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Digital Power Corp Reports Operating Results (10-Q)

November 16, 2009 | About:
10qk

10qk

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Digital Power Corp (DPW) filed Quarterly Report for the period ended 2009-09-30.

DIGITAL POWER is engaged in the design, development, manufacture, and sales of 50 to750 watt switching power supplies and DC/DC converters to original equipment manufacturers of computers and other electronic equipment. Through their subsidiary Digital Power Limited, they also design, manufacture and sell uninterruptible power supplies, power conversion and distribution equipment for naval and military applications and DC/AC inverters primarily for the telecommunications industry in Europe under the label Gresham Power Electronics. Digital Power Corp has a market cap of $8.28 million; its shares were traded at around $1.25 with a P/E ratio of 2.19 and P/S ratio of 0.7.

Highlight of Business Operations:

Total revenues for the Company decreased by 39.5% to $1,708,000 for the three months ended September 30, 2009, from $2,825,000 for the three months ended September 30, 2008. The decrease in revenues is mainly due to a decline in sales of our standard commercial products as a result of the global economic recession. Revenues from the military products of the Company decreased by 27.1% to $586,000 for the three months ended September 30, 2009, from $804,000 for the three months ended September 30, 2008. Revenues from the commercial products of the Company decreased by 44.5% to $1,122,000, from $2,021,000 for the three months ended September 30, 2008.

For the nine months ended September 30, 2009, our revenues decreased by 33.4% to $6,224,000, from $9,341,000 for the nine months ended September 30, 2008. Revenues from our commercial products decreased by 40.9% to $4,069,000 for the nine months ended September 30, 2009, from $6,889,000 for the nine months ended September 30, 2008. Revenues from our military products decreased by 12.1% to $2,155,000 for the nine months ended September 30, 2009, from $2,452,000 for the nine months ended September 30, 2008. The overall decrease in revenues is mainly attributable to the decrease in sales of our commercial products, as discussed above.

For the nine months ended September 30, 2009, revenues attributed to our U.S. operations decreased by 32.2% to $2,673,000 from $3,942,000 for the nine months ended September 30, 2008. Revenues from our European operations of DPL decreased by 34.2% to $3,551,000 for the nine months ended September 30, 2009, from $5,399,000 for the nine months ended September 30, 2008. The decrease in revenues from our U.S. and European operations is mainly attributable to a decrease in sales of our commercial products, as discussed above.

Engineering and product development expenses were $136,000, or 8.0% of revenues, for the three months ended September 30, 2009, compared to $158,000, or 5.6% of revenues, for the three months ended September 30, 2008. Engineering and product development expenses were $405,000, or 6.5% of revenues, for the nine months ended September 30, 2009, compared to $460,000, or 4.9% of revenues, for the nine months ended September 30, 2008. This decrease for the three and nine-month periods was primarily due to a decrease in salary expenses.

General and administrative expenses were $357,000, or 20.9% of revenues, for the three months ended September 30, 2009, compared to $364,000, or 12.9% of revenues, for the three months ended September 30, 2008. The increase in such expenses as a percentage of revenues is due mainly to the decrease in revenues in the three months ended September 30, 2009 compared to the revenues in the three months ended September 30, 2008. General and administrative expenses were $1,022,000, or 16.4% of revenues, for the nine months ended September 30, 2009, compared to $1,243,000, or 13.3% of revenues, for the nine months ended September 30, 2008. Expenditures decreased in 2009 by $221,000 mainly due to the accrual of liabilities in relation to the separation agreement with our former President and Chief Executive Officer in the nine months ended September 30, 2008.

Financial income was $26,000 for the three months ended September 30, 2009, compared to financial income of $62,000 for the three months ended September 30, 2008. Financial expense was $46,000 for the nine months ended September 30, 2009, compared to financial income of $74,000 for the nine months ended September 30, 2008. From time to time, we enter into forward contracts to hedge certain sales transactions which are denominated in foreign currencies. The change in financial results was due to foreign currency fluctuations during the respective periods and changes in the fair value of forward contracts.

Read the The complete Report

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