Datalink Corporation Reports Third Quarter and Nine Month Operating Results; Strong Growth Continues; New Marketing Program Launched.Business Editors & High-Tech high-tech also hi-tech adj. Informal Of, relating to, or resembling high technology. high-tech Adjective same as hi-tech Adj. 1. Writers MINNEAPOLIS--(BUSINESS WIRE)--Oct. 18, 2000 Conference Call is scheduled at 9:30 am Central Standard Time today, October October: see month. 18, 2000 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), an independent storage system architect, reported that revenues for the quarter ended September September: see month. 30, 2000 increased to $36.3 million from $30.3 million in the same period a year ago, an increase of 20%. Net income was $1.6 million or $.17 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 $1.7 million or $.22 per diluted share for the same period in the prior year. For the nine months ended September 30, 2000, revenues totaled $99.2 million, an increase of 17% over the $85.0 million in revenues generated in the same period a year ago. Net income before the cumulative impact of a change in accounting principle for the nine months ended September 30, 2000 was $3.9 million or $.42 per diluted share, compared to $5.5 million or $.80 per diluted share in the same period a year ago. Datalink completed an initial public offering of its common stock in August 1999. If 1999 net income amounts were adjusted to reflect income tax expense on a comparable basis with 2000, net income would be $1.4 million or $.18 per diluted share for the quarter ended September 30, 1999, and $3.4 million or $.50 per diluted share for the nine months ended September 30, 1999. 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: "Our sales momentum continued during the quarter. We have added sales and technical staff in key regions to expand our capabilities to serve our customers. During our third quarter, we opened two new offices bringing our total number of offices to 24. "Customers continue to look to Datalink to help them with the management of their business-critical data. We see no end in sight to the explosive explosive, substance that undergoes decomposition or combustion with great rapidity, evolving much heat and producing a large volume of gas. The reaction products fill a much greater volume than that occupied by the original material and exert an enormous pressure, growth in the amount of data stored or the ways businesses look to use it. We help our customers meet these challenges by helping them to build infrastructures such as Storage Area Networks (SANs) and introduce them to productivity tools such as storage management software. We plan to grow our leadership position in providing independent, objectively designed, information storage infrastructures and services. "This month we introduced our new company logo, a new marketing program, and a new company themeline `Information Means The World'. Datalink has always had a loyal customer base. We are looking to our new marketing efforts to help us expand this customer base, bringing a new generation of customers to our products and services. This marketing campaign enables us to build upon our success, increase market awareness, and ultimately, capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. growing market opportunities." 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 worldwide. A conference call will be held at 9:30 a.m. Central Standard Time today, October 18, 2000 to discuss the operating results. To participate, please dial (800) 603-4337. Refer to the Datalink conference call. An audio replay will also be available through October 25, 2000. To listen, please dial (800) 642-1687. The pass-code for the replay is 634561. A replay is also available via web cast on Datalink's website, www.datalink.com. 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 that may adversely affect our revenues and profits; the level of continuing demand for data storage; 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
Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)
Sept. 30, Dec. 31,
2000 1999
(preliminary
and
unaudited)
---------- ----------
Assets
Current assets
Cash and cash equivalents $ 4,009 $ 6,515
Accounts receivable, net 22,925 19,272
Inventories 5,991 9,528
Inventories shipped but not installed 5,911 -
Other current assets 330 361
Deferred income taxes 1,884 427
---------- ---------
Total current assets 41,050 36,103
---------- ---------
Property and equipment, net 3,913 2,496
Intangibles, net 3,192 3,412
Other assets 77 47
---------- ---------
Total assets $ 48,232 $ 42,058
========== =========
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $ 16,188 $ 13,695
Accrued expenses 2,897 2,809
Income taxes payable 499 257
Note payable to former stockholder,
current portion 705 705
Capital lease obligation, current
portion - 13
Deferred compensation, current
portion 34 73
Distribution payable to S corporation
stockholders - 744
Deferred revenue 1,658 -
---------- ---------
Total current liabilities 21,981 18,296
Note payable to former stockholder,
less current portion 704 1,409
Deferred income taxes and compensation 646 648
---------- ---------
Total liabilities 23,331 20,353
---------- ---------
Stockholders' equity
Common stock, $.001 par value, 50,000,000
shares authorized, 8,792,043 and
8,772,537 shares issued and
outstanding as of June 30, 2000 and
December 31, 1999, respectively 9 9
Additional paid in capital 18,989 18,213
Retained earnings 5,903 3,483
---------- ---------
Total stockholders' equity 24,901 21,705
---------- ---------
Total liabilities and
stockholders' equity $ 48,232 $ 42,058
========== =========
Datalink Corporation
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30 September 30
(unaudited) (unaudited)
2000 1999 2000 1999
---- ---- ---- ----
Revenues $36,292 $30,282 $99,201 $85,038
Cost of revenues 27,653 22,258 73,036 62,891
---------------- -----------------
Gross profit 8,639 8,024 26,165 22,147
---------------- -----------------
Sales and marketing 2,825 3,080 10,258 8,572
General and administrative 2,270 1,792 6,794 5,402
Engineering 978 767 2,424 2,157
Offering costs (1) - - 381 173
---------------- -----------------
Total operating expenses 6,073 5,639 19,857 16,304
---------------- -----------------
Income from operations 2,566 2,385 6,308 5,843
Interest income (expense), net 80 3 279 (180)
---------------- -----------------
Income before income taxes
and cumulative effect of a
change in accounting principle 2,646 2,388 6,587 5,663
Income taxes 1,085 668 2,701 151
---------------- -----------------
Income before cumulative
effect of a change
in accounting principle 1,561 1,720 3,886 5,512
Cumulative impact of a
change in accounting
principle, net of income
taxes (2) - - (753) -
---------------- -----------------
Net income (loss) $ 1,561 $ 1,720 $ 3,133 $5,512
================ =================
Net income per share:
Basic:
Income per share before
cumulative effect of a change
in accounting principle $ 0.18 $ 0.22 $ 0.44 $ 0.81
Loss per share from the
cumulative effect of a
change in accounting principle - - $ 0.08 -
---------------- -----------------
Net income B45per share $ 0.18 $ 0.22 $ 0.36 $ 0.81
================ =================
Fully diluted:
Income per share before
cumulative effect of a
change in accounting principle $ 0.17 $ 0.22 $ 0.42 $ 0.80
Loss per share from the
cumulative effect of a
change in accounting principle - - (0.08) -
---------------- -----------------
Net income (loss) per share $ 0.17 $ 0.22 $ 0.34 $ 0.80
================ =================
Weighted average shares
outstanding:
Basic 8,800 7,653 8,783 6,797
Fully diluted 9,178 7,821 9,157 6,853
(1) Reflects legal, accounting and other costs associated with the
Company's public offerings, which were postponed or cancelled due to
market conditions.
(2) Effective January 1, 2000, the Company changed its revenue
recognition policy related to hardware and software products. This
charge represents the cumulative impact of the new policy, net of
income taxes, effective January 1, 2000.
Pro forma income (loss) and income (loss) per share calculations:
Pro forma income before cumulative
effect of a change in accounting
principle (1) $1,561 $1,015 $3,886 $3,341
Cumulative effect of a change in
accounting principle, net of
income taxes - - (753) -
---------------- -----------------
Net income $1,561 $1,015 $3,133 $3,341
================ =================
Pro forma income per share before
cumulative effect of a change in
accounting principle (2) $ 0.17 $ 0.11 $ 0.42 $ 0.41
Cumulative effect per share, of a
change in accounting principle,
net of income taxes - - (0.08) -
---------------- -----------------
Proforma income per share $ 0.17 $ 0.11 $ 0.34 $ 0.41
================ =================
Weighted average shares used in
calculating pro forma income per
share:
Fully diluted weighted average
shares 9,178 7,821 9,157 6,853
Additional shares required to
fund distribution to
shareholders - 1,309 - 1,309
---------------- -----------------
9,178 9,130 9,157 8,162
================ =================
(1) Pro forma net income is calculated as if the Company was
subject to income taxes for all periods presented.
(2) Pro forma income per share is computed by dividing pro forma
net income by the fully diluted weighted average number of shares for
the period, after giving effect to the number of shares that would be
required to be sold at the initial offering price to fund a
distribution to the shareholders of all previously taxed, but
undistributed, S Corporation earnings.
Income and income per share before cumulative effect of a change in
accounting principle, assuming income taxes and excluding offering
cost:
Income (1) $1,561 $1,409 $4,111 $3,443
Income per share:
Basic $ 0.18 $ 0.18 $ 0.47 $ 0.51
Fully diluted $ 0.17 $ 0.18 $ 0.45 $ 0.50
Weighted average shares outstanding:
Basic 8,800 7,653 8,783 6,797
Fully diluted 9,178 7,821 9,157 6,853
(1) Reflects income and income per share before cumulative effect
of a change in accounting principle, excluding offering costs and
assuming the Company was subject to income taxes for all periods
presented.
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