##### Table of Contents



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
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended July 29, 2006
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number 0-3319
 DEL GLOBAL TECHNOLOGIES CORP.
  New York
    
    13-1784308(State or Other Jurisdiction of
    
    (I.R.S. Employer Identification No.)Incorporation or Organization)11550 West King Street, Franklin Park, IL
    
    60131(Address of Principal Executive Offices)
    
    (Zip Code)
   Title of Each Class
    
    Name of Each Exchange on Which RegisteredNone
    
    None
  Common Stock, $.10 par value (Common Stock)
 o þ
 o þ
 þ o
 o
  o o þ
 o þ




---



TABLE OF CONTENTS  PART IITEM 1. BUSINESSITEM 1AITEM 1B. UNRESOLVED STAFF COMMENTSITEM 2. PROPERTIESITEM 3. LEGAL PROCEEDINGSITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSPART IIITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESITEM 6. SELECTED FINANCIAL DATAITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSUREITEM 9A. CONTROLS AND PROCEDURESITEM 9B. OTHER INFORMATIONPART IIIITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTITEM 11. EXECUTIVE COMPENSATIONITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONSITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESPART IVITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES3. EXHIBITSSIGNATURESWaiver and Third Amendment to the Loan and Security AgreementConsent of Deloitte & Touche LLPConsent of BDO Seidman, LLP302 Certification of Chief Executive Officer302 Certification of Principal Financial Officer906 Certification of Chief Executive Officer906 Certification of Principal Financial Officer    Table of Contents  
  
       Executive
    
    
    1Administration and finance
    
    
    26Manufacturing
    
    
    210Engineering
    
    
    44Sales and Marketing
    
    
    33Total
    
    
    314
   2




---



##### Table of Contents



DIVISION
    
    BRANDS
    
    SUBSIDIARIES
    
    FACILITIESMEDICAL SYSTEMS GROUP:Medical Imaging
    
    Del Medical, Villa,
UNIVERSAL, DynaRad
    
    Del Medical Imaging Corp
(Del Medical)
    
    Franklin Park, ILVilla Sistemi Medicali
S.p.A. (Villa)
    
    Milan, ItalyPOWER CONVERSION GROUP:Electronic Systems & Components
    
    RFI, Filtron,
Sprague,
Stanley
    
    RFI Corporation (RFI)
    
    Bayshore, NY
        Hospitals
    
    Veterinary ClinicsTeaching Institutions
    
    Chiropractic ClinicsMedical Clinics
    
    Dental OfficesPrivate Practitioners
    
    MilitaryOrthopedic Facilities
    
    Home Health Care ProvidersImaging Centers
  3




---



##### Table of Contents



4




---



##### Table of Contents



5




---



##### Table of Contents



6




---



##### Table of Contents



7




---



##### Table of Contents




    
    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.
         8




---



##### Table of Contents



MILITARY
    
    INDUSTRIALGuidance & Weapons Systems
    
    Induction HeatingCommunications
    
    AutomotiveCapital EquipmentCOMMERCIALPower Systems
    
    MEDICALTelecommunications
    
    Radiation OncologySatellite
    
    Magnetic ResonanceMeteorological
    
    Imaging (MRI)
     9




---



##### Table of Contents



10




---



##### Table of Contents



11




---



##### Table of Contents



12




---



##### Table of Contents



13




---



##### Table of Contents



14




---



##### Table of Contents




    
    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.
  
   15




---



##### Table of Contents



APPROX.FLOOR
    
    
    
    OWNED/LEASEDAREA IN
    
    
    
    (EXPIRATIONSEGMENT
    
    LOCATION
    
    SQ. FT.
    
    PRINCIPAL USES
    
    DATE IF LEASED)MEDICAL SYSTEMS GROUP:Del Medical Imaging Corp
    
    Franklin Park, IL
    
    
    68,000
    
    
    Corporate headquarters, Design and manufacturing
    
    Leased (2008)Villa
    
    Milan, Italy
    
    
    67,000
    
    
    Design and manufacturing
    
    Leased (2011)(1)CORPORATE
    
    Valhalla, NY
    
    
    4,188
    
    
    Corporate offices
    
    Leased (2006)(2)POWER CONVERSION GROUP:RFI
    
    Bayshore, NY
    
    
    55,000
    
    
    Design and manufacturing
    
    Owned
 
 (1)
    
    Villa has the option to purchase this property at the conclusion of this lease.(2)
    
    The current lease expired September 30, 2006, at which time the Corporate offices moved to
the Franklin Park, IL facility.  
     16




---



##### Table of Contents



In Favor
    
    WithheldJames R. Henderson
    
    
    9,968,761
    
    
    
    1,080,725Gerald M. Czarnecki
    
    
    9,995,560
    
    
    
    1,053,926James A. Risher
    
    
    10,007,940
    
    
    
    1,041,546General Merrill A. McPeak
    
    
    10,011,935
    
    
    
    1,037,551Walter F. Schneider (1)
    
    
    10,952,300
    
    
    
    97,186
   
 (1)
    
    On July 18, 2006, Mr. Schneider resigned as a director of the Company. 17




---



##### Table of Contents



FISCAL PERIOD
    
    HIGH
    
    LOWFISCAL 2006First Quarter
    
    $
    3.15
    
    
    $
    2.00Second Quarter
    
    
    3.95
    
    
    
    2.80Third Quarter
    
    
    4.50
    
    
    
    2.95Fourth Quarter
    
    
    3.35
    
    
    
    1.70FISCAL 2005First Quarter
    
    $
    3.05
    
    
    $
    2.50Second Quarter
    
    
    2.85
    
    
    
    2.30Third Quarter
    
    
    3.50
    
    
    
    2.50Fourth Quarter
    
    
    3.00
    
    
    
    2.40
  18




---



##### Table of Contents



Equity Compensation Plan Information
 NUMBER OF
    
    
    
    
    
    NUMBER OFSECURITIES TO BE
    
    
    
    
    
    SECURITIESISSUED UPON
    
    WEIGHTED-AVERAGE
    
    REMAINING AVAILABLEEXERCISE OF
    
    EXERCISE PRICE OF
    
    FOR FUTURE ISSUANCEOUTSTANDING
    
    OUTSTANDING
    
    UNDER EQUITYOPTIONS, WARRANTS
    
    OPTIONS, WARRANTS
    
    COMPENSATIONPLAN CATEGORY
    
    AND RIGHTS
    
    AND RIGHTS
    
    PLANS(1)Equity compensation plans
approved by security holders:Stock Option Plan
    
    
    1,545,996
    
    
    $
    3.93
    
    
    
    425,002Equity compensation plans not
approved by security holders:Warrants issued in settlement of
class action lawsuit (2)
    
    
    940,370
    
    
    $
    1.50
    
    
    Not applicable
 
 (1)
    
    Excludes securities to be issued upon exercise of outstanding options, warrants and
rights.(2)
    
    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.  19




---



##### Table of Contents



FISCAL YEARS ENDEDJULY 29,
    
    
    JULY 30,
    
    
    JULY 31,
    
    
    AUGUST 2,
    
    
    AUGUST 3,(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
    
    2006
    
    
    2005
    
    
    2004(1)
    
    
    2003(2)
    
    
    2002(3)INCOME STATEMENT DATA:Net sales
    
    $
    83,014
    
    
    $
    84,872
    
    
    $
    83,827
    
    
    $
    68,212
    
    
    $
    68,288Gross margin
    
    
    19,358
    
    
    
    22,281
    
    
    
    21,315
    
    
    
    15,670
    
    
    
    14,715Selling, general and administrative
    
    
    13,619
    
    
    
    16,452
    
    
    
    15,907
    
    
    
    17,904
    
    
    
    16,041Research and development
    
    
    1,562
    
    
    
    1,636
    
    
    
    1,562
    
    
    
    1,593
    
    
    
    1,502Litigation settlement costs
    
    
    697
    
    
    
    300
    
    
    
    3,652
    
    
    
    2,126
    
    
    
    7,713Facilities reorganization costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    128
    
    
    
    Operating income (loss)
    
    
    3,480
    
    
    
    3,893
    
    
    
    194
    
    
    
    (6,081
    )
    
    
    (10,541
    )Minority interest
    
    
    108
    
    
    
    393
    
    
    
    559
    
    
    
    115
    
    
    
    197Provision (benefit) for income taxes
    
    
    1,758
    
    
    
    2,054
    
    
    
    8,691
    
    
    
    8,233
    
    
    
    (1,982
    )Income (loss) from continuing operation
    
    
    269
    
    
    
    193
    
    
    
    (10,729
    )
    
    
    (15,173
    )
    
    
    (9,919
    )Discontinued operation
    
    
    (175
    )
    
    
    199
    
    
    
    (5,095
    )
    
    
    128
    
    
    
    (2,093
    )Net income (loss) (4)
    
    
    94
    
    
    
    392
    
    
    
    (15,824
    )
    
    
    (15,045
    )
    
    
    (12,012
    )Net income (loss) per share  BasicContinuing operations
    
    $
    0.02
    
    
    $
    0.02
    
    
    $
    (1.04
    )
    
    $
    (1.46
    )
    
    $
    (1.14
    )Discontinued operation
    
    
    (0.01
    )
    
    
    0.02
    
    
    
    (0.49
    )
    
    
    0.01
    
    
    
    (0.24
    )Net income (loss) per basic share(4)
    
    $
    0.01
    
    
    $
    0.04
    
    
    $
    (1.53
    )
    
    $
    (1.45
    )
    
    $
    (1.38
    )Net income (loss) per share  DilutedContinuing operations
    
    $
    0.02
    
    
    $
    0.01
    
    
    $
    (1.04
    )
    
    $
    (1.46
    )
    
    $
    (1.14
    )Discontinued operation
    
    
    (0.01
    )
    
    
    0.02
    
    
    
    (0.49
    )
    
    
    0.01
    
    
    
    (0.24
    )Net income (loss) per diluted share(4)
    
    $
    0.01
    
    
    $
    0.03
    
    
    $
    (1.53
    )
    
    $
    (1.45
    )
    
    $
    (1.38
    )Weighted average shares outstanding  Basic
    
    
    11,244
    
    
    
    10,490
    
    
    
    10,334
    
    
    
    10,376
    
    
    
    8,704Weighted average shares outstanding  Diluted
    
    
    12,076
    
    
    
    11,465
    
    
    
    10,334
    
    
    
    10,376
    
    
    
    8,704
 AS OFJULY 29,
    
    JULY 30,
    
    JULY 31,
    
    AUGUST 2,
    
    AUGUST 3,2006
    
    2005
    
    2004
    
    2003
    
    2002BALANCE SHEET DATA:Working capital
    
    $
    6,935
    
    
    $
    10,122
    
    
    $
    7,764
    
    
    $
    13,598
    
    
    $
    18,646Total assets
    
    
    49,153
    
    
    
    40,776
    
    
    
    49,261
    
    
    
    60,492
    
    
    
    77,697Long-term debt and subordinated note
    
    
    5,133
    
    
    
    6,454
    
    
    
    7,038
    
    
    
    7,100
    
    
    
    6,724Shareholders equity
    
    
    12,814
    
    
    
    9,228
    
    
    
    7,775
    
    
    
    22,979
    
    
    
    37,141
 
 (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. 20




---



##### Table of Contents



(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)
    
    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 in fiscal 2002. Net loss per basic and diluted share
would have been $1.37 in fiscal 2002. 21




---



##### Table of Contents



22




---



##### Table of Contents



23




---



##### Table of Contents



24




---



##### Table of Contents



25




---



##### Table of Contents



26




---



##### Table of Contents



WITHIN
    
    
    2-3
    
    
    4-5
    
    
    AFTER 5OBLIGATIONS
    
    TOTAL (1)
    
    
    1 YEAR
    
    
    YEARS
    
    
    YEARS
    
    
    YEARSLong-Term Debt Obligations
    
    $
    3,475
    
    
    $
    804
    
    
    $
    2,206
    
    
    $
    465
    
    
    $
    Capital Lease Obligations
    
    
    2,800
    
    
    
    338
    
    
    
    747
    
    
    
    1,715
    
    
    
    Subordinated Note
    
    
    2,415
    
    
    
    2,415
    
    
    
    
    
    
    
    
    
    
    
    Interest
    
    
    1,658
    
    
    
    670
    
    
    
    659
    
    
    
    275
    
    
    
    54Operating Lease Obligations
    
    
    622
    
    
    
    419
    
    
    
    203
    
    
    
    
    
    
    
    Total Contractual Cash Obligations
    
    $
    10,970
    
    
    $
    4,646
    
    
    $
    3,815
    
    
    $
    2,455
    
    
    $
    54
 
 (1)
    
    In addition to the long term obligations above, as of July 29, 2006 we had approximately
$2.5 million in revolving credit debt in the US and $3.3 million in Italy. The Italian
credit facilities are generally renewed on a yearly basis and the North Fork Facility, as
amended, matures in August 2008.      27




---



##### Table of Contents



28




---



##### Table of Contents



29




---



##### Table of Contents



30




---



##### Table of Contents



31




---



##### Table of Contents



32




---



##### Table of Contents



PAGE NUMBER(a) 1. FINANCIAL STATEMENTSCONSOLIDATED FINANCIAL STATEMENTS OF DEL GLOBAL TECHNOLOGIES
CORP. AND SUBSIDIARIES:Reports of Independent Registered Public Accounting Firms
    
    
    F1- F2Consolidated Balance Sheets as of July 29, 2006 and July 30, 2005
    
    
    F3Consolidated Statements of Operations for the Fiscal Years Ended
July 29, 2006, July 30, 2005 and July 31, 2004
    
    
    F4Consolidated Statements of Cash Flows for the Fiscal Years Ended
July 29, 2006, July 30, 2005 and July 31, 2004
    
    
    F5Consolidated Statements of Shareholders Equity for the Fiscal
Years Ended July 29, 2006, July 30, 2005 and July 31, 2004
    
    
    F6 - F7Notes to Consolidated Financial Statements for the Fiscal Years
Ended July 29, 2006, July 30, 2005 and July 31, 2004
    
    
    F8 - F242. FINANCIAL STATEMENT SCHEDULESReport on Financial Statement Schedule
    
    
    F25Schedule II Valuation and Qualifying Accounts
    
    
    F26
 33




---



##### Table of Contents



EXHIBITNUMBER
    
    DESCRIPTION OF DOCUMENT2.1
    
    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.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.
 34




---



##### Table of Contents



EXHIBITNUMBER
    
    DESCRIPTION OF DOCUMENT4.11*
    
    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.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.4.18
    
    Stock Purchase Agreement dated as of December 22, 2005 by and among Del Global
Technologies Corp. and Mr. Giuseppe Carmelo Ammendola, Mr. Emilio Bruschi, Mr.
Roberto Daglio and Mr. Luigi Emmanuele Filed as Exhibit 10.1 to Del Global
Technologies Corp. Current Report on Form 8-K filed December 28, 2005 and
incorporated herein by reference.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.
 35




---



##### Table of Contents



EXHIBITNUMBER
    
    DESCRIPTION OF DOCUMENT10.10
    
    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.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.
 36




---



##### Table of Contents



EXHIBITNUMBER
    
    DESCRIPTION OF DOCUMENT10.23
    
    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.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.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.
 37




---



##### Table of Contents



EXHIBITNUMBER
    
    DESCRIPTION OF DOCUMENT10.37
    
    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.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.
 38




---



##### Table of Contents



EXHIBITNUMBER
    
    DESCRIPTION OF DOCUMENT10.51
    
    Waiver and First Amendment to the Loan and Security Agreement dated as of December
12, 2005 among Del Global Technologies Corp., RFI Corporation and Del Medical
Imaging Corp. (Borrowers) and North Fork Business Capital Corporation. Filed as
Exhibit 10.51 to Del Global Technologies Corp. Quarterly Report on Form 10-Q for the
quarterly period ended October 29, 2005 and incorporated herein by reference.10.52
    
    Waiver to the Loan and Security Agreement dated as of March 14, 2006 among Del
Global Technologies Corp., RFI Corporation and Del Medical Imaging Corp. (Borrowers)
and North Fork Business Capital Corporation. Filed as Exhibit 10.52 to Del Global
Technologies Corp. Quarterly Report on Form 10-Q for the quarterly period ended
January 28, 2006 and incorporated herein by reference.10.53*
    
    Separation Agreement and Release dated as of March 21, 2006 by and between Del
Global Technologies Corp. and Christopher N. Japp. Filed as Exhibit 99.1 to Del
Global Technologies Corp. Current Report on Form 8-K filed March 24, 2006 and
incorporated herein by reference.10.54
    
    Waiver to the Loan and Security Agreement dated as of June 13, 2006 by and among Del
Global Technologies Corp., Del Medical Imaging Corp., RFI Corporation (Borrowers)
and North Fork Business Capital Corporation. Filed as Exhibit 10.53 to Del Global
Technologies Corp. Quarterly Report on Form 10-Q for the quarterly period ended
April 29, 2006 and incorporated herein by reference.10.55
    
    Consulting Agreement dated as of June 14, 2006 by and between Del Global
Technologies Corp. and Lumina Group LLC. Filed as Exhibit 99.1 to Del Global
Technologies Corp. Current Report on Form 8-K filed June 30, 2006 and incorporated
herein by reference.10.56
    
    Second Amendment to the Loan and Security Agreement dated as of June 30, 2006 among
Del Global Technologies Corp., RFI Corporation and Del Medical Imaging Corp.
(Borrowers) and North Fork Business Capital Corporation. Filed as Exhibit 99.01 to
Del Global Technologies Corp. Current Report on Form 8-K filed July 7, 2006 and
incorporated herein by reference.10.57*
    
    Separation Agreement and Release dated as of July 24, 2006 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 July 24, 2006 and incorporated
herein by reference.10.58*
    
    Letter Agreement dated as of August 31, 2006 between Del Global Technologies Corp.
and James A. Risher. Filed as Exhibit 99.01 to Del Global Technologies Corp. Current
Report on Form 8-K filed August 31, 2006 and incorporated herein by reference.10.59*
    
    Letter Agreement dated as of August 30, 2006 between Del Global Technologies Corp.
and Mark Zorko. Filed as Exhibit 99.02 to Del Global Technologies Corp. Current
Report on Form 8-K filed August 31, 2006 and incorporated herein by reference.10.60
    
    Full-Time Permanent Engagement Resources Agreement dated as of August 21, 2006
between Del Global Technologies Corp. and Tatum, LLC. Filed as Exhibit 99.01 to Del
Global Technologies Corp. Current Report on Form 8-K filed August 31, 2006 and
incorporated herein by reference.10.61*
    
    Separation Agreement and Release dated as of September 7, 2006 by and between Del
Global Technologies Corp. and Mark A. Koch. Filed as Exhibit 99.01 to Del Global
Technologies Corp. Current Report on Form 8-K filed September 7, 2006 and
incorporated herein by reference.10.62
    
    Waiver and Third Amendment to the Loan and Security Agreement dated as of October
25, 2006 by and among Del Global Technologies Corp., Del Medical Imaging Corp., RFI
Corporation (Borrowers) and North Fork Business Capital Corporation. (1)23.1
    
    Consent of Deloitte & Touche, LLP (1).23.2
    
    Consent of BDO Seidman, LLP (1).31.1
    
    Certification of Chief Executive Officer, James Risher, pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002 (1).
 39




---



##### Table of Contents



EXHIBITNUMBER
    
    DESCRIPTION OF DOCUMENT31.2
    
    Certification of Principal Financial Officer, Mark Zorko, pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002 (1).32.1
    
    Certification of the Chief Executive Officer, James Risher, 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 Financial Officer, Mark Zorko, pursuant to 18 U.S.C.
Section 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (1).
 
 *
    
    Represents a management contract or compensatory plan or arrangement.  40




---



##### Table of Contents



SIGNATURES
  DEL GLOBAL TECHNOLOGIES CORP.October 27, 2006
    By:
    /s/ James A. RisherJames A. RisherPresident and Chief Executive Officer October 27, 2006
    By:
    /s/ Mark A. ZorkoMark A. ZorkoChief Financial Officer and Principal Financial Officer October 27, 2006
    By:
    /s/ Mark A KochMark A. KochTreasurer and Principal Accounting Officer  /s/ James R. Henderson
    
    Director  Chairman
    
    October 27, 2006James Henderson/s/ Merrill A. McPeak
    
    Director
    
    October 27, 2006Merrill McPeak/s/ Gerald M. Czarnecki
    
    Director
    
    October 27, 2006Gerald M. Czarnecki/s/ James A. Risher
    
    Director
    
    October 27, 2006James A. Risher
    
    Chief
Executive Officer
 41




---



##### Table of Contents



F-1




---



##### Table of Contents



F-2




---



##### Table of Contents



JULY 29,
    
    
    JULY 30,2006
    
    
    2005ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    333
    
    
    $
    1,466Trade receivables (net of allowance for
doubtful accounts of $1,095 and $1,028
for 2006 and 2005, respectively)
    
    
    17,382
    
    
    
    14,218Inventories
    
    
    16,436
    
    
    
    14,852Prepaid expenses and other current assets
    
    
    808
    
    
    
    724Total current assets
    
    
    34,959
    
    
    
    31,260NON-CURRENT ASSETS:Property plant and equipment, net
    
    
    6,366
    
    
    
    6,485Deferred income taxes
    
    
    1,159
    
    
    
    841Goodwill
    
    
    6,437
    
    
    
    1,911Other intangible assets, net
    
    
    
    
    
    
    38Other assets
    
    
    232
    
    
    
    241Total non-current assets
    
    
    14,194
    
    
    
    9,516TOTAL ASSETS
    
    $
    49,153
    
    
    $
    40,776LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Short-term credit facilities
    
    $
    5,959
    
    
    $
    5,051Current portion of long-term debt
    
    
    3,557
    
    
    
    783Accounts payable  trade
    
    
    11,037
    
    
    
    9,258Accrued liabilities
    
    
    7,244
    
    
    
    5,488Litigation settlement payables
    
    
    200
    
    
    
    56Income taxes payable
    
    
    27
    
    
    
    502Total current liabilities
    
    
    28,024
    
    
    
    21,138NON-CURRENT LIABILITIES:Long-term debt
    
    
    5,133
    
    
    
    4,296Subordinated note
    
    
    
    
    
    
    2,158Deferred income taxes
    
    
    302
    
    
    
    Other long-term liabilities
    
    
    2,880
    
    
    
    2,683Total non-current liabilities
    
    
    8,315
    
    
    
    9,137Total liabilities
    
    
    36,339
    
    
    
    30,275COMMITMENTS AND CONTINGENCIESMINORITY INTEREST IN SUBSIDIARY
    
    
    
    
    
    
    1,273SHAREHOLDERS EQUITY:Common stock  $.10 par value;
authorized - 20,000,000 shares; issued -
12,258,294 and 11,252,958 shares at July
29, 2006 and July 30, 2005
    
    
    1,226
    
    
    
    1,125Additional paid-in capital
    
    
    67,679
    
    
    
    64,448Accumulated other comprehensive income
    
    
    1,610
    
    
    
    1,450Accumulated deficit
    
    
    (52,155
    )
    
    
    (52,249
    )Less treasury shares - 622,770 shares
    
    
    (5,546
    )
    
    
    (5,546
    )Total shareholders equity
    
    
    12,814
    
    
    
    9,228TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    49,153
    
    
    $
    40,776
  F-3




---



##### Table of Contents



FISCAL YEARS ENDEDJULY 29,
    
    
    JULY 30,
    
    
    JULY 31,2006
    
    
    2005
    
    
    2004NET SALES
    
    $
    83,014
    
    
    $
    84,872
    
    
    $
    83,827COST OF SALES
    
    
    63,656
    
    
    
    62,591
    
    
    
    62,512GROSS MARGIN
    
    
    19,358
    
    
    
    22,281
    
    
    
    21,315Selling, general and administrative
    
    
    13,619
    
    
    
    16,452
    
    
    
    15,907Research and development
    
    
    1,562
    
    
    
    1,636
    
    
    
    1,562Litigation settlement costs
    
    
    697
    
    
    
    300
    
    
    
    3,652Total operating expenses
    
    
    15,878
    
    
    
    18,388
    
    
    
    21,121OPERATING INCOME
    
    
    3,480
    
    
    
    3,893
    
    
    
    194Interest expense (net of interest income of $0, $0 and $20 in
2006, 2005 and 2004, respectively)
    
    
    (1,311
    )
    
    
    (1,350
    )
    
    
    (1,796
    )Other income (loss)
    
    
    (34
    )
    
    
    97
    
    
    
    123INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
AND MINORITY INTEREST
    
    
    2,135
    
    
    
    2,640
    
    
    
    (1,479
    )INCOME TAX PROVISION
    
    
    1,758
    
    
    
    2,054
    
    
    
    8,691INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST
    
    
    377
    
    
    
    586
    
    
    
    (10,170
    )MINORITY INTEREST
    
    
    108
    
    
    
    393
    
    
    
    559INCOME (LOSS) FROM CONTINUING OPERATIONS
    
    
    269
    
    
    
    193
    
    
    
    (10,729
    )DISCONTINUED OPERATION
    
    
    (175
    )
    
    
    199
    
    
    
    (5,095
    )NET INCOME (LOSS)
    
    $
    94
    
    
    $
    392
    
    
    $
    (15,824
    )NET INCOME (LOSS) PER BASIC SHAREContinuing operations
    
    $
    0.02
    
    
    $
    0.02
    
    
    $
    (1.04
    )Discontinued operation
    
    
    (0.01
    )
    
    
    0.02
    
    
    
    (0.49
    )Net income (loss) per basic share
    
    $
    0.01
    
    
    $
    0.04
    
    
    $
    (1.53
    )NET INCOME (LOSS) PER DILUTED SHAREContinuing operations
    
    $
    0.02
    
    
    $
    0.01
    
    
    $
    (1.04
    )Discontinued operation
    
    
    (0.01
    )
    
    
    0.02
    
    
    
    (0.49
    )Net income (loss) per diluted share
    
    $
    0.01
    
    
    $
    0.03
    
    
    $
    (1.53
    )Weighted average shares outstanding  Basic
    
    
    11,244
    
    
    
    10,490
    
    
    
    10,334Weighted average shares outstanding  Diluted
    
    
    12,076
    
    
    
    11,465
    
    
    
    10,334
  F-4




---



##### Table of Contents



FISCAL YEARS ENDEDJULY 29,
    
    
    JULY 30,
    
    
    JULY 31,2006
    
    
    2005
    
    
    2004CASH FLOWS FROM OPERATING ACTIVITIESIncome (loss) from continuing operations
    
    $
    269
    
    
    $
    193
    
    
    $
    (10,729
    )Adjustments to reconcile net income (loss) to net cash provided
by (used in) operating activities:Depreciation and amortization
    
    
    1,026
    
    
    
    1,303
    
    
    
    1,425Deferred income tax provision
    
    
    (277
    )
    
    
    276
    
    
    
    7,678Loss on sale of property plant and equipment
    
    
    161
    
    
    
    100
    
    
    
    50Non cash litigation settlement costs
    
    
    455
    
    
    
    
    
    
    
    350Non cash pension cost
    
    
    
    
    
    
    492
    
    
    
    (9
    )Imputed interest  subordinated note
    
    
    257
    
    
    
    196
    
    
    
    175Minority interest
    
    
    108
    
    
    
    393
    
    
    
    559Stock based compensation expense
    
    
    141
    
    
    
    39
    
    
    
    38Changes in operating assets and liabilities:(Increase) decrease in trade receivables
    
    
    (2,707
    )
    
    
    (1,368
    )
    
    
    309(Increase) decrease in inventories
    
    
    (1,180
    )
    
    
    345
    
    
    
    (1,291
    )(Increase) decrease in prepaid expenses and other current assets
    
    
    (68
    )
    
    
    348
    
    
    
    (318
    )Decrease in other assets
    
    
    11
    
    
    
    710
    
    
    
    225Decrease in income tax receivable
    
    
    
    
    
    
    54
    
    
    
    54Increase (decrease) in accounts payable  trade
    
    
    1,486
    
    
    
    (1,764
    )
    
    
    3,351Increase (decrease) in accrued liabilities
    
    
    1,038
    
    
    
    (3,314
    )
    
    
    3,485Payment of accrued litigation settlement costs
    
    
    (311
    )
    
    
    (5,092
    )
    
    
    Increase (decrease) in income taxes payable
    
    
    (177
    )
    
    
    (640
    )
    
    
    833Increase (decrease) in other long-term liabilities
    
    
    97
    
    
    
    230
    
    
    
    (194
    )Net cash provided by (used in) operating activities
of continuing operations
    
    
    329
    
    
    
    (7,499
    )
    
    
    5,991Net cash provided by discontinued operation
    
    
    (175
    )
    
    
    3,463
    
    
    
    2,229Net cash provided by (used in) operating activities
    
    
    154
    
    
    
    (4,036
    )
    
    
    8,220CASH FLOWS FROM INVESTING ACTIVITIESProperty plant and equipment purchases
    
    
    (765
    )
    
    
    (891
    )
    
    
    (517
    )Proceeds from sale of property plant and equipment
    
    
    
    
    
    
    
    
    
    
    50Acquisition of minority interest
    
    
    (2,612
    )
    
    
    
    
    
    
    Net cash used in investing activities
    
    
    (3,377
    )
    
    
    (891
    )
    
    
    (467
    )CASH FLOWS FROM FINANCING ACTIVITIESBorrowing (repayment) of bank borrowings
    
    
    809
    
    
    
    1,583
    
    
    
    (4,224
    )Exercise of warrants
    
    
    2
    
    
    
    
    
    
    
    Exercise of stock options and warrants
    
    
    238
    
    
    
    364
    
    
    
    2Borrowing of long-term debt
    
    
    2,000
    
    
    
    
    
    
    
    Repayment of long-term debt
    
    
    (972
    )
    
    
    
    
    
    
    Dividend paid to minority shareholders
    
    
    
    
    
    
    (502
    )
    
    
    (430
    )Net cash provided by (used in) financing activities
    
    
    2,077
    
    
    
    1,445
    
    
    
    (4,652
    )EFFECT OF EXCHANGE RATE CHANGES ON CASH
    
    
    13
    
    
    
    193
    
    
    
    273CASH AND CASH EQUIVALENTS INCREASE (DECREASE) FOR THE YEAR
    
    
    (1,133
    )
    
    
    (3,289
    )
    
    
    3,374CASH AND CASH EQUIVALENTS, BEGINNING OF THE YEAR
    
    
    1,466
    
    
    
    4,755
    
    
    
    1,381CASH AND CASH EQUIVALENTS, END OF THE YEAR
    
    $
    333
    
    
    $
    1,466
    
    
    $
    4,755SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid during the period for interest
    
    $
    1,054
    
    
    $
    654
    
    
    $
    1,296Cash paid during the period for income taxes
    
    
    1,443
    
    
    
    2,221
    
    
    
    322NON-CASH TRANSACTIONSFinancing ActivitiesAcquisition of minority interest
    
    $
    (2,950
    )
    
    $
    
    
    
    $
    Investing ActivitiesStock issued for purchase of minority interest
    
    
    2,950
    
    
    
    
    
    
    
    
  F-5




---



##### Table of Contents



ACCUMULATEDOTHERCOMMON
    
    
    ADDITIONAL
    
    
    COMPRE-STOCK ISSUED
    
    
    PAID-IN
    
    
    HENSIVE
    
    
    ACCUMULATED
    
    
    TREASURY STOCKSHARES
    
    
    AMOUNT
    
    
    CAPITAL
    
    
    INCOME
    
    
    DEFICIT
    
    
    SHARES
    
    
    AMOUNT
    
    
    TOTALBALANCE, AUGUST
2, 2003
    
    
    10,976,081
    
    
    $
    1,097
    
    
    $
    63,682
    
    
    $
    563
    
    
    $
    (36,817
    )
    
    
    643,533
    
    
    $
    (5,546
    )
    
    $
    22,979Issuance of stock
on exercise of
options
    
    
    2,500
    
    
    
    1
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3Compensation cost
of non-employee
stock options and
warrants issued
    
    
    
    
    
    
    
    
    
    
    38
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    38Warrant
modification costs
    
    
    
    
    
    
    
    
    
    
    350
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    350Comprehensive Loss:Net Loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,824
    )
    
    
    
    
    
    
    
    
    
    
    (15,824
    )Accumulated
unfunded
obligation for
pension trust
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9
    )Foreign exchange
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    238
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    238Total
comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,595
    )BALANCE, JULY 31,
2004
    
    
    10,978,581
    
    
    $
    1,098
    
    
    $
    64,072
    
    
    $
    792
    
    
    $
    (52,641
    )
    
    
    643,533
    
    
    $
    (5,546
    )
    
    $
    7,775Issuance of stock
on exercise of
options
    
    
    248,421
    
    
    
    24
    
    
    
    253
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    277Issuance of stock
on exercise of
warrants
    
    
    25,956
    
    
    
    3
    
    
    
    84
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    87Compensation cost
of non-employee
stock options and
warrants issued
    
    
    
    
    
    
    
    
    
    
    39
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39Correction of
treasury shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20,763
    )Comprehensive
Income:Net Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    392
    
    
    
    
    
    
    
    
    
    
    
    392Reversal of
accumulated
unfunded
obligation for
pension trust
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    417
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    417Foreign exchange
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    241
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    241Total
comprehensive
income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,050BALANCE, JULY 30,
2005
    
    
    11,252,958
    
    
    $
    1,125
    
    
    $
    64,448
    
    
    $
    1,450
    
    
    $
    (52,249
    )
    
    
    622,770
    
    
    $
    (5,546
    )
    
    $
    9,228
 F-6




---



##### Table of Contents



ACCUMULATEDOTHERCOMPRE-COMMON
    
    
    ADDITIONAL
    
    
    HENSIVESTOCK ISSUED
    
    
    PAID-IN
    
    
    INCOME
    
    
    ACCUMULATED
    
    
    TREASURY STOCKSHARES
    
    
    AMOUNT
    
    
    CAPITAL
    
    
    (LOSS)
    
    
    DEFICIT
    
    
    SHARES
    
    
    AMOUNT
    
    
    TOTALBALANCE, JULY
30, 2005
    
    
    11,252,958
    
    
    $
    1,125
    
    
    $
    64,448
    
    
    $
    1,450
    
    
    $
    (52,249
    )
    
    
    622,770
    
    
    $
    (5,546
    )
    
    $
    9,228Issuance of stock on
exercise of options
    
    
    99,000
    
    
    
    10
    
    
    
    228
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    238Issuance of stock on
exercise of warrants
    
    
    1,574
    
    
    
    1
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2Compensation cost of
employee stock
options under SFAS
123R
    
    
    
    
    
    
    
    
    
    
    142
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    142Issuance of stock on
purchase of minority
interest in Villa
Sistemi Medicali
S.p.A.
    
    
    904,762
    
    
    
    90
    
    
    
    2,860
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,950Comprehensive Income:Net Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    94
    
    
    
    
    
    
    
    
    
    
    
    94Foreign exchange
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    160
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    160Total comprehensive
income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    254BALANCE, JULY 29,
2006
    
    
    12,258,294
    
    
    $
    1,226
    
    
    $
    67,679
    
    
    $
    1,610
    
    
    $
    (52,155
    )
    
    
    622,770
    
    
    $
    (5,546
    )
    
    $
    12,814
  F-7




---



##### Table of Contents



F-8




---



##### Table of Contents



DESCRIPTION
    
    USEFUL LIVESBuildings
    
    
    25-33Machinery and equipment
    
    
    5-15Furniture and fixtures
    
    
    5-10Transportation equipment
    
    
    3-4Computer and other equipment
    
    
    3-7
         F-9




---



##### Table of Contents



FOR FISCAL YEARS ENDEDJULY 30, 2005
    
    
    JULY 31, 2004Net income (loss)  as reported:
    
    $
    392
    
    
    $
    (15,824
    )Total stock-based awards under fair value method
    
    
    (292
    )
    
    
    (456
    )Pro forma net income (loss)
    
    $
    100
    
    
    $
    (16,280
    )Income (loss) per share  BasicAs reported
    
    $
    0.04
    
    
    $
    (1.53
    )Pro forma
    
    $
    0.01
    
    
    $
    (1.57
    )Income (loss) per share  DilutedAs reported
    
    $
    0.03
    
    
    $
    (1.53
    )Pro forma
    
    $
    0.01
    
    
    $
    (1.58
    )Weighted average number of shares outstanding  Basic
    
    
    10,490,178
    
    
    
    10,333,668Weighted average number of shares outstanding  Diluted
    
    
    11,464,718
    
    
    
    10,333,668
    F-10




---



##### Table of Contents



F-11




---



##### Table of Contents



JULY 29,
    
    JULY 30,
    
    JULY 31,YEARS ENDED
    
    2006
    
    2005
    
    2004Revenues
    
    $
    
    
    
    $
    1,899
    
    
    $
    15,655Net income (loss) before income taxes
    
    
    (175
    )
    
    
    199
    
    
    
    (5,095
    )Income taxes
    
    
    
    
    
    
    
    
    
    
    Income (loss) from discontinued operation, net
    
    
    (175
    )
    
    
    199
    
    
    
    (5,095
    )
   JULY 29, 2006
    
    
    JULY 30, 2005Inventories consists of the following:Raw materials and purchased parts
    
    $
    13,660
    
    
    $
    12,540Work-in-process
    
    
    3,747
    
    
    
    2,615Finished goods
    
    
    2,732
    
    
    
    2,71420,139
    
    
    
    17,869Less: allowance for obsolete and excess inventories
    
    
    (3,703
    )
    
    
    (3,017
    )Total inventories net
    
    $
    16,436
    
    
    $
    14,852
    JULY 29, 2006
    
    
    JULY 30, 2005Land
    
    $
    694
    
    
    $
    694Buildings
    
    
    6,253
    
    
    
    6,092Machinery and equipment
    
    
    6,384
    
    
    
    6,218Furniture and fixtures
    
    
    721
    
    
    
    699Leasehold improvements
    
    
    1,585
    
    
    
    1,173Transportation equipment
    
    
    119
    
    
    
    66Computers and other equipment
    
    
    4,187
    
    
    
    4,09019,943
    
    
    
    19,032Less: accumulated depreciation and amortization
    
    
    (13,577
    )
    
    
    (12,547
    )Property plant and equipment, net
    
    $
    6,366
    
    
    $
    6,485
  F-12




---



##### Table of Contents



JULY 29, 2006
    
    
    JULY 30, 2005Balance at beginning of year
    
    $
    1,040
    
    
    $
    1,030Accruals of anticipated warranty claims
    
    
    636
    
    
    
    410Costs incurred related to warranty claims
    
    
    (666
    )
    
    
    (400
    )Balance at end of year
    
    $
    1,010
    
    
    $
    1,040
   JULY 29, 2006
    
    
    JULY 30, 2005Revolving lines of credit:Domestic
    
    $
    2,672
    
    
    $
    5,051Foreign
    
    
    3,287
    
    
    
    $
    5,959
    
    
    $
    5,051
 F-13




---



##### Table of Contents



F-14




---



##### Table of Contents



JULY 29, 2006
    
    
    JULY 30, 2005
    
    
    INTEREST RATENorth Fork Facility Term Loan
    
    $
    1,817
    
    
    $
    Italian subsidiarys total long-term debt:Capital lease obligation
    
    
    2,800
    
    
    
    2,907
    
    
    
    5.0
    %Medium-term credit facilities with commercial institutions
    
    
    324
    
    
    
    624
    
    
    Euribor + 1.0%Italian Government long-term loans
    
    
    1,334
    
    
    
    1,548
    
    
    
    3.4
    %Long Term Debt
    
    
    6,275
    
    
    
    5,079Subordinated Note
    
    
    2,415
    
    
    
    2,158Less current portion of long-term debt and subordinated note
    
    
    (3,557
    )
    
    
    (783
    )Long-term debt and Subordinated Note
    
    $
    5,133
    
    
    $
    6,454
     CAPITALFISCAL YEARS ENDING
    
    DEBT
    
    
    LEASE
    
    
    TOTAL2007
    
    $
    3,219
    
    
    
    3382008
    
    
    489
    
    
    
    3612009
    
    
    1,717
    
    
    
    3862010
    
    
    310
    
    
    
    41320112012 and beyond
    
    
    155
    
    
    
    1,360Purchase option
    
    
    
    
    
    
    972Total payments
    
    
    5,890
    
    
    
    3,830Less: amount representing interest
    
    
    
    
    
    
    (1,030
    )Total
    
    $
    5,890
    
    
    $
    2,800
    
    
    $
    8,690
     F-15




---



##### Table of Contents



MEDICAL
    
    
    POWERFISCAL YEAR ENDED
    
    SYSTEMS
    
    
    CONVERSIONJULY 29, 2006
    
    GROUP
    
    
    GROUP
    
    
    OTHER
    
    
    TOTALNet sales to external customers
    
    $
    70,287
    
    
    $
    12,727
    
    
    $
    
    
    
    $
    83,014Cost of sales
    
    
    55,453
    
    
    
    8,203
    
    
    
    
    
    
    
    63,656Gross margin
    
    
    14,834
    
    
    
    4,524
    
    
    
    
    
    
    
    19,358Selling, general and administrative
    
    
    9,467
    
    
    
    2,148
    
    
    
    2,004
    
    
    
    13,619Research and development
    
    
    1,562
    
    
    
    
    
    
    
    
    
    
    
    1,562Litigation settlement costs
    
    
    252
    
    
    
    (55
    )
    
    
    500
    
    
    
    697Total operating expenses
    
    
    11,281
    
    
    
    2,093
    
    
    
    2,504
    
    
    
    15,878Operating income (loss)
    
    $
    3,553
    
    
    $
    2,431
    
    
    $
    (2,504
    )
    
    
    3,480Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,311
    )Other expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (34
    )Income from continuing operations, before income taxes and minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    2,135Depreciation
    
    $
    793
    
    
    $
    193
    
    
    $
    2
    
    
    $
    988Amortization
    
    
    38
    
    
    
    
    
    
    
    
    
    
    
    38Segment assets
    
    
    43,630
    
    
    
    5,055
    
    
    
    468
    
    
    
    49,153Expenditures for segment assets
    
    
    695
    
    
    
    66
    
    
    
    4
    
    
    
    765
  F-16




---



##### Table of Contents



MEDICAL
    
    
    POWERFISCAL YEAR ENDED
    
    SYSTEMS
    
    
    CONVERSIONJULY 30, 2005
    
    GROUP
    
    
    GROUP
    
    
    OTHER
    
    
    TOTALNet sales to external customers
    
    $
    70,792
    
    
    $
    14,080
    
    
    $
    
    
    
    $
    84,872Cost of sales
    
    
    54,288
    
    
    
    8,303
    
    
    
    
    
    
    
    62,591Gross margin
    
    
    16,504
    
    
    
    5,777
    
    
    
    
    
    
    
    22,281Selling, general and administrative
    
    
    9,261
    
    
    
    2,630
    
    
    
    4,561
    
    
    
    16,452Research and development
    
    
    1,636
    
    
    
    
    
    
    
    
    
    
    
    1,636Litigation settlement costs
    
    
    
    
    
    
    300
    
    
    
    
    
    
    
    300Total operating expenses
    
    
    10,897
    
    
    
    2,930
    
    
    
    4,561
    
    
    
    18,388Operating income (loss)
    
    $
    5,607
    
    
    $
    2,847
    
    
    $
    (4,561
    )
    
    
    3,893Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,350
    )Other income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    97Loss from continuing operations, before income taxes and minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    2,640Depreciation
    
    $
    850
    
    
    $
    247
    
    
    $
    141
    
    
    $
    1,238Amortization
    
    
    65
    
    
    
    
    
    
    
    
    
    
    
    65Segment assets
    
    
    32,731
    
    
    
    6,008
    
    
    
    2,037
    
    
    
    40,776Expenditures for segment assets
    
    
    736
    
    
    
    151
    
    
    
    4
    
    
    
    891
  MEDICAL
    
    
    POWERFISCAL YEAR ENDED
    
    SYSTEMS
    
    
    CONVERSIONJULY 31, 2004
    
    GROUP
    
    
    GROUP
    
    
    OTHER
    
    
    TOTALNet sales to external customers
    
    $
    70,752
    
    
    $
    13,075
    
    
    $
    
    
    
    $
    83,827Cost of sales
    
    
    53,392
    
    
    
    9,120
    
    
    
    
    
    
    
    62,512Gross margin
    
    
    17,360
    
    
    
    3,955
    
    
    
    
    
    
    
    21,315Selling, general and administrative
    
    
    10,388
    
    
    
    2,310
    
    
    
    3,209
    
    
    
    15,907Research and development
    
    
    1,562
    
    
    
    
    
    
    
    
    
    
    
    1,562Litigation settlement costs
    
    
    
    
    
    
    3,199
    
    
    
    453
    
    
    
    3,652Total operating expenses
    
    
    11,950
    
    
    
    5,509
    
    
    
    3,662
    
    
    
    21,121Operating income (loss)
    
    $
    5,410
    
    
    $
    (1,554
    )
    
    $
    (3,662
    )
    
    
    194Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,796
    )Other income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    123Loss before income taxes and minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (1,479
    )Depreciation
    
    $
    879
    
    
    $
    311
    
    
    $
    169
    
    
    $
    1,359Amortization
    
    
    66
    
    
    
    
    
    
    
    
    
    
    
    66Segment assets
    
    
    37,308
    
    
    
    6,161
    
    
    
    5,792
    
    
    
    49,261Expenditures for segment assets
    
    
    440
    
    
    
    75
    
    
    
    2
    
    
    
    517
     JULY 29, 2006
    
    
    JULY 30, 2005
    
    
    JULY 31, 2004United States / Canada
    
    $
    30,137
    
    
    
    36
    %
    
    $
    39,282
    
    
    
    46
    %
    
    $
    38,186
    
    
    
    46
    %Europe
    
    
    37,078
    
    
    
    45
    %
    
    
    32,571
    
    
    
    38
    %
    
    
    24,192
    
    
    
    29
    %Far East
    
    
    6,298
    
    
    
    8
    %
    
    
    8,819
    
    
    
    11
    %
    
    
    7,941
    
    
    
    9
    %Mexico, Central and South America
    
    
    6,750
    
    
    
    8
    %
    
    
    1,976
    
    
    
    2
    %
    
    
    10,705
    
    
    
    13
    %Africa, Middle East and Australia
    
    
    2,751
    
    
    
    3
    %
    
    
    2,224
    
    
    
    3
    %
    
    
    2,803
    
    
    
    3
    %$
    83,014
    
    
    
    100
    %
    
    $
    84,872
    
    
    
    100
    %
    
    $
    83,827
    
    
    
    100
    %
 F-17




---



##### Table of Contents



FOREIGN CURRENCY
    
    
    ACCUMULATEDTRANSLATION
    
    
    UNFUNDED OBLIGATIONGAINS/(LOSSES)
    
    
    FOR PENSION TRUST
    
    
    TOTALBalance as of July 31, 2004
    
    
    1,209
    
    
    
    (417
    )
    
    
    792Net change
    
    
    241
    
    
    
    417
    
    
    
    658Balance as of  July 30, 2005
    
    
    1,450
    
    
    
    
    
    
    
    1,450Net change
    
    
    160
    
    
    
    
    
    
    
    160Balance as of July 29, 2006
    
    $
    1,610
    
    
    $
    
    
    
    $
    1,610
      F-18




---



##### Table of Contents



JULY 29, 2006
    
    JULY 30, 2005
    
    JULY 31, 2004WEIGHTED
    
    
    
    
    
    WEIGHTED
    
    
    
    
    
    WEIGHTEDAVERAGE
    
    
    
    
    
    AVERAGE
    
    
    
    
    
    AVERAGESHARES
    
    EXERCISE
    
    SHARES
    
    EXERCISE
    
    SHARES
    
    EXERCISEOUTSTANDING
    
    PRICE
    
    OUTSTANDING
    
    PRICE
    
    OUTSTANDING
    
    PRICEGranted and outstanding, beginning of year
    
    
    1,662,494
    
    
    $
    3.81
    
    
    
    2,133,415
    
    
    $
    3.15
    
    
    
    2,116,815
    
    
    $
    3.12Granted
    
    
    100,000
    
    
    
    2.66
    
    
    
    150,000
    
    
    
    2.70
    
    
    
    110,000
    
    
    
    2.10Exercised
    
    
    (99,000
    )
    
    
    2.09
    
    
    
    (248,420
    )
    
    
    1.12
    
    
    
    (2,500
    )
    
    
    1.00Cancelled and forfeited
    
    
    (117,498
    )
    
    
    2.56
    
    
    
    (372,501
    )
    
    
    1.41
    
    
    
    (90,900
    )
    
    
    2.65Outstanding at end of year
    
    
    1,545,996
    
    
    
    3.93
    
    
    
    1,662,494
    
    
    
    3.81
    
    
    
    2,133,415
    
    
    
    3.15Exercisable at end of year
    
    
    1,477,243
    
    
    
    4.00
    
    
    
    1,508,742
    
    
    
    3.92
    
    
    
    1,913,415
    
    
    
    3.21
  PCT OF
    
    
    
    
    
    PCT OF
    
    
    
    
    
    PCT OFSHARES
    
    
    
    
    
    SHARES
    
    
    
    
    
    SHARESSHARES
    
    GRANTED
    
    SHARES
    
    GRANTED
    
    SHARES
    
    GRANTEDGranted to officers
    
    
    100,000
    
    
    
    100
    %
    
    
    100,000
    
    
    
    67
    %
    
    
    50,000
    
    
    
    45
    %
  OPTIONS OUTSTANDING
    
    
    OPTIONS EXERCISABLEWEIGHTED
    
    
    
    
    
    
    WEIGHTEDAVERAGE
    
    
    
    
    
    
    AVERAGEEXERCISE
    
    NUMBER OF
    
    
    EXERCISE
    
    
    SHARES
    
    
    EXERCISEPRICE RANGE
    
    OPTION SHARES
    
    
    PRICE
    
    
    EXERCISABLE
    
    
    PRICE$1.00 - $3.34
    
    
    855,288
    
    
    $
    1.76
    
    
    
    786,535
    
    
    $
    1.71$4.00 - $6.60
    
    
    313,256
    
    
    
    4.85
    
    
    
    313,256
    
    
    
    4.85$7.00 - $7.94
    
    
    220,775
    
    
    
    7.51
    
    
    
    220,775
    
    
    
    7.51$8.00 - $10.00
    
    
    156,677
    
    
    
    8.91
    
    
    
    156,677
    
    
    
    8.911,545,996
    
    
    $
    3.93
    
    
    
    1,477,243
    
    
    $
    4.00
    YEAR ENDED
    
    JULY 29, 2006
    
    JULY 30, 2005
    
    JULY 31, 2004Proceeds from stock options exercised
    
    
    238
    
    
    
    277
    
    
    
    3Granted
    
    
    137
    
    
    
    367
    
    
    
    4
 F-19




---



##### Table of Contents



FOR FISCAL YEARS ENDEDJULY 29, 2006
    
    
    JULY 30, 2005
    
    
    JULY 31, 2004Numerator:Net income (loss)
    
    $
    94
    
    
    $
    392
    
    
    $
    (15,824
    )Denominator: Denominator for basic income (loss) per share:Weighted average shares outstanding
    
    
    11,244,421
    
    
    
    10,490,178
    
    
    
    10,333,668Effect of dilutive securities
    
    
    832,075
    
    
    
    974,540
    
    
    
    Denominator for diluted income (loss) per share
    
    
    12,076,496
    
    
    
    11,464,718
    
    
    
    10,333,688Income (loss) per basic common share
    
    $
    0.01
    
    
    $
    0.04
    
    
    $
    (1.53
    )Income (loss) per diluted common share
    
    $
    0.01
    
    
    $
    0.03
    
    
    $
    (1.53
    )
      FOR FISCAL YEARS ENDEDJULY 29, 2006
    
    
    JULY 30, 2005
    
    
    JULY 31, 2004CURRENT TAX EXPENSE:Foreign
    
    $
    1,739
    
    
    $
    1,640
    
    
    $
    1,250State and local
    
    
    35
    
    
    
    42
    
    
    
    11DEFERRED PROVISION (BENEFIT):Federal
    
    
    
    
    
    
    101
    
    
    
    6,552State and local
    
    
    
    
    
    
    
    
    
    
    1,144Foreign
    
    
    (16
    )
    
    
    271
    
    
    
    (266
    )NET PROVISION
    
    $
    1,758
    
    
    $
    2,054
    
    
    $
    8,691
 F-20




---



##### Table of Contents



FOR FISCAL YEARS ENDEDJULY 29, 2006
    
    
    JULY 30, 2005
    
    
    JULY 31, 2004Statutory Federal Income Tax Rate
    
    
    34.0
    %
    
    
    34.0
    %
    
    
    (34.0
    )%State Tax (Benefit), less Federal tax effect
    
    
    0.4
    %
    
    
    6.2
    %
    
    
    64.3
    %Foreign
    
    
    5.6
    %
    
    
    72.4
    %
    
    
    27.1
    %Valuation Allowance
    
    
    28.2
    %
    
    
    (34.8
    )%
    
    
    432.4
    %Provision for undistributed earnings of foreign
subsidiary
    
    
    14.2
    %
    
    
    
    
    
    
    Fines & Penalties
    
    
    
    
    
    
    
    
    
    
    73.8
    %Other
    
    
    
    
    
    
    
    
    
    
    23.9
    %Effective tax rate
    
    
    82.4
    %
    
    
    77.8
    %
    
    
    587.5
    %
  JULY 29, 2006
    
    
    JULY 30, 2005Deferred income tax assets:Federal net operating loss carry forward
    
    $
    15,602
    
    
    $
    14,736Foreign deferred tax assets
    
    
    1,159
    
    
    
    41State tax credits and operating loss carry forwards
    
    
    639
    
    
    
    3,071Reserve for inventory obsolescence
    
    
    644
    
    
    
    628Allowances and reserves not currently deductible
    
    
    490
    
    
    
    1,382Amortization
    
    
    197
    
    
    
    86Stock based compensation
    
    
    315
    
    
    
    Gross deferred income tax assets
    
    
    19,046
    
    
    
    20,744Deferred income tax liabilities:Undistributed earnings of foreign subsidiary
    
    
    (302
    )
    
    
    Other
    
    
    (129
    )
    
    
    (127
    )Gross deferred income tax liabilities
    
    
    (431
    )
    
    
    (127
    )Less: valuation allowance
    
    
    (17,758
    )
    
    
    (19,776
    )Net deferred income tax assets
    
    $
    857
    
    
    $
    841
  JULY 30, 2005
    
    
    JULY 30, 2004Deferred tax assets  non-current
    
    $
    1,159
    
    
    $
    841Deferred tax liabilities  non-current
    
    
    (302
    )
    
    
    $
    857
    
    
    $
    841
      F-21




---



##### Table of Contents



a.
    
    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.The Companys Board of Directors, elected at the Companys Annual Meeting of Shareholders held
on May 29, 2003, had reviewed the change of control provisions regarding payments totaling up
to approximately $1,800 under the employment agreement between the Company and its former CEO,
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 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. The Company has
not recorded an accrual for any potential settlements of this claim as it has no basis upon
which to estimate either the outcome or amount of loss.In July 2006 the Company signed a separation agreement with Walter Schneider the President and
CEO who replaced Mr. Park. Terms of the separation agreement provides for the payment of Mr.
Schneiders annual salary of $300 over a one year period and provided for the continuation of
medical benefits to Mr. Schneider at his then current contribution and coverage levels. In
July 2006 the Company recorded a charge of $307 to accrue the future amounts payable to Mr.
Schneider under this agreement.
  F-22




---



##### Table of Contents



b.
    
    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 equipment and auto leases accounted for as operating leases.
The future minimum annual lease commitments as of July 29, 2006 are as follows:
 FISCAL YEARS
    
    AMOUNT2007
    
    $
    4192008
    
    
    1982009
    
    
    52010
    
    
    2011
    
    
    Total
    
    $
    622
  c.
    
    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
 F-23




---



##### Table of Contents



QUARTERFIRST
    
    SECOND
    
    THIRD
    
    FOURTHNet sales
    
    $
    16,239
    
    
    $
    21,994
    
    
    $
    20,804
    
    
    $
    23,977Gross margin
    
    $
    3,735
    
    
    $
    5,214
    
    
    $
    4,502
    
    
    $
    5,907Income (loss) from continuing operations
    
    $
    (483
    )
    
    $
    (60
    )
    
    $
    (73
    )
    
    $
    885Discontinued operation
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    (175
    )Net income (loss)
    
    $
    (483
    )
    
    $
    (60
    )
    
    $
    (73
    )
    
    $
    710Basic earnings per share Income (loss) from continuing operations
    
    $
    (0.05
    )
    
    $
    (0.01
    )
    
    $
    (0.01
    )
    
    $
    0.08Discontinued operation
    
    $
    0.00
    
    
    $
    0.00
    
    
    $
    0.00
    
    
    $
    (0.01
    )Net income (loss) per share
    
    $
    (0.05
    )
    
    $
    (0.01
    )
    
    $
    (0.01
    )
    
    $
    0.07Diluted earnings per share Income (loss) from continuing operations
    
    $
    (0.05
    )
    
    $
    (0.01
    )
    
    $
    (0.01
    )
    
    $
    0.07Discontinued operation
    
    $
    0.00
    
    
    $
    0.00
    
    
    $
    0.00
    
    
    $
    (0.01
    )Net income (loss) per share
    
    $
    (0.05
    )
    
    $
    (0.01
    )
    
    $
    (0.01
    )
    
    $
    0.06
  QUARTERFIRST
    
    SECOND
    
    THIRD
    
    FOURTH (2)Net sales
    
    $
    18,758
    
    
    $
    26,609
    
    
    $
    18,892
    
    
    $
    20,613Gross margin
    
    $
    4,553
    
    
    $
    6,968
    
    
    $
    4,801
    
    
    $
    5,959Income (loss) from continuing operations
    
    $
    48
    
    
    $
    368
    
    
    $
    (1,031
    )
    
    $
    808Discontinued operation
    
    $
    199
    
    
    $
    
    
    
    $
    
    
    
    $
    Net income (loss)
    
    $
    247
    
    
    $
    368
    
    
    $
    (1,031
    )
    
    $
    808Basic earnings per share Income (loss) from continuing operations
    
    $
    0.00
    
    
    $
    0.04
    
    
    $
    (0.10
    )
    
    $
    0.08Discontinued operation
    
    $
    0.02
    
    
    $
    0.00
    
    
    $
    0.00
    
    
    $
    0.00Net income (loss) per share
    
    $
    0.02
    
    
    $
    0.04
    
    
    $
    (0.10
    )
    
    $
    0.08Diluted earnings per share Income (loss) from continuing operations
    
    $
    0.00
    
    
    $
    0.03
    
    
    $
    (0.10
    )
    
    $
    0.07Discontinued operation
    
    $
    0.02
    
    
    $
    0.00
    
    
    $
    0.00
    
    
    $
    0.00Net income (loss) per share
    
    $
    0.02
    
    
    $
    0.03
    
    
    $
    (0.10
    )
    
    $
    0.07
 
 (2)
    
    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-24




---



##### Table of Contents



F-25




---



##### Table of Contents



BALANCE AT
    
    CHARGED TOBEGINNING OF
    
    COSTS AND
    
    
    
    
    
    BALANCE ATYEAR
    
    EXPENSE
    
    DEDUCTIONS (1)
    
    END OF YEARYEAR ENDED JULY 29, 2006Allowance for doubtful accounts
    
    $
    1,028
    
    
    $
    338
    
    
    $
    271
    
    
    $
    1,095Allowance for obsolete and excess inventories
    
    
    3,017
    
    
    
    1,050
    
    
    
    364
    
    
    
    3,703YEAR ENDED JULY 30, 2005Allowance for doubtful accounts
    
    $
    888
    
    
    $
    375
    
    
    $
    235
    
    
    $
    1,028Allowance for obsolete and excess inventories
    
    
    2,536
    
    
    
    620
    
    
    
    139
    
    
    
    3,017YEAR ENDED JULY 31, 2004Allowance for doubtful accounts
    
    $
    1,232
    
    
    $
    501
    
    
    $
    845
    
    
    $
    888Allowance for obsolete and excess inventories
    
    
    3,847
    
    
    
    539
    
    
    
    1,850
    
    
    
    2,536
 
 (1)
    
    Write-off of accounts receivable and inventories previously charged to costs and expenses. F-26