Digi International Reports First Fiscal Quarter 2009 Results
MINNEAPOLIS, Jan. 23 /PRNewswire-Asia-AsiaNet/ --
revenue of $41.4 million for the first fiscal quarter of 2009, compared with
$44.6 million for the first fiscal quarter of 2008, a decrease of $3.2 million,
or 7.2%.
"The Digi team continues to execute steadfastly on its strategy in a tough
environment," said Joseph Dunsmore, Digi's CEO. "Digi is positioned with its
balance sheet, strong operating margins, and market and product positioning, to
gain share and emerge in a strengthened position, despite rapidly changing
economic conditions."
Revenue from embedded products in the first fiscal quarter of 2009 was $18.0
million compared to $20.7 million in the first fiscal quarter of 2008, a decrease
of $2.7 million, or 13.0%. Revenue from non-embedded products was $23.4 million
in the first fiscal quarter of 2009 compared to $23.9 million in the first fiscal
quarter of 2008, a decrease of $0.5 million, or 2.2%. Revenue from embedded
products includes $1.0 million of Spectrum revenue in the first fiscal quarter of
2009. Revenue from non-embedded products includes Sarian-branded revenue of $3.1
million for the first fiscal quarter of 2009. Spectrum Design Solutions, Inc.
and Sarian Systems, Inc. were acquired in April 2008 and July 2008, respectively.
The weakening of the Euro and UK pound sterling had an unfavorable impact on
revenue of $1.4 million in the first fiscal quarter of 2009 compared to the first
fiscal quarter of 2008.
Revenue by geographic region is shown below:
Revenue by Geographic Region
(in millions)
Q1 09 v. Q1 08 Q1 09 v. Q1 08
Q1 2009 Q1 2008 Favorable Favorable
(Unfavorable) (Unfavorable)
EMEA (Europe, Middle
East and Africa) $ 13.3 (1) $ 11.1 $ 2.2 19.6%
Latin America 1.1 0.8 0.3 35.7%
North America 23.2 (2) 28.2 (5.0) -17.7%
Asia Pacific 3.8 4.5 (0.7) -15.4%
Total revenue $ 41.4 $ 44.6 $ (3.2) -7.2%
(1) Includes Sarian revenue of $3.1 million.
(2) Includes Spectrum revenue of $1.0 million.
Gross profit was $21.2 million in the first fiscal quarter of 2009 compared
to $23.9 million in the same period in the prior year. The gross margin was
51.4% in the first fiscal quarter of 2009 compared to 53.6% in the first fiscal
quarter of 2008. The gross margin was lower in the first fiscal quarter of 2009
than in the comparable period a year ago due to unfavorable product mix within
primarily the non-embedded products, including sales of Sarian non-embedded
products which provide lower gross profit margins.
Total operating expenses in the first fiscal quarter of 2009 were $20.5
million, or 49.5% of revenue, compared to $19.3 million, or 43.3% of revenue, in
the first fiscal quarter of 2008. The increase in operating expenses in the
first fiscal quarter of 2009 compared to the same quarter in the prior year is
primarily due to incremental ongoing operating expenses for Sarian and Spectrum.
Total other income, net decreased by $0.8 million in the first fiscal quarter
of 2009 compared to the same quarter in the prior year due to a decrease in
interest income, net of $0.5 million and foreign currency transaction losses of
$0.3 million.
Reported net income was $1.0 million in the first fiscal quarter of 2009, or
$0.04 per diluted share, compared to $3.7 million, or $0.14 per diluted share, in
the first fiscal quarter of 2008. As a result of the extension in fiscal 2009
of the research and development tax credit for two additional years beyond
calendar 2007, a benefit for research and development credits earned during the
last three quarters of fiscal 2008 was recorded in the first quarter of fiscal
2009, resulting in an additional tax benefit of $0.4 million, or $0.01 per
diluted share.
Digi's cash and cash equivalents and marketable securities balance, including
long-term marketable securities, was $70.2 million at December 31, 2008, a
decrease of $3.4 million from September 30, 2008. The decrease in the cash and
cash equivalents and marketable securities balance at December 31, 2008 compared
to the prior quarter is a result of payments for estimated income taxes,
incentive compensation payments related to prior year company performance, and
unfavorable changes in working capital. Please refer to the Condensed
Consolidated Statements of Cash Flows which is included in this earnings release
for additional cash flow details. At December 31, 2008, Digi's current ratio was
6.7 to 1 compared to 6.4 to 1 at September 30, 2008.
First Fiscal Quarter 2009 Business Highlights:
-- In spite of the challenging economy, Digi's wireless revenue grew over
40% from the first fiscal quarter of 2008. With wireless revenue now
reaching 32.5% of revenue, Digi's wireless initiatives continue to
build momentum.
Digi's Wireless Drop-In Networking
-- With the Rabbit brand, Digi launched two new product lines. The ultra-
compact Rabbit MiniCore modules are smaller than a packet of sugar and
provide low-cost, easy to use, wired or wireless building blocks for
embedded devices. For the fastest time to market for a wireless
embedded device, Rabbit launched a new family of wireless single board
computers (SBCs). Embedded developers start with a virtually complete
piece of hardware and only have to add software and an enclosure to
create a product with Rabbit SBCs.
-- Digi increased its access to European M2M markets with the release of
868 MHz Wireless Modules and Device Adapters in the XBee product
family. These long range (up to 40km line of sight) products operate in
the 868 MHz frequency range that is popular in Europe.
-- Leveraging the recent Sarian acquisition, Digi launched a new line of
advanced enterprise class cellular routers. These devices are ideal
for remote transportation, lottery, financial, retail and enterprise
backup applications.
-- Digi released the industry's first 802.11a/b/g secure embedded
networking core module, the ConnectCore(TM) Wi-9P 9215. This module is
ideal for devices that are located in environments with a lot of
wireless interference, like hospitals, manufacturing facilities, and
airports.
Other Launches
-- Increasing its access to Linux markets, Digi launched the industry's
smallest Linux embedded device server. About the size of a pair of dice,
the high-performance Digi Connect ME 9210 allows OEMs to easily add
secure Ethernet connectivity using Linux in space-constrained devices.
Fiscal 2009 Guidance
Digi expects revenue for the second fiscal quarter of 2009 in a range of $40
million to $46 million, and earnings per diluted share in a range of $0.01 to
$0.07. As previously announced in its pre-release on January 5, 2009, Digi
projects annual revenue in a range of $170 million to $200 million. Digi
projects GAAP earnings per diluted share to be in a range of $0.19 to $0.47.
First Fiscal Quarter 2009 Conference Call Details
Digi invites all those interested in hearing management's discussion of its
quarter, on Thursday, January 22, 2009 after market close at 5:00 p.m. EST (4:00
p.m. CST), to join the call by dialing (866) 700-6293 and entering passcode
92000866. International participants may access the call by dialing (617) 213-
8835 and entering passcode 92000866. A replay will be available two hours after
the completion of the call, and for one week following the call, by dialing (888)
286-8010 for domestic participants or (617) 801-6888 for international
participants and entering access code 38683029 when prompted. Participants may
also access a live webcast of the conference call through the investor relations
About Digi International
Digi International, based in Minneapolis, is the leader in device networking
for business. Digi develops reliable products and technologies that enable
companies to connect and securely manage local or remote electronic devices over
the network or via the web.
call+852-2833-1008.
Condensed Consolidated Statement of Operations:
Condensed Consolidated Balance Sheet:
Condensed Consolidated Statement of Cash Flows:
Press Contact:
Kylie Chan
Channel Marketing Manager, Asia Pacific
Digi International
Tel: +852-2833-1008
Fax: +852-2572-9989
Email: kylie.chan@digi.com
SOURCE Digi International
NEWS 
