MINNETONKA, Minn., Nov. 29 /Xinhua-PRNewswire/ -- Digi International(R) Inc. (Nasdaq: DGII) reported revenue of $173.3 million for the fiscal year ended September 30, 2007 compared to $144.7 million for the fiscal year ended September 30, 2006, an increase of $28.6 million, or 19.8%. Other financial highlights for the quarter and the fiscal year include:
-- Digi’s net sales of $45.1 million in the fourth quarter of fiscal
2007 is the highest net sales achieved in the past thirty-one
quarters, and represents a 9.8% increase over the net sales for the
fourth quarter of fiscal 2006.
-- Digi has reported net income for nineteen consecutive quarters.
-- Operating income for fiscal 2007 increased by 53.7% over fiscal 2006.
-- Net income for fiscal 2007 was $19.8 million, or 11.4% of net sales.
Net income for the fourth quarter of fiscal 2007 was 84.9% higher than
the fourth quarter of fiscal 2006, including the impact of discrete
income tax benefits in both periods.
-- Digi met its annual revenue and earnings per share guidance, generated
strong cash from operations, and continued to maintain a healthy
balance sheet in fiscal 2007.
Revenue from embedded products in the fourth quarter of 2007 was $20.6 million, an increase of $3.3 million, or 19.4%, compared to the fourth quarter of fiscal 2006. Revenue from non-embedded products was $24.5 million in the fourth quarter of fiscal 2007, an increase of $0.7 million, or 2.9%, compared to the fourth quarter of fiscal 2006. MaxStream-branded product revenue was $5.6 million for the fourth quarter of fiscal 2007 compared to $3.2 million for the fourth quarter of fiscal 2006, which includes revenue from the date of acquisition of July 27, 2006.
Digi reported net income of $5.6 million for the fourth quarter of fiscal 2007, or $0.21 per diluted share, compared with $3.0 million in the fourth quarter of fiscal 2006, or $0.12 per diluted share. Reversals of tax reserves associated with the settlements of foreign tax audits and other discrete tax benefits increased earnings per diluted share by $0.03 and $0.04 in the fourth quarter of fiscal 2007 and 2006, respectively. In-process research and development and other acquisition-related expenses associated with MaxStream reduced earnings per diluted share by $0.08 in the fourth quarter of fiscal 2006. Earnings per diluted share were $0.18 and $0.16 for the fourth quarter of fiscal 2007 and 2006, respectively, excluding the aforementioned items.
Gross profit margin in the fourth quarter of fiscal 2007 was 52.8% compared with 52.4% during the same quarter of fiscal 2006. Gross profit margin includes the amortization of identifiable intangibles for purchased and core technology, shown separately on our Condensed Consolidated Statements of Operations.
Total operating expenses were $17.6 million, or 39.1% of net sales, in the fourth quarter of fiscal 2007 compared to $18.1 million, or 44.2% of net sales, in the fourth quarter of 2006. Operating expenses for fiscal 2006 include a charge of $2.0 million for in-process research and development associated with the acquisition of MaxStream.
For the fiscal years ended September 30, 2007 and 2006, operating income was $20.3 million and $13.2 million, respectively, or an increase of 53.7%.
Digi reported net income of $19.8 million in fiscal 2007, or $0.76 per diluted share, compared with $11.1 million, or $0.46 per diluted share, for fiscal 2006. Digi recorded benefits associated with reversals of tax reserves and other discrete tax benefits that increased earnings per diluted share by $0.17 and $0.04 for fiscal 2007 and 2006, respectively. Acquired in-process research and development charges and other acquisition-related expenses reduced earnings per diluted share by $0.09 in fiscal 2006. Earnings per diluted share were $0.59 and $0.51 for fiscal 2007 and 2006, respectively, excluding the aforementioned items.
Digi’s cash and cash equivalents and marketable securities balance, including long-term marketable securities, was $87.6 million at September 30, 2007, an increase of $28.7 million over the cash and cash equivalents and marketable securities balance at the end of fiscal 2006. At September 30, 2007, Digi’s current ratio is 6.4 to 1, and the Company has no debt other than capital lease obligations.
"Fiscal 2007 was a very strong year for Digi," said Joe Dunsmore, Digi’s Chief Executive Officer. "Our revenue growth of almost 20% and the 53.7% year over year improvement in our operating income demonstrates a very strong positive momentum for our business. As we move into fiscal 2008, we expect our drop-in networking products will provide the impetus to continue that momentum."
Fiscal 2007 Business Highlights:
-- Digi united wireless technologies to pioneer "Drop-In Networking,"with
the introduction of the ConnectPort X product family, a line of IP
gateways that provide seamless connectivity of Zigbee(R), Wi-Fi(R),
cellular, and Ethernet traffic to centralized applications and
databases. Drop-In Networking solutions provide end-to-end wireless
connectivity to commercial grade electronic devices in locations where
wires don’t exist or satisfy customer needs.
-- Digi strengthened its leadership position in easy-to-use Zigbee(R)
technology with the expansion of the MaxStream XBee brand to include
an embedded product with full mesh networking capabilities.
-- Digi launched a Stand-Alone Wireless Modem product line, based on
acquired MaxStream(R) technology, which provides simple, low-cost
serial and Ethernet cable replacement.
-- Digi extended its family of cellular routers with support of the
latest 3G technologies, including HSDPA for GSM-based carrier networks
and EVDO Rev A for CDMA-based carrier networks. These latest
generation routers are certified on the three largest carrier networks
in the U.S., which include AT&T, Sprint, and Verizon, as well as
numerous international networks.
-- Digi moved the Rabbit brand strongly into the embedded wireless market
with two new wireless RabbitCore(R) modules and a new Rabbit Wireless
Control Application Kit. The modules, one with integrated Wi-Fi(R)
and the other with integrated Zigbee(R), are the latest addition to
the popular family of pin-compatible RabbitCore modules.
-- Digi increased its access to embedded markets by rolling out a new
approach to ARM embedded development. Digi JumpStart Kits(TM) are
sub $500 development kits that get design engineers started in
developing complex NetOS, Linux, and WinCE based embedded products
within 30 minutes.
-- Digi expanded its strong embedded development relationship with
Microsoft with two industry firsts. The Digi Connect ME Jumpstart Kit
for Microsoft .NET Micro Framework was the industry’s first Ethernet
networking solution for .NET Micro Framework. Digi was also the first
company to offer a Windows(R) Embedded CE 6.0 board support package
(BSP) for ARM processors and wireless networking. As a Microsoft Gold
Certified Partner, Digi is one of the Microsoft Business Partners who
receives the highest level of customer endorsement.
2008 Guidance
For fiscal year 2008, Digi projects revenue to be in the range of $197 million to $207 million, or an increase over fiscal year 2007 revenue of 14% to 19%. Digi projects earnings per diluted share to be in a range of $0.69 to $0.87. Projected fiscal 2008 earnings per diluted share of $0.69 to $0.87 represents a 17% to 47% increase over fiscal 2007 earnings per diluted share, excluding the discrete tax benefits of $0.17 recorded in fiscal 2007.
Fourth Quarter and Year-End 2007 Conference Call Details
Digi invites all those interested in hearing management’s discussion of its fourth quarter and year end earnings results on Thursday, November 1, 2007 at 5:00 p.m. EDT (4:00 p.m. CT), to join the call by dialing (800) 952-4645. International participants may access the call by dialing (212) 231-2901. A replay will be available two hours after the completion of the call, and for one week following the call, by dialing (800) 633-8284 for domestic participants or (402) 977-9140 for international participants and entering access code 21351615 when prompted. Participants may also access a live webcast of the conference call through the investor relations section of Digi’s website, http://www.digi.com .
This release contains a non-GAAP disclosure for earnings per diluted share for the three and twelve month periods ended September 30, 2007 and 2006, excluding the impact of acquisition-related expenses, the reversal of tax reserves, and other discrete tax benefits associated with the closure of tax audits and tax periods. Additional details related to these non-GAAP disclosures are provided in the Form 8-K that Digi filed with the Securities and Exchange Commission on the date of this earnings release.
For the table provides a reconciliation of the non-GAAP measures described above to the most directly comparable GAAP measure, and the full financial tables, please refer to: http://www.digi.com.cn/news/half_part.jsp .
