Digital Power Corporation Reports Financial Results for the Second

Quarter Ended June 30, 2012


FREMONT, Calif., August 14, 2012, Digital Power Corporation (NYSE Amex: DPW - News) today announced its financial results for the second quarter ended June 30, 2012.

Digital Power’s revenue for the second quarter ended June 30, 2012 were $2,942,000, a decrease of 7% from revenue of $3,172,000 for the same quarter ended June 30, 2011. Net income for the quarter ended on June 30, 2012 was $478,000 a increase of 17% from the “net income” of $408,000 in the quarter ended on June 30, 2011.Gross margin in the quarter ended June 30, 2012 was 43%, an increase from the gross margin reported on June 30, 2011 of 41%. Operating income for the quarter ended June 30, 2012 was $471,000, an increase of 12% from the quarter ended June 30, 2011.

Commenting on the results, Amos Kohn, President and CEO stated, “We are pleased to report that our ongoing improvements in operating efficiency resulted in a respectable net income for the second quarter despite a mild revenue shortfall caused by the global economic slowdown. While we have been very aggressive in containing operation costs, we have not cut back in new product development. These development efforts are intended to result in several new and advanced high efficiency power systems that will be released to production within the next two to three quarters.”

Mr. Kohn adds, “We will continue to focus on advanced, solution-driven applications in our vertical markets. Our achievements this quarter included positioning Digital Power to increase its presence in the defense marine industry and in commercial markets. We expect to strengthen our sales force in the next quarter to support our growth strategy.”

About Digital Power:

Digital Power Corporation is a solution-driven organization that designs, develops, manufactures and sells high-grade customized and flexible power system solutions for the most demanding applications in the medical, military, telecom and industrial markets. We are highly focused on high-grade and custom product designs for both the commercial and military/defense markets, where customers demand high density, high efficiency and ruggedized products to meet the harshest and/or military mission critical operating conditions. We are a California corporation originally formed in 1969, and our common stock trades on the NYSE Amex under the symbol "DPW". Digital Power's headquarters is located at 41324 Christy Street, Fremont, California, 94538-3158; Contact: Leo Yen, Investor Relations, 510-657-2635; Website: www.digipwr.com.


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