10-Q

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549
                                    FORM 10-Q

[x] QUARTERLY  REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES  EXCHANGE ACT
    OF 1934.
             For the quarterly period ended April 30, 2005
                                 or


[ ] 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.
             (Exact name of registrant as specified in its charter)


New York                                              13-1784308
- --------                                   -----------------------------------
(State or other jurisdiction of                   (I.R.S. Employer
incorporation or organization)                    Identification No.)

                      One Commerce Park, Valhalla, NY 10595
               (Address of principal executive offices) (Zip Code)


                                  914-686-3650
                                  ------------
              (Registrant's telephone number, including area code)
                                      None

(Former  name,  former  address and former  fiscal year,  if changed  since last
report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

Yes /X/       No  / /

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-25 of the Exchange Act) Yes / /     No /X/

The number of shares of  Registrant's  common stock  outstanding as of June 10,
2005 was 10,584,425.

                                       1


                 DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES

                                TABLE OF CONTENTS

Part I. Financial Information:                                         Page No.
                                                                       --------

       Item 1.  Financial Statements (Unaudited)

       Consolidated Statements of Operations for the Three                3
        and Nine Months ended April 30, 2005 and May 1, 2004

       Consolidated Balance Sheets - April 30, 2005 and July 31, 2004     4-5

       Consolidated Statements of Cash Flows for the Nine Months Ended    6
         April 30, 2005 and May 1, 2004

       Notes to Consolidated Financial Statements                         7-17

       Item 2.  Management's Discussion and Analysis of
                  Financial Condition and Results of Operations           18-27

       Item 3.  Quantitative and Qualitative Disclosures about Market
                  Risk                                                    28

       Item 4.  Controls and Procedures                                   28

Part II. Other Information:

       Item 1.  Legal Proceedings                                         29-31

       Item 6.  Exhibits                                                  32

       Signatures                                                         32

       Certifications                                                     33-38

                                       2


PART I  FINANCIAL INFORMATION
 ITEM 1  FINANCIAL STATEMENTS
                 DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  (Dollars in Thousands except per share data)
                                   (Unaudited)

                                   Three Months Ended    Nine Months Ended
                                   Apr. 30,      May 1,  Apr. 30,    May 1,
                                       2005        2004      2005      2004
                                     -------    -------   ------     -------
 NET SALES                          $18,892    $20,610    $64,259    $64,445
 COST OF SALES                       14,091     15,590     47,937     49,110
                                    -------    -------    -------    -------
 GROSS MARGIN                         4,801      5,020     16,322     15,335
                                    -------    -------    -------    -------
 Selling, general and administrative  4,874      3,375     12,546     11,639
 Research and development               446        413      1,268      1,144
 Litigation settlement costs              -          -        300      3,199
                                    --------    ------    -------    -------
 Total operating expenses             5,320      3,788     14,114     15,982
                                    -------    -------    -------    -------
 OPERATING INCOME (LOSS)               (519)     1,232      2,208       (647)
 Interest expense                      (297)      (908)      (978)    (1,545)
 Other income/(expense)                  46         46         34        101
                                    -------      -----    -------    -------
 INCOME (LOSS) FROM CONTINUING
 OPERATIONS BEFORE INCOME TAX
 PROVISION AND MINORITY INTEREST       (770)       370      1,264     (2,091)
 Income tax provision                   248        940      1,557      8,479
                                   --------     ------    -------    -------
 LOSS FROM CONTINUING
 OPERATIONS BEFORE MINORITY INTEREST (1,018)      (570)      (293)   (10,570)
 Minority interest                       13        139        322        485
                                    -------      ------    -------    -------
 LOSS FROM CONTINUING
 OPERATIONS                          (1,031)      (709)      (615)   (11,055)
 Discontinued operations                  -        420        199     (2,198)
                                   --------     ------    -------   --------
 NET LOSS                           $(1,031)  $   (289)   $  (416)  $(13,253)
                                   ========    =======    =======   ========
INCOME(LOSS)PER COMMON SHARE-BASIC
   Continuing operations             $(0.10)   $ (0.07)   $ (0.06)    $(1.07)
   Discontinued operations                -       0.04       0.02      (0.21)
                                     ------      ------     -----      -----
   Net loss per basic share          $(0.10)   $ (0.03)   $ (0.04)    $(1.28)
                                    =======     =======     =====     ======
INCOME (LOSS) PER COMMON SHARE-DILUTED
   Continuing operations             $(0.10)    $(0.07)   $ (0.06)    $(1.07)
   Discontinued operations                -       0.04       0.02      (0.21)
                                    -------    ------     ------     ------
   Net loss per diluted share        $(0.10)    $(0.03)   $ (0.04)    $(1.28)
                                     =======    ======     ======     ======
   Weighted average number of common
   shares outstanding (in thousands):
        Basic                        10,517     10,333     10,449     10,333
        Diluted                      10,517     10,333     10,449     10,333

 See notes to consolidated financial statements

                                       3


                 DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                             (Dollars in Thousands)
                                   (Unaudited)

                                     ASSETS

                                                 April 30,          July 31,
                                                     2005              2004
                                                 --------           --------

   CURRENT ASSETS
   Cash and cash equivalents                      $   945           $  4,755

   Trade receivables (net of allowance
    for doubtful accounts of $1,027 and $888
    at April 30, 2005 and July 31, 2004,
    respectively)                                  12,870             12,900

   Inventory                                       14,598             15,122
   Assets attributable to discontinued operations,
   at net realizable value                              -              4,369
   Prepaid expenses and other current
    assets                                          1,002              1,068
                                                  -------           --------
      Total current assets                         29,415             38,214

   FIXED ASSETS - Net                               6,604              6,907
   DEFERRED INCOME TAX ASSET-NON CURRENT            1,302              1,102
   GOODWILL                                         1,911              1,911
   INTANGIBLES - Net                                   54                103
   OTHER ASSETS                                       994              1,024
                                                 --------          ---------
      TOTAL ASSETS                                $40,280            $49,261
                                                 ========          =========

  See notes to consolidated financial statements

                                       4


                 DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                             (Dollars in Thousands)
                                   (Unaudited)

                      LIABILITIES AND SHAREHOLDERS' EQUITY

                                                 April 30,          July 31,
                                                     2005              2004
                                                 --------           --------
CURRENT LIABILITIES
   Short-term credit facilities                  $ 3,600             $ 2,699
   Current portion of long-term debt                 799                 730
   Accounts payable - trade                        8,620              10,926
   Accrued liabilities                             7,423               8,920
   Liabilities attributable to
   discontinued operations                             -                 958
   Litigation settlement reserves                     66               5,148
   Income taxes payable                            1,336               1,069
                                                --------           ---------
      Total current liabilities                   21,844              30,450

NON-CURRENT LIABILITIES
   Long-term debt                                  4,672               5,076
   Subordinated note                               2,070               1,962
   Other long-term liabilities                     2,737               2,462
   Other liabilities attributable to
      discontinued operations                          -                 147
                                                 -------           ---------
      Total liabilities                           31,321              40,097
                                                 -------           ---------

MINORITY INTEREST IN SUBSIDIARY                    1,299               1,389
                                                 -------            ---------
COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY
   Common stock, $.10 par value;
   Authorized  20,000,000  shares;
     Issued  - 11,206,958 and 10,978,581
     at April 30, 2005 and July 31, 2004           1,120               1,098
   Additional paid-in capital                     64,355              64,072
   Accumulated other comprehensive income            788                 792
   Accumulated deficit                           (53,057)            (52,641)
   Less common stock in treasury - 643,533
     shares at April 30, 2005 and
     July 31, 2004                                (5,546)             (5,546)
                                            -------------      --------------
   Total shareholders' equity                      7,660               7,775
                                            -------------      --------------
   TOTAL LIABILITIES AND SHAREHOLDERS'
   EQUITY                                       $ 40,280            $ 49,261
                                                ========            ========

See notes to consolidated financial statements

                                       5


                 DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Dollars in Thousands)
                                   (Unaudited)

                                                      Nine Months Ended
                                                Apr. 30, 2005    May 1, 2004
CASH FLOWS FROM OPERATING ACTIVITIES:
  Loss from continuing operations                   $(615)      $(11,055)
  Adjustments to reconcile net loss to
   net cash provided by operating activities:
  Depreciation and amortization                       977          1,533
  Imputed interest - Subordinated note                107            133
  Minority interest                                   322            485
  Stock based compensation expense                     29             31
  Deferred income tax                                (123)         7,903
  Impairment of intangible assets                       -          1,453
  Loss on disposal of fixed assets                     51             72
  Litigation settlement provision                     300          3,199
  Changes in operating assets and liabilities:
  Increase in trade receivables                       604            137
  Decrease in inventory                             1,194          1,731
  Decrease (increase) in prepaid expenses and
    other current assets                               95           (123)
  Decrease (increase) in other assets                  66           (247)
  (Decrease) increase in accounts payable - trade  (2,829)         3,866
  (Decrease) increase in accrued liabilities       (2,187)           114
  Payment of litigation settlement costs           (5,382)             -
  Increase in income taxes payable                    170            525
  Increase in other long-term liabilities             111             41
                                              -----------    -----------
Net cash(used in)provided by operating activities  (7,110)         9,798
                                              -----------    -----------
Cash Flows from discontinued operations
  and sale proceeds                                 3,463         (2,198)
CASH FLOWS FROM INVESTING ACTIVITIES:          -----------    ----------
  Fixed asset purchases                              (366)          (345)
                                                ----------      --------
Net cash used in investing activities                (366)          (345)
                                               ----------     ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Borrowing (repayment) of bank borrowings            174         (1,593)
  Warrant exercise                                     44              -
  Stock option exercise                               231              -
  Dividend to Villa minority shareholders            (509)          (505)
                                              -----------     ----------
Net cash used in financing activities                 (60)        (2,098)
                                              -----------     ----------
EFFECT OF EXCHANGE RATE CHANGES                       263            215
                                              -----------    -----------
NET CHANGE IN CASH AND CASH EQUIVALENTS            (3,810)         5,372
CASH AND CASH EQUIVALENTS AT THE BEGINNING
OF THE PERIOD                                       4,755          1,381
                                              -----------      ---------
CASH AND CASH EQUIVALENTS AT THE END OF
THE PERIOD                                        $   945        $ 6,753
                                               ===========     =========
See notes to consolidated financial statements

                                       6





                 DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   (Dollars in thousands, except share data)
                                 (Unaudited)

1. DESCRIPTION OF THE BUSINESS

Del Global  Technologies  Corp,  (the  "Company")  is  primarily  engaged in the
design,   manufacture  and  marketing  of  cost-effective  medical  imaging  and
diagnostic   systems  consisting  of  stationary  and  portable  x-ray  systems,
radiographic/fluoroscopic   systems,  dental  imaging  systems  and  proprietary
high-voltage  power  conversion   subsystems  for  medical  and  other  critical
industrial  applications.  Through its subsidiary RFI Corporation  ("RFI"),  the
Company  manufactures   electronic  filters,  high  voltage  capacitors,   pulse
modulators,  transformers and reactors, and a variety of other products designed
for industrial, medical, military and other commercial applications.


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

FISCAL YEAR

The Company's  fiscal year is based on a 52/53 week cycle ending on the Saturday
nearest to July 31.  Results of the Company's  Milan,  Italy based Villa Sistemi
Medicali S.p.A. ("Villa") subsidiary are reported on a one-month lag.

BASIS OF PRESENTATION

The  accompanying  financial  data as of April 30, 2005 and for the three months
and nine months  ended  April 30, 2005 and May 1, 2004 has been  prepared by the
Company,  without audit, pursuant to the rules and regulations of the Securities
and Exchange  Commission.  Certain information and footnote disclosures normally
included  in  financial   statements  prepared  in  accordance  with  accounting
principles  generally  accepted  in the United  States  have been  condensed  or
omitted  pursuant to such rules and  regulations.  In the opinion of management,
all adjustments  (consisting  only of normal recurring  adjustments)  considered
necessary for a fair  presentation  of the results for the interim  periods have
been included. Results of operations for the interim periods are not necessarily
indicative  of the  results  that  may be  expected  for the  full  year.  These
consolidated  financial  statements  should  be read  in  conjunction  with  the
financial  statements  and the notes thereto  included in the  Company's  annual
report on Form 10-K filed with the  Securities  and Exchange  Commission for the
year ended July 31, 2004.

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

                                       7





REVENUE RECOGNITION

The Company  recognizes  revenue upon  shipment,  provided  there is  persuasive
evidence of an arrangement,  there are no uncertainties  concerning  acceptance,
the sales price is fixed,  collection  of the  receivable  is probable  and only
perfunctory  obligations  related to the arrangement  need to be completed.  The
Company's  products are covered primarily by one year warranty plans and in some
cases optional extended warranties for up to five years are offered. The Company
establishes  allowances  for  warranties as more fully  described in the Product
Warranty footnote herein. The Company recognizes service revenue when repairs or
out of warranty  repairs are  completed.  The Company has an FDA  obligation  to
continue to provide repair service for certain  medical  systems for up to seven
years past the  warranty  period,  which are billed to the  customers  at market
rates.

EMPLOYEE STOCK OPTION PLANS

The Company  accounts for  stock-based  awards to employees  using the intrinsic
value method of  accounting  in  accordance  with  Accounting  Principles  Board
Opinion  No 25,  "Accounting  for Stock  Issued  to  Employees".  The  Company's
practice in granting  these awards to employees is to set the exercise  price of
the stock options equal to the market price of our underlying  stock on the date
of grant. Therefore under the intrinsic value method, no compensation expense is
recognized in the Company's Consolidated Statements of Operations.

Had compensation cost for the Company's stock option plans been determined based
on the fair value at the grant dates for awards  under  those  plans  consistent
with the methods  recommended  by SFAS 123, the Company's net income or loss and
net income or loss per share for the three  months and nine  months  ended April
30,  2005 and May 1,  2004  would  have been  stated  at the pro  forma  amounts
indicated below:

                                   Three Months Ended       Nine Months Ended
                                   ------------------     -------------------
                                   Apr. 30,    May 1,     Apr. 30,    May 1,
                                     2005      2004         2005      2004
                                   --------  --------    --------- ---------
Net loss  - as reported            $(1,031)  $  (289)    $ (416)   $(13,253)

  Deduct: Total stock-based
  awards determined under
  fair value method                    (69)     (114)      (208)       (342)
                                   --------  --------    -------   ---------
Proforma Net loss                   $(1,100) $  (403)    $ (624)   $(13,595)
                                   ========  ========    ========  =========

Loss per share -
  Basic

  As reported                     $  (0.10)   $(0.03)    $(0.04)     $(1.28)
  Proforma                        $  (0.10)   $(0.04)     (0.06)      (1.32)

Loss per share -
  Diluted

  As reported                     $  (0.10)   $(0.03)    $(0.04)     $(1.28)
  Proforma                        $  (0.10)   $(0.04)     (0.06)      (1.32)

                                       8





RECENT ACCOUNTING PRONOUNCEMENTS

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

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

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

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

                                       9





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

3. DISCONTINUED OPERATIONS

On October 1, 2004,  the Company  completed the sale of DHV for a purchase price
of $3,100,  plus the  assumption  of  approximately  $800 of  liabilities.  This
division  was  formerly  part  of  the  Power  Conversion  Group  and  designed,
manufactured and marketed proprietary  precision power conversion subsystems for
medical as well as critical industrial  applications.  The results of operations
of this  division  are  shown as  discontinued  operations  in the  accompanying
financial statements.

Certain information is summarized below:

                                                Quarter Ended    Nine Months Ended
                                             Apr. 30,    May 1,  Apr. 30,   May 1,
                                               2005      2004     2005      2004
                                               ------    ------   ------   -------
Revenues                                       $    -   $3,985   $1,899   $11,922
Net income (loss) before income tax provision       -      420      199    (2,198)
Income tax provision                                -        -        -         -
Income (loss) from discontinued operations          -      420      199    (2,198)

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

4. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill  represents the excess of the cost of acquisitions  over the fair value
of the identifiable  assets acquired and liabilities  assumed.  Other intangible
assets  consist of the Company's  distribution  network.  Intangibles  are being
amortized on a  straight-line  basis over their  estimated  useful lives,  which
range from 5 to 10 years.  The components of our amortizable  intangible  assets
are as follows:

                                       10



                   April 30, 2005                   July 31, 2004
                   ----------------                 --------------
             Gross Carrying  Accumulated     Gross Carrying   Accumulated
                 Amounts     Amortization        Amounts      Amortization

Distribution
Network          $   653        S   599           $   653        $   550
                 -------        -------           -------        -------
Total            $   653        $   599           $   653        $   550
                 =======        =======           =======        =======

Amortization  expense  for  intangible  assets for the three and nine  months of
fiscal year 2005 was $17 and $49, respectively, and for fiscal year 2004 was $17
and $49, respectively.  Estimated amortization expense for the remainder of 2005
and the five succeeding fiscal years is as follows:

     2005 (remainder)          $17
     2006                       37
     2007-2009                 None

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

There were no changes in goodwill balances during the fiscal year 2005.

5. INVENTORY

Inventory  is stated  at the  lower of cost  (first-in,  first-out)  or  market.
Inventories  and their effect on cost of sales are  determined by physical count
for annual  reporting  purposes  and are  evaluated  using  perpetual  inventory
records for interim reporting periods.  For certain  subsidiaries during interim
periods we estimate the amount of labor and overhead  costs  related to finished
goods  inventories.  The  estimation  methodologies  used for interim  reporting
purposes are  described  in  Management's  Discussion  and Analysis of Financial
Condition  and Results of  Operations  under the subtitle  "Critical  Accounting
Policies".

                                          April 30, 2005       July 31, 2004
                                         -----------------   ------------------
 Raw materials and purchased parts          $ 12,833             $ 10,839
 Work-in-process                               2,282                2,974
 Finished goods                                2,652                3,845
                                          ----------           ----------
                                              17,767               17,658
 Less allowance for obsolete and excess
  inventory                                   (3,169)              (2,536)
                                         -----------           ----------
        Total inventory                     $ 14,598             $ 15,122
                                         ===========           ==========

                                       11





6. PRODUCT WARRANTIES

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

During the third  quarter  and first nine  months of fiscal  2005,  the  Company
incurred  costs of $161 and  $271,  respectively,  related  to  warranty  claims
submitted,  and accrued $90 and $372 related to product warranties issued during
the three and nine months of fiscal 2005, respectively. The liability related to
warranties  is included in accrued  expenses  on the  accompanying  Consolidated
Balance  Sheets and is $1,180 and  $1,030 at April 30,  2005 and July 31,  2004,
respectively.

7. COMPREHENSIVE LOSS
Comprehensive loss for the Company includes foreign currency translation
adjustments and net loss reported in the Company's Consolidated Statements of
Operations.

Comprehensive loss for 2005 and 2004 was as follows:

                                              Three Months Ended   Nine Months Ended
                                              Apr. 30,    May 1,    Apr. 30,    May 1,
                                                2005       2004       2005       2004
                                               -------     ------    ------      -----

Net loss                                       $(1,031)  $   (289)    $ (416)  $(13,253)
Foreign currency translation adjustments          (337)      (304)        (4)       286
                                               -------   --------     ------   --------
 Comprehensive loss                            $(1,368)  $   (593)    $ (420)  $(12,967)
                                               =======   ========     ======   ========

8.    LOSS PER SHARE

                                              Three Months Ended       Nine Months Ended
                                              Apr. 30,    May 1,       Apr. 30,     May 1,
                                                2005      2004           2005       2004
                                              -------    -------      -------    -------
Numerator:
   Net loss                                  $(1,031)   $   (289)      $ (416)   $(13,253)
                                             =======    ========       ======    ========

Denominator for basic loss per share -
  Weighted average shares
    outstanding                            10,517,195  10,332,548  10,449,118  10,332,548
  Effect of dilutive securities                     -           -           -           -
                                           ----------  ----------  ----------  ----------
Denominator for diluted loss
   per share                               10,517,195  10,332,548  10,449,118  10,332,548
                                           ==========  ==========  ==========  ==========
Loss per common share
   Basic                                       $(0.10)    $ (0.03)     $(0.04)     $(1.28)
   Diluted                                      (0.10)      (0.03)      (0.04)      (1.28)

Common shares outstanding for the current and prior period ended were reduced by
643,533 shares of treasury stock. The computation of diluted shares  outstanding
at April 30, 2005, does not include 2,008,494 employee stock options and 991,994
warrants  to purchase  Company  common  stock since the effect of their  assumed
conversion would be anti-dilutive. The computation of diluted shares outstanding
at May 1, 2004 does not include  2,129,681  employee stock options and 1,065,000
warrants  to purchase  Company  common  stock since the effect of their  assumed
conversion would be anti-dilutive.

                                       12





9. SEGMENT INFORMATION

The  Company  has  three  reportable  segments:  Medical  Systems  Group,  Power
Conversion Group and Other. The "Other" segment includes  unallocated  corporate
costs.  The  results of the Power  Conversion  Group's DHV  operation  have been
reclassified  to  Discontinued  Operations  and are  excluded  from the  Segment
Information presented below. Interim segment information is as follows:

                                          Medical     Power
For three months ended                    Systems  Conversion
April 30, 2005                             Group      Group    Other    Total
- -----------------------                 ---------   --------  -------  -------
Net Sales to Unaffiliated Customers       $15,380   $  3,512       -   $18,892
Cost of sales                              11,937      2,154       -    14,091
                                          -------   --------   ------- -------
Gross margin                                3,443      1,358       -     4,801

Operating expenses                          3,058        661    1,601    5,320
                                           ------    -------   ------   ------
Operating income (loss)                    $  385   $    697  $(1,601) $  (519)
                                           ======    =======   ======   ======


                                          Medical     Power
For three months ended                    Systems  Conversion
May 1, 2004                                Group      Group    Other    Total
- -----------------------                 ---------   --------  -------  -------
Net Sales to Unaffiliated Customers       $17,417   $  3,193       -   $20,610
Cost of sales                              13,346      2,244       -    15,590
                                          -------   --------  -------  -------
Gross margin                                4,071        949       -     5,020

Operating expenses                          2,482        606   $  700    3,788
                                           ------    -------   ------   ------
Operating income (loss)                   $ 1,589   $    343  $  (700) $ 1,232
                                           ======    =======   ======    ======

                                          Medical     Power
For nine months ended                     Systems   Conversion
April 30, 2005                             Group       Group    Other    Total
- -----------------------                  --------     -------  -------  -------
Net Sales to Unaffiliated Customers       $53,661   $ 10,598       -    $64,259
Cost of sales                              40,852      7,085       -     47,937
                                          -------   --------   -------   ------
Gross margin                               12,809      3,513       -     16,322

Operating expenses                          8,357      1,810    3,647    13,814
Litigation Settlement Costs                              300       -        300
                                           ------    -------   ------    ------
Operating income (loss)                    $4,452    $ 1,403  $(3,647)   $2,208
                                           ======    =======   ======    ======

                                       13





                                          Medical      Power
For nine months ended                     Systems   Conversion
May 1, 2004                                Group       Group    Other    Total
- -----------------------                 ---------   ---------  -------  --------
Net Sales to Unaffiliated Customers       $54,952   $  9,493       -    $64,445
Cost of sales                              41,890      7,220       -     49,110
                                          -------   --------   -------  -------
Gross margin                               13,062      2,273       -     15,335

Operating expenses                          8,588      1,669   $2,526    12,783
Litigation Settlement Costs                     -      3,199        -     3,199
                                           ------    -------   ------   -------
Operating income (loss)                   $ 4,474   $ (2,595) $(2,526)  $  (647)
                                          =======   ========  =======   =======


10. INCOME TAXES

Our  effective  tax rate for the three and nine months  ended April 30, 2005 was
significantly  higher  than our U.S.  statutory  tax rate.  This is  because  we
generated taxable income at our Italian subsidiary Villa, which has an effective
rate of  approximately  43%.  However,  we generated  taxable losses in our U.S.
operations. We recorded no benefit on those losses, as management has determined
it is more likely than not the benefit will be unrealized. All domestic deferred
tax assets carry a 100% valuation allowance.  The deferred tax asset recorded on
our  consolidated  balance sheet at April 30, 2005 relates to Villa. We continue
to project  that it is more likely than not we will  recover  this  deferred tax
asset through the generation of taxable income.

During  fiscal year 2004,  management  updated  each  domestic  business  unit's
forecast and  operating  results,  and  concluded  that it was prudent to record
additional  valuation  allowances,  increasing the total valuation  allowance to
100% of both long and short-term US domestic  deferred tax assets.  Accordingly,
the Company  recorded a provision of $7,171 during the second  quarter of fiscal
2004 related to the establishment of this valuation allowance.

11. CONTINGENCIES

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

In June 2003,  the  Company was advised  that the US  Government  was willing to
enter  into   negotiations   regarding  a   comprehensive   settlement  of  this
investigation.  Prior to the preliminary  discussions  with the US Government in
June 2003,  the Company had no basis to estimate  the  financial  impact of this
investigation.   Based  on  preliminary   settlement  discussions  with  the  US
Government,   discussions   with  the  Company's   advisors,   consideration  of
settlements  reached by other  parties in  investigations  of this  nature,  and
consideration of the Company's capital  resources,  management then developed an
estimate of the low end of the potential financial impact.  Accordingly,  during
the third quarter of fiscal 2003, the Company  recorded a charge of $2,347 which
represented  its estimate of the low end of a range of potential fines and legal
and professional fees.

                                       14





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

In connection with this settlement,  the Company recognized an additional charge
of  approximately  $3,199 in the second  quarter  of fiscal  2004.  This  charge
represented  the  difference  between the $2,347  charge  taken during the third
quarter  of fiscal  2003,  and the up to $5,000 in fines and  restitution,  plus
estimated legal and professional fees related to this settlement.  The liability
associated with these charges is included in Litigation  settlement  reserves on
the July 31, 2004 balance sheet.

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

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

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

STRATEGIC  ALTERNATIVES  - On March 21,  2005,  the Company was  notified by the
party  with whom it signed a  non-binding  letter of intent  for the sale of its
Medical  Systems  Group that the buyer was  terminating  negotiations  under the
letter of  intent.  The letter of intent  provided  for a $1.0  million  payment
payable in the event  that no later  than  March 4,  2005,  the buyer was ready,
willing  and able to enter into a  definitive  purchase  agreement  based on the
terms  of  the  letter  of  intent  and  containing   reasonable  and  customary
representations,  warranties,  terms and conditions relating to the transaction,
and the Company  elected not to enter into such  purchase  agreement.  The party
with whom the Company  signed the letter of intent  filed a lawsuit on April 15,
2005 in the United States District Court, Southern District of New York, seeking
payment of the $1.0 million,  plus  interest,  as well as reasonable  attorney's
fees. The Company filed an answer to this lawsuit on June 8, 2005 contesting the
buyer's  claim to these  damages.  Although  there can be no assurance  that the
Company will not have to pay the $1.0 million, the Company believes that no such
payment is payable under the terms of the letter of intent.  The Company intends
to vigorously defend this lawsuit.

ERISA  MATTERS - During the year ended July 28, 2001,  management of the Company
concluded  that  violations  of the Employee  Retirement  Income  Security  Act,
("ERISA")  existed  relating  to a defined  benefit  plan for which  accrual  of
benefits  had been frozen as of May 3, 1986.  The  violations  related to excess
concentrations  of the Common stock of the Company in the plan  assets.  In July
2001,  management  of the Company  decided to  terminate  this plan,  subject to
having  available  funds  to  finance  the plan in  accordance  with  rules  and
regulations  relating to  terminating  pension  plans.  The Company  started the
process of terminating  this plan in September  2004. At the time of settlement,
which is expected in the fourth quarter of fiscal 2005,  the Company  expects to
recognize a related charge of approximately $500,  including a cash disbursement
of  approximately  $100.

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.

                                       15





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

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

During the fourth quarter of fiscal 2004,  the Company  recorded $363 related to
potential  change of control payments the Company may have been required to make
to a former  executive.  During fiscal 2005, a different member of the executive
management  asserted a diminishment  of duties claim under his change in control
agreement.  Based on a settlement  offer made by the Company to this  executive,
the Company recorded a charge of approximately $480 during the second quarter of
Fiscal  2005.   Such  amounts  are  included  in  accrued   liabilities  in  the
accompanying  consolidated  financial  statements.  On June 2, 2005, the Company
entered into a Separation and Release Agreement with this executive.  Under such
Agreement,  the  Company  paid this  executive a $475  severance  payment and an
additional  $25  representing  payment of certain  legal fees and expenses  such
executive incurred in connection with his separation from the Company.

OTHER LEGAL  MATTERS -In  addition,  the Company is a defendant in several other
legal  actions  arising  from the normal  course of  business  in various US and
foreign jurisdictions.  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.

                                       17





              DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS

This Management's  Discussion and Analysis of Financial Condition and Results of
Operations contains forward-looking statements within the meaning of the Private
Securities  Litigation Reform Act of 1995. These statements are based on current
expectations  and the  current  economic  environment.  We  caution  that  these
statements  are not guarantees of future  performance.  They involve a number of
risks and uncertainties that are difficult to predict including, but not limited
to, our  ability to  implement  our  business  plan,  retention  of  management,
changing industry and competitive  conditions,  obtaining  anticipated operating
efficiencies, securing necessary capital facilities, favorable determinations in
various legal matters, and favorable general economic conditions. Actual results
could differ  materially from those expressed or implied in the  forward-looking
statements.  Important  assumptions and other important factors that could cause
actual results to differ materially from those in the forward-looking statements
are  specified  in the  Company's  filings  with  the  Securities  and  Exchange
Commission including our Form 10-K for the fiscal year ended July 31, 2004.

OVERVIEW

The Company is primarily  engaged in the design,  manufacture  and  marketing of
cost-effective  medical imaging and diagnostic  systems consisting of stationary
and portable x-ray systems,  radiographic/fluoroscopic  systems,  dental imaging
systems and proprietary high-voltage power conversion subsystems for medical and
other critical industrial applications. The Company also manufactures electronic
filters, high voltage capacitors,  pulse modulators,  transformers and reactors,
and a variety of other products designed for industrial,  medical,  military and
other commercial applications. We manage our business in two operating segments:
our Medical Systems Group and our Power Conversion Group. In addition, we have a
third  reporting  segment,  Other,  comprised of certain  unallocated  corporate
General and Administrative expenses. See "Segment Information" in Part I, Item 1
of this  Quarterly  Report on Form 10-Q for the fiscal  quarter  ended April 30,
2005 (this "Quarterly Report") for discussions of the Company's segments.

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

The Company's  domestic asset based revolving credit lending facility matures on
August 1, 2005.  The Company is working with a  replacement  lender to refinance
this facility pursuant to a financing  proposal that was signed on May 10, 2005.
There can be no assurance that the Company will be able to refinance the lending
facility before August 1,2005 on terms  acceptable to the Company or at all. The
failure to refinance this lending  facility would have a material adverse effect
on the Company.

                                       18





CRITICAL ACCOUNTING POLICIES

Complete descriptions of significant  accounting policies are outlined in Note 1
to the  Consolidated  Financial  Statements of our Form 10-K for the fiscal year
ended July 31, 2004.  Within these  policies,  we have identified the accounting
for deferred tax assets and the allowance  for obsolete and excess  inventory as
being critical  accounting  policies due to the significant  amount of estimates
involved. In addition,  for interim periods, we have identified the valuation of
finished  goods  inventory  as being  critical  due to the  amount of  estimates
involved.

DEFERRED INCOME TAXES

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

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

During the first nine months of fiscal 2005 the Company  recorded taxable income
on a  consolidated  basis  and  its  individual  domestic  business  units  were
profitable.   However,   after  factoring  in  approximately   $4.0  million  in
unallocated costs of the Other reporting  segment which are considered  domestic
costs for income tax purposes,  the Company  experienced a domestic taxable loss
during the period. Accordingly the Company has concluded that it should continue
to carry a 100% valuation allowance against domestic deferred tax assets and has
not recorded any income tax benefit for this domestic taxable loss during fiscal
2005.

We recorded a tax  provision  with respect to the income of Villa in all periods
presented and  anticipate it is more likely than not the remaining  deferred tax
asset which  relates to our Villa  subsidiary  will be utilized  against  future
operating  profits or as an offset to dividend  income  received  from our Villa
subsidiary.  However,  we can make no assurances that our Villa  subsidiary will
generate profits in the future.

OBSOLETE AND EXCESS INVENTORY

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

                                       19





VALUATION OF FINISHED GOODS INVENTORIES

In addition,  we use certain estimates in determining interim operating results.
The most significant  estimates in interim  reporting relate to the valuation of
finished goods inventories.  For certain  subsidiaries,  for interim periods, we
estimate  the  amount of labor and  overhead  costs  related to  finished  goods
inventories.  As of April 30, 2005,  finished  goods  represented  approximately
14.9% of the gross carrying value of our total gross  inventory.  We believe the
estimation methodologies used to be appropriate and are consistently applied.

CONSOLIDATED RESULTS OF OPERATIONS

Consolidated  net sales of $18.9  million  for the third  quarter of fiscal 2005
decreased  by $1.7  million or 8.3% from fiscal 2004 third  quarter net sales of
$20.6 million,  with increases at the Power Conversion Group offset by decreases
at the Medical  Systems Group.  The Medical Systems Group's third quarter fiscal
2005 sales of $15.4  million  declined  by $2.0  million or 11.7% from the prior
year's  third  quarter  with   decreases  in  shipments  in  both  domestic  and
international locations. Decreased shipments at international locations were due
to the strong Euro  causing  pricing for our  international  products to be less
attractive   in  non-Euro   denominated   markets.   The  Company  is  obtaining
international  certifications  for  certain  of  its  domestically  manufactured
product in order to have US dollar based offerings in these non-Euro denominated
economies.  The Power Conversion Group's third quarter fiscal 2005 sales of $3.5
million  increased by $0.3 million or 10.0% from last year's  levels  reflecting
stronger government sales.

Consolidated net sales of $64.3 million for the first nine months of fiscal 2005
were in line with prior year's  sales,  with  increases at the Power  Conversion
Group  offsetting a decrease in the Medical  Systems Group.  The Medical Systems
Group's  sales  for the  first  nine  months  of  fiscal  2005 of $53.7  million
decreased  $1.3 million or 2.3% from the prior  year's  first nine months,  with
increases  in  shipments  of digital  units at domestic  locations  offsetting a
decrease  in  shipments  at  international  locations.  Decreased  shipments  at
international  locations  were due to the strong  euro  causing  pricing for our
international  products to be less attractive in non-Euro  denominated  markets.
The  Company  is  obtaining  international  certifications  for  certain  of its
domestically  manufactured product in order to have US dollar based offerings in
these non-Euro denominated economies. The Power Conversion Group's sales for the
first nine months of fiscal 2005 of $10.6  million  increased by $1.1 million or
11.6% from the prior years levels.

Consolidated  backlog at April 30, 2005 was $16.6 million versus backlog at July
31, 2004 of  approximately  $25.9 million.  The backlog in the Power  Conversion
Group  decreased  $1.2 million from levels at beginning of the fiscal year while
there  was an $8.0  million  decrease  in the  backlog  at our  Medical  Systems
Segment.  Backlog  in the  Medical  Systems  Segment  reflects  declines  due to
shipments  of  approximately  $6.8  million  under a large  tender  order at our
international  location as well as a decrease in incoming order rates due to the
strong  euro,  partially  offset  by an  increase  in  backlog  at our  domestic
operation due to strong  bookings  during the period.  Substantially  all of the
backlog should result in shipments within the next 12 months.

                                       20





Gross  margins as a percent of sales were 25.4% for the third  quarter of fiscal
2005,  compared  to 24.4%  in the  third  quarter  of  fiscal  2004.  The  Power
Conversion  Group's  gross  margins  for the third  quarter of fiscal  2005 were
38.7%,  versus 29.7% in the prior year quarter.  Third quarter fiscal 2005 Power
Conversion group margins benefited from  improvements in procurement,  decreased
material  costs as a percent of sales and lower  waste  levels.  For the Medical
Systems Group, third quarter gross margins of 22.4% were slightly lower than the
23.4% level in the prior year third quarter due to unfavorable product mix.

Gross  margins as a percent  of sales  were  25.4% for the first nine  months of
fiscal  2005,  compared  to 23.8% in the first nine months of fiscal  2004.  The
Power  Conversion  group margins  benefited from  improvements  in  procurement,
decreased  material  costs as a percent of sales and lower waste  levels,  which
contributed  to a gross margin of 33.1% for the first nine months of fiscal 2005
as compared to 23.9% for the first nine months of fiscal  2004.  For the Medical
Systems Group,  gross margins of 23.9% were comparable to gross margins of 23.8%
in the prior year's first nine months.

Selling,  General and Administrative expenses ("SG&A") for the third quarter
of fiscal  2005 were $4.9  million  (25.8% of sales)  compared  to $3.4  million
(16.4% of sales) in the prior year's third quarter.  The increase in SG&A in
the third  quarter  of fiscal  2005  reflects  headcount  reductions,  offset by
increased  corporate  legal  and  accounting  costs  related  to  the  strategic
alternatives program.

SG&A  expenses  for the first nine months of fiscal 2005 were $12.5  million
(19.5% of sales)  compared to $11.6 million (18.1% of sales) in the prior year's
first nine months.  The increase in SG&A for the first nine months of fiscal
2005 is due to increased  corporate legal and professional  costs related to the
strategic  alternatives  program,  and a $0.5 million  charge for an  employment
settlement,  partially offset by reduced selling expenses in the Medical Systems
Segment.

During the second  quarter of fiscal 2004,  we reached an agreement in principal
with the U.S.  Government  regarding  a  settlement  of the civil  and  criminal
aspects of the previously disclosed Department of Defense ("DOD")  investigation
of our RFI  subsidiary  (See  Part  II,  Item  1,  "Legal  Proceedings"  of this
Quarterly  Report on Form 10-Q for the fiscal quarter ended April 30, 2005 (this
"Quarterly Report")). The settlement included the Company pleading guilty to one
criminal count and agreeing to pay fines and restitution to the US Government of
$5.0 million.

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

                                       21





As a  result  of the  foregoing,  we  recognized  a third  quarter  fiscal  2005
operating loss of $0.5 million  compared to operating  income of $1.2 million in
the third  quarter of fiscal  2004.  The Medical  Systems  Group  posted a third
quarter  fiscal 2005 operating  profit of $0.4 million and the Power  Conversion
Group had operating  profit of $0.7  million,  offset by  unallocated  corporate
costs of $1.6 million.

For the first nine months of fiscal 2005, we recognized operating income of $2.2
million  compared to an operating  loss of $0.6 million in the first nine months
of fiscal  2004.  The  Medical  Systems  Group had an  operating  profit of $4.5
million for the first nine months of fiscal 2005 and the Power  Conversion Group
achieved an  operating  profit of $1.4  million,  partly  offset by  unallocated
corporate costs of $3.7 million.

During the third  quarter  of fiscal  2004,  we  incurred  $0.6  million in fees
related to a revolving  credit loan  amendment.  Interest  expense for the third
quarter of fiscal  2005 was lower than the prior  year's  third  quarter  due to
decreased  borrowings  and lower  interest  rates and the absence of these fees.
Interest  expense  for the first nine  months of fiscal  2005 was lower than the
prior year for the same period for the same reasons.

The Company has not provided for a U.S. domestic income tax benefit in the third
quarter or first nine months of fiscal 2005  because it  continues to maintain a
full  valuation  allowance  relative to its  deferred tax assets as discussed in
Critical  Accounting  Policies,  above. With the exception of tax provisions and
adjustments  recorded at Villa Sistemi Medicali,  S.p.A., our Italian subsidiary
("Villa"),  we  recorded  no  adjustments  to our  current or net  deferred  tax
accounts  during  the  third  quarter  or first  nine  months  of  fiscal  2005.
Management  periodically  evaluates the likelihood of the  recoverability of the
deferred  tax  asset  recognized  on our  balance  sheet.  Based  on  management
analysis,  we believe it is more likely than not that the remaining deferred tax
assets, which relate to our foreign subsidiary will be realized.

Provision for income taxes for the three and nine month period ended May 1, 2004
reflects the establishment of a $7.2 million deferred tax valuation allowance as
discussed in Critical Accounting Policies, above.

As discussed  above,  Discontinued  Operations  are related to our DHV division,
which was sold on October 1, 2004.  Discontinued operations in the first quarter
of fiscal 2005 reflect the  operations  of the DHV division  through the date of
sale,  which  recorded  income from  operations of $0.2 million during the first
quarter  of fiscal  2005.  The prior  year had income  from  operations  of $0.4
million for the third  quarter and loss from  operations of $2.2 million for the
first nine months.

Reflecting  the above,  we recorded  net loss of $1.0 million or $0.10 per share
basic and diluted in the third quarter of fiscal 2005, as compared to a net loss
of $0.3 million, or $0.03 per share(basic and diluted), during the third quarter
of fiscal 2004.  We recorded a net loss of $0.4 million or $0.04 per share basic
and diluted in the first nine months of fiscal  2005,  as compared to a net loss
of $13.3 million,  or $1.28 per share (basic and diluted)  during the first nine
months of fiscal 2004.

                                       22





FINANCIAL CONDITION
LIQUIDITY AND CAPITAL RESOURCES

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

Working  Capital -- At April 30, 2005 and July 31, 2004, our working capital was
approximately $7.6 million and $7.8 million, respectively. At such dates, we had
approximately  $0.9  million and $4.8  million,  respectively,  in cash and cash
equivalents,  the majority of which is at our Villa  subsidiary in Italy.  As of
April  30,  2005,  we  had  approximately   $0.9  million  of  excess  borrowing
availability  under our  domestic  revolving  credit  facility  compared to $5.8
million at July 31, 2004,  reflecting  the payment of a $5.0 million fine to the
DOD in September 2004.

In addition, as of April 30, 2005 and July 31, 2004, our Villa subsidiary had an
aggregate  of  approximately  $8.1 and $7.5  million,  respectively,  of  excess
borrowing availability under its various short-term credit facilities.  Terms of
the Italian credit facilities do not permit the use of borrowing availability to
directly finance operating activities at our US subsidiaries.

Cash Flows from Operating Activities - For the nine month period ended April 30,
2005,  the  Company  used  approximately  $7.1  million of cash for  operations,
compared to a generation of $9.8 million in the corresponding  prior fiscal year
period.  Contributing to cash usage in fiscal 2005 was the payment of a total of
$5.3 million in fines  related to the DOD  investigation  as explained in "Legal
Proceedings" in Part II, Item 1 of this Quarterly Report.

Cash Flows from Investing  Activities -- we have made approximately $0.4 million
in facility improvements and capital equipment  expenditures for the nine months
ended April 30, 2005  compared to $0.3 million for the  comparable  prior fiscal
year period.

Cash Flows from Financing Activities -- During the nine month period ended April
30, 2005, we borrowed a total of approximately  $0.2 million on our domestic and
Italian credit facilities.  In addition, the Villa subsidiary paid a dividend of
approximately  $2.5 million,  of which $0.5 million was paid to Villa's minority
shareholders.  The remaining  $1.9 million,  net of  withholding  taxes,  was an
intercompany  transaction  with the  Company  and  therefore  eliminated  in the
accompanying consolidated financial statements.

The following table summarizes our contractual  obligations,  including debt and
operating leases at July 31, 2004 (in thousands):

                                                           WITHIN     2-3     4-5     AFTER 5
                 OBLIGATIONS                   TOTAL (1)   1 YEAR    YEARS   YEARS     YEARS
- -------------------------------------------   -----------------------------------------------
Long-Term Debt Obligations....................$    2,733   $  564   $1,155   $  568   $  446
Capital Lease Obligations ....................     3,073      368      897      994      814
Subordinated Note ............................     2,000       --    2,000       --       --
Operating Lease Obligations ..................       953      514      421       18       --
                                              ----------   ------   ------   ------   ------
Total Contractual Cash Obligations............$    8,759   $1,446   $4,473   $1,580   $1,260
                                              ===========  ======   ======   ======   ======

(1)   In addition to the long term obligations above, as of July 31, 2004 we had
      approximately  $2.7  million in  revolving  credit debt in the US and $0.3
      million in Italy. The Italian credit facilities are generally renewed on a
      yearly basis and the GECC Facility (as hereinafter  defined),  as amended,
      matures in August 2005.  The  maturity of the GECC  Facility is subject to
      acceleration  upon  certain  events of  default  as  defined in the credit
      agreement,  including  uncured  covenant  defaults.  The  maturity is also
      subject to  acceleration  in the event of the  consummation of the sale of
      the Medical Systems Group, or the remainder of the Power Conversion Group.

                                       23





Credit  Facility and Borrowing -- The Company has a $5 million senior  revolving
credit  agreement,  as amended,  entered into on June 10, 2002 with Transamerica
Corporation  (the  "GECC  Facility").  In  January  2004,  GE  Business  Capital
Corporation  ("GECC") completed the acquisition of Transamerica  Corporation and
assumed  the  ownership  and  administration  of our US  credit  facility.  This
facility,  as  amended,  expires on the earlier of August 1, 2005 or the sale of
substantially  all of the assets or stock of RFI or the  Medical  Systems  Group
Segment.  Interest  under the GECC  Facility  is based on thirty day  commercial
paper rates plus a margin of 3.5%.  The interest  rate on the GECC  Facility was
4.75% at April 30, 2005 and 5.0% at July 31, 2004.  The GECC Facility is subject
to commitment  fees of 3/8% on the daily unused portion payable  monthly.  Under
terms of the GECC  Facility,  interest is calculated  based on the higher of the
actual  balance,  or a floor  revolving  credit balance of $5 million.  The GECC
Facility is secured by substantially all of the Company's  accounts  receivable,
inventory,  and fixed assets in the US. The terms of the GECC  Facility  require
the Company to comply with various operational and financial  covenants,  and to
place limitations on the Company's  ability to make capital  expenditures and to
pay dividends. The Company was in compliance with these various covenants,  with
the  exception of the fixed charge  coverage  ratio during the third  quarter of
fiscal 2005. On June 9, 2005 the Company and GECC signed the Ninth  Amendment to
the GECC Facility. This Ninth Amendment waived the event of default arising from
the Company's  non-compliance with the fixed charge coverage ratio covenant.  In
addition the Ninth Amendment lowered the minimum availability covenant under the
line from  $500,000 to  $250,000.  The  Company  intends to  refinance  the GECC
Facility and any related debt before the August 1, 2005 expiration. No assurance
can be given that the Company  will be able to  refinance  the GECC  Facility on
terms  acceptable  to the Company or at all. The failure to  refinance  the GECC
Facility would have a material adverse effect on the Company.

On October 25, 2004, the Company signed a Sixth  Amendment to the GECC Facility.
This Sixth  Amendment:  (i) extended the maturity of the credit  facility to the
earlier of (a) August 1, 2005 or (b) the sale of substantially all of the assets
or stock of RFI or the Medical  Systems Group segment,  (ii) reduced the maximum
formula based borrowing cap from $10 million to $5 million (iii) accelerated the
payment of the $0.5 million Performance Fee immediately upon signing as a charge
against the credit facility,  (iv) provided for a $50,000  extension fee payable
immediately  as a charge against the facility and (v) provided for an additional
fee of $10,000 per month for each month the credit facility remains  outstanding
subsequent to December 2004.

On  February  2,  2005,  the  Company  signed a  Seventh  Amendment  to the GECC
Facility.  This Seventh Amendment:  (i) gave a consent for the use of up to $0.6
million loan proceeds for settlement of certain employment matters, (ii) reduced
the  inventory  borrowing  sub limit  under  the  availability  formula  to $2.5
million,  and (iii)  extended  the expiry of the  Company's  fixed  charge ratio
covenant through the August 1, 2005 maturity of the GECC Facility.

On April 5, 2005 the Company  signed an Eighth  Amendment to the GECC  Facility.
This Eighth Amendment:  (1) permitted the Borrowers to use up to $300,000 of the
proceeds of the GECC Facility to pay additional  amounts owing by RFI to the DOD
in  connection  with  the  settlement  of  the  investigation  conducted  by the
Department  of Defense  with respect to RFI and (ii)  provided  that in no event
shall the  aggregate  amount of loans and letters of credit  outstanding  at any
time  under the GECC  Facility  (x) in  respect  of  Eligible  Inventory  exceed
$2,000,000 or (y) exceed the Maximum Amount of the GECC Facility.

                                       24





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

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

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

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

                                       25





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

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

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

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

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

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

The Company's  Board of Directors,  elected at the Company's  Annual  Meeting of
Shareholders  held on May  29,  2003,  has  reviewed  the  "change  in  control"
provisions  regarding  payments totaling up to approximately  $1.8 million under
the  employment  agreement  between the Company and its former  Chief  Executive
Officer,  Samuel  Park.  As a result of this review and based upon,  among other
things,  the advice of special  counsel,  the  Company's  Board of Directors has
determined that no obligation to pay these amounts has been triggered.  Prior to
his departure from the Company on October 10, 2003, Mr. Park orally informed the
Company that, after reviewing the matter with his counsel,  he believed that the
obligation to pay these  amounts has been  triggered.  On October 27, 2003,  the
Company received a letter from Mr. Park's counsel  demanding  payment of certain
sums and other consideration pursuant to the Company's employment agreement with
Mr. Park, including these change of control payments.  On November 17, 2003, the
Company filed a complaint  against Mr. Park seeking a declaratory  judgment that
no change in control payment was or is due to Mr. Park, and that an amendment to
the employment contract with Mr. Park regarding advancement and reimbursement of
legal fees is invalid and  unenforceable.  Mr. Park  answered the  complaint and

                                       27





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. The Company and Mr. Park have 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.  If Mr. Park prevails on his claims and the payments he seeks are
required to be paid in a lump sum,  these  payments may have a material  adverse
effect on the Company's liquidity.  It is not possible to predict the outcome of
these claims;  however,  the Company's  Board of Directors does not believe that
such a claim is  reasonably  likely  to  result in a  material  decrease  in the
Company's liquidity in the foreseeable future.

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

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

On March 21,  2005,  the Company was notified by the party with whom it signed a
non-binding  letter of intent for the sale of its Medical Systems Group that the
buyer was  terminating  negotiations  under the letter of intent.  The letter of
intent  provided for a $1.0 million  payment  payable in the event that no later
than March 4, 2005,  (i) the buyer was ready,  willing  and able to enter into a
definitive  purchase  agreement  based on the terms of the  letter of intent and
containing  reasonable  and  customary  representations,  warranties,  terms and
conditions  relating to the  transaction,  and (ii) the  Company  elected not to
enter into such purchase  agreement.  The party with whom the Company signed the
letter of intent filed a lawsuit on April 15, 2005 in the United States District
Court,  Southern District of New York, seeking payment of the $1.0 million, plus
interest,  as well as reasonable attorney's fees. The Company filed an answer to
this  lawsuit on June 8, 2005  contesting  the buyer's  claim to these  damages.
Although  there can be no  assurance  that the Company  will not have to pay the
$1.0  million,  the Company  believes  that no such payment is payable under the
terms of the letter of intent.  The Company  intends to  vigorously  defend this
lawsuit.

                                       28





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

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


ITEM 3         QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We do  not  ordinarily  hold  market  risk  sensitive  instruments  for  trading
purposes.  We do, however,  recognize market risk from interest rate and foreign
currency exchange exposure.  There have been no changes in financial market risk
as  originally  discussed in the  Company's  Annual  Report on Form 10-K for the
fiscal year ended July 31, 2004.

ITEM 4         CONTROLS AND PROCEDURES

The Company,  under the supervision and with the  participation of the Company's
management,  including Walter F. Schneider,  Chief Executive Officer and Mark A.
Koch,  Principal  Accounting  Officer,  has evaluated the  effectiveness  of the
design and operation of the Company's  "disclosure controls and procedures",  as
such  term is  defined  in Rules  13a-15e  and  15d-15e  promulgated  under  the
Securities Exchange Act of 1934, as amended, as of the end of the period covered
by this Quarterly  Report on Form 10-Q.  Based upon that  evaluation,  the Chief
Executive  Officer and  Principal  Accounting  Officer have  concluded  that the
Company's disclosure controls and procedures were effective as of the end of the
period  covered  by this  Quarterly  Report on Form 10-Q to  provide  reasonable
assurance  that  information  required to be disclosed by the Company in reports
that it files or  submits  under the  Securities  Act of 1934,  as  amended,  is
recorded,  processed,  summarized and reported within the time periods specified
in SEC rules and forms.

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

A control  system,  no matter how well conceived and operated,  can provide only
reasonable, not absolute assurance that the objectives of the control system are
met. Because of the inherent  limitations in all control systems,  no evaluation
of controls can provide absolute assurance that all control issues and instances
of fraud, if any, within a company have been detected.

                                       29





                          PART II - OTHER INFORMATION

ITEM 1.      LEGAL PROCEEDINGS

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

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

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

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

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

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

                                       30





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

STRATEGIC ALTERNATIVES - On March 21, 2005, the Company was notified by Palladio
Corporate  Finance  S.p.A.  and  Palladio   Finaziaria   S.p.A.   (collectively,
"Palladio"),  the party with whom it signed a  non-binding  letter of intent for
the  sale  of  its  Medical   Systems  Group,   that  Palladio  was  terminating
negotiations  under the letter of intent.  The letter of intent  provided  for a
$1.0 million  payment payable in the event that no later than March 4, 2005, (i)
the  buyer was  ready,  willing  and able to enter  into a  definitive  purchase
agreement  based on the terms of the letter of intent and containing  reasonable
and customary representations,  warranties, terms and conditions relating to the
transaction,  and (ii) the  Company  elected  not to enter  into  such  purchase
agreement.  Palladio  filed a lawsuit  against  the  Company and its Del Medical
Imaging Corp  subsidiary on April 15, 2005 in the United States  District Court,
Southern  District of New York.  The lawsuit  seeks payment of the $1.0 million,
plus  interest,  as well as  reasonable  attorney's  fees.  The Company filed an
Answer to this lawsuit on June 8, 2005.  Although there can be no assurance that
the Company will not have to pay the $1.0 million,  the Company believes that no
such  payment is payable  under the terms of the letter of intent.  The  Company
intends to vigorously defend this lawsuit.

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

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

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

                                       31





"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. The Company and Mr. Park have 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.  If Mr. Park prevails on his claims and the payments he seeks are
required to be paid in a lump sum,  these  payments may have a material  adverse
effect on the Company's liquidity.  It is not possible to predict the outcome of
these claims.  However,  the Company's  Board of Directors does not believe that
such a claim is  reasonably  likely  to  result in a  material  decrease  in the
Company's liquidity in the foreseeable future.

During  fiscal  2004,  an Italian  subsidiary  of the Company  began  employment
termination  proceedings  against  an  executive.  Subsequently,  the  executive
instituted legal proceedings in the labor court in Italy against the executive's
former  employer  asserting  certain  monetary claims based on change in control
provisions in a letter dated January 10, 2003 to the executive. The court issued
a "pay or justify"  order  directing the Company's  subsidiary to pay damages of
about euro 306,000,  plus interest and costs. The subsidiary has challenged this
order in the Italian labor court.  Subsequently,  the executive served a writ of
summons  on the  Company  as a third  party  claim  against  the  Company in the
litigation  pending  with the  subsidiary.  The next hearing date in the Italian
labor court on this action is scheduled for October 28, 2005.  In addition,  the
executive  has  brought  an  action in the  Italian  labor  court  for  unlawful
dismissal  under the Italian  labor laws against the Company's  subsidiary.  The
subsidiary  entered an appearance  and filed a  counterclaim.  In addition,  the
executive has brought an action in the Italian corporate courts  challenging the
subsidiary's  removal of the executive as managing  director.  The executive has
not specified any damages in this action and it is in the preliminary stage. The
Company believes that the executive's  change in control  provision has not been
triggered and that the executive's termination was justified.  However, based on
the court's "pay or justify" order to pay euro 300,000,  the Company  recorded a
charge in fiscal year 2004 of approximately $0.4 million in connection with this
matter and which  charge is included in  Litigation  Settlement  reserves in the
accompanying financial statements.

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

                                       32





ITEM 6.      EXHIBITS

                Exhibits


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

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

   32.1*        Certification  of  the  Chief  Executive   Officer,   Walter  F.
                Schneider,  pursuant to 18 U.S.C.  Section 1350 adopted pursuant
                to Section 906 of the Sarbanes-Oxley Act of 2002.

   32.2*        Certification of the Principal  Accounting  Officer,  Mark Koch,
                pursuant to 18 U.S.C.  Section 1350 adopted  pursuant to Section
                906 of the Sarbanes-Oxley Act of 2002.

                * Filed herewith

                DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES


                                   SIGNATURES

Pursuant to the  requirements  of the  Securities  and Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.


                                              DEL GLOBAL TECHNOLOGIES CORP.



Dated:    June 14, 2005                       /s/ Walter F. Schneider
                                              -----------------------
                                              Walter F. Schneider
                                              Chief Executive Officer
                                              and President


Dated:    June 14, 2005                       /s/ Mark Koch
                                              -----------------------
                                              Mark Koch
                                              Principal Accounting Officer
                                              and Treasurer

                                       33

EX-31.1

                                                                    EXHIBIT 31.1

                                 CERTIFICATIONS


I, Walter F. Schneider, certify that:

1.    I have  reviewed  this  Quarterly  Report  on  Form  10-Q  of  Del  Global
      Technologies Corp.;

2.    Based on my knowledge,  this report does not contain any untrue  statement
      of a material fact or omit to state a material fact  necessary to make the
      statements made, in light of the circumstances under which such statements
      were made,  not  misleading  with  respect  to the period  covered by this
      report;

3.    Based on my  knowledge,  the  financial  statements,  and other  financial
      information  included  in this  report,  fairly  present  in all  material
      respects the financial condition,  results of operations and cash flows of
      the registrant as of, and for, the periods presented in this report;

4.    The  registrant's  other  certifying  officer(s) and I are responsible for
      establishing  and  maintaining  disclosure  controls  and  procedures  (as
      defined in Exchange Act Rules  13a-15(e) and 15d-15(e)) for the registrant
      and have:

      (a)   Designed such  disclosure  controls and  procedures,  or caused such
            disclosure   controls  and  procedures  to  be  designed  under  our
            supervision,  to ensure that  material  information  relating to the
            registrant,  including its consolidated subsidiaries,  is made known
            to us by others  within  those  entities,  particularly  during  the
            period in which this report is being prepared;

      (b)   Evaluated the effectiveness of the registrant's  disclosure controls
            and  procedures and presented in this report our  conclusions  about
            the effectiveness of the disclosure  controls and procedures,  as of
            the  end  of the  period  covered  by  this  report  based  on  such
            evaluation; and

      (c)   Disclosed  in this  report any change in the  registrant's  internal
            control  over   financial   reporting   that  occurred   during  the
            registrant's  most recent fiscal  quarter (the  registrant's  fourth
            fiscal  quarter in the case of an annual report) that has materially
            affected,   or  is  reasonably  likely  to  materially  affect,  the
            registrant's internal control over financial reporting; and

5.    The registrant's other certifying  officer(s) and I have disclosed,  based
      on  our  most  recent   evaluation  of  internal  control  over  financial
      reporting,  to the  registrant's  auditors and the audit  committee of the
      registrant's  board of directors  (or persons  performing  the  equivalent
      functions):

      (a)   All significant  deficiencies and material  weaknesses in the design
            or operation of internal control over financial  reporting which are
            reasonably  likely to adversely affect the  registrant's  ability to
            record, process, summarize and report financial information; and

      (b)   Any fraud,  whether or not  material,  that  involves  management or
            other  employees  who have a  significant  role in the  registrant's
            internal control over financial reporting.

Date: June 14, 2005
                                          /s/ Walter F. Schneider
                                          ---------------------------
                                          Walter F. Schneider
                                          Chief Executive Officer

EX-31.2

                                                                    EXHIBIT 31.2

                                 CERTIFICATIONS

I, Mark Koch, certify that:

1.    I have  reviewed  this  Quarterly  Report  on  Form  10-Q  of  Del  Global
      Technologies Corp.;

2.    Based on my knowledge,  this report does not contain any untrue  statement
      of a material fact or omit to state a material fact  necessary to make the
      statements made, in light of the circumstances under which such statements
      were made,  not  misleading  with  respect  to the period  covered by this
      report;

3.    Based on my  knowledge,  the  financial  statements,  and other  financial
      information  included  in this  report,  fairly  present  in all  material
      respects the financial condition,  results of operations and cash flows of
      the registrant as of, and for, the periods presented in this report;

4.    The  registrant's  other  certifying  officer(s) and I are responsible for
      establishing  and  maintaining  disclosure  controls  and  procedures  (as
      defined in Exchange Act Rules  13a-15(e) and 15d-15(e)) for the registrant
      and have:

      (a)   Designed such  disclosure  controls and  procedures,  or caused such
            disclosure   controls  and  procedures  to  be  designed  under  our
            supervision,  to ensure that  material  information  relating to the
            registrant,  including its consolidated subsidiaries,  is made known
            to us by others  within  those  entities,  particularly  during  the
            period in which this report is being prepared;

      (b)   Evaluated the effectiveness of the registrant's  disclosure controls
            and  procedures and presented in this report our  conclusions  about
            the effectiveness of the disclosure  controls and procedures,  as of
            the  end  of the  period  covered  by  this  report  based  on  such
            evaluation; and

      (c)   Disclosed  in this  report any change in the  registrant's  internal
            control  over   financial   reporting   that  occurred   during  the
            registrant's  most recent fiscal  quarter (the  registrant's  fourth
            fiscal  quarter in the case of an annual report) that has materially
            affected,   or  is  reasonably  likely  to  materially  affect,  the
            registrant's internal control over financial reporting; and

5.    The registrant's other certifying  officer(s) and I have disclosed,  based
      on  our  most  recent   evaluation  of  internal  control  over  financial
      reporting,  to the  registrant's  auditors and the audit  committee of the
      registrant's  board of directors  (or persons  performing  the  equivalent
      functions):

      (a)   All significant  deficiencies and material  weaknesses in the design
            or operation of internal control over financial  reporting which are
            reasonably  likely to adversely affect the  registrant's  ability to
            record, process, summarize and report financial information; and

      (b)   Any fraud,  whether or not  material,  that  involves  management or
            other  employees  who have a  significant  role in the  registrant's
            internal control over financial reporting.

Date: June 14, 2005
                                                /s/ Mark Koch
                                                ----------------------------
                                                Mark Koch
                                                Principal Accounting Officer

EX-32.1

                                                                    EXHIBIT 32.1


                  CERTIFICATION OF CHIEF EXECUTIVE OFFICER (1)



Pursuant  to  18  U.S.C.  Section  1350,  as  created  by  Section  906  of  the
Sarbanes-Oxley  Act of  2002,  the  following  certification  is  being  made to
accompany the  Registrant's  Quarterly  Report on Form 10-Q for the period ended
April 30, 2005:

In connection with the Quarterly  Report of Del Global  Technologies  Corp. (the
"Company")  on Form 10-Q for the period  ended  April 30, 2005 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"),  I, Walter
F. Schneider,  Chief Executive Officer of the Company,  certify,  pursuant to 18
U.S.C. ss. 1350,  adopted pursuant to Section 906 of the  Sarbanes-Oxley  Act of
2002 that to my knowledge:

      (1)   The Report fully complies with the  requirements of Section 13(a) or
            Section  15(d),  as applicable,  of the  Securities  Exchange Act of
            1934, as amended; and

      (2)   The  information  contained in the Report  fairly  presents,  in all
            material respects, the financial condition and results of operations
            of the Company.



                                           /s/ Walter F. Schneider
                                           -------------------------
                                           Name: Walter F. Schneider
                                           Title: Chief Executive Officer
                                           Date: June 14, 2005


      (1)   A signed original of this written statement  required by Section 906
            has  been  provided  to Del  Global  Technologies  Corp  and will be
            retained  by Del Global  Technologies  Corp.  and  furnished  to the
            Securities and Exchange Commission or its staff upon request.

            The foregoing certification is being furnished solely pursuant to 18
            U.S.C.  Section 1350 and is not being filed as part of the Report or
            as a separate disclosure document.

EX-32.2

                                                                    EXHIBIT 32.2

                CERTIFICATION OF PRINCIPAL ACCOUNTING OFFICER (1)

Pursuant  to  18  U.S.C.  Section  1350,  as  created  by  Section  906  of  the
Sarbanes-Oxley  Act of  2002,  the  following  certification  is  being  made to
accompany the  Registrant's  Quarterly  Report on Form 10-Q for the period ended
April 30, 2005:

In connection with the Quarterly  Report of Del Global  Technologies  Corp. (the
"Company")  on Form 10-Q for the period  ended  April 30, 2005 as filed with the
Securities and Exchange  Commission on the date hereof (the  "Report"),  I, Mark
Koch,  Principal  Accounting  Officer of the  Company,  certify,  pursuant to 18
U.S.C. ss. 1350,  adopted pursuant to Section 906 of the  Sarbanes-Oxley  Act of
2002 that to my knowledge:

      (1)   The Report fully complies with the  requirements of Section 13(a) or
            Section  15(d),  as applicable,  of the  Securities  Exchange Act of
            1934, as amended; and

      (2)   The  information  contained in the Report  fairly  presents,  in all
            material respects, the financial condition and results of operations
            of the Company.


                                          /s/ Mark Koch
                                          ------------------------------------
                                          Name: Mark Koch
                                          Title:  Principal Accounting Officer
                                          Date: June 14, 2005


      (1)   A signed original of this written statement  required by Section 906
            has  been  provided  to Del  Global  Technologies  Corp  and will be
            retained  by Del Global  Technologies  Corp.  and  furnished  to the
            Securities and Exchange Commission or its staff upon request.

            The foregoing certification is being furnished solely pursuant to 18
            U.S.C.  Section 1350 and is not being filed as part of the Report or
            as a separate disclosure document.