAL SYSTEMS GROUP:

Medical Imaging...................   Del Medical, Villa,           Del Medical Imaging Corp    Franklin Park, IL
                                     UNIVERSAL, DynaRad            ("Del Medical")

                                                                   Villa Sistemi Medicali      Milan, Italy
                                                                   S.p.A. ("Villa")
                                                                   (80% owned)

POWER CONVERSION GROUP:

Electronic Systems & Components...   RFI, Filtron, Sprague,        RFI Corporation ("RFI")     Bayshore, NY
                                     Stanley
</TABLE>

MEDICAL SYSTEMS GROUP

                                       1

<PAGE>

      Our Medical Systems Group designs, manufactures, markets and sells medical
imaging and diagnostic systems consisting of stationary and portable imaging
systems, radiographic/ fluoroscopic systems, dental imaging systems and
mammography systems. Approximately 64% of this segment's revenues are attributed
to Villa.

      Medical imaging systems of the types we manufacture 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, a patient
positioning system, and an image recording system, which is either film or a
digital detector. X-rays are 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 image recording
system. X-rays, which are not reflected by opaque surfaces, pass through the
object and expose the film or image recording system. However, if the object is
comprised of areas of varying densities or chemical compositions, x-rays will be
absorbed 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,
because 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 system components.

      This segment designs, manufactures, markets and sells medical imaging and
diagnostic systems worldwide in the following markets:

                      MEDICAL SYSTEMS GROUP MARKETS SERVED

<TABLE>
<S>                                                <C>
Hospitals                                          Veterinary Clinics
Teaching Institutions                              Chiropractic Clinics
Medical Clinics                                    Dental Offices
Private Practitioners                              Military
National Buying Groups                             Home Health Care Providers
Orthopedic Facilities
</TABLE>

      Our medical imaging systems are sold under the Del, Villa, UNIVERSAL, and
DynaRad brand names. The prices of our medical imaging systems range from
approximately $5,000 to $250,000 per unit, depending on the complexity and
flexibility of the system. The following is a description of our product lines
in this segment.

PRODUCTS

      GENERAL RADIOGRAPHIC SYSTEM - For more than 100 years, conventional
projection radiography has used film to capture x-ray images. Conventional
technology requires that x-ray film be exposed and then chemically processed to
create a visible image for diagnosis.

      General Radiography represents approximately 40% -- 60% of the Medical
Systems Group's revenues depending on the product mix within each period. We
produce a broad line of conventional radiographic products used in outpatient
facilities, as well as more sophisticated and expensive x-ray systems typically
used in hospitals and clinics. For example, our higher-end DRV system is
designed to meet the broad requirements of a hospital or teaching university's
radiographic room, while our mid-range Del Medical and Villa Medical systems are
suited more to the needs of smaller hospitals, outpatient clinics and private
practitioners.

      We also have a broad range of products serving medical practitioners,
veterinarians and chiropractors through our UNIVERSAL brand product line. These
units are designed for durability, are space efficient, rugged and are priced
more economically. Our UNIVERSAL medical products include a variety of
configurations that can be constructed to best suit the needs of the desired
work environment. Our UNIVERSAL VetTek veterinary line of products are designed
with many of the same attributes as the medical line. Our UNIVERSAL chiropractic
line,

                                       2

<PAGE>

consisting of our ChiroEZ and Raymaster product, combine precision alignment and
positioning with a versatile chiro imaging system.

      During fiscal 2005, we continued to expand our product portfolio with a
digital radiographic offering branded under the DRV product line. This system
enables radiologists to obtain better patient images within a fraction of the
time and with lower overall costs than traditional film-based systems. In
addition, we entered into an agreement with Hologic, Inc., a medical imaging
systems manufacturer (Nasdaq: HOLX), to manufacture and market medical Epex
digital x-ray systems during fiscal 2004.

      We also produce a full product line of high frequency medical x-ray
generators which economically provide superior quality x-ray generation,
resulting in lower patient dosage, extended tube life and less blurring due to
patient motion when compared to single phase generators. We are investigating
arrangements with generator suppliers to further upgrade our medical x-ray
generator offerings.

      RADIOGRAPHIC/FLUOROSCOPIC SYSTEMS - We produce a wide range of
radiographic/ fluoroscopic, or R/F, systems able to perform complex x-ray
analyses with contrast liquids for sequential images. Our Vision, Viromatic,
Mercury and Symphony systems include tilting tables for the patient being
x-rayed. These tables can be used easily with digital imaging systems. R/F
systems are often used for diagnostic gastrointestinal procedures to image the
progress of a radiopaque solution (typically barium) as it travels through the
digestive tract. R/F systems (Apollo, Mercury and Symphony) are also widely used
in connection with our digital acquisition system DIVA, to perform real time
angiographic examinations.

      PORTABLE MEDICAL X-RAY SYSTEMS - We sell portable x-ray equipment under
our DynaRad brand HF-110A and PHANTOM systems, for the military and home health
care provider markets. 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.

      DENTAL SYSTEMS - We produce a broad range of DC and AC powered intra-oral
(commonly known as bite wing) x-ray systems. In addition, our Rotograph Plus and
Strato-2000 systems are utilized to perform panoramic images for dental
applications. The most recent addition to the dental product line is a Direct
Digital version of Strato 2000, which captures panoramic images directly in
digital format and can be connected to a PC for image reviewing and
post-examination processing.

      MAMMOGRAPHY SYSTEMS - We currently resell the Melody system principally
outside of the US. The Melody unit is manufactured by a European-based
manufacturer and, although we have exclusive use of the "Melody" name, our
supplier markets a similar product in several competing markets. In addition, we
also resell a small number of other European manufactured mammography systems in
the US on a non-exclusive basis.

      MARKETING AND DISTRIBUTION: Our medical imaging systems are sold in the US
and foreign countries, principally by a network of over 200 distributors
worldwide. Medical imaging systems distributors are supported by our regional
managers, product line managers and technical support groups, who train
distributor sales personnel and participate in customer calls. Technical support
in the selection, use and maintenance of our products is provided to
distributors and professionals by customer service representatives. We also
maintain telephone hotlines to provide technical assistance to distributors and
professionals during regular business hours. Additional product and distributor
support is provided through participation in medical equipment exhibitions and
trade advertising. We typically exhibit our products at annual conferences,
including the Radiological Society of North American Conference in Chicago, the
MEDICA Medical Conference in Dusseldorf, Germany, the European College of
Radiology Conference in Vienna, Austria, and the International Dental Show (IDS)
in Cologne, Germany. Sales of the Company's products are typically on open
account with 30 day terms, with longer terms given for customers of our Villa
operation as is customary in international business. Sales to certain
international customers are secured by letters of credit to mitigate any
potential credit risks.

      RAW MATERIALS AND PRINCIPAL SUPPLIERS: The Medical Systems Group in most
cases uses two or more alternative sources of supply for each of its raw
materials, which consist primarily of mechanical subassemblies,

                                       3

<PAGE>

electronic components, x-ray tubes and x-ray generators. In certain instances,
however, the Medical Systems Group will use a single source of supply when
directed by a customer or by need. In order to ensure the consistent quality of
the Medical System Group's products, the Company follows strict supplier
evaluation and qualification procedures, and where possible, enters into
strategic partnerships with its suppliers to assure a continuing supply of high
quality critical components.

      With respect to those items which are purchased from single sources, we
believe that comparable items would be available in the event that there was a
termination of our existing business relationships with any such supplier.
Actual experience could differ materially from this belief as a result of a
number of factors, including the time required to locate an alternate source for
the material.

      The majority of the Medical System Group's raw materials are purchased on
open account from vendors pursuant to various individual or blanket purchase
orders. Procurement lead times are such that the Company is not required to hold
significant amounts of inventory in order to meet customer demand. The Company
believes its sources of supply for the Medical Systems Group are adequate to
meet its needs.

      COMPETITION: Based on industry data, we believe our Medical Systems Group
is the largest supplier, measured by market share, to the independent
distributors of radiographic equipment in North America. Our Medical Systems
Group competes in two major segments of the highly competitive, world-wide
conventional radiographic and R/F products marketplace. Our top-tier
conventional radiographic products are sold through multi-hospital buying
networks, general purchasing organizations and major independent distributors.
The three major competitors in this market segment are GE Medical Systems, a
division of General Electric Company, Siemens Medical Solutions, a division of
Siemens AG and Philips Medical Systems, a division of Koninklijke Philips
Electronics N.V. and they compete with us on customer support, features and
breadth of product offerings. These larger competitors primarily sell directly
to large hospitals and teaching institutions and sell a broader range of
products designed to outfit a hospital's entire imaging requirements.

      Our lower-tier conventional radiographic products principally compete with
several small companies based primarily in the US and Europe. Most of these
companies sell through independent distributors and compete with us primarily on
price, quality and performance. We believe that we can be differentiated from
our competitors based on our combination of price, quality and performance,
together with the strength and breadth of our independent distribution network,
and the variety of our product portfolio.

      The markets for our products are highly competitive and subject to
technological change and evolving industry requirements and standards. We
believe that these trends will continue into the foreseeable future. Some of our
current and potential competitors have substantially greater financial,
marketing and other resources than we do. 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 we can. 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 we believe that our products are
more cost-effective than those of our primary competitors, certain competing
products may have other advantages which may limit our market. There can be no
assurance that continuing improvements in current or new competing products will
not make them technically equivalent or superior to our products in addition to
providing cost or other advantages. There can be no assurance that our current
products, products under development or ability to introduce new products will
enable us to compete effectively.

      PRODUCT DEVELOPMENT: It is generally accepted that digital radiography
will become the dominant technology used in hospitals and imaging clinics
throughout the world over the next 10 to 15 years. Currently, there are a number
of competing technologies available in connection with the digitization of x-ray
images. In addition, there are substantial hurdles which need to be addressed in
terms of transitioning radiology practices from the current analog environment
to a digital environment. These ancillary issues include image storage and
retrieval and record keeping. However, due to the high cost of this technology,
many institutions have not yet adopted digital technology. In addition, there is
uncertainty as to which technology system will be accepted as the
industry-leading protocol for image digitization and communication.

                                       4

<PAGE>

      Consequently, our current research and development spending is focused
primarily on enhancing our existing conventional radiographic products while we
study the developments in the digital marketplace. We believe these studies will
help us to assure the investments we make in this area are appropriate. Spending
for research and development for our Medical Systems Group was approximately
$1.6 million, $1.6 million and $1.6 million during fiscal years 2005, 2004 and
2003, respectively.

      We currently have two digital radiographic solutions and are committed to
expanding our selection to include a wider range of low-cost offerings for
customers. While many of our competitors have invested heavily into developing a
digital detector, we have chosen to align with technology leaders who have
already made digital investments and could benefit from our X-Ray platform
design, our systems integration capabilities and our worldwide dealer network.
This strategy also accelerates our time-to-market with new digital solutions and
avoids the significant development costs being incurred by our competitors.

      TRADEMARKS AND PATENTS: The majority of the Medical System Group's
products are based on technology that is not protected by patent or other
rights. Within the Medical System Group, certain of our products and brand names
are protected by trademarks, both in the US and internationally. Because we do
not have patent rights in our products, our technology may not preclude or
inhibit competitors from producing products that have identical performance as
our products. Our future success is dependent primarily on the technological
expertise and management abilities of our employees and the strength of our
relationship with our worldwide dealer network.

      GOVERNMENT REGULATION: Our medical imaging systems are medical devices
and, therefore, are subject to regulation by the US Food and Drug Administration
(the "FDA") and to regulation by foreign governmental authorities. We also are
subject to state and local regulation. Regulatory requirements include
registration as a manufacturer, compliance with established manufacturing
practices, procedures and quality standards, strict requirements dealing with
the safety, effectiveness and other properties of the products, conformance with
applicable industry standards, product traceability, adverse event reporting,
distribution, record keeping, reporting, compliance with advertising and
packaging standards, labeling, 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.

FDA'S PRE-MARKET CLEARANCE AND APPROVAL REQUIREMENTS

      In the US, medical devices are classified into three different categories
over which the FDA applies increasing levels of regulation: Class I, Class II,
and Class III. The FDA has classified all of our products as Class II devices.
Before a new Class II device can be introduced into the US market, the
manufacturer must obtain FDA clearance or approval through either premarket
notification under Section 510(k) of the Federal Food, Drug, and Cosmetic Act,
or a premarket approval under Section 515 of that Act, unless the product is
otherwise exempt from the requirements.

      A Section 510(k) premarket notification must contain information
supporting the claim of substantial equivalence, which may include laboratory
results or the results of clinical studies. Following submission of a 510(k)
application, a manufacturer may not market the device until the FDA finds the
product is substantially equivalent for a specific or general intended use. FDA
clearance generally takes from four to twelve months, may take longer, and there
is no assurance the FDA will ultimately grant a clearance. The FDA may determine
that a device is not substantially equivalent and may require submission and
approval of a premarket approval application, or require further information
before it is able to make a determination regarding substantial equivalence.

      After a device receives 510(k) clearance, any modification made to the
device requires the manufacturer to determine whether the modification could
significantly affect its safety or effectiveness. If it does not, the
manufacturer's decision must be documented. If the modification could
significantly affect the device's safety and effectiveness, then the
modification requires at least a new 510(k) clearance or, in some instances,
could require a premarket approval. The FDA requires each manufacturer to make
this determination, but the FDA can review any

                                       5

<PAGE>

manufacturer's decision. If the FDA disagrees with a manufacturer's decision,
the agency may retroactively require the manufacturer to seek 510(k) clearance
or premarket approval. The FDA also can require the manufacturer to cease
marketing the modified device or recall the modified device (or both) until
510(k) clearance or premarket approval is obtained. We have made minor
modifications to our products and, using the guidelines established by the FDA,
have determined that these modifications do not require us to file new 510(k)
submissions. If the FDA disagrees with our determinations, we may not be able to
sell one or more of our products until the FDA has cleared new 510(k)
submissions for these modifications.

      All of our products marketed in the US have met the appropriate FDA
requirements for marketing, either because they were exempt from submission or
through 510(k) clearance. We continuously evaluate our products for any required
new submission for changes or modifications.

PERVASIVE AND CONTINUING FDA REGULATION

      Numerous FDA regulatory requirements apply to our products as well as to
components manufactured by some of our suppliers. These requirements include:

      -     the FDA's quality system regulation which requires manufacturers to
            create, implement and follow numerous design, testing, control,
            documentation and other quality procedures; and

      -     Medical device reporting regulations, which require that
            manufacturers report to the FDA certain types of adverse and other
            events involving their products.

      Class II devices may also be subject to special controls, such as
performance standards, post-market surveillance, patient registries and FDA
guidelines that may not apply to Class I devices. Our products are currently
subject to FDA guidelines for 510(k) cleared devices and are not subject to any
other form of special controls. We believe we are in compliance with the
applicable FDA guidelines, but we could be required to change our compliance
activities or be subject to other special controls if the FDA changes its
existing regulations or adopts new requirements.

      We and some of our suppliers are subject to inspection and market
surveillance by the FDA to determine compliance with regulatory requirements. If
the FDA finds that either we or a supplier have failed to adequately comply, the
agency can institute a wide variety of enforcement actions, ranging from a
public warning letter to more severe sanctions such as: fines, injunctions and
civil penalties; recall or seizure of our products; the imposition of operating
restrictions, partial suspension or total shutdown of production; the refusal of
our requests for 510(k) clearance or premarket approval of new products; the
withdrawal of 510(k) clearance or premarket approval already granted; and
criminal prosecution.

      The FDA also has the authority to require repair, replacement or refund of
the cost of any medical device manufactured or distributed by us. Our failure to
comply with applicable requirements could lead to an enforcement action that may
have an adverse effect on our financial condition and results of operations.

OTHER FEDERAL AND STATE REGULATIONS

      As a participant in the health care industry, we are subject to extensive
and frequently changing regulation under many other laws administered by
governmental entities at the federal, state and local levels, some of which are,
and others of which may be, applicable to our business. For example, our Del
Medical Imaging facility is also licensed as a medical product manufacturing
site by the state of Illinois and is subject to periodic state regulatory
inspections. Our health care service provider customers are also subject to a
wide variety of laws and regulations that could affect the nature and scope of
their relationships with us.

FOREIGN GOVERNMENT REGULATION

      Our products are also regulated outside the US as medical devices by
foreign governmental agencies, similar to the FDA, and are subject to regulatory
requirements, similar to the FDA's, in the countries in which we plan to sell

                                       6

<PAGE>

our products. We work with our foreign distributors to obtain the foreign
regulatory approvals necessary to market our products outside of the US. In
certain foreign markets, it may be necessary or advantageous to obtain ISO 9001
certification, which is analogous to compliance with the FDA's Good
Manufacturing Practices requirements. We have obtained ISO 9001 certification
for all of our medical systems manufacturing facilities. The time and cost
required to obtain market authorization from other countries and the
requirements for licensing a product in another country may differ significantly
from FDA requirements.

      No assurance can be given that the FDA or foreign regulatory agencies will
give the requisite approvals or clearances for any of our 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 our existing products
and any future products, these agencies can later withdraw the clearance or
require us to change the system or our 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.

POWER CONVERSION GROUP - CONTINUING OPERATIONS

      Our Power Conversion Group designs, manufactures, markets and sells high
voltage precision components and sub-assemblies and electronic noise suppression
components for a variety of applications. These products are utilized by
original equipment manufacturers ("OEMs") who build systems that are used in a
broad range of markets. Our products are sold under the following industry
brands: RFI, Filtron, Sprague and Stanley. This segment is comprised of
Electronic Systems and Components.

      This segment designs and manufactures key electronic components such as
transformers, noise suppression filters and high voltage capacitors for use in
precision regulated high voltage applications. Noise suppression filters and
components are used to help isolate and reduce the electromagnetic interference
(commonly referred to as "noise") among the different components in a system
sharing the same power source. Examples of systems that use our noise
suppression products include aviation electronics, mobile and land-based
telecommunication systems and missile guidance systems.

      The Power Conversion Group provides subsystems and components which are
used in the manufacture of products for security, medical, military and
industrial applications as follows:

                      POWER CONVERSION GROUP MARKETS SERVED

ELECTRONICS SYSTEMS & COMPONENTS DIVISION

                 MILITARY

                   Guidance & Weapons Systems
                   Communications

                 COMMERCIAL

                   Power Systems
                   Telecommunications
                   Satellite
                   Meteorological

                 INDUSTRIAL

                   Induction Heating
                   Automotive
                   Capital Equipment

                 MEDICAL

                   Radiation Oncology
                   Magnetic Resonance
                     Imaging ("MRI")

PRODUCTS

      MILITARY APPLICATIONS - Through our relationships with many of the federal
government's top defense suppliers, such as Raytheon, Boeing, Lockheed Martin
and Northrop Grumman, we supply electronic components for various classified and
unclassified programs including radar systems, guidance systems, weapons systems
and communication electronics.

      INDUSTRIAL APPLICATIONS - Our high voltage power components and EMI
filters are used in many leading-edge high technology scientific and industrial
applications by OEMs, universities and private research laboratories. Some

                                       7

<PAGE>

industrial applications using high voltage subsystems include DNA sequencing,
molecular analysis, printed circuit board inspection, structural inspection,
food and mail sterilization and semiconductor capital equipment.

      MARKETING, SALES AND DISTRIBUTION: We market our Power Conversion Group
products through in-house sales personnel, independent sales representatives in
the US, and international agents in Europe, Asia, the Middle East, Canada and
Australia. Our sales representatives are compensated primarily on a commission
basis and the international agents are compensated either on a commission basis
or act as independent distributors. Our marketing efforts emphasize our ability
to custom engineer products to optimal performance specifications. We emphasize
team selling where our sales representatives, engineers and management personnel
all work together to market our products. We also market our products through
catalogs and trade journals and participation in industry shows. Sales of the
Company's products are typically on open account with 30 day terms. New accounts
are established with cash on delivery or cash in advance terms.

      RAW MATERIALS AND PRINCIPAL SUPPLIERS: The Power Conversion Group in most
cases uses two or more alternative sources of supply for each of its raw
materials, which consist primarily of electronic components and subassemblies,
metal enclosures for its products and certain other materials. In certain
instances, however, the Power Conversion Group will use a single source of
supply when directed by a customer or by need. In order to ensure the consistent
quality of the Power Conversion Group's products, the Company performs certain
supplier evaluation and qualification procedures, and where possible, enters
into strategic partnerships with its suppliers to assure a continuing supply of
high quality critical components.

      With respect to those items which are purchased from single sources, we
believe that comparable items would be available in the event that there was a
termination of our existing business relationships with any such supplier.
Actual experience could differ materially from this belief as a result of a
number of factors, including the time required to locate an alternate source for
the material.

      The majority of the Power Conversion Group's raw materials are purchased
on open account from vendors pursuant to various individual or blanket purchase
orders. Procurement lead times are such that the Company is not required to hold
significant amounts of inventory in order to meet customer demand. The Company
believes its sources of supply for the Power Conversion Group are adequate to
meet its needs

      COMPETITION: Our Power Conversion Group competes with several small,
privately owned suppliers of electronic systems and components. From our
perspective, competition is primarily based on each company's design, service
and technical capabilities, and secondarily on price. Excluding the OEMs that
manufacture their own components, based on market intelligence we have gathered,
we believe that we are among the top two or three in market share in supplying
these products.

      The markets for our products are subject to limited technological changes
and gradually evolving industry requirements and standards. We believe that
these trends will continue into the foreseeable future. Some of our current and
potential competitors may have substantially greater financial, marketing and
other resources than we do. 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 we
can. 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 we believe that our products are more cost-effective
than those of our primary competitors, certain competing products may have other
advantages which may limit our market. There can be no assurance that continuing
improvements in current or new products will not make them technically
equivalent or superior to our products in addition to providing cost or other
advantages. There can be no assurance that our current products, products under
development or our ability to introduce new products will enable us to compete
effectively.

      PRODUCT DEVELOPMENT: We have a well developed engineering and technical
staff in our Power Conversion Group. Our technical and scientific employees are
generally employed in the engineering departments at our RFI business unit, and
split their time, depending on business mix and their own technical background,
between supporting existing production and development and research efforts for
new product variations or new customer

                                       8

<PAGE>

specifications. Our products include transformers, noise suppression filters and
high voltage capacitors for use in precision regulated high voltage
applications. Noise suppression filters and components are used to help isolate
and reduce the electromagnetic interference (commonly referred to as "noise")
among the different components in a system sharing the same power source.
Examples of systems that use our noise suppression products include aviation
electronics, mobile and land-based telecommunication systems and missile
guidance systems. No significant engineering related time was charged to
research and development spending for the continuing operations of the Power
Conversion Group in fiscal years 2005, 2004 or 2003. These time allocations were
minimal because our technical and scientific employees were focused on reshaping
our production and quality practices at our Bayshore plant.

      TRADEMARKS AND PATENTS: The majority of the Power Conversion Group's
products are based on technology that is not protected by patent or other
rights. Within the Power Conversion Group, certain of our products and brand
names are protected by trademarks, both in the US and internationally. Our
future success is dependent primarily on the technological expertise and
management abilities of our employees.

      GOVERNMENT REGULATION: We are subject to various US government guidelines
and regulations relating to the qualification of our 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. We have had
many years of experience in designing, testing and qualifying our products for
sale to governmental agencies. Certain government contracts are subject to
cancellation rights at the Government's election. We have experienced no
material termination of any government contract and are not aware of any pending
terminations of government contracts.

DISCONTINUED OPERATION:

      As of July 31, 2004, the DHV division has been classified as a
discontinued operation. This division manufactured and sold high voltage power
systems, primarily for security, medical, scientific, military and industrial
OEM applications.

      The results of this operation are segregated on the accompanying financial
statements as income or loss from discontinued operation. See Note 2 of the
Notes to Consolidated Financial Statements included in Part II, Item 8, of this
Annual Report.

      DHV recorded fiscal 2005 net income of $0.2 million through the October 1,
2004 date the sale of this division was consummated. The division recorded
losses of $5.1 million including, impairment losses of $4.9 million for the
fiscal year ended July 31, 2004 and recorded income of $0.1 million for the
fiscal year ended August 2, 2003.

SEASONALITY

      Revenue in both operating segments is typically lower during the first
quarter of each fiscal year due to the shutdown of operations in our Milan,
Italy (Medical Systems Group) and Bayshore, New York (Power Conversion Group)
facilities for part of August as a result of both vacation schedules and
year-end physical inventories.

BACKLOG

      Consolidated backlog at July 30, 2005 was $14.6 million versus backlog at
July 31, 2004 of approximately $25.9 million. The backlog in the Power
Conversion Group of $6.1 million decreased $1.6 million from levels at beginning
of the fiscal year while there was a $9.6 million decrease in the backlog at our
Medical Systems Segment. Backlog in the Medical Systems Segment of $8.6 million
reflects declines due to shipments of approximately $8.8 million under a large
tender order at our international location as well as a decrease in incoming
order rates during the period. Substantially all of the backlog should result in
shipments within the next 12 months.

EMPLOYEES

                                       9

<PAGE>

      As of July 30, 2005 we had 341 employees in continuing operations. We
believe that our employee relations are good. None of our approximately 210 US
based employees are represented by a labor union. Employment by functional area
as of July 30, 2005, excluding approximately 80 employees at Del High Voltage
division, is as follows:

<TABLE>
<S>                                                                          <C>
Executive................................................................      2
Administration...........................................................     26
Manufacturing............................................................    238
Engineering..............................................................     46
Sales and Marketing......................................................     29
                                                                             ---
Total....................................................................    341
                                                                             ===
</TABLE>

GEOGRAPHIC AREAS

      For further information about Geographic areas the Company operates in as
well as other Segment related disclosures refer to Note 9 of the Notes to
Consolidated Financial Statements in Part II, Item 8 of this Annual Report.

RISK FACTORS

      Prospective investors should carefully consider the following risk
factors, together with the other information contained in this Annual Report, in
evaluating the Company and its business before purchasing our securities. In
particular, prospective investors should note that this Annual Report contains
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934
and that actual results could differ materially from those contemplated by such
statements. The factors listed below represent certain important factors which
we believe could cause such results to differ. These factors are not intended to
represent a complete list of the general or specific risks that may affect us.
It should be recognized that other risks may be significant, presently or in the
future, and the risks set forth below may affect us to a greater extent than
indicated.

OUR COMMON STOCK HAS BEEN DELISTED FROM THE NASDAQ NATIONAL MARKET AND WE CANNOT
PREDICT WHEN OR IF EVER IT WILL BE LISTED ON ANY NATIONAL SECURITIES EXCHANGE.

      Due to our past failure to comply with the United States Securities Laws,
our common stock was suspended from trading on the Nasdaq National Market in
December 2000. Current pricing information on our common stock has been
available in the "pink sheets" published by National Quotation Bureau, LLC. The
"pink sheets" is an over-the-counter market which generally provides
significantly less liquidity than established stock exchanges or the Nasdaq
National Market, and quotes for stocks included in the "pink sheets" are not
listed in the financial sections of newspapers. Therefore, prices for securities
traded solely in the "pink sheets" may be difficult to obtain, and shareholders
may find it difficult to resell their shares. In order to be re-listed, we will
need to meet certain listing requirements. There can be no assurance that we
will be able to meet such listing requirements.

FAILURE BY US TO ADHERE TO OUR ADMINISTRATIVE AGREEMENT WITH THE DEFENSE
LOGISTICS AGENCY COULD RESULT IN OUR DEBARMENT FROM DOING BUSINESS WITH THE U.S.
GOVERNMENT.

      On April 5, 2005, the Company announced that it had reached an
administrative agreement with the U.S. Defense Logistics Agency (DLA), a
component of the US Department of Defense (DOD), which provides that RFI will
not be debarred from doing business with the U.S. Government entities as long as
RFI maintains its compliance program and adheres to the terms of the
administrative agreement. If RFI fails to maintain its compliance program or RFI
or the Company fails to adhere to the terms of the administrative agreement, the
DLA could debar the Company from doing business with U.S. Government entities.

OUR BUSINESS IS BASED ON TECHNOLOGY THAT IS NOT PROTECTED BY PATENT OR OTHER
RIGHTS.

                                       10

<PAGE>

      The technology and designs underlying our products are unprotected by
patent rights. Our future success is dependent primarily on unpatented trade
secrets and on the innovative skills, technological expertise and management
abilities of our employees. Because we do not have patent rights in our
products, our technology may not preclude or inhibit competitors from producing
products that have identical performance as our products. In addition, we cannot
guarantee that any protected trade secret could ultimately be proven valid if
challenged. Any such challenge, with or without merit, could be time consuming
to defend, result in costly litigation, divert management's attention and
resources and, if successful, require us to pay monetary damages.

WE MAY NOT BE ABLE TO COMPETE SUCCESSFULLY.

      A number of companies have developed, or are expected to develop, products
that compete or will compete with our products. Many of these competitors offer
a range of products in areas other than those in which we compete, which may
make such competitors more attractive to hospitals, radiology clients, general
purchasing organizations and other potential customers. In addition, many of our
competitors and potential competitors are larger and have greater financial
resources than we do and offer a range of products broader than our products.
Some of the companies with which we now compete or may compete in the future
have or may have more extensive research, marketing and manufacturing
capabilities and significantly greater technical and personnel resources than we
do, and may be better positioned to continue to improve their technology in
order to compete in an evolving industry.

OUR DELAY OR INABILITY TO OBTAIN ANY NECESSARY US OR FOREIGN REGULATORY
CLEARANCES OR APPROVALS FOR OUR PRODUCTS COULD HARM OUR BUSINESS AND PROSPECTS.

      Our medical imaging products, with the exception of certain veterinary
lines, are the subject of a high level of regulatory oversight. Any delay in our
obtaining or our inability to obtain any necessary US or foreign regulatory
approvals for new products could harm our business and prospects. There is a
limited risk that any approvals or clearances, once obtained, may be withdrawn
or modified which could create delays in shipping our product, pending
re-approval. Medical devices cannot be marketed in the US without clearance or
approval by the FDA. Our Medical Systems Group businesses must be operated in
compliance with FDA Good Manufacturing Practices, which regulate the design,
manufacture, packing, storage and installation of medical devices. Our
manufacturing facilities and business practices are subject to periodic
regulatory audits and quality certifications and we do self audits to monitor
our compliance. In general, corrective actions required as a result of these
audits do not have a significant impact on our manufacturing operations; however
there is a limited risk that delays caused by a potential response to extensive
corrective actions could impact our operations. Virtually all of our products
manufactured or sold overseas are also subject to approval and regulation by
foreign regulatory and safety agencies. If we do not obtain these approvals, we
could be precluded from selling our products or required to make modifications
to our products which could delay bringing our products to market. Because our
US products lines are mature, new product changes are in general relatively
minor, and accordingly regulatory approval is more streamlined.

WE MUST RAPIDLY DEVELOP NEW PRODUCTS IN ORDER TO COMPETE EFFECTIVELY.

      Technology in our industry, particularly in the x-ray and medical imaging
businesses, evolves rapidly, and making timely product innovations is essential
to our success in the marketplace. The introduction by our competitors of
products with improved technologies or features may render our existing products
obsolete and unmarketable. If we cannot develop products in a timely manner in
response to industry changes, or if our products do not perform well, our
business and financial condition will be adversely affected. Also, our new
products may contain defects or errors which give rise to product liability
claims against us or cause the products to fail to gain market acceptance.

      It is generally accepted that digital radiography will become the dominant
technology used in hospitals and imaging clinics throughout the world over the
next 10 to 15 years. Currently, there are a number of competing technologies
available in connection with the digitization of x-ray images. However, due to
the high cost of this technology, many institutions have not yet adopted digital
technology. In addition, there is uncertainty as to which

                                       11

<PAGE>

technology system will be accepted as the industry-leading protocol for image
digitization and communication. Lack of an adequate digital capability could
impact our business and result in a loss of market share.

WE MUST CONDUCT OUR BUSINESS OPERATIONS WITHOUT INFRINGING ON THE PROPRIETARY
RIGHTS OF THIRD PARTIES.

      Although we believe our products do not infringe on the intellectual
property rights of others, there can be no assurance that infringement claims
will not be asserted against us in the future or that, if asserted, any
infringement claim will be successfully defended. A successful claim, or any
claim, against us could distract our management's attention from other business
concerns and adversely affect our business, financial condition and results of
operations.

POTENTIAL PAYMENTS REQUIRED UNDER A CHANGE OF CONTROL AGREEMENTS WITH A FORMER
CEO COULD UNDULY BURDEN OUR COMPANY.

      The Company's employment agreement with Samuel E. Park, a former CEO of
the Company, provides for payments upon certain changes of control. The
Company's Board of Directors elected at the Company's Annual Meeting of
Shareholders held on May 29, 2003, had previously reviewed the "change of
control" provisions regarding payments totaling up to approximately $1,800,000
under the employment agreement between the Company and Mr. Park. As a result of
this review and based upon, among other things, the advice of special counsel,
the Company's Board of Directors determined that no obligation to pay these
amounts has been triggered. Prior to his departure from the Company on October
10, 2003, Mr. Park orally informed the Company that, after reviewing the matter
with his counsel, he believed that the obligation to pay these amounts has been
triggered. On October 27, 2003, the Company received a letter from Mr. Park's
counsel demanding payment of certain sums and other consideration pursuant to
the Company's employment agreement with Mr. Park, including these change of
control payments. On November 17, 2003, the Company filed a complaint against
Mr. Park seeking a declaratory judgment that no change in control payment was or
is due to Mr. Park, and that an amendment to the employment contract with Mr.
Park regarding advancement and reimbursement of legal fees is invalid and
unenforceable. Mr. Park answered the complaint and asserted counterclaims
seeking payment from the Company based on his position that a "change in
control" occurred in June 2003. Mr. Park is also seeking other consideration he
believes he is owed under his employment agreement. The Company filed a reply to
Mr. Park's counterclaims denying that he is entitled to any of these payments.
Discovery in this matter was conducted and completed. Following discovery, the
Company and Mr. Park filed motions for summary judgment on the issues related to
change in control and the amendment to the employment agreement, which motions
have been fully submitted to the Court for consideration. To date, no decision
ha been issued by the Court on these motions. If Mr. Park prevails on his claims
and the payments he seeks are required to be paid in a lump sum, these payments
may have a material adverse effect on the Company's liquidity.

THERE IS A RISK THAT OUR INSURANCE WILL NOT BE SUFFICIENT TO PROTECT US FROM
PRODUCT LIABILITY CLAIMS, OR THAT IN THE FUTURE PRODUCT LIABILITY INSURANCE WILL
NOT BE AVAILABLE TO US AT A REASONABLE COST, IF AT ALL.

      Our business involves the risk of product liability claims inherent to the
medical device business. We maintain product liability insurance subject to
certain deductibles and exclusions. There is a risk that our insurance will not
be sufficient to protect us from product liability claims, or that product
liability insurance will not be available to us at a reasonable cost, if at all.
An uninsured or underinsured claim could materially harm our operating results
or financial condition.

WE FACE RISKS ASSOCIATED WITH HANDLING HAZARDOUS MATERIALS AND PRODUCTS.

      Our research and development activity involves the controlled use of
hazardous materials, such as toxic and carcinogenic chemicals. Although we
believe that our safety procedures for handling and disposing of such materials
comply with the standards prescribed by federal, state and local regulations, we
cannot completely eliminate the risk of accidental contamination or injury from
these materials. In the event of an accident, we could be held liable for any
resulting damages, and such liability could be extensive. We are also subject to
substantial regulation relating to occupational health and safety, environmental
protection, hazardous substance control, and

                                       12

<PAGE>

waste management and disposal. The failure to comply with such regulations could
subject us to, among other things, fines and criminal liability.

OUR BUSINESS COULD BE HARMED IF OUR PRODUCTS CONTAIN UNDETECTED ERRORS OR
DEFECTS OR DO NOT MEET CUSTOMER SPECIFICATIONS.

      We are continuously developing new products and improving our existing
products. Newly introduced or upgraded products can contain undetected errors or
defects. In addition, these products may not meet their performance
specifications under all conditions or for all applications. If, despite our
internal testing and testing by our customers, any of our products contains
errors or defects, or any of our products fails to meet customer specifications,
we may be required to recall or retrofit these products. We may not be able to
do so on a timely basis, if at all, and may only be able to do so at
considerable expense. In addition, any significant reliability problems could
result in adverse customer reaction and negative publicity and could harm our
business and prospects.

THE SEASONALITY OF OUR REVENUE MAY ADVERSELY IMPACT THE MARKET PRICES FOR OUR
SHARES.

      Our revenue is typically lower during the first quarter of each fiscal
year due to the shut-down of operations in our Milan, Italy and Bayshore, New
York facilities for part of August. This seasonality causes our operating
results to vary from quarter to quarter and these fluctuations could adversely
affect the market price of our common stock.

A SIGNIFICANT NUMBER OF OUR SHARES WILL BE AVAILABLE FOR FUTURE SALE AND COULD
DEPRESS THE MARKET PRICE OF OUR STOCK.

      As of October 28, 2005, an aggregate of 10,630,188 shares of our common
stock were outstanding. In addition, as of October 28, 2005, there were
outstanding warrants to purchase 991,994 shares of our common stock and options
to purchase 1,662,494 shares of our common stock, 1,508,742 of which were fully
vested. Sales of large amounts of our common stock in the market could adversely
affect the market price of the common stock and could impair our future ability
to raise capital through offerings of our equity securities. A large volume of
sales by holders exercising the warrants or options could have a significant
adverse impact on the market price of our common stock.

WE HAVE A LIMITED TRADING MARKET AND OUR STOCK PRICE MAY BE VOLATILE.

      There is a limited public trading market for our common stock in the "pink
sheets." We cannot assure you that a regular trading market for our common stock
will ever develop or that, if developed, it will be sustained.

      The experiences of other small companies indicate that the market price
for our common stock could be highly volatile. Many factors could cause the
market price of our common stock to fluctuate substantially, including:

      -     future announcements concerning us, our competitors or other
            companies with whom we have business relationships;

      -     changes in government regulations applicable to our business;

      -     overall volatility of the stock market and general economic
            conditions;

      -     changes in our earnings estimates or recommendations by analysts;
            and

      -     changes in our operating results from quarter to quarter.

      Accordingly, substantial fluctuations in the price of our common stock
could limit the ability of our current shareholders to sell their shares at a
favorable price.

                                       13

<PAGE>

ITEM 2. PROPERTIES

      The following is a list of our principal properties, classified by segment
and subsidiary:

<TABLE>
<CAPTION>
                                                                     APPROX.
                                                                      FLOOR                         OWNED/LEASED
                                                                     AREA IN                         (EXPIRATION
SEGMENT                                          LOCATION            SQ. FT.   PRINCIPAL USES      DATE IF LEASED)
-------------------------------------------  -----------------       -------   --------------      ----------------
<S>                                          <C>                     <C>       <C>                 <C>
MEDICAL SYSTEMS GROUP:
Del Medical Imaging Corp. ................   Franklin Park, IL       68,000         Design and     Leased (2007)
                                                                                 manufacturing
Villa.....................................   Milan, Italy            67,000         Design and     Leased (2011)(1)
                                                                                 manufacturing

POWER CONVERSION GROUP:
Corporate.................................   Valhalla, NY             4,188          Corporate     Leased (2006)(2)
                                                                                  headquarters
RFI.......................................   Bayshore, NY            55,000         Design and     Owned
                                                                                 manufacturing
</TABLE>

(1)   Villa has the option to purchase this property at the conclusion of this
      lease.

(2)   The Company originally occupied 43,750 square feet in this building. The
      buyer of the DHV business signed a lease for 34,562 square feet of this
      space on October 1, 2004. The Company assigned approximately 5,000 square
      feet of the remaining 9,188 square feet Corporate headquarters space to a
      third party, leaving 4,188 square feet for our Corporate headquarter
      space.

      We believe that our current facilities are sufficient for our present
requirements. The Company's domestic credit facilities are secured, in part, by
a mortgage on RFI's property.

ITEM 3. LEGAL PROCEEDINGS

DOD INVESTIGATION - On March 8, 2002, RFI, a subsidiary of the Company and the
remaining part of the Power Conversion Group segment, was served with a subpoena
by the US Attorney for the Eastern District of New York in connection with an
investigation by the DOD. RFI supplies electro-magnetic interference filters for
communications and defense applications. Since March 2002, the DOD has been
investigating certain past practices at RFI which date back more than six years
and pertain to RFI's Military Specification testing, record keeping and general
operating procedures. Management retained special counsel to represent the
Company on this matter. The Company has cooperated fully with this
investigation, including voluntarily providing employees to be interviewed by
the Defense Criminal Investigative Services division of the DOD.

In June 2003, the Company was advised that the US Government was willing to
enter into negotiations regarding a comprehensive settlement of this
investigation. Prior to the preliminary discussions with the US Government in
June 2003, the Company had no basis to estimate the financial impact of this
investigation. Based on preliminary settlement discussions with the US
Government, discussions with the Company's advisors, consideration of
settlements reached by other parties in investigations of this nature, and
consideration of the Company's capital resources, management then developed an
estimate of the low end of the potential range of the financial impact.
Accordingly, during the third quarter of fiscal 2003, the Company recorded a
charge of $2.3 million, which represented its estimate of the low end of a range
of potential fines and legal and professional fees.

Following negotiations, the Company reached a global settlement in February 2004
with the US Government that resolves the civil and criminal matters relating to
the DOD's investigation. The settlement included the Company pleading guilty to
one criminal count and agreeing to pay fines and restitution to the US
Government of $4.6 million if paid by June 30, 2004 and $5.0 million if paid by
September 30, 2004.

In connection with this settlement, the Company recognized an additional charge
of approximately $3.2 million in the second quarter of fiscal 2004. This charge
represents the difference between the $2.3 million charge taken

                                       14

<PAGE>

during the third quarter of fiscal 2003, and the up to $5.0 million in fines and
restitution, plus estimated legal and professional fees related to this
settlement. The liability associated with these charges is included in
Litigation settlement reserves on the July 31, 2004 balance sheet.

On September 30, 2004, pursuant to the terms of the settlement, the Company
fulfilled its obligation under this agreement by paying to the US Government the
sum of $5 million representing fines and restitution. On October 7, 2004, RFI
entered a criminal guilty plea to a single count conspiracy charge pursuant to
the settlement and a criminal plea agreement. Sentencing occurred on March 15,
2005. At sentencing, the Court imposed an additional fine of $0.3 million to be
paid within 30 days. The Company paid this additional fine on April 8, 2005.

The Company worked with the US Defense Logistics Agency ("DLA"), a component of
the DOD, to avoid any future limitations on the ability of the Company to do
business with US Government entities. Such limitations could have included the
US Government seeking a "debarment" or exclusion of the Company from doing
business with US Government entities for a period of time.

On April 5, 2005, the Company announced that it had reached an administrative
agreement with the DLA which provides that RFI will not be debarred from doing
business with U.S. Government entities so long as RFI maintains its compliance
program and adheres to the terms of the administrative agreement. This agreement
with the DLA is the final component of the Company's previously announced
settlement of an investigation by the DOD into practices at RFI.

STRATEGIC ALTERNATIVES - On March 21, 2005, the Company was notified by Palladio
Corporate Finance S.p.A and Palladio Finaziraria S.p.A (collectively,
"Palladio"), the party with whom it signed a non-binding letter of intent for
the sale of its Medical Systems Group, that Palladio was terminating
negotiations under the letter of intent. The letter of intent provided for a
$1.0 million payment payable in the event that no later than March 4, 2005, the
buyer was ready, willing and able to enter into a definitive purchase agreement
based on the terms of the letter of intent and containing reasonable and
customary representations, warranties, terms and conditions relating to the
transaction, and the Company elected not to enter into such purchase agreement.
Palladio filed a lawsuit against the Company and its Del Medical Imaging Corp
subsidiary on April 15, 2005 in the United States District Court, Southern
District of New York. The lawsuit seeks payment of the $1.0 million, plus
interest, as well as reasonable attorney's fees. The Company filed an Answer to
this lawsuit on June 8, 2005 contesting Palladio's claim to these damages, and
thereafter served discovery requests. At a court conference held on September
28, 2005, the parties agreed to submit to non-binding mediation in an attempt to
settle this dispute. A mediation conference has been scheduled for November 21,
2005. Although there can be no assurance that the Company will not have to pay
the $1.0 million, the Company believes that no such payment is payable under the
terms of the letter of intent. If the outcome of the non-binding mediation is
not acceptable to either party, the Company intends to vigorously defend this
lawsuit.

EMPLOYMENT MATTERS - The Company had an employment agreement with Samuel Park,
the previous Chief Executive Officer ("CEO"), for the period May 1, 2001 to
April 30, 2004. The employment agreement provided for certain payments in the
event of a change in the control of the Company.

On October 10, 2003, the Company announced the appointment of Walter F.
Schneider as President and CEO to replace Mr. Park, effective as of such date.
As a result, the Company recorded a charge of $0.2 million during the first
quarter of fiscal 2004 to accrue the balance remaining under Mr. Park's
employment agreement.

In addition, the Company's Board of Directors elected at the Company's Annual
Meeting of Shareholders held on May 29, 2003 had previously reviewed the "change
of control" provisions regarding payments totaling up to approximately $1.8
million under the employment agreement between the Company and Mr. Park. As a
result of this review and based upon, among other things, the advice of special
counsel, the Company's Board of Directors determined that no obligation to pay
these amounts has been triggered. Prior to his departure from the Company on
October 10, 2003, Mr. Park orally informed the Company that, after reviewing the
matter with his counsel, he believed that the obligation to pay these amounts
has been triggered. On October 27, 2003, the Company received a letter from Mr.
Park's counsel demanding payment of certain sums and other consideration
pursuant to the

                                       15

<PAGE>

Company's employment agreement with Mr. Park, including these change of control
payments. On November 17, 2003, the Company filed a complaint in the United
States District Court, Southern District of New York against Mr. Park seeking a
declaratory judgment that no change in control payment was or is due to Mr.
Park, and that an amendment to the employment contract with Mr. Park regarding
advancement and reimbursement of legal fees is invalid and unenforceable. Mr.
Park answered the complaint and asserted counterclaims seeking payment from the
Company based on his position that a "change in control" occurred in June 2003.
Mr. Park is also seeking other consideration he believes he is owed under his
employment agreement. The Company filed a reply to Mr. Park's counterclaims
denying that he is entitled to any of these payments. Discovery in this matter
was conducted and completed. Following discovery, the Company and Mr. Park filed
motions for summary judgment on the issues related to the change in control and
the amendment to the employment agreement, which motions have been fully
submitted to the court for consideration. To date, no decision has been issued
by the court on these motions. If Mr. Park prevails on his claims and the
payments he seeks are required to be paid in a lump sum, these payments may have
a material adverse effect on the Company's liquidity. It is not possible to
predict the outcome of these claims. However, the Company's Board of Directors
does not believe that such a claim is reasonably likely to result in a material
decrease in the Company's liquidity in the foreseeable future.

      During fiscal 2004, an Italian subsidiary of the Company began employment
termination proceedings against an executive. Subsequently, the executive
instituted legal proceedings in the labor court in Italy against the executive's
former employer asserting certain monetary claims based on change in control
provisions in a letter dated January 10, 2003 to the executive. The court issued
a "pay or justify" order directing the Company's subsidiary to pay damages of
about euro 306,000, plus interest and costs. The subsidiary has challenged this
order in the Italian labor court. Subsequently, the executive served a writ of
summons on the Company as a third party claim against the Company in the
litigation pending with the subsidiary in March 2005. The next hearing date in
the Italian labor court on this action is scheduled for October 28, 2005. In
addition, the executive has brought an action in the Italian labor court for
unlawful dismissal under the Italian labor laws against the Company's
subsidiary. The subsidiary entered an appearance and filed a counterclaim. In
addition, the executive has brought an action in the Italian Corporate courts
challenging the subsidiary's removal of the executive as managing director. The
executive has not specified any damages in this action and it is in the
preliminary stage. The Company believes that the executive's change in control
provision has not been triggered and that the executive's termination was
justified. However, based on the court's "pay or justify" order to pay euro
306,000, the Company recorded a charge in fiscal year 2004 of approximately $0.4
million in connection with this matter and which charge is included in
Litigation Settlement reserves in the accompanying financial statements.

OTHER LEGAL MATTERS - The Company is a defendant in several other legal actions
in various US and foreign jurisdictions arising from the normal course of
business. Management believes the Company has meritorious defenses to such
actions and that the outcomes will not be material to the Company's consolidated
financial statements.

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

Not applicable.

                                       16

<PAGE>

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
        ISSUER PURCHASES OF EQUITY SECURITIES

SHAREHOLDER MATTERS

      Our common stock was suspended from trading on the Nasdaq National Market
on December 19, 2000 because we had not filed an annual report for the year
ended July 29, 2000 within the SEC's prescribed time period. In December 2000,
the Nasdaq National Market delisted our common stock and since that time, our
common stock has been traded on the "pink sheets," or over-the-counter market,
under the symbol "DGTC.PK" and our warrants are traded under the symbol
"DGTCW.PK". The "pink sheets" is an over-the-counter market which provides
significantly less liquidity than established stock exchanges or the Nasdaq
National Market, and quotes for stocks included in the "pink sheets" are not
listed in the financial sections of newspapers as are those for established
stock exchanges and the Nasdaq National Market.

      As of October 21, 2005, there were approximately 874 holders of record of
our common stock. The following table shows the high and low closing bid prices
per share of our common stock for the past eight quarters, as reported by the
over the counter market. The over-the-counter market quotations listed below
reflect inter-dealer prices, without retail mark-up, mark down or commission and
may not represent actual transactions.

<TABLE>
<CAPTION>
FISCAL PERIOD                                                                             HIGH           LOW
------------------------------------------------------------------------------------    -------       -------
<S>                                                                                     <C>           <C>
FISCAL 2005
  First Quarter.....................................................................    $  3.05       $  2.50
  Second Quarter....................................................................       2.85          2.30
  Third Quarter.....................................................................       3.50          2.50
  Fourth Quarter....................................................................       3.00          2.40
FISCAL 2004
  First Quarter.....................................................................    $  2.50       $  1.75
  Second Quarter....................................................................       2.83          1.95
  Third Quarter.....................................................................       2.80          2.00
  Fourth Quarter....................................................................       3.00          2.05
</TABLE>

      We have not paid any cash dividends, except for the payment of cash in
lieu of fractional shares, since 1983. The payment of cash dividends is
prohibited under the Credit Facility. We do not intend to pay any cash dividends
in the foreseeable future.

      The following table summarizes the securities authorized for issuance
under equity compensation plans as of the end of Fiscal 2005:

<TABLE>
<CAPTION>
                                                             NUMBER OF                                NUMBER OF
                                                         SECURITIES TO BE                            SECURITIES
                                                            ISSUED UPON       WEIGHTED-AVERAGE   REMAINING AVAILABLE
                                                            EXERCISE OF       EXERCISE PRICE OF  FOR FUTURE ISSUANCE
                                                            OUTSTANDING          OUTSTANDING        UNDER EQUITY
                                                         OPTIONS, WARRANTS    OPTIONS, WARRANTS     COMPENSATION
                     PLAN CATEGORY                          AND RIGHTS          AND RIGHTS            PLANS(1)
-------------------------------------------------------  -----------------   ------------------  ------------------
<S>                                                      <C>                 <C>                 <C>
Equity compensation plans approved by security holders:
  Stock Option Plan..................................         1,662,494           $  3.81             538,681
Equity compensation plans not approved by security
  holders:
  Warrants issued in connection with the acquisition
   of Villa (2)......................................            50,000           $  7.94              None

  Warrants issued in settlement of class action
   lawsuit (3).......................................           941,994           $  1.50         Not applicable
</TABLE>

                                       17

<PAGE>

      (1) Excludes securities to be issued upon exercise of outstanding options,
warrants and rights.

      (2) These warrants were granted to the former majority shareholder of
Villa in connection with the acquisition of Villa in December 1999. They expire
in December 2005.

      (3) Pursuant to our class action settlement with our shareholders
concerning allegations that the Company had violated federal Securities laws, we
issued 2.5 million shares of our common stock and one million warrants to
purchase our common stock at $2.00 per share. The issuance of these securities
was pursuant to a court order issued in connection with the settlement of this
class action lawsuit in January 2002, and therefore was exempt from the
registration requirements of the Securities Act of 1933 pursuant to Section 3(a)
(10) thereof. These warrants were originally set to expire in March 2008.

      In a motion filed in February 2004, a plaintiff class claimed damages due
to Del Global's failure to timely complete a registration statement for the
shares of common stock issuable upon exercise of these warrants. The class
sought damages of $1.25 million together with interest and costs, and a
declaration that $2 million in subordinated notes issued as part of the 2002
class action settlement were immediately due and payable. In settlement of this
matter, Del Global modified the exercise, or "strike," price of the warrants
issued in 2002 from $2.00 to $1.50 per share, and extended the expiration date
of such warrants by one year to March 28, 2009.

ITEM 6. SELECTED FINANCIAL DATA

SELECTED FINANCIAL DATA

      The selected income statement data presented for the fiscal years ended
July 30, 2005, July 31, 2004 and August 2, 2003 and the balance sheet data as of
July 30, 2005 and July 31, 2004 have been derived from our audited consolidated
financial statements included elsewhere in this form 10-K. The income statement
data for the years ended August 3, 2002 and July 28, 2001 and the balance sheet
data as of August 2, 2003, August 3, 2002 and July 28, 2001 have been derived
from audited financial statements not included herein. This selected financial
data should be read in conjunction with the Consolidated Financial Statements
and related notes included in Part II, Item 8, "Financial Statements and
Supplementary Data" thereto and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in Part II, Item 7 of this form
10K.

<TABLE>
<CAPTION>
                                                                                 FISCAL YEARS ENDED
                                                         ------------------------------------------------------------------
                                                           JULY 30,      JULY 31,      AUGUST 2,      AUGUST 3,    JULY 28,
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)                         2005         2004(1)       2003(2)        2002(3)      2001(4)
-----------------------------------------------------    -----------   -----------   -----------    ----------   ----------
<S>                                                      <C>           <C>           <C>            <C>          <C>
INCOME STATEMENT DATA:
Net sales............................................    $    84,872   $    83,827   $    68,212    $   68,288   $   70,441
Gross margin.........................................         22,281        21,315        15,670        14,715       14,029
Selling, general and administrative..................         16,452        15,907        17,904        16,041        9,424
Research and development.............................          1,636         1,562         1,593         1,502        2,392
Litigation settlement costs..........................            300         3,652         2,126         7,713        9,759
Facilities reorganization costs......................              -             -           128             -          822
Operating income (loss)..............................          3,893           194        (6,081)      (10,541)      (8,368)
Minority interest....................................            393           559           115           197          379
Provision (benefit) for income taxes.................          2,054         8,691         8,233        (1,982)      (3,470)
Income (loss) from continuing operation..............            193       (10,729)      (15,173)       (9,919)      (5,671)
Discontinued operation..............................             199        (5,095)          128        (2,093)      (2,850)
Net income (loss) (5)................................            392       (15,824)      (15,045)      (12,012)      (8,521)
Net income (loss) per share - Basic
Continuing operations................................    $      0.02   $     (1.04)  $     (1.46)   $     (1.14  $    (0.73)
Discontinued operation...............................           0.02         (0.49)         0.01          (0.24)      (0.36)
                                                         -----------   -----------   -----------    -----------  ----------
Net income (loss) per basic share(5).................    $      0.04   $     (1.53)  $     (1.45)   $     (1.38) $    (1.09)
Net income (loss) per share - Diluted
</TABLE>

                                       18

<PAGE>

<TABLE>
<S>                                                      <C>           <C>           <C>            <C>          <C>
Continuing operations................................    $      0.01   $     (1.04)  $     (1.46)   $     (1.14  $    (0.73)
Discontinued operation...............................           0.02         (0.49)         0.01          (0.24)      (0.36)
                                                         -----------   -----------   -----------    -----------  ----------
Net income (loss) per  diluted share(5)..............    $      0.03   $     (1.53)  $     (1.45)   $     (1.38) $    (1.09)
                                                         ===========   ===========   ===========    ============ ==========
Weighted average shares outstanding - Basic                   10,490        10,334        10,376          8,704       7,817
Weighted average shares outstanding - Diluted                 11,465        10,334        10,376          8,704       7,817
</TABLE>

<TABLE>
<CAPTION>
                                                                                                       AS OF
                                                                JULY 30,    JULY 31,     AUGUST 2,    AUGUST 3,   JULY 28,
                                                                  2005        2004         2003         2002        2001
                                                               ---------   ----------    ---------    --------   ---------
<S>                                                            <C>         <C>           <C>          <C>        <C>
BALANCE SHEET DATA:
Working capital.............................................   $  10,122   $    7,764    $  13,598    $ 18,646   $   22,269
Total assets................................................      40,776       49,261       60,492      77,697       81,658
Long-term debt and subordinated note........................       6,454        7,038        7,100       6,724        6,222
Shareholders' equity........................................       9,228        7,775       22,979      37,141       41,791
</TABLE>

      (1) Net loss for the year ended July 30, 2004 includes a $9,794 income
tax provision related to the establishment of a deferred tax valuation
allowance. In addition, net loss reflects the accrual of a $3,199 charge related
to the DOD investigation of our RFI subsidiary and $454 related to a motion
filed in February 2004 related to the warrants to purchase common stock that
were issued in fiscal year 2002. For more information about these legal charges,
see Part I, Item 3 "Legal Proceedings" of this Annual Report.

      (2) Net loss for the year ended August 2, 2003 includes approximately
$7,967 income tax provision related to the establishment of a deferred tax
valuation allowance. In addition, net loss reflects the accrual of a $2,347
charge related to an ongoing DOD Investigation of our RFI subsidiary. For more
information about the DOD investigation, see Part I, Item 3, and "Legal
Proceedings" of this Annual Report. See Notes to Consolidated Financial
Statements included in Part II, Item 8," of this Annual Report.

      (3) Fiscal 2002 includes $7,713 in litigation settlement costs,
principally for finalization of the settlement of a class action suit and the
agreement in principle to settle an SEC investigation. See Notes to Consolidated
Financial Statements included in Part II, Item 8, of this Annual Report.

      (4) During fiscal 2001, we recorded $9,759 in litigation settlement costs
related to a class action lawsuit. During fiscal 2001, we also decided to close
two facilities and recorded a restructuring charge of $822.

      (5) Effective August 4, 2002, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets,"
which establishes new accounting and reporting requirements for goodwill and
other intangible assets. Under SFAS No. 142, all goodwill amortization ceased
effective August 4, 2002. Assuming goodwill was not amortized pursuant to SFAS
No. 142, the net loss would have been $11,881 and, $8,390 in fiscal 2002 and
2001, respectively. Net loss per basic and diluted share would have been $1.37
and $1.07 in fiscal 2002 and 2001, respectively.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

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

                                       19

<PAGE>

OVERVIEW

      The Company is primarily engaged in the design, manufacture and marketing
of cost-effective medical imaging and diagnostic systems consisting of
stationary and portable x-ray systems, radiographic/fluoroscopic systems, dental
imaging systems and proprietary high-voltage power conversion subsystems for
medical and other critical industrial applications. The Company also
manufactures electronic filters, high voltage capacitors, pulse modulators,
transformers and reactors, and a variety of other products designed for
industrial, medical, military and other commercial applications. We manage our
business in two operating segments: our Medical Systems Group and our Power
Conversion Group. In addition, we have a third reporting segment, Other,
comprised of certain unallocated corporate General and Administrative expenses.
See Part I, Item 1, "Business-Operating Segments" of this Annual Report for
discussions of the Company's segments.

On October 1, 2004, we sold this division for a purchase price of $3.1 million,
plus the assumption of approximately $0.8 million of liabilities. Accordingly,
the results of operations have been restated to show this division as a
discontinued operation.

CRITICAL ACCOUNTING POLICIES

      Complete descriptions of significant accounting policies are outlined in
Note 1 of the Notes to Consolidated Financial Statements included in Part II,
Item 8, "Financial Statements and Supplementary Data" of this Annual Report.
Within these policies, we have identified the accounting for deferred tax assets
and the allowance for obsolete and excess inventory as being critical accounting
policies due to the significant amount of estimates involved. In addition, for
interim periods, we have identified the valuation of finished goods inventory as
being critical due to the amount of estimates involved.

REVENUE RECOGNITION

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

DEFERRED TAXES

      We account for deferred income taxes in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes,"
whereby we recognize an asset related to our net operating loss carry forwards
and other temporary differences between financial reporting basis and income tax
basis. The valuation of our deferred tax assets and the recognition of tax
benefits in each period assumes future taxable income and profitability. We
periodically evaluate the likelihood of the recoverability of our deferred tax
asset recognized, based upon our actual operating results and expectations of
future operating profits.

      During fiscal year 2004, as part of our customary six month planning and
review cycle, management updated each domestic business unit's forecast and
operating results, and concluded that it was prudent to record additional
valuation allowances, increasing the total valuation allowance to 100% of both
long and short-term US domestic deferred tax assets. The valuation allowance
recorded is the estimate of the amount of deferred tax assets that are more
likely than not to be unrealized by the Company.

                                       20

<PAGE>

      During fiscal year 2005, the Company recorded taxable income on a
consolidated basis and its individual domestic business units were profitable.
However, after factoring in approximately $4.6 million in unallocated costs of
the Other reporting segment which are considered domestic costs for income tax
purposes, the Company experienced a domestic taxable loss during the period.
Accordingly, the Company has concluded that it should continue to carry a 100%
valuation allowance against domestic deferred tax assets and has not recorded
any income tax benefit for this domestic taxable loss during fiscal 2005.

      We recorded a tax provision with respect to the income of Villa in all
periods presented and anticipate it is more likely than not the remaining
deferred tax asset which relates to our Villa subsidiary will be utilized
against future operating profits or as an offset to dividend income received
from our Villa subsidiary. The deferred tax assets on the balance sheet of $0.8
million related to Villa, is net of a $0.5 million valuation allowance
established in prior years. However, we can make no assurances that our Villa
subsidiary will generate profits in the future.

OBSOLETE AND EXCESS INVENTORY

      We re-evaluate our allowance for obsolete inventory once a quarter, and
this allowance comprises the most significant portion of our inventory reserves.
The re-evaluation of reserves is based on a written policy, which requires at a
minimum that reserves be established based on our analysis of historical actual
usage on a part-by-part basis. In addition, if management learns of specific
obsolescence in addition to this minimum formula, these additional reserves will
be recognized as well. Specific obsolescence might arise due to a technological
or market change, or based on cancellation of an order. As we typically do not
purchase inventory substantially in advance of production requirements, we do
not expect cancellation of an order to be a material risk. However, market or
technology changes can occur.

VALUATION OF FINISHED GOODS INVENTORIES

      In addition, we use certain estimates in determining interim operating
results. The most significant estimates in interim reporting relate to the
valuation of finished goods inventories. For certain subsidiaries, for interim
periods, we estimate the amount of labor and overhead costs related to finished
goods inventories. As of July 30, 2005, finished goods represented approximately
15% of the gross carrying value of our total gross inventory. We believe the
estimation methodologies used to be appropriate and are consistently applied.

CONSOLIDATED RESULTS OF OPERATIONS - CONTINUING OPERATIONS

FISCAL 2005 COMPARED TO FISCAL 2004

      Consolidated net sales of $84.9 million for fiscal year 2005 increased by
$1.0 million or 1.2 % from fiscal 2004 net sales of $83.8 million, due to
increases at the Power Conversion Group and consistent year to year sales levels
at the Medical Systems Group. The Power Conversion Group's fiscal 2005 sales of
$14.1 million increased by $1.0 million or 7.7% from last year's levels
primarily reflecting manufacturing flow improvements and a decrease in late
orders of $0.7 million. The Medical Systems Group's fiscal 2005 sales of $70.8
million were consistent with the prior year's as a $1.0 million increase in
domestic shipments was offset with a corresponding decrease in shipments from
our international location. Domestic shipments were higher due to increases in
sales of higher priced digital X-ray units. Decreased shipments at international
locations were due to the strong Euro causing pricing for our international
products to be less attractive in non-Euro denominated markets as well as a
decrease in larger "tender orders in fiscal 2005 versus the prior year. The
Company is obtaining international certifications for certain of its
domestically manufactured product in order to have US dollar based offerings in
these non-Euro denominated economies.

                                       21

<PAGE>

      Consolidated backlog at July 30, 2005 was $14.6 million versus backlog at
July 31, 2004 of approximately $25.9 million. The backlog in the Power
Conversion Group decreased $1.6 million from levels at beginning of the fiscal
year while there was an $9.6 million decrease in the backlog at our Medical
Systems Segment. Backlog in the Medical Systems Segment reflects declines due to
shipments of approximately $8.8 million under a large tender order at our
international location as well as a decrease in incoming order rates during the
period. Substantially all of the backlog should result in shipments within the
next 12 months.

      Gross margins as a percent of sales were 26.3% for fiscal 2005, compared
to 25.4% in fiscal 2004. The Power Conversion Group's gross margins fiscal 2005
were 41.0%, versus 30.2% in the prior year. Fiscal 2005 Power Conversion group
margins benefited from increased absorption of fixed costs as a result of higher
sales levels, decreased material costs as a percent of sales due to improved
procurement practices and lower waste levels. For the Medical Systems Group,
fiscal 2005 gross margins of 23.3% were lower than the 24.5% level in the prior
year reflecting higher engineering costs related to product certifications and
the higher material costs affiliated with the increase in digital unit sales in
fiscal 2005.

      SG&A expenses for fiscal 2005 were $16.5 million (19.4% of sales) compared
to $15.9 million (19.0% of sales) in the prior year's period. The increase in
SG&A for fiscal 2005 is primarily due to increased corporate legal and
professional costs related to the strategic alternatives program, partially
offset by reduced selling expenses in the Medical Systems Segment. Fiscal 2005
SG&A also includes a $0.5 million write-off of net deferred pension costs
associated with the termination of a frozen Power Conversion Group pension plan.
In addition the Power Conversion Group's SG&A, excluding litigation settlement
costs in both periods, increased $0.3 million reflecting increased headcount in
fiscal 2005.

      During the second quarter of fiscal 2004, we reached an agreement in
principal with the U.S. Government regarding a settlement of the civil and
criminal aspects of the previously disclosed Department of Defense ("DOD")
investigation of our RFI subsidiary (See Part I Item 3 "Legal Proceedings"). The
settlement included the Company pleading guilty to one criminal count and
agreeing to pay fines and restitution to the US Government of $5.0 million.

      In connection with this settlement, the Company recognized an additional
charge for Litigation settlement costs of approximately $3.2 million in the
second quarter of fiscal 2004. This charge represented the difference between
the $2.3 million charge taken during the third quarter of fiscal 2003, and the
up to $5.0 million in fines and restitution, plus estimated legal and
professional fees, related to this settlement. The fine was paid during the
first quarter of fiscal 2005, subject to Court approval. At the sentencing,
which occurred on March 15, 2005, the Court imposed an additional fine of $0.3
million related to this matter. Accordingly, the Company has recorded an
additional charge for Litigation settlement costs of $0.3 million in the second
quarter of fiscal 2005. During the fourth quarter of fiscal 2004, the Company
recorded a charge of approximately $0.5 million to Litigation Settlement Costs
in recognition of the modification of warrants formerly issued in conjunction
with a shareholder settlement and the related legal and professional fees
incurred.

      For fiscal 2005, we recognized operating income of $3.9 million compared
to operating income of $0.2 million in fiscal 2004. The Medical Systems Group
had an operating profit of $5.6 million for fiscal 2005 and the Power Conversion
Group achieved an operating profit of $2.8 million, partly offset by unallocated
corporate costs of $4.6 million. Fiscal 2005 and fiscal 2004 operating income
was net of $0.3 million and $3.7 million, respectively, of litigation settlement
costs, principally related to the DOD settlement as explained above.

      Interest expense for fiscal 2005 was lower than the prior expense due to
decreased borrowings and lower interest rates and the absence of these fees.

      The Company has not provided for a U.S. domestic income tax benefit in
fiscal 2005 because it continues to maintain a full valuation allowance relative
to its deferred tax assets as discussed in Critical Accounting Policies, above.
With the exception of tax provisions and adjustments recorded at Villa, our
Italian subsidiary, we recorded no adjustments to our current or net deferred
tax accounts during fiscal 2005. Management periodically evaluates

                                       22

<PAGE>

the likelihood of the recoverability of the deferred tax asset recognized on our
balance sheet. Based on management analysis, we believe it is more likely than
not that the remaining deferred tax assets, which relate to our foreign
subsidiary will be realized.

      Provision for income taxes for fiscal 2004 reflects the establishment of a
$7.2 million deferred tax valuation allowance as discussed in Critical
Accounting Policies, above.

      As discussed above, the Discontinued Operation is related to our DHV
division, which was sold on October 1, 2004. The discontinued operation in the
first quarter of fiscal 2005 reflect the operations of the DHV division through
the date of sale, which recorded income from operations of $0.2 million during
the first quarter of fiscal 2005. The discontinued operation in fiscal 2004
included a write down of assets to net realizable value of $3.5 million and
losses from operations of $1.6 million

      Reflecting the above, we recorded net income of $0.4 million or $0.04 per
basic share and $0.03 per diluted share in fiscal 2005, as compared to a net
loss of $15.8 million, or $1.53 per share(basic and diluted), during fiscal
2004.

FISCAL 2004 COMPARED TO FISCAL 2003

      Consolidated net sales of $83.8 million for fiscal year 2004 increased by
$15.6 million or 22.9% from fiscal 2003 net sales of $68.2 million. The Medical
Systems Group fiscal 2004 sales of $70.8 million improved by $14.7 million or
26.1%, with most of the increase at our international location offsetting a
decline at domestic locations, plus favorable exchange rate effects from the
translation of Villa's financial statements from euros to dollars of
approximately $1.4 million. This increase in sales included the second quarter
fiscal 2004 shipment of $8.2 million of medical equipment to the Ministry of
Social Services in Mexico. The Power Conversion Group fiscal 2004 sales of $13.1
million improved by $1.0 million or 8.0%. Prior year Power Conversion Group
sales were lower due to effects of the DOD investigation.

      Consolidated backlog at July 31, 2004 was $25.9 million versus backlog at
August 2, 2003 of approximately $16.3 million. The backlog in the Medical
Systems Segment increased by $9.6 million on strong international orders, and
Power Conversion Group backlog remained even levels at the beginning of the
fiscal year. Substantially all of the backlog should result in shipments within
the next 12 months.

      Gross margins as a percent of sales were 24.5% in fiscal 2004, compared to
23.0% in fiscal 2003. The Power Conversion Group's margins for fiscal 2004 were
30.2% versus 28.9% in the prior year. The fiscal 2004 margins increased due to
improvements in procurement practices resulting in lower average material costs.
The Medical Systems Group's fiscal 2004 gross margins were 24.5% compared to
21.7% in fiscal 2003 due to higher margins domestically as a result of cost
control measures.

      Selling, General and Administrative expenses ("SG&A") for fiscal 2004 were
$15.9 million (19.0% of sales), compared to $17.9 million (26.2% of sales) in
the same period in the prior year. The decline in SG&A during fiscal 2004 is a
result of reduced corporate legal and accounting costs.

      During fiscal 2004, we reached a settlement with the US government
regarding the civil and criminal aspects of the previously disclosed
investigation of our RFI subsidiary (See Part I Item 3 "Legal Proceedings"). The
settlement included the Company pleading guilty to one criminal count and
agreeing to pay fines and restitution to the US Government of $5.0 million if
paid by September 30, 2004.

      In connection with this settlement, Del Global recognized an additional
charge for Litigation settlement costs of approximately $3.2 million in the
second quarter of fiscal 2004. This charge represents the difference between the
$2.3 million charge taken during the third quarter of fiscal 2003, and the up to
$5.0 million in fines and restitution, plus estimated legal and professional
fees, related to this settlement. The liability associated with these charges is
included in Litigation settlement reserves on the accompanying balance sheet.
During the first quarter of fiscal 2005,

                                       23

<PAGE>

the Company paid the US Government $5.0 million pursuant to a written settlement
agreement with the DOD, as explained more fully in Liquidity and Capital
Resources, below.

      In February 2004, a plaintiff class filed a motion claiming damages due to
Del Global's failure to timely complete a registration statement for the shares
of common stock issuable upon exercise of warrants which were issued in
conjunction with a class action settlement approved by the courts in January
2002. In settlement of this matter, Del Global modified the exercise, or
"strike," price of the warrants issued in 2002 from $2.00 to $1.50 per share,
and extended the expiration date of such warrants by one year to March 28, 2009.
During the fourth quarter of Fiscal 2004, the Company recorded a charge of
approximately $0.5 million to Litigation Settlement Costs in recognition of the
modification to the warrants and the related legal and professional fees
incurred.

      As a result of the foregoing, we recognized operating income of $0.2
million in fiscal 2004 as compared to an operating loss of $6.1 million in
fiscal 2003. The Medical Systems Group posted operating income of $5.4 million
in fiscal 2004 as compared to $1.0 million in fiscal 2003. This was offset by
operating losses of $1.6 million and $1.3 million at the Power Conversion Group
in 2004 and 2003, respectively. Unallocated corporate costs were $3.7 million in
fiscal 2004 as compared to $5.8 million in fiscal 2003.

      Interest expense for fiscal 2004 was higher than the prior year's
comparable period reflecting $0.6 million in fees related to an amendment of the
GECC Facility.

      During fiscal 2003, the Company recognized other income of $0.5 million
related to the settlement of a dispute in connection with a 1999 product line
acquisition and $0.1 million related to foreign exchange gains on a deposit
denominated in euros. During fiscal year 2004, the Company recognized other
income of $0.1 million, which included $0.2 million of income related to
favorable settlements of product royalty disputes, offset by other losses.

      The provision for income taxes for 2004 reflects the establishment of a
$9.8 million deferred tax valuation allowance as discussed in Critical
Accounting Policies, above. As of July 31, 2004 the Company's domestic deferred
tax assets are subject to a 100% valuation allowance based on management's
analysis of the likelihood of the recoverability of the remaining domestic
deferred tax assets. Any remaining deferred tax assets on our balance sheet as
of July 31, 2004 relate to our Villa subsidiary which has been historically
profitable. During fiscal 2003, the Company established a $7.9 million valuation
allowance, as discussed above.

      Minority interest for fiscal 2004 was $0.6 million as compared to $0.1
million in fiscal 2003. This increase reflects the improved operating results of
our foreign subsidiary in the Medical Systems Group.

      As discussed above, the Discontinued Operation is related to our Del High
Voltage Division, which was sold on October 1, 2004. Discontinued operations in
fiscal 2004 included a write down of assets to net realizable value of $3.5
million and losses from operations of $1.6 million. In fiscal 2003, the
discontinued operation had net income of $0.1 million.

      Reflecting the above, we recorded a net loss of $15.8 million, or $1.53
per share, in fiscal 2004 as compared to a net loss of $15.0, or $1.45 per share
million in fiscal 2003.

      LIQUIDITY AND CAPITAL RESOURCES

      FISCAL 2005 COMPARED TO FISCAL 2004

      We fund our investing and working capital needs through a combination of
cash flow from operations and short-term credit facilities.

      Working Capital -- At July 30, 2005 and July 31, 2004, our working capital
was approximately $10.1 million and $7.8 million, respectively. At such dates,
we had approximately $1.5 million and $4.8 million, respectively, in cash and
cash equivalents, the majority of which is at our Villa subsidiary in Italy. As
of July 30, 2005, we had

                                       24

<PAGE>

approximately $0.5 million of excess borrowing availability under our domestic
revolving credit facility compared to $5.8 million at July 31, 2004, reflecting
the payment of a $5.0 million fine to the DOD in September 2004.

      In addition, as of July 30, 2005 and July 31, 2004, our Villa subsidiary
had an aggregate of approximately $ 7.5 million and $7.5 million, respectively,
of excess borrowing availability under its various short-term credit facilities.
Terms of the Italian credit facilities do not permit the use of borrowing
availability to directly finance operating activities at our US subsidiaries.

      Cash Flows from Operating Activities - For the year ended July 30, 2005,
the Company used approximately $7.5 million of cash for continuing operations,
compared to a generation of $6.0 million in the prior fiscal year. Contributing
to cash usage in fiscal 2005 was the payment of a total of $5.1 million in fines
and legal fees related to the DOD settlement that were accrued as of July
30,2004 and the payment of an additional $0.3 million at time of sentencing as
explained in "Legal Proceedings" in Part I, Item 3 of this Annual Report.

      Cash Flows from Investing Activities -- We have made approximately $0.9
million in facility improvements and capital equipment expenditures for the year
ended July 30, 2005 compared to $ 0.5 million for the comparable prior fiscal
year period.

      Cash Flows from Financing Activities -- During the year ended July 30,
2005, we borrowed a total of approximately $ 1.6 million on our domestic and
Italian credit facilities. In addition, the Villa subsidiary paid a dividend of
approximately $2.5 million, of which $0.5 million was paid to Villa's minority
shareholders. The remaining $1.9 million, net of withholding taxes, was an
intercompany transaction with the Company and therefore eliminated in the
accompanying consolidated financial statements. We also received a total of $0.4
million in payment of the exercise price of stock options and warrants during
fiscal 2005.

      The following table summarizes our contractual obligations, including debt
and operating leases at July 30, 2005 (in thousands):

<TABLE>
<CAPTION>
                                                                         WITHIN         2-3          4-5         AFTER5
                 OBLIGATIONS                             TOTAL (1)       1 YEAR        YEARS         YEARS        YEARS
----------------------------------------------           ---------     ---------     ---------     ---------    ---------
<S>                                                      <C>           <C>           <C>           <C>          <C>
Long-Term Debt Obligations....................           $   2,172     $     573     $     862     $     588    $     149
Capital Lease Obligations.....................               2,963           210           673           770        1,310
Subordinated Note.............................               2,158             -         2,158             -            -
Interest on long term obligations and note....               1,239           601           432           154           52
Operating Lease Obligations...................                 776           454           322             -            -
                                                         ---------     ---------     ---------     ---------    ---------
Total Contractual Cash Obligations............           $   9,308     $   1,838     $   4,447     $   1,512    $   1,511
                                                         =========     =========     =========     =========    =========
</TABLE>

      (1)   In addition to the long term obligations above, as of July 30, 2005
            we had approximately $4 million in revolving credit debt in the US
            and $ 0.3 million in Italy. The Italian credit facilities are
            generally renewed on a yearly basis and the GECC Facility, as
            amended, matured in August 2005. The Company refinanced the GECC
            Facility with a combination of a $6 million formula based revolving
            credit facility and a $2 million term loan entered into with North
            Fork Bank, as described more fully below.

      Credit Facility and Borrowing -- As of July 30, 2005, the Company had a $5
million senior revolving credit agreement, as amended, entered into on June 10,
2002 with Transamerica Corporation (the "GECC Facility"). In January 2004, GE
Business Capital Corporation ("GECC") completed the acquisition of Transamerica
Corporation and assumed the ownership and administration of our US credit
facility. This facility, as amended, expired August 1, 2005 and was refinanced
by the Company with another lender. Interest under the GECC Facility was based
on thirty day commercial paper rates plus a margin of 3.5%. The interest rate on
the GECC Facility was 4.75% at July 30, 2005 and 5.0% at July 31, 2004. The GECC
Facility was subject to commitment fees of 3/8% on the daily unused portion
payable monthly. Under terms of the GECC Facility, interest was calculated based
on the higher of the actual balance, or a floor revolving credit balance of $5
million. In addition, the facility was subject to a $10,000 per month additional
fee for each month it remained outstanding past December 2004.The GECC Facility
was secured by substantially all of the Company's accounts receivable,
inventory, and fixed assets in the US. The terms

                                       25

<PAGE>

of the GECC Facility required the Company to comply with various operational and
financial covenants, and placed limitations on the Company's ability to make
capital expenditures and to pay dividends. The Company was in compliance with
these various covenants, with the exception of the fixed charge coverage ratio
during the third quarter of fiscal 2005. On June 9, 2005 the Company and GECC
signed the Ninth Amendment to the GECC Facility. This Ninth Amendment waived the
event of default arising from the Company's non-compliance with the fixed charge
coverage ratio covenant. In addition the Ninth Amendment lowered the minimum
availability covenant under the line from $500,000 to $250,000.

      On August 1, 2005, the Company entered into a three-year revolving credit
and term loan facility with North Fork Business Capital (the "North Fork
Facility") and repaid the GECC facility. The North Fork Facility provides for a
$6 million formula based revolving credit facility based on the Company's
eligible accounts receivable and inventory as defined in the credit agreement.
In addition, the Company borrowed $2 million under a term loan facility secured
by the Company's Bay Shore, New York building. Interest on the revolving credit
borrowings is payable at prime plus 0.5 % or alternatively at a LIBOR rate plus
2.5%. The $2 million term loan is repayable in monthly installments of $16,667
with the a balloon payment of the remaining balance due at the maturity in three
years. Interest on the term loan is payable monthly at prime plus 0.75 % or a
LIBOR rate plus 2.75%. At the closing on August 1, 2005, the Company had $1.7
million of availability under the North Fork Facility, of which North Fork has
reserved $1 million against possible litigation settlements as described more
fully in Part I-Item 3 "Legal Proceedings". The North Fork Facility is secured
by substantially all of the Company's accounts receivable, inventory and fixed
assets in the US.

      Our Villa subsidiary is a party to various short-term credit facilities
with interest rates ranging from 6% to 14%. These facilities generally renew on
a yearly basis and include overdraft, receivables and import export financing
facilities. In addition, Villa is a party to various medium-term commercial and
Italian Government long-term loans. Medium term facilities have interest rates
ranging from 3% to 6%, with principal payable semi-annually through maturity in
March 2007, and interest payable quarterly. The Government long-term facilities
have an interest rate of 3.4% with principal payable annually through September
2010. Villa's manufacturing facility is subject to a capital lease obligation
which matures in 2011 with an option to purchase. Villa is in compliance with
all related financial covenants under these short and long-term financings.

      As of May 1, 2004, the Company has a frozen defined benefit plan that was
under-funded. In accordance with SFAS No. 88, at the time of final settlement of
the pension plan, the Company will recognize an expense to recognize its
under-funded status. During fiscal 2005, the Company applied to the Pension
Benefit Guaranty Corp and to the IRS for a determination letter and approval to
terminate this plan. In the fourth quarter of fiscal 2005, the Company
recognized a related non-cash charge of approximately $0.5 million to write off
the pension assets on its balance sheet in recognition of the formal decision to
terminate the plan. In preparation for the plan termination, the Company
transferred $0.1 million to the pension account in April 2005. This transfer,
including cash already on hand in this account, has fully funded the expected
cash disbursement of $0.2 million due at the time the Company receives the IRS
determination letter approving the final settlement.

      As described in Part I, Item 3, Legal Proceedings of this Annual Report,
on March 8, 2002, RFI, a subsidiary of the Company and the remaining part of the
Power Conversion Group segment, was served with a subpoena by the US Attorney
for the Eastern District of New York in connection with an investigation by the
DOD. RFI supplies electromagnetic interference filters for communications and
defense applications. Since March 2002, the DOD has been investigating certain
past practices at RFI which date back more than six years and pertain to RFI's
Military Specification testing, record keeping and general operating procedures.
Management retained special counsel to represent the Company on this matter. The
Company has cooperated fully with this investigation, including voluntarily
providing employees to be interviewed by the Defense Criminal Investigative
Services division of the DOD.

      In June 2003, the Company was advised that the US Government was willing
to enter into negotiations regarding a comprehensive settlement of this
investigation. Prior to the preliminary discussions with the US Government in
June 2003, the Company had no basis to estimate the financial impact of this
investigation. Based on preliminary

                                       26

<PAGE>

settlement discussions with the US Government, discussions with the Company's
advisors, consideration of settlements reached by other parties in
investigations of this nature, and consideration of the Company's capital
resources, management then developed an estimate of the low end of the potential
range of the financial impact. Accordingly, during the third quarter of fiscal
2003, the Company recorded a charge of $2.3 million, which represented its
estimate of the low end of a range of potential fines and legal and professional
fees.

      Following negotiations, the Company reached a global settlement in
February 2004 with the US Government that resolves the civil and criminal
matters relating to the DOD's investigation. The settlement included the Company
pleading guilty to one criminal count and agreeing to pay fines and restitution
to the US Government of $4.6 million if paid by June 30, 2004 and $5.0 million
if paid by September 30, 2004.

      In connection with this settlement, the Company recognized an additional
charge of approximately $3.2 million in the second quarter of fiscal 2004. This
charge represents the difference between the $2.3 million charge taken during
the third quarter of fiscal 2003, and the up to $5.0 million in fines and
restitution, plus estimated legal and professional fees related to this
settlement. The liability associated with these charges is included in
Litigation settlement reserves on the accompanying balance sheet.

      On September 30, 2004, pursuant to the terms of the settlement, the
Company fulfilled its obligation under this agreement by paying to the US
Government the sum of $5 million representing fines and restitution. On October
7, 2004, RFI entered a criminal guilty plea to a single count conspiracy charge
pursuant to the settlement and a criminal plea agreement. Sentencing occurred on
March 15, 2005. At sentencing, the Court imposed an additional fine of $0.3
million to be paid within 30 days. The Company paid this additional fine on
April 8, 2005.

      The Company worked with the US Defense Logistics Agency (DLA), a component
of the DOD, to avoid any future limitations on the ability of the Company to do
business with US Government entities. Such limitations could have included the
US Government seeking a "debarment" or exclusion of the Company from doing
business with US Government entities for a period of time.

      On April 5, 2005, the Company announced that it had reached an
administrative agreement with the DLA, which provides that RFI will not be
debarred from doing business with U.S. Government entities so long as RFI
maintains its compliance program and adheres to the terms of the administrative
agreement. This agreement with the DLA is the final component of the Company's
previously announced settlement of an investigation by the DOD into practices at
RFI.

      The Company funded the $5 million paid pursuant to this settlement by a
combination of $2 million in borrowings under its GECC Facility and the receipt
of a combination of dividends, return of intercompany amounts and a $0.6 million
intercompany advance from the Company's Villa subsidiary, totaling $3.0 million.

      The Company had an employment agreement with Samuel Park, the previous
Chief Executive Officer ("CEO"), for the period May 1, 2001 to April 30, 2004.
The employment agreement provided for certain payments in the event of a change
in the control of the Company.

      On October 10, 2003, the Company announced the appointment of Walter F.
Schneider as President and CEO to replace Mr. Park, effective as of such date.
As a result, the Company recorded a charge of $200 during the first quarter of
fiscal 2004 to accrue the balance remaining under Mr. Park's employment
agreement.

      The Company's Board of Directors, elected at the Company's Annual Meeting
of Shareholders held on May 29, 2003, had reviewed the "change in control"
provisions regarding payments totaling up to approximately $1.8 million under
the employment agreement between the Company and its former Chief Executive
Officer, Samuel Park. As a result of this review and based upon, among other
things, the advice of special counsel, the Company's Board of Directors has
determined that no obligation to pay these amounts has been triggered. Prior to
his departure from the Company on October 10, 2003, Mr. Park orally informed the
Company that, after reviewing the matter with his counsel, he believed that the
obligation to pay these amounts has been triggered. On October 27, 2003, the

                                       27

<PAGE>

Company received a letter from Mr. Park's counsel demanding payment of certain
sums and other consideration pursuant to the Company's employment agreement with
Mr. Park, including these change of control payments. On November 17, 2003, the
Company filed a complaint against Mr. Park seeking a declaratory judgment that
no change in control payment was or is due to Mr. Park, and that an amendment to
the employment contract with Mr. Park regarding advancement and reimbursement of
legal fees is invalid and unenforceable. Mr. Park answered the complaint and
asserted counterclaims seeking payment from the Company based on his position
that a "change in control" occurred in June 2003. Mr. Park is also seeking other
consideration he believes he is owed under his employment agreement. The Company
filed a reply to Mr. Park's counterclaims denying that he is entitled to any of
these payments. Discovery in this matter was conducted and completed. Following
discovery, the Company and Mr. Park filed motions for summary judgment on the
issues related to the change in control and the amendment to the employment
agreement, which motions have been fully submitted to the court for
consideration. To date, no decision has been issued by the Court on these
motions. If Mr. Park prevails on his claims and the payments he seeks are
required to be paid in a lump sum, these payments may have a material adverse
effect on the Company's liquidity. It is not possible to predict the outcome of
these claims; however, the Company's Board of Directors does not believe that
such a claim is reasonably likely to result in a material decrease in the
Company's liquidity in the foreseeable future.

      During the fourth quarter of fiscal 2004, the Company recorded $0.4
million related to potential change of control payments the Company may have
been required to make to a former executive. During fiscal 2005, a different
member of the executive management asserted a diminishment of duties claim under
his change in control agreement. Based on a settlement offer made by the Company
to this executive, the Company recorded a charge of approximately $0.5 million
during the second quarter of fiscal 2005. Such amounts are included in selling,
general and administrative expense. On June 2, 2005, the Company entered into a
Separation and Release Agreement with this executive. Under such Agreement, the
Company paid this executive approximately $0.5 million, representing a severance
payment and certain legal fees and expenses such executive incurred in
connection with his separation from the Company.

      On October 1, 2004, the Company completed the sale of its DHV division for
$3.1 million plus the assumption of $0.8 million of liabilities as described
more fully in the Notes to the Consolidated Financial Statements included in
Part II, Item 8 of this Annual Report.

      On March 21, 2005, the Company was notified by the party with whom it
signed a non-binding letter of intent for the sale of its Medical Systems Group
that the buyer was terminating negotiations under the letter of intent. The
letter of intent provided for a $1.0 million payment payable in the event that
no later than March 4, 2005, the buyer was ready, willing and able to enter into
a definitive purchase agreement based on the terms of the letter of intent and
containing reasonable and customary representations, warranties, terms and
conditions relating to the transaction, and the Company elected not to enter
into such purchase agreement. The party with whom the Company signed the letter
of intent commenced filed a lawsuit on April 15, 2005 in the United States
District Court, Southern District of New York seeking payment of the $1.0
million, plus interest, as well as reasonable attorney's fees. The Company filed
an answer to this lawsuit on June 8, 2005 contesting the buyers claim to these
damages, and thereafter filed discovery requests. At a court conference held on
September 28, 2005, the parties agreed to submit to non-binding mediation in an
attempt to settle this dispute. A mediation conference has been scheduled for
November 21, 2005. Although there can be no assurance that the Company will not
have to pay the $1.0 million, the Company believes that no such payment is
payable under the terms of the letter of intent. If the outcome of
the-non-binding mediation is not acceptable to either party, the Company intends
to vigorously defend this lawsuit.

      The Company has or had no investments in unconsolidated variable interest
entities or other off balance sheet arrangements during any of the periods
presented in this form 10K.

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

EFFECTS OF NEW ACCOUNTING PRONOUNCEMENTS

                                       28

<PAGE>

      In December 2004, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 153, "Exchanges of
Nonmonetary Assets," which eliminates the exception for nonmonetary exchanges of
similar productive assets and replaces it with a general exception for exchanges
of nonmonetary assets that do not have commercial substance. SFAS No. 153 will
become effective for nonmonetary asset exchanges occurring in fiscal periods
beginning after June 15, 2005. The Company does not believe the adoption of SFAS
No. 153 will have a material impact on the Company's financial statements.

      In December 2004, the FASB issued SFAS No. 123 (R), "Share-Based Payment,"
which established standards for transactions in which an entity exchanges its
equity instruments for goods and services. This standard requires a public
entity to measure the cost of employee services received in exchange for an
award of equity instruments based on the grant-date fair value of the award.
This eliminates the exception to account for such awards using the intrinsic
method previously allowed under APB Opinion No. 25. SFAS No 123 (R) will be
effective for fiscal years beginning after June 15, 2005. The statement does not
require restatement of previously issued statements and can be applied on a
prospective basis. The Company is in the process of evaluating the impact the
adoption of this statement will have on its financial statements.

      In November 2004, the FASB issued SFAS No. 151, "Inventory Costs, an
amendment of ARB No. 43, Chapter 4." This Statement amends the guidance in ARB
No. 43, Chapter 4, "Inventory Pricing," to clarify the accounting for abnormal
amounts of idle facility expense, freight, handling costs and wasted material
(spoilage), requiring that those items be recognized as current-period charges.
In addition, this Statement requires that allocation of fixed production
overheads to the costs of conversion be based on the normal capacity of the
production facilities. The provisions of this statement are effective for fiscal
years beginning after June 15, 2005, with early application permitted. The
Company is in the process of evaluating the impact the adoption of this
statement will have on its financial statements.

      In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error
Corrections, a replacement of APB Opinion No. 20 and SFAS No. 3." This Statement
provides guidance on the accounting for and reporting of accounting changes and
error corrections. It establishes, unless impracticable, retrospective
application as the required method for reporting a change in accounting
principle, in the absence of explicit transition requirements specific to the
newly adopted accounting principle. This Statement also provides guidance for
determining whether retrospective application of a change in accounting
principle is impracticable and for reporting a change when retrospective
application is impracticable. The correction of an error in previously issued
financial statements is not an accounting change. However, the reporting of an
error correction involves adjustments to previously issued financial statements
similar to those generally applicable to reporting an accounting change
retrospectively. Therefore, the reporting of a correction of an error by
restating previously issued financial statements is also addressed by this
Statement. This Statement is effective for accounting changes made in fiscal
years beginning after December 15, 2005. The Company does not believe the
adoption of SFAS No. 154 will have a material impact on the Company's financial
statements or results of operations.

      In March 2005, the FASB issued FASB Interpretation ("FIN") No. 47,
"Accounting for Conditional Asset Retirement Obligations." FIN No. 47 provides
guidance relating to the identification of and financial reporting for legal
obligations to perform an asset retirement activity. The Interpretation requires
recognition of a liability for the fair value of a conditional asset retirement
obligation when incurred if the liability's fair value can be reasonably
estimated. FIN No. 47 also defines when an entity would have sufficient
information to reasonably estimate the fair value of an asset retirement
obligation. The provision is effective no later than the end of fiscal years
ending after December 15, 2005. The Company does not believe the adoption of FIN
No. 47 will have a material impact on the Company's financial statements or
results of operations.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      We do not ordinarily hold market risk sensitive instruments for trading
purposes. We do, however, recognize market risk from interest rate and foreign
currency exchange exposure.

                                       29

<PAGE>

INTEREST RATE RISK

      Our US and foreign revolving credit facilities and certain of our Italian
subsidiary's long-term debt incur interest charges that fluctuate with changes
in market interest rates. See Note 7 of Notes to Consolidated Financial
Statements included in Part II, Item 8 of this Annual Report. Based on the
balances as of July 30, 2005, an increase of 1/2 of 1% in interest rates would
increase interest expense by approximately $28,000 annually. There is no
assurance that interest rates will increase or decrease over the next fiscal
year. Because we believe this risk is not material, we do not undertake any
specific steps to reduce or eliminate this risk.

FOREIGN CURRENCY RISK

      The financial statements of Villa are denominated in Euros. Based on our
historical results and expected future results, Villa accounts for approximately
43% to 55% of our total revenues, based in part on the rate at which Villa's
Euro denominated financial statements have been or will be converted into US
dollars. In addition, over the last three years, Villa has contributed positive
operating income, as compared to our consolidated operating losses. Having a
portion of our future income denominated in Euros exposes us to market risk with
respect to fluctuations in the US dollar value of future Euro earnings. A 10%
decline in the value of the Euro in fiscal 2005, for example, would have reduced
sales by approximately $4.5 million, and would have decreased our consolidated
income from continuing operations by approximately $153,000 (due to the
reduction in the US dollar value of Villa's operating income.)

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      The consolidated financial statements of the Company, including the notes
to all such statements and other supplementary data are included in this report
beginning on page F-1.

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

      On June 30, 2005, the Company dismissed Deloitte & Touche LLP ("Deloitte")
as its independent registered public accounting firm. The Company's Audit
Committee of the Board of Directors (the "Audit Committee") recommended the
dismissal of Deloitte. During the Company's most recent two fiscal years,
Deloitte's report on the financial statements did not contain an adverse opinion
or disclaimer of opinion nor was qualified or modified as to uncertainty, audit
scope, or accounting principles. In connection with the audits for the two
previous recent fiscal years ended August 3, 2003 and July 31, 2004, and the
nine-month subsequent interim period ended April 30, 2005, there were no
disagreements with Deloitte on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which, if not
resolved to the satisfaction of Deloitte, would have caused Deloitte to make
reference thereto in their reports on the financial statements for such fiscal
years. During the two most recent fiscal years and through the date of
dismissal, there have been no "reportable events," as such term is defined in
Item 304(a)(1)(v) of Regulation S-K.

      On June 30, 2005, the Company engaged BDO Seidman, LLP ("BDO") as its
principal accountant. The engagement of BDO was recommended by the Audit
Committee.

      During the two most recent fiscal years and prior to its engagement, the
Company had not consulted with BDO regarding any of the matters or reportable
events set forth in Item 304(a)(2)(i) and (ii) of Regulation S-K.

ITEM 9A. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

      The Company, under the supervision and with the participation of the
Company's management, including Walter F. Schneider, Chief Executive Officer and
Mark A Koch, Principal Accounting Officer, has evaluated the effectiveness of
the design and operation of the Company's "disclosure controls and procedures,"
as such term is defined in Rules 13a-15e and 15d-15e promulgated under the
Securities Exchange Act of 1934, as amended, as of

                                       30

<PAGE>

the date of this Annual Report. Based upon that evaluation, the Chief Executive
Officer and Principal Accounting Officer have concluded that the Company's
disclosure controls and procedures were effective as of the end of the period
covered by this report to provide reasonable assurance that information required
to be disclosed by the Company in reports that it files or submits under the
Securities Act of 1934, as amended, is recorded, processed, summarized and
reported within the time periods specified in SEC rules and forms.

INTERNAL CONTROL OVER FINANCIAL REPORTING

      In the ordinary course of business, the Company routinely enhances its
information systems by either upgrading its current systems or implementing new
systems. There were no changes in the Company's internal controls or in other
factors that could significantly affect these controls, during the Company's
fourth fiscal quarter ended July 30, 2005 that have materially affected, or are
reasonably likely to materially affect, the Company's internal control over
financial reporting.

ITEM 9B. OTHER INFORMATION

Not applicable.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

      The information required by this Item 10 for all directors and executive
officers of the Company is incorporated herein by reference to the Company's
definitive Proxy Statement pursuant to Regulation 14A for the 2006 Annual
Meeting of Stockholders, which Proxy Statement will be filed with the SEC not
later than 120 days after the end of the fiscal year covered by this Annual
Report.

ITEM 11. EXECUTIVE COMPENSATION

      The information required by this Item 11 with respect to executive
compensation is incorporated herein by reference to the Company's definitive
Proxy Statement pursuant to Regulation 14A for the 2006 Annual Meeting of
Stockholders, which Proxy Statement will be filed with the SEC not later than
120 days after the end of the fiscal year covered by this Annual Report.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

      The information required by this Item 12 with respect to security
ownership of directors, executive officers and substantial stockholders is
incorporated herein by reference to the Company's definitive Proxy Statement
pursuant to Regulation 14A for the 2006 Annual Meeting of Stockholders, which
Proxy Statement will be filed with the SEC not later than 120 days after the end
of the fiscal year covered by this Annual Report.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      The information required by this Item 13 with respect to certain
relationships and transactions between directors and executive officers and
substantial stockholders of the Company with the Company is incorporated by
reference to the Company's definitive Proxy Statement pursuant to Regulation 14A
for the 2006 Annual Meeting of Stockholders, which Proxy Statement will be filed
with the SEC not later than 120 days after the end of the fiscal year covered by
this Annual Report.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

      The information required by this Item 14 with respect to principal
accounting fees and services is incorporated by reference to the Company's
definitive Proxy Statement pursuant to Regulation 14A for the 2006 Annual
Meeting

                                       31

<PAGE>

of Stockholders, which Proxy Statement will be filed with the SEC not later than
120 days after the end of the fiscal year covered by this Annual Report.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

<TABLE>
<CAPTION>
                                                                                                            PAGE NUMBER
<S>                                                                                                         <C>
(a) 1. FINANCIAL STATEMENTS
       CONSOLIDATED FINANCIAL STATEMENTS OF DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES:
       Reports of Independent Registered Public Accounting Firms...................................            F1 - F2
       Consolidated Balance Sheets as of July 30, 2005 and July 31, 2004...........................            F3 - F4
       Consolidated Statements of Operations for the Fiscal Years Ended July 30, 2005, July 31,
         2004 and August 2, 2003...................................................................                 F5
       Consolidated Statements of Cash Flows for the Fiscal Years Ended July 30, 2005, July 31,
         2004 and August 2, 2003...................................................................                 F6
       Consolidated Statements of Shareholders' Equity for the Fiscal Years Ended July 30,
         2005, July 31, 2004 and August 2, 2003....................................................            F7 - F8
       Notes to Consolidated Financial Statements for the Fiscal Years Ended July 30, 2005,
         July 31, 2004 and August 2, 2003..........................................................           F9 - F28
    2. FINANCIAL STATEMENT SCHEDULES
       Report on Financial Statement Schedule......................................................                F29
       Schedule II Valuation and Qualifying Accounts...............................................                F30
</TABLE>

3. EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                         DESCRIPTION OF DOCUMENT
-------   ----------------------------------------------------------------------
<S>       <C>
  2.1     Stock Purchase Agreement (related to the acquisition of Villa Sistemi
          Medicali S.p.A.) dated as of December 28, 1999. Filed as Exhibit 2.1
          to Del Global Technologies Corp. Current Report on Form 8-K dated May
          4, 2000 and incorporated herein by reference.

  2.2     Asset Purchase Agreement dated as of October 1, 2004 by and between
          Spellman High Voltage Electronics Corporation and Del Global
          Technologies Corp. Filed as Exhibit 99.01 to Del Global Technologies
          Corp. Current Report on Form 8-K filed October 7, 2004 and
          incorporated herein by reference.

  3.1     Certificate of Incorporation dated October 25, 1954. Filed as Exhibit
          to Del Electronics Corp. Registration Statement on Form S-1 (No.
          2-16839) and incorporated herein by reference.

  3.2     Certificate of Amendment of Certificate of Incorporation dated January
          26, 1957. Filed as Exhibit to Del Electronics Corp. Registration
          Statement on Form S-1 (No. 2-16839) and incorporated herein by
          reference.

  3.3     Certificate of Amendment of Certificate of Incorporation dated July
          12, 1960. Filed as Exhibit to Del Electronics Corp. Registration
          Statement on Form S-1 (No. 2-16839) and incorporated herein by
          reference.

  3.4     Certificate of Amendment of Certificate of Incorporation dated March
          18, 1985. Filed as Exhibit 3.5 to Del Electronics Corp. Form 10-K for
          the year ended August 2, 1989 and incorporated herein by reference.

  3.5     Certificate of Amendment of Certificate of Incorporation dated January
          19, 1989. Filed as Exhibit 4.5 to Del Electronics Corp. Form S-3 (No.
          33-30446) filed August 10, 1989 and incorporated herein by reference.
</TABLE>

                                       32

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                         DESCRIPTION OF DOCUMENT
-------   ----------------------------------------------------------------------
<S>       <C>
 3.6      Certificate of Amendment of the Certificate of Incorporation of Del
          Electronics Corp., dated February 5, 1991. Filed with Del Electronics
          Corp. Proxy Statement dated January 22, 1991 and incorporated herein
          by reference.

 3.7      Certificate of Amendment of the Certificate of Incorporation of Del
          Electronics Corp. dated February 14, 1996. Filed as Exhibit 3.6 to Del
          Global Technologies Corp. Annual Report on Form 10-K for the year
          ended August 1, 1998 and incorporated herein by reference.

 3.8      Certificate of Amendment of Certificate of Incorporation of Del Global
          Technologies Corp. dated February 13, 1997. Filed as Exhibit 3.1 to
          Quarterly Report on Form 10-Q for the quarter ended February 1, 1997
          and incorporated herein by reference.

 3.9      Amended and Restated By-Laws of Del Global Technologies Corp. Filed as
          Exhibit 3.1 to Current Report on Form 8-K dated September 5, 2001 and
          incorporated herein by reference.

 3.10     Amendment No. 1 to the Amended and Restated By-Laws of Del Global
          Technologies Corp. dated July 17, 2003. Filed as Exhibit 3.01 to
          Current Report on Form 8-K dated July 30, 2003 and incorporated herein
          by reference.

 4.1      INTENTIONALLY OMITTED.

 4.2      INTENTIONALLY OMITTED.

 4.8      Warrant Certificate of Laurence Hirschhorn. Filed as Exhibit 4.1 to
          Del Global Technologies Corp. Quarterly Report on Form 10-Q for the
          quarter ended January 29, 2000 and incorporated herein by reference.

 4.9      Warrant Certificate of Steven Anreder. Filed as Exhibit 4.2 to Del
          Global Technologies Corp. Quarterly Report on Form 10-Q for the
          quarter ended January 29, 2000 and incorporated herein by reference.

 4.10     Warrant Certificate of UBS Capital S.p.A. dated as of December 28,
          1999. Filed as Exhibit 4 to Del Global Technologies Corp. Quarterly
          Report on Form 10-Q for the quarter ended January 29, 2000 and
          incorporated herein by reference.

 4.11*    Del Global Technologies Corp. Amended and Restated Stock Option Plan
          (as adopted effective as of January 1, 1994 and as amended December
          14, 2000). Filed as Exhibit 4.11 to Del Global Technologies Corp.
          Annual Report on Form 10-K for the year ended August 3, 2002 and
          incorporated herein by reference.

 4.12*    Stock Purchase Plan. 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.

 4.13*    Option Agreement, substantially in the form used in connection with
          options granted under the Plan. Filed as Exhibit 4.8 to Del
          Electronics Corp. Annual Report on Form 10-K for the year ended July
          29, 1989 and incorporated herein by reference.

 4.14*    Option Agreement dated as of December 28, 1999. Filed as Exhibit 4.2
          to Del Global Technologies Corp. Current Report on Form 8-K dated May
          4, 2000 and incorporated herein by reference.

 4.15     Warrant Agreement substantially in the form used for 1,000,000
          warrants issued in connection with the settlement of the Class Action
          Lawsuit on January 29, 2002. Filed as Exhibit 10.12 to Del Global
          Technologies Corp. Annual Report on Form 10-K for the year ended
          August 3, 2002 and incorporated herein by reference.
</TABLE>

                                       33

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                         DESCRIPTION OF DOCUMENT
-------   ----------------------------------------------------------------------
<S>       <C>
 4.16*    Amendment No. 1 dated July 17, 2003 to the Del Global Technologies
          Corp. Amended and Restated Stock Option Plan (as adopted effective as
          of January 1, 1994 and as amended December 14, 2000). Filed as Exhibit
          4.1 to Del Global Technologies Corp. Quarterly Report on Form 10-Q for
          the quarterly period ended November 1, 2003 and incorporated herein by
          reference.

 4.17*    Amendment No. 2 dated July 7, 2005 to the Del Global Technologies
          Corp. Amended and Restated Stock Option Plan (as adopted effective as
          of January 1, 1994 and as amended December 14, 2000 and July 17,
          2003). Filed as Exhibit 99.01 to Del Global Technologies Corp. Current
          Report on Form 8-K dated July 7, 2005 and incorporated herein by
          reference.

 10.1     INTENTIONALLY OMITTED

 10.2     INTENTIONALLY OMITTED.

 10.3     INTENTIONALLY OMITTED.

 10.4     INTENTIONALLY OMITTED.

 10.5     INTENTIONALLY OMITTED.

 10.6     INTENTIONALLY OMITTED.

 10.7     Lease Agreement dated April 7, 1992 between Messenger Realty and Del
          Electronics Corp. 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.

 10.8     Lease and Guaranty of Lease dated May 25, 1994 between Leshow
          Enterprises and Bertan High Voltage Corp. Filed as Exhibit 2.5 to Del
          Electronics Corp. Current Report on Form 8-K dated June 10, 1994 and
          incorporated herein by reference.

 10.9     Lease dated January 4, 1993 between Curto Reynolds Oelerich Inc. and
          Del Medical Imaging Corp. (formerly knows as Gendex-Del Medical
          Imaging Corp.). 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.

 10.10    Loan and Security Agreement dated June 10, 2002, in the principal
          amount of $10,000,000, between Del Global Technologies Corp., Bertan
          High Voltage Corp., RFI Corporation and Del Medical Imaging Corp.
          (Borrowers) and Transamerica Business Capital Corporation. The Company
          agrees to furnish supplementally a copy of any omitted exhibits or
          schedules to the SEC upon request. Filed as Exhibit 99.01 to Del
          Global Technologies Corp. Current Report on Form 8-K filed on November
          4, 2002 and incorporated herein by reference.

 10.11    Subordinated Promissory Note substantially in the form used for a
          total principal amount of $2 million issued in connection with the
          settlement of the Class Action Lawsuit on January 29, 2002. Filed as
          Exhibit 10.11 to Del Global Technologies Corp. Annual Report on Form
          10-K for the year ended August 3, 2002 and incorporated herein by
          reference.

 10.12    INTENTIONALLY OMITTED.

 10.13*   Executive Employment Agreement dated May 1, 2001, by and between Del
          Global Technologies Corp. and Samuel E. Park. Filed as Exhibit 99.1 to
          Del Global Technologies Corp. Current Report on Form 8-K filed on
          August 1, 2001 and incorporated herein by reference.

 10.14*   Change of Control Agreement substantially in the form used by the
          Company for the current executive officers as named in Item 11, except
          for Samuel E. Park (see Exhibit 10.13). Filed as Exhibit 10.14 to Del
          Global Technologies Corp. Annual Report on Form 10-K for the year
          ended August 3, 2002 and incorporated herein by reference.
</TABLE>

                                       34

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                         DESCRIPTION OF DOCUMENT
-------   ----------------------------------------------------------------------
<S>       <C>
 10.15    Extension and Modification Agreement (lease agreement) dated as of
          July 30, 2002 between Praedium II Valhalla LLC and Del Global
          Technologies Corp. Filed as Exhibit 10.15 to Del Global Technologies
          Corp. Annual Report on Form 10-K for the year ended August 3, 2002 and
          incorporated herein by reference.

 10.16    Grant Decree No. 0213 between the Ministry of Industry, Trade and
          Handicrafts and Villa Sistemi Medicali S.p.A. dated September 6, 1995.
          Filed as Exhibit 10.16 to Del Global Technologies Corp. Annual Report
          on Form 10-K for the year ended August 3, 2002 and incorporated herein
          by reference.

 10.17    Financial Property Lease Contract no. 21136 dated March 30, 2000
          between ING Lease (Italia) S.p.A. and Villa Sistemi Medicali S.p.A.
          Filed as Exhibit 10.17 to Del Global Technologies Corp. Annual Report
          on Form 10-K for the year ended August 3, 2002 and incorporated herein
          by reference.

 10.18    Declaration of Final Obligation between the Ministry of Productive
          Industry and Villa Sistemi Medicali S.p.A. dated May 6, 2002. Filed as
          Exhibit 10.18 to Del Global Technologies Corp. Annual Report on Form
          10-K for the year ended August 3, 2002 and incorporated herein by
          reference.

 10.19    Private Contract between Banca Mediocredito S.p.A and Villa Sistemi
          Medicali S.p.A. dated November 4, 1998 in the principal amount of 3
          billion Lire. Filed as Exhibit 10.19 to Del Global Technologies Corp.
          Annual Report on Form 10-K for the year ended August 3, 2002 and
          incorporated herein by reference.

 10.20*   Change of Control Agreement as approved by the Board of Directors on
          October 24, 2002, substantially in the form used by its current
          executive officers (in the case of Walter F. Schneider, as amended
          pursuant to Exhibit 10.22 hereof). Filed as Exhibit 10.20 to Del
          Global Technologies Corp. Annual Report on Form 10-K for the year
          ended August 3, 2002 and incorporated herein by reference.

 10.21    Waiver and First Amendment to Loan and Security Agreement dated as of
          November 1, 2002 among Del Global Technologies Corp., Bertan High
          Voltage Corp., RFI Corporation and Del Medical Imaging Corp.
          (Borrowers) and Transamerica Business Capital Corporation. Filed as
          Exhibit 99.02 to Del Global Technologies Corp. Current Report on Form
          8-K filed on November 4, 2002 and incorporated herein by reference.

 10.22    Second Amendment to the Loan and Security Agreement dated December 17,
          2002 among Del Global Technologies Corp., Bertan High Voltage Corp.,
          RFI Corporation and Del Medical Imaging Corp. (Borrowers) and
          Transamerica Business Capital Corporation. Filed as Exhibit 10.1 to
          Del Global Technologies Corp. Quarterly Report on Form 10-Q for the
          quarter ended November 2, 2002 and incorporated herein by reference.

 10.23    Settlement Agreement and Release dated March 10, 2003 by and between
          Del Global Technologies Corp. and its affiliates, subsidiaries,
          present and former directors, officers, agents, accountants,
          attorneys, stockholders, predecessors and the agents and attorneys of
          its present and former directors, and Leonard A. Trugman and each of
          his heirs, administrators, liquidators, executors, successors, and
          assigns. Filed as Exhibit 10.22 to Del Global Technologies Corp.
          Quarterly Report on Form 10-Q for the quarter ended February 1, 2003
          and incorporated herein by reference.

 10.24    Separation Agreement and General Release of Claims dated April 9,
          2003, by and between James M. Tiernan and Del Global Technologies
          Corp. Filed as Exhibit 99.01 to Del Global Technologies Corp.
          Amendment to Current Report on Form 8-K/A filed on April 23, 2003 and
          incorporated herein by reference.
</TABLE>

                                       35

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                         DESCRIPTION OF DOCUMENT
-------   ----------------------------------------------------------------------
<S>       <C>
 10.25    Separation Agreement and General Release of Claims dated April 9,
          2003, by and between David Michael, David Michael & Co., P.C. and Del
          Global Technologies Corp. Filed as Exhibit 99.02 to Del Global
          Technologies Corp. Amendment to Current Report on Form 8-K/A filed on
          April 23, 2003 and incorporated herein by reference.

 10.26    Form of Indemnification Agreement. Filed as Exhibit 10.22 to Del
          Global Technologies Corp. Amendment #1 to Registration Statement on
          Form S-1/A, filed on May 1, 2003 and incorporated herein by reference.

 10.27    Amendment to Executive Employment Agreement dated May 28, 2003 by and
          between Del Global Technologies Corp. and Samuel E. Park. Filed as
          Exhibit 10.23 to Del Global Technologies Corp. Quarterly Report on
          Form 10-Q for the quarterly period ended May 3, 2003 and incorporated
          herein by reference.

 10.28    Amendment dated October 10, 2003 to Change of Control Agreement for
          Walter F. Schneider filed as Exhibit 10.28 to Del Global Technologies
          Corp. Annual Report on Form 10-K for the year ended August 2, 2003 and
          incorporated herein by reference.

 10.29    Waiver and Third Amendment to the Loan and Security Agreement dated as
          of October 30, 2003, among Del Global Technologies Corp., Bertan High
          Voltage Corp., RFI Corporation and Del Medical Imaging Corp.
          (Borrowers) and Transamerica Business Capital Corporation filed as
          Exhibit 10.29 to Del Global Technologies Corp. Annual Report on Form
          10-K for the year ended August 2, 2003 and incorporated herein by
          reference.

 10.30    Waiver, Consent and Fourth Amendment to the Loan and Security
          Agreement dated as of March 12, 2004, by and among Del Global
          Technologies Corp. and General Electric Capital Corporation, as
          successor by assignment to Transamerica Business Corporation. Filed as
          Exhibit 10.30 to Del Global Technologies Corp. Quarterly Report on
          Form 10-Q for the quarterly period ended January 31, 2004 and
          incorporated herein by reference.

 10.31*   Letter Agreement dated as of February 10, 2003 between Mark Koch and
          Del Global Technologies Corp. Filed as Exhibit 99.01 to Del Global
          Technologies Corp. Current Report on Form 8-K filed August 27, 2004
          and incorporated herein by reference.

 10.32    Non-Competition Agreement dated as of September 8, 2004 by and between
          Del Global Technologies Corp. and Walter F. Schneider. Filed as
          Exhibit 99.01 to Del Global Technologies Corp. Current Report on Form
          8-K filed September 10, 2004 and incorporated herein by reference.

 10.33    Separation Agreement and Release dated as of September 1, 2004 between
          Del Global Technologies Corp. and Thomas V. Gilboy. Filed as Exhibit
          99.01 to Del Global Technologies Corp. Current Report on Form 8-K
          filed September 15, 2004 and incorporated herein by reference.

 10.34    Amendment No. 1 dated as of September 15, 2004 to the Letter Agreement
          dated February 10, 2003 between Mark Koch and Del Global Technologies
          Corp. Filed as Exhibit 99.01 to Del Global Technologies Corp. Current
          Report on Form 8-K filed September 20, 2004 and incorporated herein by
          reference.

 10.35    Loan Agreement dated as of September 23, 2004 between Del Global
          Technologies Corp. ("Del Global") and Villa Sistemi Medicali S.p.A., a
          subsidiary of Del Global. Filed as Exhibit 99.01 to Del Global
          Technologies Corp. Current Report on Form 8-K filed September 28, 2004
          and incorporated herein by reference.
</TABLE>

                                       36

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                         DESCRIPTION OF DOCUMENT
-------   ----------------------------------------------------------------------
<S>       <C>
 10.36    Waiver, Consent and Fifth Amendment to the Loan and Security Agreement
          dated as of September 23, 2004, by and among Del Global Technologies
          Corp., Bertan High Voltage Corp., RFI Corporation and Del Medical
          Imaging Corp. (Borrowers) and General Electric Capital Corporation, as
          successor by assignment to Transamerica Business Capital Corporation.
          Filed as Exhibit 99.02 to Del Global Technologies Corp. Current Report
          on Form 8-K filed September 28, 2004 and incorporated herein by
          reference.

 10.37    Settlement Agreement dated as of September 30, 2004, by and among the
          United States of America, on behalf of the Department of Defense,
          acting through the United States Attorney's Office for the Eastern
          District of New York, Del Global Technologies Corp. and RFI
          Corporation. Current Report on Form 8-K filed October 5, 2004 and
          incorporated herein by reference.

 10.38    Assignment, Assumption and Amendment of Lease dated as of October 1,
          2004 among DP 16, LLC, Del Global Technologies Corp. and Spellman High
          Voltage Electronics Corporation. Filed as Exhibit 99.02 to Del Global
          Technologies Corp. Current Report on Form 8-K filed October 7, 2004
          and incorporated herein by reference.

 10.39    First Amendment to Villa Loan Agreement dated October 22, 2004 between
          Del Global Technologies Corp and Villa Sistemi Medicali, S.p.A filed
          as Exhibit 99.01 to Del Global Technologies Corp. Current Report on
          Form 8-K filed October 26, 2004 and incorporated herein by reference.

 10.40    Sixth Amendment to the Loan and Security Agreement dated as of October
          25, 2004 by and among Del Global Technologies Corp, Bertan High
          Voltage Corp, RFI Corporation and Del Medical Imaging Corp (Borrowers)
          and General Electric Capital Corporation as successor to Transamerica
          Business Capital Corporation filed as Exhibit 99.02 to Del Global
          Technologies Corp. Current Report on Form 8-K filed October 26, 2004
          and incorporated herein by reference.

 10.41    Consent and Seventh Amendment to the Loan and Security Agreement dated
          as of February 2, 2005, among Del Global Technologies Corp., Bertan
          High Voltage Corp., RFI Corporation and Del Medical Imaging Corp.
          (Borrowers) and GE Business Capital Corporation F/K/A Transamerica
          Business Capital Corporation filed as Exhibit 99.1 to Del Global
          Technologies Corp. Current Report on Form 8-K filed February 7, 2005
          and incorporated herein by reference.

 10.42    Administrative Agreement dated as of April 1, 2005 between Del Global
          Technologies Corp., RFI Corporation and the Defense Logistics Agency.
          Filed as Exhibit 99.01 to Del Global Technologies Corp. Current Report
          on Form 8-K filed April 5, 2005 and incorporated herein by reference.

 10.43    Consent and Eighth Amendment to the Loan and Security Agreement dated
          as of April 5, 2005, among Del Global Technologies Corp., Bertan High
          Voltage Corp., RFI Corporation and Del Medical Imaging Corp.
          (Borrowers) and GE Business Capital Corporation F/K/A Transamerica
          Business Capital Corporation filed as Exhibit 99.02 to Del Global
          Technologies Corp. Current Report on Form 8-K filed April 5, 2005 and
          incorporated herein by reference.

 10.44*   Senior Management Incentive Plan filed as Exhibit 99.01 to Del Global
          Technologies Corp. Current Report on Form 8-K filed May 3, 2005 and
          incorporated herein by reference.

 10.45*   Severance Benefits Letter Agreement dated as of May 23, 2005 between
          Del Global Technologies Corp. and Walter F. Schneider. Filed as
          Exhibit 99.01 to Del Global Technologies Corp. Current Report on Form
          8-K filed May 25, 2005 and incorporated herein by reference.

 10.46*   Severance Benefits Letter Agreement dated as of May 23, 2005 between
          Del Global Technologies Corp. and Mark A. Koch. Filed as Exhibit 99.02
          to Del Global Technologies Corp. Current Report on Form 8-K filed May
          25, 2005 and incorporated herein by reference.
</TABLE>

                                       37

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                         DESCRIPTION OF DOCUMENT
-------   ----------------------------------------------------------------------
<S>       <C>
 10.47    Separation Agreement and Release dated as of April 1, 2005 between Del
          Global Technologies Corp. and Edward Ferris filed as Exhibit 99.01 to
          Del Global Technologies Corp. Current Report on Form 8-K filed June 6,
          2005 and incorporated herein by reference.

 10.48    Waiver and Ninth Amendment to the Loan and Security Agreement dated as
          of June 9, 2005, among Del Global Technologies Corp., Bertan High
          Voltage Corp., RFI Corporation and Del Medical Imaging Corp.
          (Borrowers) and GE Business Capital Corporation F/K/A Transamerica
          Business Capital Corporation filed as Exhibit 99.01 to Del Global
          Technologies Corp. Current Report on Form 8-K filed June 9, 2005 and
          incorporated herein by reference.

 10.49    Loan and Security Agreement dated as of August 1, 2005 among Del
          Global Technologies Corp., RFI Corporation, Del Medical Imaging Corp.
          and North Fork Business Capital Corporation. Filed as Exhibit 10.01 to
          Del Global Technologies Corp. Current Report on Form 8-K filed August
          3, 2005 and incorporated herein by reference.

 10.50    Second Amendment to Villa Loan Agreement dated August 1, 2005 between
          Del Global Technologies Corp and Villa Sistemi Medicali, S.p.A filed
          as Exhibit 10.02 to Del Global Technologies Corp. Current Report on
          Form 8-K filed August 3, 2005 and incorporated herein by reference.

 14.1     Del Global Technologies Corp. Code of Business Conduct and Ethics.
          Filed as an exhibit to the Del Global Technologies Corp. Definitive
          Proxy Statement on Schedule 14A filed on April 29, 2003 and
          incorporated herein by reference.

 21       Subsidiaries of Del Global Technologies Corp. Filed as Exhibit 21 to
          Del Global Technologies Corp. Annual Report on Form 10-K for the year
          ended August 3, 2002 and incorporated herein by reference.

 23.1     Consent of Deloitte & Touche LLP (1).

 23.2     Consent of BDO Seidman LLP (1).

 31.1     Certification of Chief Executive Officer, Walter F. Schneider,
          pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (1).

 31.2     Certification of Principal Accounting Officer, Mark Koch, pursuant to
          Section 302 of the Sarbanes-Oxley Act of 2002 (1).

 32.1     Certification of the Chief Executive Officer, Walter F. Schneider,
          pursuant to 18 USC. Section 1350 adopted pursuant to Section 906 of
          the Sarbanes-Oxley Act of 2002 (1).

 32.2     Certification of the Principal Accounting Officer, Mark Koch, pursuant
          to 18 U.S.C. Section 1350 adopted pursuant to Section 906 of the
          Sarbanes-Oxley Act of 2002 (1).
</TABLE>

------------
*   Represents a management contract or compensatory plan or arrangement.

(1) Filed herewith.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                       38

<PAGE>

                                   DEL GLOBAL TECHNOLOGIES CORP.

October 28, 2005                   By: /s/ Walter F. Schneider
                                       -------------------------------------
                                       Walter F. Schneider
                                       President and Chief Executive Officer

October 28, 2005                   By: /s/ Mark Koch
                                       -------------------------------------
                                       Mark Koch
                                       Principal Accounting Officer

Pursuant to the requirements of the Securities and 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/ James Henderson           Director -- Chairman          October 28, 2005
-------------------------
James Henderson

/s/ Walter Schneider          Director - President and      October 28, 2005
-------------------------     Chief Executive Officer
Walter Schneider

/s/ Merrill McPeak            Director                      October 28, 2005
-------------------------
Merrill McPeak

/s/ Gerald M. Czarnecki       Director                      October 28, 2005
-------------------------
Gerald M. Czarnecki

/s/ James Risher              Director                      October 28, 2005
-------------------------
James Risher

/s/ Edgar J. Smith, Jr.       Director                      October 28, 2005
-------------------------
Edgar J. Smith, Jr.

                                       39

<PAGE>
             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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

We have audited the accompanying consolidated balance sheet of Del Global
Technologies Corp. and subsidiaries as of July 30, 2005, and the related
consolidated statements of operations, shareholders' equity and cash flows for
the year ended July 30, 2005. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on the
financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Del Global
Technologies Corp. and subsidiaries at July 30, 2005, and the results of its
operations and its cash flows for the year ended July 30, 2005, in conformity
with accounting principles generally accepted in the United States of America.

/s/ BDO SEIDMAN, LLP

Valhalla, New York
October 14, 2005

                                      F-1

<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


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

We have audited the accompanying consolidated balance sheets of Del Global
Technologies Corp. and subsidiaries as of July 31, 2004, and the related
consolidated statements of operations, shareholders' equity and cash flows for
each of the fiscal years ended July 31, 2004 and August 2, 2003. Our audits also
included the financial statement schedule listed in the Index at Item 15(a)2, as
it relates to the years ended July 31, 2004 and August 2, 2003. These financial
statements and financial statement schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on the
financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, 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 consolidated financial statements present fairly, in all
material respects, the financial position of Del Global Technologies Corp. and
subsidiaries at July 31, 2004, and the results of their operations and their
cash flows for each of the fiscal years ended July 31, 2004 and August 2, 2003,
in conformity with accounting principles generally accepted in the United States
of America. Also, in our opinion, such financial statement schedule, when
considered in relation to the basic consolidated financial statements taken as a
whole, presents fairly in all material respects the information set forth
therein.

/s/ DELOITTE AND TOUCHE, LLP

New York, New York
October 28, 2004

                                      F-2

<PAGE>

DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                                JULY 30,       JULY 31,
                                                                                                  2005           2004
                                                                                               ----------     ----------
<S>                                                                                            <C>            <C>
ASSETS
CURRENT ASSETS:
  Cash and cash equivalents.................................................................   $    1,466     $    4,755
  Trade receivables (net of allowance for doubtful accounts of $1,028  and $888 for 2005
   and 2004, respectively)..................................................................       14,218         12,900
  Inventories...............................................................................       14,852         15,122
  Assets attributable to discontinued operation, at net realizable value....................           --          4,369
  Prepaid expenses and other current assets.................................................          724          1,068
                                                                                               ----------     ----------
   Total current assets.....................................................................       31,260         38,214
                                                                                               ----------     ----------
NON-CURRENT ASSETS:
  Fixed assets, net.........................................................................        6,485          6,907
  Deferred income tax assets................................................................          841          1,102
  Goodwill..................................................................................        1,911          1,911
  Other intangible assets, net..............................................................           38            103
  Other assets..............................................................................          241          1,024
                                                                                               ----------     ----------
   Total non-current assets.................................................................        9,516         11,047
                                                                                               ----------     ----------
TOTAL ASSETS................................................................................   $   40,776     $   49,261
                                                                                               ==========     ==========
</TABLE>

See notes to consolidated financial statements

                                      F-3

<PAGE>

DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                                                              JULY 30,        JULY 31,
                                                                                                2005            2004
                                                                                            -----------     -----------
<S>                                                                                         <C>             <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
  Short-term credit facilities...........................................................   $     5,051     $     2,699
  Current portion of long-term debt......................................................           783             730
  Accounts payable - trade...............................................................         9,258          10,926
  Accrued liabilities....................................................................         5,488           8,920
  Net liabilities attributable to discontinued operation.................................            --             958
  Litigation settlement reserves.........................................................            56           5,148
  Income taxes payable...................................................................           502           1,069
                                                                                            -----------     -----------
   Total current liabilities.............................................................        21,138          30,450
                                                                                            -----------     -----------
NON-CURRENT LIABILITIES:
  Long-term debt.........................................................................         4,296           5,076
  Subordinated note......................................................................         2,158           1,962
  Other long-term liabilities............................................................         2,683           2,462
  Other liabilities attributable to discontinued operation...............................            --             147
                                                                                            -----------     -----------
   Total non-current liabilities.........................................................         9,137           9,647
                                                                                            -----------     -----------
   Total liabilities.....................................................................        30,275          40,097
                                                                                            -----------     -----------
COMMITMENTS AND CONTINGENCIES

MINORITY INTEREST IN SUBSIDIARY..........................................................         1,273           1,389
                                                                                            -----------     -----------
SHAREHOLDERS' EQUITY:
  Common stock -- $.10 par value; authorized - 20,000,000 shares; issued -
    11,252,958 and 10,978,581 shares at July 30, 2005 and July 31, 2004..................         1,125           1,098
  Additional paid-in capital.............................................................        64,448          64,072
  Accumulated other comprehensive income.................................................         1,450             792
  Accumulated deficit....................................................................       (52,249)        (52,641)
  Less common stock in treasury - 622,770 shares and 643,533 shares at July 30,
   2005 and July 31, 2004................................................................        (5,546)         (5,546)
                                                                                            -----------     -----------
   Total shareholders' equity............................................................         9,228           7,775
                                                                                            -----------     -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY...............................................   $    40,776     $    49,261
                                                                                            ===========     ===========
</TABLE>

See notes to consolidated financial statements

                                      F-4

<PAGE>

DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                                     FISCAL YEARS ENDED
                                                                         JULY 30,        JULY 31,         AUGUST 2,
                                                                           2005            2004             2003
                                                                        ----------      ----------       ----------
<S>                                                                     <C>             <C>              <C>
NET SALES..........................................................     $   84,872      $   83,827       $   68,212
COST OF SALES......................................................         62,591          62,512           52,542
                                                                        ----------      ----------       ----------
GROSS MARGIN.......................................................         22,281          21,315           15,670
                                                                        ----------      ----------       ----------
   Selling, general and administrative.............................         16,452          15,907           17,904
   Research and development........................................          1,636           1,562            1,593
   Litigation settlement costs.....................................            300           3,652            2,126
   Facilities reorganization costs.................................            --              --               128
                                                                        ----------      ----------       ----------
     Total operating expenses......................................         18,388          21,121           21,751
                                                                        ----------      ----------       ----------
OPERATING INCOME (LOSS)............................................          3,893             194           (6,081)
   Interest expense (net of interest income of $0, $20
     and $10 in 2005, 2004 and 2003, respectively).................         (1,350)         (1,796)          (1,340)
   Other income....................................................             97             123              596
                                                                        ----------      ----------       ----------
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
  AND MINORITY INTEREST............................................          2,640          (1,479)          (6,825)
INCOME TAX PROVISION ..............................................          2,054           8,691            8,233
                                                                        ----------      ----------       ----------
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST..            586         (10,170)         (15,058)
MINORITY INTEREST..................................................            393             559              115
                                                                        ----------      ----------       ----------
INCOME (LOSS) FROM CONTINUING OPERATIONS...........................            193         (10,729)         (15,173)
DISCONTINUED OPERATION.............................................            199          (5,095)             128
                                                                        ----------      -----------      ----------
NET INCOME (LOSS)..................................................     $      392      $  (15,824)      $  (15,045)
                                                                        ==========      ==========       ==========
NET INCOME (LOSS) PER BASIC SHARE
   Continuing operations...........................................     $     0.02      $    (1.04)      $    (1.46)
   Discontinued operation..........................................           0.02           (0.49)            0.01
                                                                        ----------      -----------      ----------
   Net income (loss) per basic share...............................     $     0.04      $    (1.53)      $    (1.45)
                                                                        ==========      ==========       ==========
NET INCOME (LOSS) PER DILUTED SHARE
   Continuing operations                                                $     0.01      $    (1.04)      $    (1.46)
   Discontinued operation                                                     0.02           (0.49)            0.01
                                                                        ----------      -----------      ----------
   Net income (loss) per diluted share                                  $     0.03      $    (1.53)      $    (1.45)
                                                                        ==========      ==========       ==========

   Weighted average shares outstanding - Basic                              10,490          10,334           10,341
                                                                        ----------      ----------       ----------
   Weighted average shares outstanding - Diluted                            11,465          10,334           10,341
                                                                        ----------      ----------       ----------
</TABLE>

See notes to consolidated financial statements

                                      F-5

<PAGE>

DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                         FISCAL YEARS ENDED
                                                                                 ------------------------------------
                                                                                  JULY 30,    JULY 31,      AUGUST 2,
                                                                                    2005        2004          2003
                                                                                 ----------  ----------    ----------
<S>                                                                              <C>         <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Income (loss) from continuing operations.....................................    $      193  $  (10,729)   $  (15,173)
Adjustments to reconcile net income (loss) to net cash provided by
  (used in) operating activities:
  Depreciation and amortization..............................................         1,303       1,425         2,611
  Deferred income tax provision..............................................           276       7,678         7,950
  Loss on sale of fixed assets...............................................           100          50            42
  Non cash litigation settlement costs.......................................             -         350             -
  Non cash pension cost......................................................           492          (9)            -
  Imputed interest - subordinated note.......................................           196         175           177
  Minority interest..........................................................           393         559           115
  Stock based compensation expense...........................................            39          38           135
  Other......................................................................             -           -           (29)
Changes in operating assets and liabilities:
  (Increase) decrease in trade receivables...................................        (1,368)        309         3,783
  (Increase) decrease in inventories.........................................           345      (1,291)        3,587
  (Increase) decrease in prepaid expenses and other current assets...........           348        (318)        1,018
  Decrease  in other assets..................................................           710         225           216
  Decrease in income tax receivable..........................................            54          54         4,086
  Increase (decrease) in accounts payable - trade............................        (1,764)      3,351        (2,104)
  Increase (decrease) in accrued liabilities.................................        (3,314)      3,485        (1,559)
  Payment of accrued litigation settlement costs                                     (5,092)          -             -
  Increase (decrease) in income taxes payable................................          (640)        833          (126)
  Increase (decrease) in other long-term liabilities.........................           230        (194)           84
                                                                                 ----------  ----------    ----------
Net cash provided by (used in) operating activities
  of continuing operations...................................................        (7,499)      5,991         4,813
Net cash provided by discontinued operation..................................         3,463       2,229           128
                                                                                 ----------  ----------    ----------

Net cash provided by (used in) operating activities..........................        (4,036)      8,220         4,941
                                                                                 ----------  ----------    ----------

CASH FLOWS FROM INVESTING ACTIVITIES
  Fixed assets purchases.....................................................          (891)       (517)       (1,971)
  Proceeds from sale of fixed assets.........................................             -          50             -
  Proceeds from sale of marketable securities and investment.................             -           -            45
                                                                                 ----------  ----------    ----------
Net cash used in investing activities........................................          (891)       (467)       (1,926)
                                                                                 ----------  ----------    ----------
CASH FLOWS FROM FINANCING ACTIVITIES
  Borrowing (repayment) of bank borrowings...................................         1,583      (4,224)       (2,630)
  Exercise of stock options and warrants.....................................           364           2             -
  Dividend paid to minority shareholders.....................................          (502)       (430)            -
                                                                                -----------  ----------    ----------
Net cash provided by (used in) financing activities..........................         1,445      (4,652)       (2,630)
                                                                                 ----------  ----------    ----------
EFFECT OF EXCHANGE RATE CHANGES ON CASH......................................           193         273           101
                                                                                 ----------  ----------    ----------
CASH AND CASH EQUIVALENTS INCREASE (DECREASE) FOR THE YEAR...................        (3,289)      3,374           486
CASH AND CASH EQUIVALENTS, BEGINNING OF THE YEAR.............................         4,755       1,381           895
                                                                                 ----------  ----------    ----------
CASH AND CASH EQUIVALENTS, END OF THE YEAR...................................    $    1,466  $    4,755    $    1,381
                                                                                 ==========  ==========    ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Cash paid during the period for interest...................................    $      654  $    1,296    $      999
  Cash paid during the period for income taxes...............................         2,221         322           429
</TABLE>

                 See notes to consolidated financial statements

                                      F-6

<PAGE>

DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                ACCUMULATED
                                                                                   OTHER
                                             COMMON                  OBLIGATION   COMPRE-
                                           STOCK ISSUED   ADDITIONAL  TO ISSUE    HENSIVE                 TREASURY STOCK
                                        -----------------  PAID-IN    SHARES &    INCOME     ACCUMULATED  ---------------
                                         SHARES    AMOUNT  CAPITAL    WARRANTS    (LOSS)       DEFICIT    SHARES   AMOUNT   TOTAL
                                        ---------- ------ ---------- ---------- -----------  -----------  ------- -------  --------
<S>                                     <C>        <C>    <C>        <C>        <C>          <C>          <C>     <C>      <C>
BALANCE, AUGUST 3, 2002...............  10,976,081 $1,097 $   63,547 $        - $      (229) $   (21,772) 628,566 $(5,502) $ 37,141

Shares received in legal settlement...                                                                     14,967     (44)      (44)
Compensation cost of non-employee
  stock options and warrants issued...                           135                                                            135
Comprehensive Loss:
  Net Loss............................                                                           (15,045)                   (15,045)
  Accumulated unfunded obligation for
   pension trust......................                                                   16                                      16
  Foreign exchange....................                                                  776                                     776
                                                                                                                           --------
  Total comprehensive loss............                                                                                      (14,253)
                                        ---------- ------ ---------- ---------- -----------  -----------  ------- -------  --------
BALANCE, AUGUST 2, 2003...............  10,976,081 $1,097 $   63,682 $        - $       563  $   (36,817) 643,533 $(5,546) $ 22,979
                                        ---------- ------ ---------- ---------- -----------  -----------  ------- -------  --------
Issuance of stock on exercise of
  options.............................       2,500      1          2                                                              3
Compensation cost of non-employee
  stock options and warrants issued...                            38                                                             38
Warrant modification costs............                           350                                                            350
Comprehensive Loss:
  Net Loss............................                                                           (15,824)                   (15,824)
  Accumulated unfunded obligation for
   pension trust......................                                                   (9)                                     (9)
  Foreign exchange....................                                                  238                                     238
                                                                                                                           --------
  Total comprehensive loss............                                                                                      (15,595)
                                        ---------- ------ ---------- ---------- -----------  -----------  ------- -------  --------
BALANCE, JULY 31, 2004................  10,978,581 $1,098 $   64,072 $        - $       792  $   (52,641) 643,533 $(5,546) $  7,775
                                        ========== ====== ========== ========== ===========  ===========  ======= =======  ========
</TABLE>

                                      F-7

<PAGE>

DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                 ACCUMULATED
                                                                                    OTHER
                                              COMMON                  OBLIGATION   COMPRE-
                                            STOCK ISSUED   ADDITIONAL  TO ISSUE    HENSIVE                 TREASURY STOCK
                                         -----------------   PAID-IN   SHARES &    INCOME    ACCUMULATED  ----------------
                                           SHARES   AMOUNT  CAPITAL    WARRANTS    (LOSS)      DEFICIT    SHARES    AMOUNT   TOTAL
                                         ---------- ------ ---------- ---------- ----------- -----------  -------  -------  ------
<S>                                      <C>        <C>    <C>        <C>        <C>         <C>          <C>      <C>      <C>
BALANCE, JULY 31, 2004.................  10,978,581 $1,098 $   64,072 $        - $       792 $   (52,641) 643,533  $(5,546) $7,775
Issuance of stock on exercise of
  options..............................     248,421     24        253          -                                               277
Issuance of stock on exercise of
  warrants.............................      25,956      3         84                                                           87
Compensation cost of non-employee
  stock options and warrants issued....                            39                                                           39
Correction of treasury shares..........                                                                   (20,763)
Comprehensive Income:
  Net Income...........................                                                              392                       392
  Reversal of accumulated unfunded
    obligation for pension trust.......                                                  417                                   417
  Foreign exchange.....................                                                  241                                   241
                                                                                                                            ------
  Total comprehensive income...........                                                                                      1,050
                                         ---------- ------ ---------- ---------- ----------- -----------  -------  -------  ------
BALANCE, JULY 30, 2005.................  11,252,958 $1,125 $   64,448 $        - $     1,450 $   (52,249) 622,770  $(5,546) $9,228
                                         ========== ====== ========== ========== =========== ===========  =======  =======  ======
</TABLE>

See notes to consolidated financial statements

                                      F-8
<PAGE>

DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS ACTIVITIES - Del Global Technologies Corp. ("Del
Global") together with its subsidiaries (collectively, the "Company"), is
engaged in two major lines of business: Medical Systems Group and Power
Conversion Group. The Medical Systems Group segment designs, manufactures and
markets imaging and diagnostic systems consisting of stationary and portable
x-ray imaging systems, radiographic/fluoroscopic systems, mammography systems
and dental systems. The Power Conversion Group segment designs, manufactures and
markets key electronic components such as transformers, noise suppression
filters and high voltage capacitors for use in precision regulated high voltage
applications. Del Global's products are sold throughout

As of July 31, 2004, the Company's Board committed to a plan to dispose of its
Del High Voltage Division ("DHV") and on October 1, 2004, we sold this division
for a purchase price of $3.1 million, plus the assumption of approximately $0.8
million of liabilities. Accordingly, the results of operations have been
reclassified to show this division as a discontinued operation. See Note 2,
Discontinued Operation.

PRINCIPLES OF CONSOLIDATION - The consolidated financial statements are prepared
on the accrual basis of accounting, which conforms to accounting principles
generally accepted in the United States of America, ("U.S. GAAP") and include
the accounts of Del Global and its subsidiaries. All material intercompany
accounts and transactions have been eliminated.

USE OF ESTIMATES - The preparation of the consolidated financial statements in
conformity with U.S. GAAP 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 consolidated balance
sheets, as well as reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Significant estimates underlying the accompanying consolidated financial
statements include the allowance for doubtful accounts, allowance for obsolete
and excess inventory, realizability of deferred income tax assets,
recoverability of intangibles and other long-lived assets, and future
obligations associated with the Company's litigation.

ACCOUNTING PERIOD - The Company's fiscal year-end is based on a 52/53-week cycle
ending on the Saturday nearest to July 31. Results of the Company's 80% owned
subsidiary, Villa Sistemi Medicali S.p.A. ("Villa") are consolidated
into Del Global's consolidated financial statements based on a fiscal year that
ends on June 30 and are reported on a one-month lag.

CASH AND CASH EQUIVALENTS - The Company considers highly liquid instruments
readily convertible to known amounts of cash with original maturities of three
months or less (measured from their acquisition date) to be cash equivalents.

FOREIGN CURRENCY TRANSLATION - The financial statements of our foreign
subsidiary are translated into U.S. dollars in accordance with SFAS No.52,
"Foreign Currency Translation," Where the functional currency of a foreign
subsidiary is its local currency, balance sheet accounts are translated at the
current exchange rate and income statement items are translated at the average
exchange rate for the period. Gains and losses resulting from translation are
accumulated in a separate component of stockholders' equity. Where the local
currency of a foreign subsidiary is not its functional currency, financial
statements are translated at either current or historical exchange rates, as
appropriate. These adjustments, along with gains and losses on currency
transactions, if any, are reflected in the consolidated statements of income.

INVENTORIES - Inventories are stated at the lower of cost or market value. Cost
is comprised of direct materials and, where applicable, direct labor costs and
overhead that has been incurred in transporting the inventories to their present
location and condition. Engineering costs incurred to set up products to be
manufactured for a customer purchase order are capitalized when the scope of the
purchase order indicates that such costs are recoverable. Such costs are
included in work-in-process inventory and amortized on a units shipped basis
over the life of the customer order from the date of first shipment. Cost is
calculated using the FIFO method. Market value represents the

                                      F-9

<PAGE>

estimated selling price less all estimated costs to completion and costs to be
incurred in marketing, selling and distribution.

FIXED ASSETS, NET - Fixed assets, net are stated at cost less accumulated
depreciation and amortization. Replacements and major improvements are
capitalized; maintenance and repairs are expensed as incurred. Gains or losses
on asset dispositions are included in the determination of net income or loss.
Depreciation is computed utilizing the straight-line method. The cost of
leasehold improvements is amortized over the shorter of the useful life or the
term of the lease.

Depreciable lives are generally as follows:

<TABLE>
<CAPTION>
DESCRIPTION                                                                                USEFUL LIVES
<S>                                                                                        <C>
Buildings..............................................................................        25-33
Machinery and equipment................................................................         5-15
Furniture and fixtures.................................................................         5-10
Transportation equipment...............................................................          3-4
Computer and other equipment...........................................................          3-7
</TABLE>

RECOVERABILITY OF LONG-LIVED ASSETS - The Company evaluates the carrying amounts
of long-lived assets (including intangibles) to determine if events have
occurred which would require modification to the carrying values. In evaluating
carrying values of long-lived assets, the Company reviews certain indicators of
potential impairment, such as undiscounted projected cash flows and business
plans. In accordance with the provisions of SFAS 144, in the event that
impairment has occurred, the fair value of the related asset is determined and
the Company records a charge to operations calculated by comparing the asset's
carrying value to the estimated fair value. The Company estimates fair value
based on the best information available making whatever estimates, judgments and
projections are considered necessary.

DEFERRED FINANCING COSTS, NET - Financing costs, including fees, commission and
legal expenses are capitalized and amortized on a straight line basis, which
approximates the interest method, over the term or expected term of the relevant
loan. Amortization of deferred financing costs is included in interest expense.

GOODWILL - Goodwill represents the excess of the cost of acquisitions over the
fair value of the identifiable assets acquired and liabilities assumed.
Effective August 4, 2002, the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets," which
established new accounting and reporting requirements for goodwill and other
intangible assets. Under the provisions of SFAS No 142, the Company ceased all
goodwill amortization effective August 4, 2002.

OTHER INTANGIBLES, NET - Other intangible assets are the Company's distribution
network and non-compete agreements acquired with the purchase of certain assets
of a subsidiary. Intangibles are being amortized on a straight-line basis over
their estimated useful lives, which range from 5 to 10 years. Accumulated
amortization for other intangibles was $615 and $550 at July 30, 2005 and July
31, 2004, respectively. In connection with the fiscal 2003 adoption of SFAS 142,
the Company reviewed the useful life and classification of these assets and
determined that they continue to be appropriate, and accordingly will continue
to be amortized in future periods.

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

                                      F-10

<PAGE>

Company has an FDA obligation to continue to provide repair service for certain
medical systems for up to seven years past the warranty period. These repairs
are billed to the customers at market rates.

The Company records shipping and handling fees billed to customers in accordance
with the provisions of the Emerging Issues Task Force ("EITF") No. 00-10,
"Accounting for Shipping and Handling Fees and Costs." The EITF provides that
shipping and handling fees billed to customers be reflected in net sales and
requires additional disclosure if costs incurred for shipping and handling are
not included in costs of sales.

RESEARCH AND DEVELOPMENT COSTS - Research and development costs are recognized
as an expense in the period in which they are incurred.

INCOME TAXES - Deferred income tax assets and liabilities represents the effects
of the differences between the income tax basis and financial reporting basis of
assets and liabilities at the tax rates expected at the time the deferred tax
liability or asset is expected to be settled or realized. Management provides
valuation allowances against the deferred tax asset for amounts which are not
considered "more likely than not" to be realized.

NET INCOME (LOSS) PER SHARE - Net income (loss) per share is computed by
dividing net income (loss) by the weighted average number of common shares
outstanding during the year. The effect of the assumed exercise of options and
warrants to purchase common stock are excluded from the calculation of loss per
share when their inclusion would be anti-dilutive.

CONCENTRATION OF CREDIT RISK - Financial instruments which potentially subject
the Company to concentrations of credit risk are cash equivalents, investments
in marketable securities and trade receivables. With respect to accounts
receivable, the Company limits its credit risk by performing ongoing credit
evaluations and, when deemed necessary, requiring letters of credit, guarantees
or collateral. Management does not believe significant risk exists in connection
with the Company's concentrations of credit at July 30, 2005.

STOCK-BASED COMPENSATION - The Company accounts for stock based employee
compensation arrangements in accordance with Accounting Principles Board Opinion
("APB") No. 25, Accounting for Stock Issued to Employees, and complies with the
disclosure provisions of SFAS No. 123, Accounting for Stock-Based Compensation.
Under APB 25, compensation expense is based on the difference, if any, between
the fair value of the Company's stock and the exercise price of the option.
Options are generally granted at the fair market value at the date of grant. The
Company accounts for equity instruments issued to non-employees in accordance
with the provisions of SFAS No. 123 and Emerging Issues Task Force ("EITF")
Issue No. 96-18 Accounting for Equity Instruments That Are Issued to Other Than
Employees for Acquiring, or in Conjunction with Selling, Goods or Services. All
transactions in which goods or services are the consideration received for the
issuance of equity instruments are accounted for based on the fair value of the
consideration received or the fair value of the equity instruments issued,
whichever is more reliably measurable. The measurement date of the fair value of
the equity instruments issued is the date on which the counter party's
performance is complete.

<TABLE>
<CAPTION>
                                                                                 FOR FISCAL YEARS ENDED
                                                                   ------------------------------------------------
                                                                    JULY 30, 2005   JULY 31, 2004    AUGUST 2, 2003
                                                                   --------------  --------------    --------------
<S>                                                                <C>             <C>               <C>
Net income (loss) - as reported:................................   $          392  $      (15,824)   $      (15,045)
Total stock-based awards under fair value method................             (292)           (456)             (644)
                                                                   --------------  --------------    --------------
Pro forma net income (loss).....................................   $          100  $      (16,280)   $      (15,689)
                                                                   ==============  ==============    ==============
Income (loss) per share -- Basic
As reported.....................................................   $         0.04  $        (1.53)   $        (1.45)
Pro forma.......................................................   $         0.01  $        (1.57)   $        (1.51)
Income (loss) per share -- Diluted
As reported.....................................................   $         0.03  $        (1.53)   $        (1.45)
Pro forma.......................................................   $         0.01  $        (1.58)   $        (1.52)

Weighted average number of shares outstanding - Basic...........       10,490,178      10,333,668        10,341,430
Weighted average number of shares outstanding - Diluted.........       11,464,718      10,333,668        10,341,430
</TABLE>

                                      F-11

<PAGE>

The fair value of the options used for the above proforma disclosures were
determined on the date of grant using a Black-Scholes option pricing model.
These options were valued based on the following assumptions: an estimated life
of seven years, volatility ranging from 40% to 90%, risk free interest rate from
5% to 6.8%, and no dividend yield.

EFFECTS OF NEW ACCOUNTING PRONOUNCEMENTS - In December 2004, the Financial
Accounting Standards Board ("FASB") issued Statement of Financial Accounting
Standards ("SFAS") No. 153, "Exchanges of Nonmonetary Assets," which eliminates
the exception for nonmonetary exchanges of similar productive assets and
replaces it with a general exception for exchanges of nonmonetary assets that do
not have commercial substance. SFAS No. 153 will become effective for
nonmonetary asset exchanges occurring in fiscal periods beginning after June 15,
2005. The Company does not believe the adoption of SFAS No. 153 will have a
material impact on the Company's financial statements.

In December 2004, the FASB issued SFAS No. 123 (R), "Share-Based Payment," which
established standards for transactions in which an entity exchanges its equity
instruments for goods and services. This standard requires a public entity to
measure the cost of employee services received in exchange for an award of
equity instruments based on the grant-date fair value of the award. This
eliminates the exception to account for such awards using the intrinsic method
previously allowed under APB Opinion No. 25. SFAS No 123 (R) will be effective
for fiscal years beginning after June 15, 2005. The statement does not require
restatement of previously issued statements and can be applied on a prospective
basis. The Company is in the process of evaluating the impact the adoption of
this statement will have on its financial statements.

In November 2004, the FASB issued SFAS No. 151, "Inventory Costs, an amendment
of ARB No. 43, Chapter 4." This Statement amends the guidance in ARB No. 43,
Chapter 4, "Inventory Pricing," to clarify the accounting for abnormal amounts
of idle facility expense, freight, handling costs and wasted material
(spoilage), requiring that those items be recognized as current-period charges.
In addition, this Statement requires that allocation of fixed production
overheads to the costs of conversion be based on the normal capacity of the
production facilities. The provisions of this statement are effective for fiscal
years beginning after June 15, 2005, with early application permitted. The
Company is in the process of evaluating the impact the adoption of this
statement will have on its financial statements.

In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error
Corrections, a replacement of APB Opinion No. 20 and SFAS No. 3." This Statement
provides guidance on the accounting for and reporting of accounting changes and
error corrections. It establishes, unless impracticable, retrospective
application as the required method for reporting a change in accounting
principle, in the absence of explicit transition requirements specific to the
newly adopted accounting principle. This Statement also provides guidance for
determining whether retrospective application of a change in accounting
principle is impracticable and for reporting a change when retrospective
application is impracticable. The correction of an error in previously issued
financial statements is not an accounting change. However, the reporting of an
error correction involves adjustments to previously issued financial statements
similar to those generally applicable to reporting an accounting change
retrospectively. Therefore, the reporting of a correction of an error by
restating previously issued financial statements is also addressed by this
Statement. This Statement is effective for accounting changes made in fiscal
years beginning after December 15, 2005. The Company does not believe the
adoption of SFAS No. 154 will have a material impact on the Company's financial
statements or results of operations.

In March 2005, the FASB issued FASB Interpretation ("FIN") No. 47, "Accounting
for Conditional Asset Retirement Obligations." FIN No. 47 provides guidance
relating to the identification of and financial reporting for legal obligations
to perform an asset retirement activity. The Interpretation requires recognition
of a liability for the fair value of a conditional asset retirement obligation
when incurred if the liability's fair value can be reasonably estimated. FIN No.
47 also defines when an entity would have sufficient information to reasonably
estimate the fair value of an asset retirement obligation. The provision is
effective no later than the end of fiscal years ending after December 15, 2005.
The Company does not believe the adoption of FIN No. 47 will have a material
impact on the Company's financial statements or results of operations.

                                      F-12

<PAGE>

2. DISCONTINUED OPERATION

On October 1, 2004, the Company completed the sale of its Del High Voltage
Division ("DHV") for a purchase price of $3.1 million, plus the assumption of
approximately $0.8 million of liabilities. This division was formerly part of
the Power Conversion Group and designed, manufactured and marketed proprietary
precision power conversion subsystems for medical as well as critical industrial
applications. The results of operations of this division are shown as a
discontinued operation in the accompanying financial statements.

Certain information with respect to the discontinued operation is summarized
below:

<TABLE>
<CAPTION>
                                                                                     JULY 30,   JULY 31,  AUGUST 2,
YEARS ENDED                                                                            2005       2004      2003
                                                                                   ----------  ---------  ---------
<S>                                                                                <C>         <C>        <C>
Revenues.......................................................................    $    1,899  $  15,655  $  30,407
Net income (loss) before income taxes..........................................           199     (5,095)       128
Income taxes...................................................................            --         --         --
Income (loss) from discontinued operation, net.................................           199     (5,095)       128
</TABLE>

Income from discontinued operation, net for fiscal year 2005, includes two
months of operations through the October 1, 2004 disposition date and a gain on
the sale of the DHV assets of $21. Loss from discontinued operation for fiscal
2004 includes impairment charges of $3,481 related to the write down of the DHV
assets to net realizable value, including a goodwill write off of $1,328 and an
intangible asset write off of $125 related to the DHV business. These
impairments were recorded during the second quarter of fiscal year 2004.

Assets attributable to discontinued operation consisting of current assets of
$4,369 at net realizable value are classified as current assets on the July 31,
2004 balance sheet. Net liabilities, consisting of current liabilities of $958
assumed by the buyer, are classified as current liabilities on the July 31, 2004
consolidated balance sheet.

3. INVENTORIES

<TABLE>
<CAPTION>
                                                                                   JULY 30, 2005  JULY 31, 2004
                                                                                   -------------  -------------
<S>                                                                                <C>            <C>
Inventories consists of the following:
Raw materials and purchased parts...............................................     $  12,540      $  10,839
Work-in-process.................................................................         2,615          2,974
Finished goods..................................................................         2,714          3,845
                                                                                     ---------      ---------
                                                                                        17,869         17,658
Less: allowance for obsolete and excess inventories.............................        (3,017)        (2,536)
                                                                                     ---------      ---------
Total inventories net...........................................................     $  14,852      $  15,122
                                                                                     =========      =========
</TABLE>

The Company has pledged all of its inventories in the U.S. having a net carrying
amount of approximately $6,203 and $5,193 at July 30, 2005 and July 31, 2004,
respectively, to secure its credit facility with its lender.

4. FIXED ASSETS

Fixed assets consist of the following:

<TABLE>
<CAPTION>
                                                                       JULY 30, 2005  JULY 31, 2004
                                                                       -------------  -------------
<S>                                                                    <C>            <C>
Land................................................................    $       694    $       694
Buildings...........................................................          6,092          5,983
Machinery and equipment.............................................          6,218          6,074
Furniture and fixtures..............................................            699            697
Leasehold improvements..............................................          1,173            813
Transportation equipment............................................             66             72
Computers and other equipment.......................................          4,090          3,934
                                                                        -----------    -----------
                                                                             19,032         18,267
Less: accumulated depreciation and amortization.....................        (12,547)       (11,360)
                                                                        -----------    -----------
Fixed assets, net...................................................    $     6,485    $     6,907
                                                                        ===========    ===========
</TABLE>

                                      F-13

<PAGE>
The Company has pledged all of its fixed assets in the U.S. having a net
carrying amount of approximately $1,973 and $2,332 at July 30, 2005 and July 31,
2004, respectively, to secure its credit facility with its lender. Included in
fixed assets is the Villa building which is subject to a capital lease. Included
in the table above are capital leases in the amount of $3,747 and $3,745 at July
30, 2005 and July 3, 2004, respectively. Accumulated amortization relating to
capital leases was $590 and $480 at July 30, 2005 and July 31, 2004,
respectfully. Amortization expense relating to capital leases was $110, $133 and
$97 for fiscal 2005, 2004 and 2003, respectively.

Depreciation expense for fiscal years 2005, 2004 and 2003 was $1,238, $1,359 and
$1,291, respectively.

5. GOODWILL AND OTHER INTANGIBLE ASSETS

Effective August 4, 2002, the Company adopted SFAS 142, Goodwill and Other
Intangible Assets, which established new accounting and reporting requirements
for goodwill and other intangible assets. Under SFAS 142, all goodwill
amortization ceased effective August 4, 2002. Recorded goodwill was tested for
impairment by comparing the fair value to the carrying value for reporting units
within the Power Conversion Group and for the Medical Systems Group. Fair value
was determined using a discounted cash flow method as well as a review of
valuation parameters for comparable publicly traded companies. This impairment
test is required to be performed at adoption of SFAS 142 and at least annually
thereafter. Based on the initial impairment test and an update to the discounted
cash flow analysis conducted during the fourth quarter of fiscal 2004, it was
determined that none of the goodwill recorded was impaired. Impairment
adjustments recognized after adoption, if any, generally are required to be
recognized as operating expenses.

During fiscal year 2004, due to continuing operating losses at the Company's Del
High Voltage division, the Company concluded that sufficient indicators of
impairment were present to warrant a review of the goodwill and intangible
assets of this reporting unit. In accordance with the provisions of SFAS 142,
based on a valuation of this reporting unit, the Company compared the implied
fair value of the goodwill to the actual carrying value at January 31, 2004, and
concluded an impairment loss of $1,328 had occurred. Accordingly, a charge of
$1,328 was recorded during the second quarter of fiscal year 2004 which is
reflected in the loss from Discontinued Operation on the accompanying financial
statements.

During fiscal 2004 and 2005, the company updated its SFAS 142 valuation, and
concluded that the remaining goodwill of $1,911, which relates to its Medical
Systems Segment was not impaired as each respective balance sheet date.

In connection with the adoption of SFAS 142, the Company reviewed the useful
lives and the classification of identifiable intangible assets and determined
that they continue to be appropriate. These identifiable assets were acquired in
connection with business combinations prior to July 1, 2001.

      The Company also conducted an impairment test of the carrying value of
non-compete agreements related to the Del High Voltage division. In accordance
with the provision of SFAS 144, the Company compared the expected future cash
flows related to the non-compete agreements to the carrying value and concluded
an impairment loss of $125 had occurred. Accordingly, the Company recorded a
charge of $125 during the second quarter of fiscal year 2004 which is reflected
in the loss from Discontinued Operations on the accompanying consolidated
financial statements.

The components of our amortizable intangible assets are as follows:

<TABLE>
<CAPTION>
                                                               JULY 30, 2005                   JULY 31, 2004
                                                       ----------------------------    ----------------------------
                                                       GROSS CARRYING   ACCUMULATED    GROSS CARRYING   ACCUMULATED
                                                           AMOUNTS     AMORTIZATION        AMOUNTS     AMORTIZATION
                                                       --------------  ------------    --------------  ------------
<S>                                                    <C>             <C>             <C>             <C>
Non-Compete Agreements...........................         $    --         $   --          $    --         $   --
Distribution Network.............................             653            615              653            550
                                                          -------         ------          -------         ------
Total............................................         $   653         $  615          $   653         $  550
                                                          =======         ======          =======         ======
</TABLE>

                                      F-14

<PAGE>

Amortization expense for intangible assets during fiscal years 2005, 2004 and
2003 was $65, $66, and $144 respectively. Amortization expense of $40 was
included in results of discontinued operation for fiscal 2003. Estimated
amortization expense for fiscal 2006 and the five succeeding fiscal years is as
follows:

<TABLE>
<S>                                  <C>
2006...............................  $     38
2007-2010..........................      None
</TABLE>

There are no components of intangible assets that have an indefinite life.

6. PRODUCT WARRANTIES

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

The activity in warranty accounts is as follows:

<TABLE>
<CAPTION>
                                                                                      JULY 30, 2005  JULY 31, 2004
                                                                                      -------------  -------------
<S>                                                                                   <C>            <C>
Balance at beginning of year......................................................      $   1,030      $     670
  Accruals of warranty claims.....................................................            410          1,114
  Costs incurred related to warranty claims.......................................           (400)          (754)
                                                                                        ---------      ---------
Balance at end of year............................................................      $   1,040      $   1,030
                                                                                        =========      =========
</TABLE>

7. SHORT-TERM CREDIT FACILITIES AND LONG-TERM DEBT

Short-term credit facilities are summarized as follows:

<TABLE>
<CAPTION>
                                       JULY 30, 2005  JULY 31, 2004
                                       -------------  -------------
<S>                                    <C>            <C>
Revolving lines of credit:
  Domestic..........................     $   5,051      $   2,699
  Foreign...........................            --             --
                                         ---------      ---------
                                         $   5,051      $   2,699
                                         =========      =========
</TABLE>

      As of July 30, 2005, the Company had a $5,000 senior revolving credit
agreement, as amended, entered into on June 10, 2002 with Transamerica
Corporation (the "GECC Facility"). In January 2004, GE Business Capital
Corporation ("GECC") completed the acquisition of Transamerica Corporation and
assumed the ownership and administration of our US credit facility. This
facility, as amended, expired August 1, 2005 and was refinanced by the Company
with another lender. Interest under the GECC Facility was based on thirty day
commercial paper rates plus a margin of 3.5%. The interest rate on the GECC
Facility was 4.75% at July 30, 2005 and 5.0% at July 31, 2004. The GECC Facility
was subject to commitment fees of 3/8% on the daily unused portion payable
monthly. Under terms of the GECC Facility, interest was calculated based on the
higher of the actual balance, or a floor revolving credit balance of $5,000. In
addition the facility was subject to a $10 per month additional fee for each
month it remained outstanding past December 2004. The GECC Facility was secured
by substantially all of the Company's accounts receivable, inventory, and fixed
assets in the US. The terms of the GECC Facility required the Company to comply
with various operational and financial covenants, and placed limitations on the
Company's ability to make capital expenditures and to pay dividends. During
Fiscal 2004, the Company had breached various financial covenants contained in
its US credit facility and obtained waivers in each instance. In Fiscal 2005,
the Company was in compliance with the above various covenants, with the
exception of a breach the fixed charge coverage ratio during the third quarter
of fiscal 2005. On June 9, 2005 the Company and GECC signed the Ninth Amendment
to the GECC Facility. This Ninth Amendment waived the event of default arising
from the Company's non-compliance with the fixed charge coverage ratio covenant.
In addition the Ninth Amendment lowered the minimum availability covenant under
the line from $500,000 to $250,000.

                                      F-15

<PAGE>

      On August 1, 2005, the Company entered into a three-year revolving credit
and term loan facility with North Fork Business Capital (the "North Fork
Facility") and repaid the GECC facility. The North Fork Facility provides for a
$6,000 formula based revolving credit facility based on the Company's eligible
accounts receivable and inventory as defined in the credit agreement. In
addition, the Company borrowed $2,000 under a term loan facility secured by the
Company's Bay Shore, New York building. Interest on the revolving credit
borrowings is payable at prime plus 0.5 % or alternatively at a LIBOR rate plus
2.5%. The $2,000 term loan is repayable in 36 monthly installments of $17 with
the a balloon payment of the remaining balance due at the maturity in three
years. Interest on the term loan is payable monthly at prime plus 0.75 % or a
LIBOR rate plus 2.75%. At the closing on August 1, 2005 the Company had $1,700
of availability under the North Fork Facility, of which North Fork has reserved
$1 million against possible litigation settlements as described more fully in
Legal Proceedings.

The North Fork Facility is subject to commitment fees of 0.5% per annum on the
daily-unused portion of the facility, payable monthly. The Company granted a
security interest to the lender on its US credit facility in substantially all
of its accounts receivable, inventory, fixed assets, and intellectual property
in the US. 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.

      In addition to the domestic credit facilities discussed above, the Company
has certain short-term credit facilities at its Villa subsidiary, with interest
rates ranging from 5.0% to 12.0%. The total amount outstanding on the Villa
short-term credit facilities at July 30, 2005 and July 31, 2004 was $0 and $0,
respectively. In addition, as of July 30, 2005 and July 31, 2004, approximately
$ 7.5 million of excess borrowing availability was in place under these
facilities.

LONG-TERM DEBT - Long-term debt was comprised of the following:

<TABLE>
<CAPTION>
                                                                  JULY 30, 2005     JULY 31, 2004       INTEREST RATE
                                                                  -------------     -------------       -------------
<S>                                                               <C>               <C>                 <C>
Italian subsidiary's total long-term debt:
  Capital lease obligation....................................      $   2,907         $   3,073                   5.0%
  Medium-term credit facilities with commercial institutions..            624               936         Euribor + 1.0%
  Italian Government long-term loans..........................          1,548             1,797                   3.4%
                                                                    ---------         ---------
                                                                        5,079             5,806
Less current portion..........................................           (783)             (730)
                                                                    ---------         ---------
Long-term debt................................................      $   4,296         $   5,076
                                                                    =========         =========
</TABLE>

The variable interest rate at July 30, 2005 and July 31, 2004 on the medium-term
credit facility, based on the formula Euribor + 1%, was 3.1%.

The principal of the medium-term credit facility is payable on a semi-annual
basis and interest payments are due on a quarterly basis through March 2007.
Payments relating to the two Italian Government long-term loans are due annually
through February 2010, and September 2010, respectively.

SUBORDINATED NOTE - In connection with the settlement reached on January 29,
2002 with the plaintiffs in the class action litigation, the Company recorded
the present value at 12% of a $2,000 subordinated note that was issued in April
2002 and matures in March 2007. The subordinated note does not pay interest
currently, but accrues interest at 6% per annum, and was recorded at issuance at
a discounted present value of $1,519. The balance at July 30, 2005 was $2,158.

The Company is obligated to make principal payments under its long-term debt,
subordinated note ("Debt") and capital lease obligations as follows:

<TABLE>
<CAPTION>
                                                                                                       CAPITAL
FISCAL YEARS ENDING                                                                        DEBT         LEASE         TOTAL
------------------------------------------------------------------------------------    ---------     ---------      ---------
<S>                                                                                     <C>           <C>            <C>
2006................................................................................         573            210
2007................................................................................       2,741            325
2008................................................................................         279            348
2009................................................................................         289            372
</TABLE>

                                      F-16

<PAGE>

<TABLE>
<S>                                                                                     <C>           <C>            <C>
2010................................................................................         299            398
2011 and beyond.....................................................................         149          1,310
Purchase option.....................................................................          --            937
                                                                                        --------      ---------
Total payments......................................................................       4,330          3,900
Less: amount representing interest..................................................          --           (993)
                                                                                        --------      ---------
Total...............................................................................    $  4,330      $   2,907      $   7,237
                                                                                        ========      =========      =========
</TABLE>

8. EMPLOYEE BENEFITS

The Company has a Profit Sharing Plan that 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. No contributions were authorized for
fiscal years ended 2005, 2004 or 2003.

The Profit Sharing Plan also incorporates a 401(k) Retirement Plan that is
available to substantially all employees, allowing them to defer a portion of
their salary. Effective February 2003, the Company started matching employee
contributions at a 50% rate up to a maximum of 2% of annual salary, and recorded
a related expense of $118, $136 and $126 for fiscal years 2005, 2004 and 2003,
respectively.

The Company also has a defined benefit Plan, which was frozen effective
February 1, 1986. As of July 31, 2004, the Company had a minimum liability and
corresponding debit in other comprehensive income to account for the unfunded
status of its defined benefit plan, in accordance with SFAS No. 87. In
accordance with SFAS No. 88, at the time of final settlement of the pension
plan, the Company will recognize an expense to the statement of operations for
the amount of such debit to other comprehensive income, adjusted for the
difference between the cost to settle the pension obligations and the amount of
the recorded net liability. During Fiscal 2005 the Company applied to the
Pension Benefit Guaranty Corp and to the IRS for a determination letter and
approval to terminate this plan. In the fourth quarter of fiscal 2005, the
Company recognized a related non-cash charge of approximately $0.5 million to
write of the pension assets on its balance sheet in recognition of the formal
decision to terminate the plan.. In preparation for the plan termination, the
Company transferred $0.1 million to the pension account in April 2005. This
transfer, including cash already on hand in this account, has fully funded the
expected cash disbursement of $0.2 million due at the time the Company receives
the IRS determination letter approving the final settlement.

In addition, the Company's Villa subsidiary located in Italy provides for
employee termination indemnities. Villa has established a reserve, representing
the liability for indemnities payable upon termination of employment, accrued in
accordance with labor laws and labor agreements in force. This liability is
subject to annual revaluation using the officially-established indices. The
liability for these indemnities is included in other long-term liabilities on
the accompanying Consolidated Balance Sheets and was $2,558 and $2,362 at July
30, 2005 and July 31, 2004, respectively. Provisions for employee termination
indemnities were $412, $388 and $364 for fiscal years 2005, 2004 and 2003,
respectively.

9. SEGMENT REPORTING

The Company has three reportable segments; the Medical Systems Group, the Power
Conversion Group and Other. The segment Other includes unallocated corporate
costs and litigation settlement costs. For each fiscal year presented herein,
corporate costs (which include certain shared services) were allocated to
domestic subsidiaries on the basis of a percentage of each unit's annual sales.
Corporate costs were allocated at a fixed dollar amount to the international
subsidiary based upon an intercompany management services agreement. The
percentages and the dollar amounts used to allocate actual corporate costs are
based on management's estimate of the benefits received by each operating
segment from corporate activities and shared services.

Operating segments are defined as components of an enterprise, about which
separate financial information is available which is evaluated regularly by the
chief decision maker, or decision making group, in deciding how to allocate
resources and in assessing performance. The Company's chief operating decision
making group is comprised of the Chief Executive Officer and the senior
executives of the Company's operating segments. The Company evaluates its
operating segments based on operating income or loss.

                                      F-17

<PAGE>

The accounting policies of the segments are the same as those described in the
summary of significant accounting policies. The Balance Sheet information
presented below and Income Statement related disclosure below for all periods
presented exclude the results of the DHV division due to this division's
classification as a discontinued operation at July 31, 2004 and the subsequent
disposal on October 31, 2004.

Selected financial data of these segments are as follows:

<TABLE>
<CAPTION>
                                                                         MEDICAL    POWER
                           FISCAL YEAR ENDED                             SYSTEMS  CONVERSION
                             JULY 30, 2005                                GROUP      GROUP      OTHER        TOTAL
-------------------------------------------------------------------    ---------  ----------  ----------   ----------
<S>                                                                    <C>        <C>         <C>          <C>
Net sales to external customers....................................    $  70,792   $  14,080  $       --   $   84,872
Cost of sales......................................................       54,288       8,303          --       62,591
                                                                       ---------   ---------  ----------   ----------
Gross margin.......................................................       16,504       5,777          --       22,281
                                                                       ---------   ---------  ----------   ----------
Selling, general and administrative................................        9,261       2,630       4,561       16,452
Research and development...........................................        1,636          --          --        1,636
Litigation settlement costs........................................           --         300          --          300
                                                                       ---------   ---------  ----------   ----------
  Total operating expenses.........................................       10,897       2,930       4,561       18,388
                                                                       ---------   ---------  ----------   ----------
Operating income (loss)............................................    $   5,607   $   2,847  $   (4,561)       3,893
                                                                       =========   =========  ==========
Interest expense...................................................                                            (1,350)
Other income.......................................................                                                97
                                                                                                           ----------
Income from continuing operations, before income taxes
  and minority interest............................................                                        $    2,640
                                                                                                           ==========
Depreciation.......................................................    $     850   $     247  $      141   $    1,238
Amortization.......................................................           65          --          --           65
Segment assets.....................................................       32,731       6,008       2,037       40,776
Expenditures for segment assets....................................          736         151           4          891
</TABLE>

Inter-segment sales were $182 for the fiscal year ended July 30, 2005.
Approximately $24,704 of Medical Systems Group assets are located in Italy.

<TABLE>
<CAPTION>
                                                                         MEDICAL     POWER
                           FISCAL YEAR ENDED                             SYSTEMS  CONVERSION
                            JULY 31 , 2004                                GROUP      GROUP       OTHER      TOTAL
-------------------------------------------------------------------    ---------  ----------  ---------- ----------
<S>                                                                    <C>        <C>         <C>        <C>
Net sales to external customers....................................    $  70,752   $  13,075  $       -- $   83,827
Cost of sales......................................................       53,392       9,120          --     62,512
                                                                       ---------   ---------  ---------- ----------
Gross margin.......................................................       17,360       3,955          --     21,315
                                                                       ---------   ---------  ---------- ----------
Selling, general and administrative................................       10,388       2,310       3,209     15,907
Research and development...........................................        1,562          --          --      1,562
Litigation settlement costs........................................           --       3,199         453      3,652
                                                                       ---------   ---------  ---------- ----------
  Total operating expenses.........................................       11,950       5,509       3,662     21,121
                                                                       ---------   ---------  ---------- ----------
Operating income (loss)............................................    $   5,410   $  (1,554) $   (3,662)       194
                                                                       =========   =========  ==========
Interest expense...................................................                                          (1,796)
Other income.......................................................                                             123
                                                                                                         ----------
Loss from continuing operations, before income taxes
  and minority interest............................................                                      $   (1,479)
                                                                                                         ==========
Depreciation.......................................................    $     879   $     311  $      169 $    1,359
Amortization.......................................................           66          --          --         66
Segment assets.....................................................       37,308       6,161       5,792     49,261
Expenditures for segment assets....................................          440          75           2        517
</TABLE>

                                      F-18

<PAGE>

Segment assets for the other segment include $4,369 of assets attributable to
the discontinued operation at net realizable value.

Inter-segment sales were $28 for the fiscal year ended July 31, 2004.
Approximately $29,375 of Medical Systems Group assets are located in Italy.

<TABLE>
<CAPTION>
                                                                        MEDICAL     POWER
                           FISCAL YEAR ENDED                            SYSTEMS   CONVERSION
                            AUGUST 2, 2003                               GROUP      GROUP      OTHER       TOTAL
-------------------------------------------------------------------    ---------  ----------   --------  -----------
<S>                                                                    <C>        <C>          <C>       <C>
Net sales to external customers....................................    $  56,100  $   12,112   $     --  $    68,212
Cost of sales......................................................       43,929       8,613         --       52,542
                                                                       ---------  ----------   --------  -----------
Gross margin.......................................................       12,171       3,499         --       15,670
                                                                       ---------  ----------   --------  -----------
Selling, general and administrative................................        9,609       2,432      5,863       17,904
Research and development...........................................        1,583          10         --        1,593
Litigation settlement costs........................................           --       2,347       (221)       2,126
Facilities reorganization costs....................................           --          --        128          128
                                                                       ---------  ----------   --------  -----------
  Total operating expenses.........................................       11,192       4,789      5,770       21,751
                                                                       ---------  ----------   --------  -----------
Operating income (loss)............................................    $     979  $   (1,290)  $ (5,770)      (6,081)
                                                                       =========  ==========   ========
Interest expense...................................................                                           (1,340)
Other income.......................................................                                              596
                                                                                                         -----------
Loss before income taxes and minority interest.....................                                      $    (6,825)
                                                                                                         ===========
Depreciation.......................................................    $     897  $      362   $     32  $     1,291
Amortization.......................................................           65          --         --           65
Segment assets.....................................................       31,440      20,259      8,793       60,492
Expenditures for segment assets....................................          740         148         --          888
</TABLE>

Inter-segment sales were $785 for the fiscal year ended August 2, 2003.
Approximately $21,209 of Medical Systems Group assets are located in Italy.

MAJOR CUSTOMERS AND EXPORT SALES - During fiscal years 2005, 2004 and 2003, no
one customer accounted for more than 10% of the Company's consolidated net
sales.

Foreign sales were 54%, 29% and 30% of the Company's consolidated net sales in
fiscal years ended July 30, 2005, July 31, 2004, and August 2, 2003,
respectively. Net sales by geographic areas were:

<TABLE>
<CAPTION>
                                                JULY 31, 2005          JULY 31, 2004            AUGUST 2, 2003
                                            -------------------      -------------------     -------------------
<S>                                         <C>            <C>       <C>            <C>      <C>            <C>
United States / Canada..................    $   39,282       46%     $   38,186       46%    $   39,772       58%
Europe..................................        32,571       38%         24,192       29%        20,717       30%
Far East................................         8,819       11%          7,941        9%         4,686        7%
Mexico, Central and South America.......         1,976        2%         10,705       13%         1,318        2%
Africa, Middle East and Australia.......         2,224        3%          2,803        3%         1,719        3%
                                            ----------     ----      ----------     ----     ----------     ----
                                            $   84,872      100%     $   83,827      100%    $   68,212      100%
                                            ==========     ====      ==========     ====     ==========     ====
</TABLE>

Revenues are attributable to geographic areas based on the location of the
customers.

10. SHAREHOLDERS' EQUITY

COMPREHENSIVE INCOME (LOSS) - The components of comprehensive income (loss) are
as follows:

<TABLE>
<CAPTION>
                                                                    FOREIGN CURRENCY        ACCUMULATED
                                                                       TRANSLATION     UNFUNDED OBLIGATION
                                                                      GAINS/(LOSSES)     FOR PENSION TRUST    TOTAL
                                                                    ----------------   --------------------  -------
<S>                                                                 <C>                <C>                   <C>
Balance as of August 3, 2002....................................              195               (424)           (229)
Net change......................................................              776                 16             792
                                                                        ---------            -------         -------
Balance as of August 2, 2003....................................              971               (408)            563
Net change......................................................              238                 (9)            229
                                                                        ---------            -------         -------
Balance as of July 31, 2004.....................................            1,209               (417)            792
Net change......................................................              241                417             658
                                                                        ---------            -------         --------
Balance as of July 30, 2005 ....................................        $   1,450            $    --         $ 1,450
                                                                        =========            -------         =======
</TABLE>

                                      F-19

<PAGE>

STOCK BUY-BACK PROGRAM - In September 2000, the Board of Directors approved an
additional repurchase of $3,000 of the Company's common stock bringing the total
authorized to $7,500. The Company has not purchased any shares under this
program since fiscal 2001, when 11,500 shares were purchased for $108. As of
July 30, 2005, 489,806 shares had been purchased by the Company for $4,502 under
this Stock Buy-Back Program.

STOCK OPTION PLAN AND WARRANTS - The Company has a stock option plan under which
a total of 3,874,293 options to purchase common stock may be granted.
Substantially all of the options granted under this Plan provide for graded
vesting and vest generally at a rate of 25% per year beginning with the date of
grant, expiring ten to 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.

In December 2000, the Board of Directors approved an extension of time to
exercise for all stock option holders. The extension covers all options whose
term would have expired during the period from the stock de-listing date up to
the date that the shares become re-listed on a national exchange. This extension
grants those stock option holders a period of six months from the date of
re-listing to exercise vested options which may have otherwise expired without
the extension. Options that otherwise expired due to termination of employment
or other reasons as defined in the plan were not effected by this extension
During Fiscal 2005, the plan was modified to remove this extension provision
from options granted after January 2005.

OPTION ACTIVITY

The following stock option information is as of:

<TABLE>
<CAPTION>
                                           JULY 30, 2005              JULY 31, 2004             AUGUST 2, 2003
                                      ----------------------    -----------------------    ------------------------
                                                    WEIGHTED                   WEIGHTED                   WEIGHTED
                                                     AVERAGE                   AVERAGE                     AVERAGE
                                        SHARES      EXERCISE      SHARES      EXERCISE       SHARES       EXERCISE
                                      OUTSTANDING     PRICE     OUTSTANDING     PRICE      OUTSTANDING      PRICE
                                      -----------   --------    -----------   ---------    -----------    ---------
<S>                                   <C>           <C>         <C>           <C>          <C>            <C>
Granted and outstanding,
  beginning of year..............       2,133,415   $   3.15      2,116,815   $    3.12      1,990,055    $    3.45
Granted..........................         150,000       2.70        110,000        2.10        275,000         2.81
Exercised........................        (248,420)      1.12         (2,500)       1.00             --           --
Cancelled and forfeited..........        (372,501)      1.41        (90,900)       2.65       (148,240)        5.86
                                      -----------               -----------                -----------
Outstanding at end of year.......       1,662,494       3.81      2,133,415        3.15      2,116,815         3.12
                                      ===========               ===========                ===========
Exercisable at end of year.......       1,508,742       3.92      1,913,415        3.21      1,661,289         3.43
</TABLE>

<TABLE>
<CAPTION>
                                                     PCT OF                     PCT OF                      PCT OF
                                                     SHARES                     SHARES                      SHARES
                                     SHARES         GRANTED     SHARES         GRANTED        SHARES       GRANTED
                                     -------        -------    ---------       -------       --------      -------
<S>                                  <C>            <C>        <C>             <C>           <C>           <C>
Granted to officers..............    100,000             67%      50,000            45%       125,000           45%
                                     =======                   =========                     ========
</TABLE>

As of July 31, 2005 the distribution of stock option exercise prices is as
follows:

<TABLE>
<CAPTION>
                                  OPTIONS OUTSTANDING                   OPTIONS EXERCISABLE
                    --------------------------------------------     -------------------------
                                                      WEIGHTED
                                       WEIGHTED        AVERAGE                        WEIGHTED
                                        AVERAGE       REMAINING                        AVERAGE
     EXERCISE         NUMBER OF        EXERCISE      CONTRACTUAL       SHARES         EXERCISE
    PRICE RANGE     OPTION SHARES        PRICE      LIFE (YEARS)     EXERCISABLE        PRICE
------------------  -------------      --------     ------------     -----------      --------
<S>                 <C>                <C>          <C>              <C>              <C>
$1.00 - $3.34....         974,286      $   1.82          5.5             831,786      $   1.69
$4.00 - $6.60....         313,256          4.85          1.7             302,005          4.88
$7.00 - $7.94....         218,525          7.51          6.0             218,525          7.51
</TABLE>

                                      F-20
<PAGE>

<TABLE>
<CAPTION>
<S>                    <C>              <C>              <C>          <C>              <C>
$8.00 - $10.00...         156,427          8.92          6.9             156,427          8.92
                       ----------       -------          ---          ----------       -------
                        1,662,494       $  3.81          5.0           1,508,743       $  3.92
                       ==========       =======          ===          ==========       =======
</TABLE>

At July 30, 2005 and July 31, 2004, there were outstanding warrants of 991,994
and 1,065,000, respectively. Of these warrants, 941,994 were granted to the
Company's shareholders as part of litigation settlement in fiscal year 2002, and
50,000 were granted to the former majority shareholder of Villa in connection
with the acquisition of Villa.

On February 6, 2004, a motion was filed for summary judgment to enforce a
January 2002 class action settlement agreement entered into by the Company. The
motion sought damages in the amount of $1,250 together with interest, costs and
disbursements, and a declaration that $2,000 in promissory notes issued as part
of the class action settlement are immediately due and payable, as the value of
damages due to the Company's failure to timely complete a registration statement
related to the common shares underlying certain warrants granted in the class
action settlement. The Company filed opposition to this matter on March 5, 2004.
Plaintiffs filed reply papers on March 19, 2004. In addition, the Company filed
a registration statement related to the warrant shares on March 23, 2004, and it
was declared effective by the SEC on May 7, 2004. In July 2004, in settlement of
this matter, Del Global modified the exercise, or "strike," price of the
1,000,000 warrants issued in 2002 from $2.00 to $1.50 per share, and extended
the expiration date of such warrants by one year to March 28, 2009. During the
fourth quarter of fiscal 2004, the Company recorded a charge of approximately
$0.5 million to litigation settlement costs in recognition of the modification
to the warrants and the related legal and professional fees incurred. During
fiscal 2005, 58,006 of these warrants were exercised.

As of July 30, 2005, the distribution of warrants is as follows:

<TABLE>
<CAPTION>
            EXERCISE              NUMBER OF       EXPIRATION
              PRICE               WARRANTS           DATE
------------------------------- ------------      ------------
<S>                             <C>               <C>
$7.94..........................      50,000       December 2005
$1.50..........................     941,994       March 2009
                                 ----------
                                    991,994
                                 ==========
</TABLE>

An expense has been recognized for the fair value of options and warrants
granted to such non-employees in the amounts of $38, $38, and $135 for fiscal
years 2005, 2004, and 2003, respectively.

11. INCOME (LOSS) PER SHARE

<TABLE>
<CAPTION>
                                                                                 FOR FISCAL YEARS ENDED
                                                                   ----------------------------------------------
                                                                   JULY 30, 2005   JULY 31, 2004   AUGUST 2, 2003
                                                                   -------------   -------------   --------------
<S>                                                                <C>             <C>             <C>
Numerator:
  Net income (loss).............................................   $          392  $      (15,824)   $      (15,045)
Denominator: Denominator for basic income (loss) per share:
   Weighted average shares outstanding..........................       10,490,178      10,333,668        10,341,430
  Effect of dilutive securities.................................          974,540              --                --
                                                                   --------------  --------------    --------------
  Denominator for diluted income (loss) per share...............       11,464,718      10,333,668        10,341,430
                                                                   ==============  ==============    ==============
Income (loss) per basic common share............................   $         0.04  $        (1.53)   $        (1.45)
                                                                   ==============  ==============    ==============
Income (loss) per diluted common share                             $         0.03  $        (1.53)   $        (1.45)
                                                                   ==============  ==============    ==============
</TABLE>

Common shares outstanding for the fiscal years ended July 30, 2005, July 31,
2004 and August 2, 2003, were reduced by 622,770, 643,553 and 643,533 shares of
treasury stock, respectively.

The computation of diluted shares outstanding does not include the effect of the
assumed conversion of 545,622, 2,133,415 and 2,116,815 for employee stock
options outstanding as of July 30, 2005, July 31, 2004, and August 2, 2003,
respectively, and 428,919, 1,065,000 and 1,065,000 warrants to purchase
company common stock for those years because the effect of their assumed
conversion would be anti-dilutive.

12. INCOME TAXES

                                     F-21
<PAGE>
The Company's consolidated income (loss) from continuing operations before
income tax benefit and minority interest for fiscal years 2005, 2004 and 2003 of
$2,640, ($1,479) and ($6,825) reflects a U.S. pre-tax loss of $1,202, $5,126 and
$7,626, respectively, offset by foreign pre-tax net income of $3,842, $3,647,
and $801 for fiscal years 2005, 2004, and 2003, respectively.

Provision (Benefit) for income taxes consists of the following:

<TABLE>
<CAPTION>
                                                                                 FOR FISCAL YEARS ENDED
                                                                    -----------------------------------------------
                                                                     JULY 30, 2005   JULY 31, 2004   AUGUST 2, 2003
                                                                     -------------   -------------   --------------
<S>                                                                  <C>             <C>             <C>
CURRENT TAX EXPENSE:
  Foreign........................................................      $   1,640      $   1,250         $    304
  State and local................................................             42             11
DEFERRED PROVISION (BENEFIT):
  Federal........................................................            101          6,552            6,938
  State and local................................................             --          1,144            1,045
  Foreign........................................................            271           (266)             (54)
                                                                       ---------      ---------         --------
NET PROVISION ...................................................      $   2,054      $   8,691         $  8,233
                                                                       =========      =========         ========
</TABLE>

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

<TABLE>
<CAPTION>
                                                         FOR FISCAL YEARS ENDED
                                         ------------------------------------------------------
                                         JULY 30, 2005       JULY 31, 2004       AUGUST 2, 2003
                                         -------------       -------------       --------------
<S>                                      <C>                 <C>                 <C>
Statutory Federal Income Tax Rate.....         34.0%        (34.0)%                       (34.0)%
State Tax (Benefit), less Federal
  tax effect..........................          6.2%         64.3%                         10.1%
Foreign...............................         72.4%         27.1%                           .3%
Valuation Allowance...................        (34.8)%       432.4%                        133.7%
IRS Audit Adjustments.................           --            --                            --
Fines & Penalties.....................           --          73.8%                          8.9%
Other.................................           --          23.9%                          1.7%
                                                            -----                        ------
Effective tax rate....................         77.8%        587.6%                        120.7%
                                               ====         =====                        ======
</TABLE>

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

<TABLE>
<CAPTION>
                                                                JULY 30, 2005    JULY 31, 2004
                                                                -------------    -------------
<S>                                                             <C>              <C>
Deferred income tax assets:
  Federal net operating loss carryforward....................... $    14,736     $    14,364
  Foreign deferred tax assets, net valuation allowances of $464.         841           1,102
  State tax credits and operating loss carryforward.............       3,071           2,980
  Reserve for inventory obsolescence............................         628             821
  Allowances and reserves not currently deductible..............       1,382           1,600
  Amortization..................................................          86             207
  Defined benefit pension.......................................          --              52
                                                                 -----------     -----------
     Gross deferred income tax assets...........................      20,744          21,126
Deferred income tax liabilities:
   Other........................................................        (127)           (164)
                                                                 -----------     -----------
    Gross deferred income tax liabilities.......................        (127)           (164)
Less: valuation allowance.......................................     (19,776)        (19,860)
                                                                 -----------     -----------
Net deferred income tax assets.................................. $       841     $     1,102
                                                                 ===========     ===========
</TABLE>

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

<TABLE>
<CAPTION>
                                                                JULY 30, 2005    JULY 31, 2004
                                                                -------------    -------------
<S>                                                             <C>              <C>
Deferred tax assets - current................................     $      --       $      --
Deferred tax assets -- non-current...........................           841           1,102
                                                                  ---------       ---------
                                                                  $     841       $   1,102
                                                                  =========       =========
</TABLE>

                                     F-22
<PAGE>

DEFERRED INCOME TAX ASSET

Deferred income tax assets and liabilities represent the effects of the
differences between the income tax basis and financial reporting basis of the
assets and liabilities at the tax rates expected at the time the deferred tax
liability or asset is expected to be settled or realized.

During fiscal 2004, the Company reevaluated its deferred tax assets and
concluded that it was prudent to establish an additional valuation allowance of
$7,903 against current and long-term deferred assets. This valuation allowance
was computed by considering the amount of future U.S. taxable income expected
over the net operating loss carry forward period, considering recent performance
and other specific actions the Company has taken to improve profitability. The
valuation allowance recorded is the estimate of the amount of deferred tax
assets that more likely than not will not be realized. The accumulated valuation
allowance now covers all US domestic current and long-term deferred assets.

Likewise during fiscal 2004, a valuation allowance of $1,891 was also
established offsetting the current year tax benefits that arose from the current
year's operating losses. As result of these allowances recorded during fiscal
2004, the net deferred income tax asset was reduced from $8,739 at August 2,
2003 to $1,102 at July 31, 2004, with $1,102 classified as a long-term asset. No
assurances can be given that the Company's results of operations will generate
profits in the future.

During fiscal year 2003, the Company had also reevaluated its deferred tax
assets. Due to fiscal 2003 results being lower than originally anticipated, and
uncertainty about near term economic conditions, management concluded it was not
prudent to place reliability on the forecast component of the analyses as it had
in the past. Based on these analyses, management concluded it was prudent to
establish a valuation allowance of $7,967 against long-term deferred tax assets
created prior to fiscal year 2003

At July 30, 2005, for income tax purposes, the Company had Federal net operating
loss carryforwards of approximately $43,941, state net operating loss
carryforwards of $40,137 which will expire in 2020 through 2024.

For foreign tax purposes, the Company's Italian subsidiary has utilized all its
available net operating loss carryforwards.

13. COMMITMENTS AND CONTINGENCIES

      a.    US DEPARTMENT OF DEFENSE ("DOD") INVESTIGATION - On March 8, 2002,
            RFI, a subsidiary of the Company and the remaining part of the Power
            Conversion Group segment, was served with a subpoena by the US
            Attorney for the Eastern District of New York in connection with an
            investigation by the DOD. RFI supplies electro magnetic interference
            filters for communications and defense applications. Since March
            2002, the DOD has been investigating certain past practices at RFI
            which date back more than six years and pertain to RFI's Military
            Specification testing, record keeping and general operating
            procedures. Management retained special counsel to represent the
            Company on this matter. The Company has cooperated fully with this
            investigation, including voluntarily providing employees to be
            interviewed by the Defense Criminal Investigative Services division
            of the DOD.

            In June 2003, the Company was advised that the US Government was
            willing to enter into negotiations regarding a comprehensive
            settlement of this investigation. Prior to the preliminary
            discussions with the US Government in June 2003, the Company had no
            basis to estimate the financial impact of this investigation. Based
            on preliminary settlement discussions with the US Government,
            discussions with the Company's

                                     F-23
<PAGE>

            advisors, consideration of settlements reached by other parties in
            investigations of this nature, and consideration of the Company's
            capital resources, management then developed an estimate of the low
            end of the potential range of the financial impact. Accordingly,
            during the third quarter of fiscal 2003, the Company recorded a
            charge of $2,347, which represented its estimate of the low end of a
            range of potential fines and legal and professional fees.

            Following negotiations, Del Global reached a global settlement in
            February 2004 with the US Government that resolves the civil and
            criminal matters relating to the DOD's investigation. The settlement
            included the Company pleading guilty to one criminal count and
            agreeing to pay fines and restitution to the US Government of $4,600
            if paid by June 30, 2004 and $5,000 if paid by September 30, 2004.

            In connection with this settlement, Del Global recognized an
            additional charge of approximately $3,199 in the second quarter of
            fiscal 2004. This charge represents the difference between the
            $2,347 charge taken during the third quarter of fiscal 2003, and the
            up to $5,000 in fines and restitution, plus estimated legal and
            professional fees related to this settlement. The liability
            associated with these charges is included in Litigation settlement
            reserves on the accompanying balance sheet.

            On September 30, 2004, pursuant to the terms of the settlement, the
            Company fulfilled its obligation under this agreement by paying to
            the US Government the sum of $5,000 representing fines and
            restitution. On October 7, 2004, RFI entered a criminal guilty plea
            to a single count conspiracy charge pursuant to the settlement and a
            criminal plea agreement. Sentencing occurred on March 15, 2005. At
            sentencing, the Court imposed an additional fine of $300 to be paid
            within 30 days. The Company paid this additional fine on April 8,
            2005.

            The Company worked with the Defense Logistics Agency ("DLA"), a
            component of the DOD, to avoid any future limitations on the ability
            of the Company to do business with US Government entities. Such
            limitations could have included the US Government seeking a
            "debarment" or exclusion of the Company from doing business with US
            Government entities for a period of time.

            On April 5, 2005, the Company announced that it had reached an
            administrative agreement with the DLA, a component of the DOD, which
            provides that RFI will not be debarred from doing business with U.S.
            Government entities so long as RFI maintains its compliance program
            and adheres to the terms of the administrative agreement. This
            agreement with the DLA is the final component of the Company's
            previously announced settlement of an investigation by the DOD into
            practices at RFI.

      b.    STRATEGIC ALTERNATIVES - On March 21, 2005, the Company was notified
            by Palladio Corporate Finance S.p.A and Palladio Finaziraria S.p.A
            (collectively, "Palladio"), the party with whom it signed a
            non-binding letter of intent for the sale of its Medical Systems
            Group, that Palladio was terminating negotiations under the letter
            of intent. The letter of intent provided for a $1,000 payment
            payable in the event that no later than March 4, 2005, the buyer was
            ready, willing and able to enter into a definitive purchase
            agreement based on the terms of the letter of intent and containing
            reasonable and customary representations, warranties, terms and
            conditions relating to the transaction, and the Company elected not
            to enter into such purchase agreement. Palladio commenced a lawsuit
            against the Company and its Del Medical Imaging Corp subsidiary on
            April 15, 2005 in the United States District Court, Southern
            District of New York. The lawsuit seeks payment of the $1,000, plus
            interest, as well as reasonable attorney's fees. The Company filed
            an Answer to this lawsuit on June 8, 2005 contesting Palladio's
            claim to these damages, and thereafter served discovery requests. At
            a court conference held on September 28, 2005, the parties agreed to
            submit to non-binding mediation in an attempt to settle this
            dispute. A mediation conference has been scheduled for November 21,
            2005. Although there can be no assurance that the Company will not
            have to pay the $1,000, the Company believes that no such payment is
            payable under the terms of the letter of intent. If the outcome of
            the non-binding mediation is not acceptable to either party, the
            Company intends to vigorously defend this lawsuit.

                                     F-24
<PAGE>

      e.    EMPLOYMENT MATTERS - The Company had an employment agreement with
            Samuel Park, the previous Chief Executive Officer ("CEO"), for the
            period May 1, 2001 to April 30, 2004. The employment agreement
            provided for certain payments in the event of a change in the
            control of the Company.

            On October 10, 2003, the Company announced the appointment of Walter
            F. Schneider as President and CEO to replace Mr. Park, effective as
            of such date. As a result, the Company recorded a charge of $200
            during the first quarter of fiscal 2004 to accrue the balance
            remaining under Mr. Park's employment agreement.

            In addition, the Company's Board of Directors elected at the
            Company's Annual Meeting of Shareholders held on May 29, 2003 had
            previously reviewed the "change of control" provisions regarding
            payments totaling up to approximately $1,800 under the employment
            agreement between the Company and Mr. Park. As a result of this
            review and based upon, among other things, the advice of special
            counsel, the Company's Board of Directors determined that no
            obligation to pay these amounts has been triggered. Prior to his
            departure from the Company on October 10, 2003, Mr. Park orally
            informed the Company that, after reviewing the matter with his
            counsel, he believed that the obligation to pay these amounts has
            been triggered. On October 27, 2003, the Company received a letter
            from Mr. Park's counsel demanding payment of certain sums and other
            consideration pursuant to the Company's employment agreement with
            Mr. Park, including these change of control payments. On November
            17, 2003, the Company filed a complaint in the United States
            District Court, Southern District of New York against Mr. Park
            seeking a declaratory judgment that no change in control payment was
            or is due to Mr. Park, and that an amendment to the employment
            contract with Mr. Park regarding advancement and reimbursement of
            legal fees is invalid and unenforceable. Mr. Park answered the
            complaint and asserted counterclaims seeking payment from the
            Company based on his position that a "change in control" occurred in
            June 2003. Mr. Park is also seeking other consideration he believes
            he is owed under his employment agreement. The Company filed a reply
            to Mr. Park's counterclaims denying that he is entitled to any of
            these payments. Discovery in this matter was conducted and
            completed. Following discovery, the Company and Mr. Park filed
            motions for summary judgment on the issues related to the change in
            control and the amendment to the employment agreement, which motions
            have been fully submitted to the court for consideration. To date,
            no decision has been issued by the court on these motions. If Mr.
            Park prevails on his claims and the payments he seeks are required
            to be paid in a lump sum, these payments may have a material adverse
            effect on the Company's liquidity. It is not possible to predict the
            outcome of these claims. However, the Company's Board of Directors
            does not believe that such a claim is reasonably likely to result in
            a material decrease in the Company's liquidity in the foreseeable
            future.

            During fiscal 2004, an Italian subsidiary of the Company began
            employment termination proceedings against an executive.
            Subsequently, the executive instituted legal proceedings in the
            labor court in Italy against the executive's former employer
            asserting certain monetary claims based on change in control
            provisions in a letter dated January 10, 2003 to the executive. The
            court issued a "pay or justify" order directing the Company's
            subsidiary to pay damages of about euro 306 plus interest and costs.
            The subsidiary has challenged this order in the Italian labor court.
            Subsequently, the executive served a writ of summons on the Company
            as a third party claim against the Company in the litigation pending
            with the subsidiary in March 2005. The next hearing date in the
            Italian labor court on this action is scheduled for October 28,
            2005. In addition, the executive has brought an action in the
            Italian labor court for unlawful dismissal under the Italian labor
            laws against the Company's subsidiary. The subsidiary entered an
            appearance and filed a counterclaim. In addition, the executive has
            brought an action in the Italian Corporate courts challenging the
            subsidiary's removal of the executive as managing director. The
            executive has not specified any damages in this action and it is in
            the preliminary stage. The Company believes that the executive's
            change in control provision has not been triggered and that the
            executive's termination was justified. However, based on the court's
            "pay or justify" order to pay euro 306, the Company recorded a
            charge in fiscal year 2004 of approximately $360 in connection with
            this matter and which charge is included in Litigation Settlement
            reserves in the accompanying financial statements.

      g.    LEASE COMMITMENTS - The Company leases facilities for its corporate
            offices and manufacturing operations with expiration dates ranging
            from 2004 through 2008. In addition, the Company has various office

                                     F-25
<PAGE>

            equipment and auto leases accounted for as operating leases. The
            future minimum annual lease commitments as of July 30, 2005 are as
            follows:

<TABLE>
<CAPTION>
FISCAL YEARS                           AMOUNT
------------                          -------
<S>                                   <C>
2006...............................   $   454
2007...............................       268
2008...............................        54
2009...............................        --
2010...............................        --
                                      -------
  Total............................   $   776
                                      =======
</TABLE>

            Rent expense for fiscal years 2005, 2004, and 2003 was $336, $385
            and $713, respectively.

      h.    OTHER LEGAL MATTERS - In addition, the Company is a defendant in
            several other legal actions in various US and foreign jurisdictions
            arising from normal course of business. Management believes the
            Company has meritorious defenses to such actions and that the
            outcomes will not be material to the Company's consolidated
            financial statements

14.   FACILITIES REORGANIZATION COSTS

In the fourth quarter of fiscal 2001, the Company recorded a facilities
reorganization charge of $770 in conjunction with the announced closure of the
Power Conversion Group's Deer Park, New York facility, and the consolidation of
product lines into the Company's other U.S. operations. In addition, the Company
recorded a reorganization charge of $52 in conjunction with the lease
termination of a surplus facility in Illinois, which was vacated during the
fourth quarter of fiscal 2001.

An additional $77 of costs related to the Deer Park closedown were incurred
during 2002 and charged to expense in that year.

During the fourth quarter of fiscal 2002, the Company announced the closure of
the Power Conversion Group's Hicksville, New York facility, planned to occur
during fiscal 2003. As a result of the decision to close this facility and
combine operations at its Valhalla, New York facility, the Company accrued for
various facilities reorganization costs, including severance and outplacement
expenses covering 68 individuals.

The following table summarizes the charges related to facilities reorganization:

<TABLE>
<CAPTION>
                                                                     JULY 30, 2005  JULY 31, 2004    AUGUST 2, 2003
                                                                     -------------  -------------    --------------
<S>                                                                  <C>            <C>              <C>
ACCRUED FOR FUTURE PERIODS:

Expected employee termination costs..............................            --             --               --
Write-down of fixed assets.......................................            --             --               --
Non cancelable lease obligations.................................            --             --               --
Impairment of goodwill...........................................            --             --               --
                                                                        -------        -------          -------
  SUBTOTAL.......................................................            --             --               --
                                                                        -------        -------          -------
CURRENT PERIOD EXPENSES:
Actual employee termination costs................................       $    --        $    --          $   279
Write-down of fixed assets.......................................            --             --              141
Construction and related costs...................................            --             --              368
                                                                        -------        -------          -------
Total facilities reorganization costs............................       $    --        $    --          $   788
</TABLE>

The following table summarizes the related liabilities which are included in
accrued expenses on the accompanying balance sheet:

<TABLE>
<CAPTION>
                                                                     JULY 30, 2005  JULY 31, 2004    AUGUST 2, 2003
                                                                     -------------  -------------    --------------
<S>                                                                  <C>            <C>              <C>
Liability at beginning of period.................................       $   --         $   441          $  1,215
Accruals of reorganization costs.................................           --              --                --
Payments of reorganization costs.................................           --            (441)             (774)
                                                                        ------         -------          --------
</TABLE>

                                     F-26
<PAGE>

<TABLE>
<S>                                                                     <C>            <C>              <C>
Liability at end of period.......................................       $   --         $   --           $    441
                                                                        ======         ======           ========
</TABLE>

15. RELATED PARTIES

There were no related party transactions for the fiscal years ended July 30,
2005 and July 31, 2004.

During fiscal 2003, Damien Park worked for the Company as a consultant at the
rate of $17 per month in the area of business planning . Damien Park is the son
of Samuel E. Park, who was the Company's Chief Executive Officer until October
10, 2003. In February 2003, Damien Park accepted a full-time position with the
Company with responsibility for Corporate Planning, with an annual base salary
of $125. On September 30, 2003, Damien Park's employment relationship with the
Company was terminated and he has no continuing consulting relationship with the
Company.

The Company incurred $279 of fees and expenses with Battalia Winston
International, Inc. during fiscal year 2003, in connection with executive
recruiting services. The Chief Executive of Battalia Winston, and one of its
owners, is Dale Winston, the wife of Roger Winston, a former Chairman of the
Board of Directors.

The Company incurred $34 of accounting fees with Michael Adest & Company, PC
during fiscal year 2003, for tax compliance services. David Michael, one of our
former directors, had an ownership interest in this accounting practice.

16. SUPPLEMENTAL QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

    YEAR ENDED JULY 30, 2005:

<TABLE>
<CAPTION>
                                                                                          QUARTER
                                                                         FIRST      SECOND       THIRD    FOURTH (1)
                                                                         -----      ------       -----    ----------
<S>                                                                  <C>          <C>        <C>          <C>
Net sales.........................................................   $   18,758   $   26,609 $   18,892   $  20,613
Gross margin......................................................   $    4,553   $    6,968 $    4,801   $   5,959
Income (loss) from continuing operations..........................   $       48   $      368 $   (1,031)  $     808
Discontinued operation............................................   $      199   $       -- $       --   $      --
Net income (loss).................................................   $      247   $      368 $   (1,031)  $     808
Basic earnings per share Income (loss) from continuing operations.   $     0.00   $     0.04 $    (0.10)  $    0.08
Discontinued operation............................................   $     0.02   $     0.00 $     0.00   $    0.00
Net income (loss) per share.......................................   $     0.02   $     0.04 $    (0.10)  $    0.08

Diluted earnings per share Income (loss) from continuing
  operations                                                         $     0.00   $     0.03 $    (0.10)  $    0.07
Discontinued operation                                               $     0.02   $     0.00 $     0.00   $    0.00
Net income (loss) per share                                          $     0.02   $     0.03 $    (0.10)  $    0.07
</TABLE>

    YEAR ENDED JULY 31, 2004:

<TABLE>
<CAPTION>
                                                                                          QUARTER
                                                                          FIRST      SECOND         THIRD    FOURTH (2)
                                                                          -----      ------         -----    ----------
<S>                                                                   <C>          <C>          <C>          <C>
Net sales..........................................................   $   16,889   $  26,946    $   20,610   $  19,382
Gross margin.......................................................   $    3,784   $   6,531    $    5,020   $   5,980
Income (loss) from continuing operations...........................   $     (456)  $  (9,889)   $     (719)  $     335
Discontinued operation.............................................   $     (153)  $  (2,465)   $      430   $  (2,907)
Net loss...........................................................   $     (609)  $ (12,354)   $     (289)  $  (2,572)
Basic and diluted loss per share Loss from continuing operations...   $    (0.05)  $   (0.96)   $    (0.07)  $    0.03
Discontinued operation.............................................   $    (0.01)  $   (0.24)   $     0.04   $   (0.28)
Net loss...........................................................   $    (0.06)  $   (1.20)   $    (0.03)  $   (0.25)
</TABLE>

(1)   Continuing operations for the fourth quarter of fiscal 2005, reflect the
      non-cash write-off of $492 of pension assets as a result of the Company's
      decision to terminate a frozen pension plan related to the Del High
      Voltage division..

                                     F-27
<PAGE>

(2)   Discontinued operations for the fourth quarter of fiscal 2004 reflects an
      impairment loss of $3,481 against the assets of the Del High Voltage
      division. In addition, continuing operations reflect a $454 charge related
      to a settlement of litigation related to warrants.

                                     F-28
<PAGE>

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders
Del Global Technology Corp.
Valhalla, New York

The audit referred to in our report dated October 14, 2005 relating to the
consolidated financial statements of Del Global Technology Corp., as of and for
the year ended July 30, 2005, which is contained in Item 8 of this Form 10-K,
included the audit of the financial statement schedule listed in the
accompanying index. This financial statement schedule is the responsibility of
the Company's management. Our responsibility is to express an opinion on this
financial statement schedule based upon our audit.

In our opinion such financial statement schedule presents fairly, in all
material respects, the information set forth therein.

BDO Seidman, LLP
Valhalla, New York
October 14, 2005

                                     F-29
<PAGE>

(3) DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES

                  SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                 BALANCE AT    CHARGED TO
                                                                BEGINNING OF    COSTS AND                BALANCE AT
                                                                    YEAR         EXPENSE   DEDUCTIONS    END OF YEAR
                                                                ------------   ----------  ----------    -----------
<S>                                                             <C>            <C>         <C>           <C>
YEAR ENDED JULY 30, 2005
Allowance for doubtful accounts.............................       $   888      $    375    $    235      $  1,028
Allowance for obsolete and excess inventories...............         2,536           620         139         3,017
YEAR ENDED JULY 31, 2004
Allowance for doubtful accounts.............................         1,232           501         845           888
Allowance for obsolete and excess inventories...............         3,847           539       1,850         2,536
YEAR ENDED AUGUST 2, 2003
Allowance for doubtful accounts.............................         1,127      $    407    $    302      $  1,232
Allowance for obsolete and excess inventories...............         3,430      $  1,742    $  1,325      $  3,847
</TABLE>

                                     F-30