Digital Power Corporation Reports Financial Results for the Fourth

Quarter and for the Year Ended December 31, 2010

FREMONT, Calif., March 3, 2011–Digital Power Corporation (NYSE Amex: DPW - News) today announced its financial results for the fourth quarter and for the year ended December 31, 2010. Digital Power Corporation reported net income of $213,000 for the fourth quarter of 2010, compared to a net income of $6,000 for the fourth quarter of 2009. Operating income was $165,000 for the fourth quarter of 2010, compared to an operating income of $6,000 for the same quarter in 2009. The company reported revenue of $3,072,000 for the fourth quarter of 2010, an increase of 26% over revenue of $2,435,000 in the comparable quarter of 2009. Digital Power Corporation revenue for the year ended December 31, 2010 was $10,396,000, an increase of 20% from revenue of $8,659,000 for the year ended December 31, 2009. Net income for the year ended December 31, 2010 was $487,000, an increase of $635,000 over the loss of $148,000 for the year ended December 31, 2009. The gross margin in 2010 was 35%, similar to the gross margin reported for 2009.

Commenting on the results, Amos Kohn, president and CEO of Digital Power Corporation, stated, “We are very pleased with our fourth quarter and yearly performance. During the quarter and the year ended December 31, 2010, we generated revenue from the sale of a fully customized product solution for the medical and telecom markets as part of our strategy to transition away from a dependence on standard, commodity products. In addition, during these periods, we successfully delivered products based on our advanced off-the-shelf product line for commercial applications and ruggedized version for numerous military projects". Mr. Kohn adds: "we continued to expand our presence in the market as we were awarded several projects to provide high-grade power solutions to industry leaders, released to production feature-rich custom design products, and began providing power rectifier systems to international naval fleets. We will continue to focus on solution-driven applications for our major vertical markets: telecom, industrial, medical and military. We also will continue to expand our capabilities and accelerate our development and release of even more advanced power products. And we plan to further strengthen our sales force to support our growth strategy.”

About Digital Power:

Headquartered in Fremont, Calif., Digital Power Corporation (NYSE/Amex: DPW) designs, manufactures and sells high-grade customized and off-the-shelf power system solutions. Its products are used in the most demanding telecom, industrial, medical and military applications where customers demand high density, high efficiency and ruggedized power solutions.

Address: 41324 Christy Street, Fremont, California, 94538-3158
Contact: Assi Itshayek, 510-657-2635

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