Datalink Corporation Reports 2001 First Quarter Operating Results; Sales Increase 46% Over Prior Year; Results In Line With Recent Guidance.Business Editors MINNEAPOLIS--(BUSINESS WIRE)--April 18, 2001 Live Webcast of Conference Call is Scheduled at 9:30 am Central Time today, April 18, 2001 Datalink Corporation Datalink Corporation (NASDAQ: DTLK) is an American data storage corporation with operations throughout the United States. The company engages in the design, installation, and support of data storage infrastructures that store, protect, and provide continuous access to (Nasdaq:DTLK), a premier independent information storage architect, reported that revenues for the quarter ended March 31, 2001 rose 46% to $40.9 million from $28.0 million in the same period a year ago. Net income was $1.1 million or $.12 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to $919,000, or $.10 per diluted share for the same period in the prior year before the cumulative effect of a change in accounting principle. Greg GREG Great Egg Harbor National Scenic and Recreational River (US National Park Service) Meland Meland is a municipality in the county of Hordaland, Norway. Meland was separated from Alversund October 15, 1923. The northern part of Holsnøyni was transferred from Herdla to Meland January 1, 1964. , Datalink's President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. commented, "We are pleased with the outstanding sales results we generated in the first quarter. In a tough economic environment, we substantially expanded our business. Throughout the past year, we have added sales and technical talent. Through a targeted hiring program, and the November November: see month. 2000 acquisition of the data storage solutions business of OpenSystems.com, we grew our total number of employees by 35% since the beginning of 2000. We are focused on expanding our organization to take advantage of the growth opportunities for networked data storage. Our model of architecting information storage solutions using the best technologies for our customers continues to be a successful one. "Datalink's earnings grew 17% for the quarter, with an operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: of 4.4%. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. have increased over the prior year reflecting increased investment in our technical and sales resources and increased amortization of intangibles Property that is a "right" such as a patent, Copyright, or trademark, or one that is lacking physical existence, such as good will. from our recent acquisition." "Looking forward, we expect that in the near-term near-term adj. Of, for, or involving a short period of time in the near future. , technology spending will remain under heightened scrutiny Scrutiny (Fr. scrutin, Late Lat. scrutinium, from scrutari, to search or examine thoroughly) is a careful examination or inquiry (as though there was a mistake). . With the current level of economic uncertainty, many organizations are choosing to reduce capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. . While there is a potential for deferring decisions on implementing networked storage solutions, the strategic importance of networked storage has not diminished di·min·ish v. di·min·ished, di·min·ish·ing, di·min·ish·es v.tr. 1. a. To make smaller or less or to cause to appear so. b. . Advance information storage strategies and technologies, such as SAN's (Storage Area Networks) are still vital to our customers' ability to use information. For many organizations, these technologies present an opportunity for improved productivity through more efficient management of information. Mr. Meland continued. "We are continuously monitoring the marketplace. While we see reason for concern, we believe that the long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. opportunities in the networked data storage marketplace are as strong as ever. Therefore, we are proceeding with our plans to expand our sales and technical resources to position Datalink to take full advantage of this growing market. Due to the uncertainty in the marketplace we are modestly lowering our guidance on 2001 operating results." For 2001, Datalink expects revenues to range from $165 to $175 million, a 20% to 27% gain over 2000; and earnings to range from $.60 to $.65 per share, up 25% to 35% over 2000. For the three-month period ended June June: see month. 30, 2001, Datalink expects revenues to range from $39 to $42 million and earnings to range from $.08 to $.10 per share. Datalink Corporation, based in Minneapolis, Minnesota “Minneapolis” redirects here. For other uses, see Minneapolis (disambiguation). Minneapolis (pronounced IPA: /ˌmɪniˈæpəlɪs/) is the largest city in the U.S. , is the nation's leading independent architect of enterprise-class information storage infrastructures. As an independent, Datalink designs, builds, and supports information storage architectures using the best possible technologies. Datalink's customized storage infrastructures ensure information availability, storage, protection, and continuity for clients. A live webcast of the Datalink conference call to discuss operating results is scheduled today, April 18, 2001 at 9:30 am Central Time and can be heard via the Datalink website, www.datalink.com. An audio replay will be available through April 25, 2001. To listen to the audio replay, please dial (800) 839-6713. The pass-code for the replay is 4124599. A replay is also available via web cast on Datalink's website. The Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 provides a "safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " for certain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . This press release contains forward-looking statements, which reflect our views regarding future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties, including those identified below, which could cause actual results to differ materially from historical results or those anticipated. The words "aim," "believe," "expect," "anticipate," "intend," "estimate" and other expressions which indicate future events and trends identify forward-looking statements. Actual future results and trends may differ materially from historical results or those anticipated depending upon a variety of factors, including, but not limited to: our ability to hire and retain key technical and other personnel; competition and pricing pressures and timing of our installations that may adversely affect our revenues and profits; the level of continuing demand for data storage; including the effects of current economic conditions; our dependence on key suppliers; the strain placed on our resources by growth and expansion; our ability to adapt to rapid technological change; risks associated with possible future acquisitions; fluctuations in our quarterly operating results; future changes in applicable accounting rules; and volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the in our stock price.
Datalink Corporation
Consolidated Statements of Operations
(In Thousands, Except Per Share Data)
Three Months Ended
March 31,
(unaudited)
2001 2000
---- ----
Net Sales
Product sales $33,892 $24,329
Service sales 7,007 3,669
------------------------
Total net sales 40,899 27,998
------------------------
Cost of Sales
Cost of product sales 24,884 17,664
Cost of service sales 4,946 2,648
------------------------
Total cost of sales 29,830 20,312
------------------------
Gross Profit 11,069 7,686
------------------------
Sales and marketing 4,514 3,475
General and administrative 2,867 1,931
Engineering 1,313 595
Amortization of intangibles 589 204
------------------------
Total operating expenses 9,283 6,205
------------------------
Income from operations 1,786 1,481
Interest income (expense), net 38 76
------------------------
Income before income taxes 1,824 1,557
Income taxes 748 638
------------------------
Income before cumulative effect of a change
in accounting principle 1,076 919
Cumulative impact of a change in accounting
principle, net of income taxes (753)
------------------------
Net income $1,076 $166
========================
Net income per share:
Basic:
Income per share before cumulative effect
of a change in accounting principle $0.12 $0.10
Loss per share from the cumulative effect
of a change in accounting principle (0.08)
------------------------
Net income per share $0.12 $0.02
========================
Fully diluted:
Income per share before cumulative effect
of a change in accounting principle $0.12 $0.10
Loss per share from the cumulative effect
of a change in accounting principle (0.08)
------------------------
Net income per share $0.12 $0.02
========================
Weighted average shares outstanding:
Basic 8,901 8,773
Fully diluted 9,041 9,261
Datalink Corporation
Consolidated Balance Sheets
March 31, Dec. 31,
2001 2000
-------- --------
(Unaudited)
Current assets
Cash and cash equivalents $ 3,464 $ 4,542
Accounts receivable, net 15,157 16,255
Inventories 6,096 8,162
Inventories shipped but not installed 3,087 6,790
Other current assets 1,058 744
Deferred income taxes 2,401 2,401
-------- --------
Total current assets 31,263 38,894
-------- --------
Property and equipment, net 10,914 6,434
Intangibles, net 10,364 10,811
Other assets 365 333
-------- --------
Total assets $ 52,906 $ 56,472
======== ========
Current liabilities
Accounts payable $ 12,464 $ 19,664
Accrued expenses 3,014 4,021
Income taxes payable 765 518
Note payable to former stockholder, current portion 705 705
Deferred revenue 2,521 2,291
-------- --------
Total current liabilities 19,469 27,199
-------- --------
Note payable to former stockholder, less current
portion - 704
Obligation for construction in progress 5,611 1,968
Deferred income taxes 464 464
-------- --------
Total liabilities 25,544 30,335
-------- --------
Stockholders' equity
Common stock, $.001 par value, 50,000,000 shares
authorized, 8,903,788 and 8,895,850 shares issued
and outstanding as of of March 31, 2001 and
December 31, 2000, respectively. 9 9
Additional paid in capital 19,872 19,723
Retained earnings 7,481 6,405
-------- --------
Total stockholders' equity 27,362 26,137
-------- --------
Total liabilities and stockholders' equity $ 52,906 $ 56,472
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