Datalink Corporation (NASDAQ:DTLK)

Second Quarter 2014 Results:

• Revenues for the quarter increased 8% to $159.4 million compared to $147.8 million for the same quarter last year.
• Non-GAAP dilluted EPS was $0.22, compared to 0.26 in the second quarter of 2013

“The second quarter of 2014 saw a partial return to a normal sales cadence as some customers completed their due diligence on newer technologies like flash storage and cloud computing that had postponed sales we originally expected to close in the first quarter. We expect more of these delayed orders to get placed in the third quarter and that is reflected in our guidance,” said Paul Lidsky, Datalink’s president and CEO. “At the same time, the combination of increased services and converged technologies revenues demonstrates the validity of our end-to-end data center product and services model and its potential for building our business.”

Business Outlook

Based on the company’s current backlog and sales pipeline, the company projects revenues of $150.0 million to $160.0 million for the third quarter of 2014 compared to $139.6 million for the third quarter of 2013. This represents an increase in expected revenues of between 7% and 15%. The company expects third quarter 2014 net earnings to be between $0.11 and $0.17 per diluted share on a GAAP basis, and net earnings of between $0.16 and $0.22 per diluted share on a non-GAAP basis. This compares to net earnings of $0.04 per diluted share and $0.13 per diluted share on a GAAP and non-GAAP basis, respectively, for the same period in 2013.

Non-GAAP earnings per share exclude the effect of acquisition accounting adjustments from the StraTech acquisition to deferred revenue and costs, integration and transaction costs related to acquisitions, stock-based compensation expense, amortization of intangible assets, and the related effects on income taxes. The company estimates this total effect will be approximately $0.05 per diluted share for the third quarter of 2014.ur business.”

Jul. 20, 2011 (Business Wire) -- Datalink (Nasdaq: DTLK), a leading provider of data center infrastructure and services, today reported results for its second quarter and six month period that ended June 30, 2011. Revenues for the quarter ended June 30, 2011, increased 26% to $89.5 million compared to $70.9 million for the prior-year period. Revenues for six months ended June 30, 2011, increased 31% to $175.2 million compared to $133.4 million for the six months ended June 30, 2010.

GAAP Results

On a GAAP basis, the company reported net earnings of $2.7 million or $0.16 per diluted share for the second quarter ended June 30, 2011. This compares to break-even in the second quarter of 2010. For the six months ended June 30, 2011, the company reported net earnings of $4.4 million or $0.29 per diluted share, compared to a net loss of $886,000, or $0.07 per diluted share, for the six months ended June 30, 2010.

Non-GAAP Results

Non-GAAP net earnings for the second quarter of 2011 were $3.3 million, or $0.19 per diluted share, compared to non-GAAP net earnings of $748,000, or $0.06 per diluted share, in the second quarter of 2010. For the six months ended June 30, 2011, the company reported non-GAAP net earnings of $5.5 million, or $0.36 per diluted share, compared to net earnings of $850,000, or $0.07 per diluted share, for the six months ended June 30, 2010. A detailed reconciliation between GAAP and non-GAAP information is contained in the tables included herein.

Paul Lidsky, Datalink’s president and CEO, commented, “The second quarter of 2011 was another record quarter for Datalink. Our momentum from a record 2010 and record first quarter of 2011 has continued. We reported record second quarter and six month revenues and earnings, which exceeded the investor guidance given at the beginning of the quarter. This represents our ninth consecutive quarter of non-GAAP net earnings. Other significant accomplishments for the second quarter of 2011 include:

• We continue to see an increase in multi-million dollar accounts with Global 500 companies. In the first six months of 2011 we had 36 customers each purchase over $1 million of product and services from us as compared to 23 customers in the first six months of 2010. In addition, we acquired 77 new customers in the second quarter of 2011.
• Our customer intimacy is a cornerstone to our go-to-market strategy to deliver premier services to our customers, as demonstrated by our 21% increase in services to a record $33.0 million in the second quarter. This represents our second quarter in a row with twenty plus percent service revenue growth.
• We exited the quarter with a strong balance sheet. Our working capital increased $3.6 million to $46.2 million and we have no debt.
• Our company’s growth was also spotlighted by our recognition from CRN Everything Channel. Our VAR500 ranking was elevated to 72, compared to 195 in 2010, and furthermore we were awarded the “Top Services Sales Growth” at the VAR500 executive conference and profiled as one of the “Titans of Transformation” editorial follow up to the event.
• We were one of the first partners worldwide to achieve the Advanced Data Center Architecture (DCA) Specialization from Cisco, recognized for continuing to make significant investment to ensure our customers can make their data centers more efficient, agile and resilient. Our diligence has not waivered to provide our customers with the most technically adept professionals in the market”.

Outlook

Based on the company’s backlog and sales pipeline we expect revenues to be between $85 million and $90 million for the third quarter of 2011 and we expect third quarter 2011 net earnings to be between $0.12 and $0.16 per diluted share on a GAAP basis, and net earnings to be between $0.15 and $0.19 per diluted share on a non-GAAP basis. This compares to revenues of $69.2 million in the third quarter of 2010. GAAP net earnings per share in the third quarter of 2010 were $0.06 and non-GAAP net earnings per share were $0.11 per share.

We will begin tracking Datalink

• The Company expects third quarter 2010 revenues to be in the range of $69.0 million to $70.0 million. This compares to revenues of $42.7 million in the third quarter of 2009, a 62% increase.
  
• On a GAAP basis the company expects results per share to be in the range of a loss of $0.01 per share to earnings of $0.01 per share.
  
• On a non-GAAP basis the company expects earnings per share in the range of $0.07 per share to $0.09 per share.  2009 third quarter non-GAAP EPS was $0.01.
  
• The company ended the quarter with a record backlog of over $52 million.

Paul Lidsky, Datalink’s president and CEO, commented, “Customer demand for our data center solutions remained strong during the quarter as result of a steadily increasing trend in technology spending coupled with the success we are seeing from the investments we made to expand Datalink’s market share around data center solutions. This is evidenced by both record third quarter revenues and backlog.”

• Analysts are estimating
  
  
  • 2010 EPS to reach $0.25 vs. a loss in 2009.
    
  • 2011 EPS to grow 68.0% to $0.42.

We are attempting to determine if estimates are taxed. Also note that the stock has been in a steady decline for many months.

The company ended the second quarter of 2009 with a backlog of approximately $28 million, which represents firm orders expected to be recognized as revenue within the next 90 days. This compares to a backlog of $29 million at the end of the first quarter of 2009. Based on the level of activity that we are currently seeing in our sales opportunity pipeline, we are cautiously optimistic that customer storage spending levels may improve during the second half of this year. However, we do expect to see some slow down in activity during the third quarter, as projects get delayed due to vacations and other data center availability issues during the summer months.

^a The above forecasts reflect the Company's current and preliminary view and are therefore subject to change. Please refer to the Company's Safe Harbor Statement (usually in press releases) for the factors that could cause actual results to differ materially from those contained in any forward-looking statement.

^b Non-GAAP EPS Figures exclude certain non-operating gains and losses as well as certain non-cash items. Non-GAAP information should not be viewed in isolation or as a substitute for reported, or GAAP information . For a more complete explanation of the company's definition of non-GAAP please refer to its financial press releases. The GeoTeam® non-GAAP figures may, from time to time, differ from company supplied figures.

The company ended the first quarter of 2009 with a backlog of approximately $29 million, which represents firm orders expected to be recognized as revenue within the next 90 days. After a slow period of bookings activity throughout January, February and early March, we did see bookings pick up considerably during the last few weeks of March, and this increased activity has continued through the first two weeks of April. While we expect customers to continue to be cautious with their IT and storage purchasing activity during the second quarter, we believe that we will be able to generate sequentially higher revenues and earnings for the second quarter of 2009.

^a The above forecasts reflect the Company's current and preliminary view and are therefore subject to change. Please refer to the Company's Safe Harbor Statement (usually in press releases) for the factors that could cause actual results to differ materially from those contained in any forward-looking statement.

^b Non-GAAP EPS Figures exclude certain non-operating gains and losses as well as certain non-cash items. Non-GAAP information should not be viewed in isolation or as a substitute for reported, or GAAP information . For a more complete explanation of the company's definition of non-GAAP please refer to its financial press releases. The GeoTeam® non-GAAP figures may, from time to time, differ from company supplied figures.

Guidance Update:

2008 fourth quarter guidance: 

New Guidance

 Old Guidance

Source: Business Wire (January 5, 2009)