DGT HOLDINGS CORP 
By 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.
STATEMENTS OF OPERATIONS
(In thousands except per share amounts)
(UNAUDITED)
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.
BALANCE SHEETS
(In thousands)
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.
