DGT Holdings Reports Preliminary Fiscal 2013 Fourth Quarter And Fiscal Year Financial Results And Accelerated Termination Of Rights Agreement
NEW YORK, Oct. 18, 2013 /PRNewswire/ -- DGT Holdings Corp. (OTCBB: DGTC) ("DGT Holdings" or "The Company") today announced preliminary, unaudited financial results for its fiscal 2013 fourth quarter and year ended July 27, 2013. Final results will be reported on completion of the Company's annual audited financial statements.
FINANCIAL PRESENTATION
The Company's operations currently consist of a real estate business from rental buildings retained from the sale of its Power Conversion business on August 16, 2012 and the sale of its Medical Systems Group on November 3, 2011. The operating results for the Power Conversion Business and for the Medical Systems Group, as well as the gains on disposals of such units, are reported as discontinued operations for all periods presented. Continuing operations consist of the real estate business, investments, and general and administrative expenses.
FINANCIAL RESULTS
Revenues from continuing operations, consisting of rental revenue from the Company's real estate, was $111,000 and $710,000, for the quarter and year ended July 27, 2013, respectively. Cost of sales, consisting of depreciation and rental-related costs was $175,000 and $453,000 for the quarter and year ended July 27, 2013, respectively. Operating expenses, consisting of general and administrative expenses, were $325,000 and $2,114,000, for the quarter and year ended July 27, 2013, respectively.
The loss from continuing operations was $238,000 and $1,958,000, for the quarter and year ended July 27, 2013, respectively.
Income from discontinued operations was $96,000 for the quarter ended July 27, 2013 and $8,473,000, including a gain of $8,795,000 on the sale of the Power Conversion Business, for the year ended July 27, 2013.
Net income (loss) was $(142,000) and $6,515,000 for the quarter and year ended July 27, 2013, respectively.
FINANCIAL CONDITION
DGT Holdings' working capital at July 27, 2013 was $49,620,000 which included $8,997,000 of unrestricted cash, $1,250,000 of restricted cash and $38,611,000 of investments.
OTHER
Since the Company's two active business operations have been sold, and due to the substantial gains realized on the sale of those operations, the Company's Board of Directors has determined that the Company's remaining net operating losses (NOLs) no longer have significant value to the Company. In addition, our majority shareholder, Steel Partners Holdings LP, has requested that the Board provide Steel Partners with greater flexibility to acquire additional shares of the Company's common stock from time to time, should it desire to do so, in privately negotiated or open market transactions or otherwise, and depending upon price and availability. To the extent such incremental acquisitions by Steel Partners could provide additional liquidity to the Company's minority shareholders, and since the value of the NOLs is no longer sufficient in the Board's judgment to justify the restrictions imposed by the Rights Agreement, dated as of January 22, 2007, between the Company and Mellon Investor Services LLC, the Board , by unanimous vote of the independent directors, approved an amendment to the Rights Agreement accelerating the expiration date of the Rights Agreement from February 2, 2017 to November 1, 2013. Accordingly, as of November 1, 2013, the rights issued pursuant to the Rights Agreement will expire and will no longer be outstanding, and the Rights Agreement will terminate. Shareholders do not have to take any action as a result of this termination.
ABOUT DGT HOLDINGS
DGT Holdings Corp. previously manufactured proprietary high-voltage power conversion subsystems, including 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 through its Power Conversion Group's RFI Corporation subsidiary. This business was sold on August 16, 2012. The Company currently owns and leases two industrial buildings.
The Company's website is www.dgtholdings.com.
DGT Holdings Corp.
Terry Gibson
Chief Executive Officer
Chief Financial Officer
(408) 399-6490
| DGT HOLDINGS CORP. |
|||||||
| Three-month Period Ended |
Fiscal Year Ended |
||||||
| July 27, 2013 |
July 28, 2012 |
July 27, 2013 |
July 28, 2012 |
||||
| Sales |
$ 111 |
$ 117 |
$ 710 |
$ 335 |
|||
| Cost of sales |
175 |
22 |
453 |
64 |
|||
| Gross margin |
(64) |
95 |
257 |
271 |
|||
| Operating expenses: |
|||||||
| General and administrative expenses |
325 |
2,254 |
2,114 |
4,327 |
|||
| Loss from continuing operations |
(389) |
(2,159) |
(1,857) |
(4,056) |
|||
| Interest and other income (expense), net |
33 |
9 |
(98) |
98 |
|||
| Loss from continuing operations before income taxes |
(356) |
(2,150) |
(1,955) |
(3,958) |
|||
| Income tax (benefit) provision |
(118) |
47 |
3 |
91 |
|||
| Loss from continuing operations, net of taxes |
(238) |
(2,197) |
(1,958) |
(4,049) |
|||
| Income from discontinued operations: |
|||||||
| Income (loss) from discontinued operations, net of taxes |
96 |
357 |
(322) |
2,328 |
|||
| Gain on disposal of discontinued operations, net of taxes |
- |
- |
8,795 |
6,837 |
|||
| Income from discontinued operations |
96 |
357 |
8,473 |
9,165 |
|||
| Net income (loss) |
$ (142) |
$ (1,840) |
$ 6,515 |
$ 5,116 |
|||
| Net income (loss) per basic and diluted share: |
|||||||
| Loss from continuing operations, net of taxes |
$ (0.08) |
$ (0.57) |
$ (0.54) |
$ (1.05) |
|||
| Income from discontinued operations, net of taxes |
$ 0.03 |
$ 0.09 |
$ 2.36 |
$ 2.38 |
|||
| Net income (loss) |
$ (0.05) |
$ (0.48) |
$ 1.81 |
$ 1.33 |
|||
| Weighted average basic common shares |
3,088 |
3,839 |
3,594 |
3,847 |
|||
| DGT HOLDINGS CORP. |
|||
| July 27, 2013 |
July 28, 2012 |
||
| Unaudited |
|||
| ASSETS |
|||
| Current assets: |
|||
| Cash and cash equivalents |
$ 8,997 |
$ 38,169 |
|
| Restricted cash |
1,250 |
2,428 |
|
| Available-for-sale securities |
38,611 |
4,359 |
|
| Prepaid expenses and other current assets |
99 |
158 |
|
| Assets for sale |
949 |
||
| Current assets of discontinued operations |
- |
3,125 |
|
| Total current assets |
49,906 |
48,239 |
|
| Property, plant and equipment, net |
2,477 |
3,428 |
|
| Promissory note receivable |
- |
614 |
|
| Other long-term assets |
- |
73 |
|
| Long-term assets of discontinued operations |
- |
443 |
|
| TOTAL ASSETS |
$ 52,383 |
$ 52,797 |
|
| LIABILITIES AND SHAREHOLDERS' EQUITY |
|||
| Current liabilities: |
|||
| Accounts payable |
114 |
11 |
|
| Accrued expenses |
172 |
1,951 |
|
| Current portion of long-term debt |
- |
82 |
|
| Current liabilities of discontinued operations |
- |
1,002 |
|
| Total current liabilities |
286 |
3,046 |
|
| Long-term debt, net of current portion |
- |
2,278 |
|
| Deferred income taxes |
463 |
458 |
|
| Total liabilities |
749 |
5,782 |
|
| Commitments and contingencies |
|||
| Shareholders' equity: |
|||
| Common stock |
329 |
404 |
|
| Additional paid-in capital |
87,879 |
98,174 |
|
| Treasury stock |
(7,429) |
(7,429) |
|
| Accumulated other comprehensive income (loss) |
8,396 |
(78) |
|
| Accumulated deficit |
(37,541) |
(44,056) |
|
| Total shareholders' equity |
51,634 |
47,015 |
|
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
$ 52,383 |
$ 52,797 |
|
SOURCE DGT Holdings Corp.
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