Thirty-Sixth Consecutive Quarter of Profitability, Despite Thailand Flooding Impact
Digi International® Inc. (NASDAQ: DGII, www.digi.com) reported revenue of $46.7 million for the first fiscal quarter of 2012, compared with $48.3 million for the first fiscal quarter of 2011.
Net income for the first fiscal quarter of 2012 was $0.7 million, or $0.03 per diluted share, compared to $2.3 million or $0.09 per diluted share in the prior year comparable quarter.
As announced in October 2011, the flooding in Thailand impacted the operations of Digi’s contract manufacturer near Bangkok. During the first fiscal quarter of 2012, Digi experienced lower revenue by approximately $3.0 million due to the flooding in Thailand, resulting in a reduction of earnings per diluted share of approximately $0.05, inclusive of additional costs incurred to reestablish limited production capabilities of our contract manufacturer.
“The Digi team did an outstanding job recovering from the Thailand flooding and the subsequent effects experienced with our key contract manufacturer there,” said Joe Dunsmore, Digi’s Chief Executive Officer. “We expect that the disruption caused by the flooding is not likely to adversely impact Digi’s results going forward.”
Business Results for the Three Months Ended December 31, 2011
Revenue from embedded products in the first fiscal quarter of 2012 was $21.8 million compared to $21.1 million in the first fiscal quarter of 2011, an increase of $0.7 million or 3.4%.
Revenue from non-embedded products was $24.9 million in the first fiscal quarter of 2012 compared to $27.2 million in the first fiscal quarter of 2011, a decrease of $2.3 million, or 8.8%.
Revenue from wireless products in the first fiscal quarter of 2012 was $19.8 million, or 42.5% of net sales, compared to $20.2 million, or 41.8% of net sales, in the first fiscal quarter of 2011, a decrease of $0.4 million, or 1.8 %.
Revenue from wired products was $26.8 million, or 57.5% of net sales, in the first fiscal quarter of 2012 compared to $28.1 million, or 58.2% of net sales, in the first fiscal quarter of 2011, a decrease of $1.3 million, or 4.6%.
Revenue in North America was $27.8 million in both the first quarter of fiscal 2012 and the first quarter of fiscal 2011.
Revenue in EMEA (Europe, Middle East and Africa) was $11.6 million in the first quarter of fiscal 2012 compared to $12.6 million in the comparable quarter a year ago, a decrease of $1.0 million, or 8.7%.
Revenue in the Asia Pacific region was $5.6 million in the first quarter of fiscal 2012 compared to $6.1 million in the first quarter of fiscal 2011, a decrease of $0.5 million, or 8.4%.
Latin American revenue was $1.7 million in the first quarter of fiscal 2012 compared to $1.8 million in the comparable quarter a year ago, a decrease of $0.1 million, or 4.0%.
Gross profit was $24.4 million in the first fiscal quarter of 2012 compared to $24.7 million in the same period of the prior year, a decrease of $0.3 million. The Thailand flooding reduced our gross profit by approximately $1.9 million due to lower revenue and additional costs incurred in the restoration of production for certain of our product lines built by our contract manufacturer located in Bangkok.
The gross margin was 52.4% in the first fiscal quarter of 2012 compared to 51.0% in the first fiscal quarter of 2011, an increase of 1.4 percentage points. The gross margin in the first fiscal quarter of 2012 reflects an impact of less than one percentage point as a result of the Thailand flooding. The gross margin was higher in the first fiscal quarter of 2012 than in the comparable period a year ago primarily due to product cost reductions, manufacturing efficiencies and reduced amortization of purchased and core technology.
Earnings before interest, taxes, depreciation and amortization in the first fiscal quarter of 2012 were $3.0 million, or 6.4% of revenue, compared to $5.1 million, or 10.5% of revenue in the first fiscal quarter of 2011.
First Fiscal Quarter 2012 Business Highlights:
Smart Grid Expansion
- Demonstrating increased penetration into the European energy management market, Digi announced a relationship with Honeywell subsidiary Trend France for remote monitoring and control of heating and ventilation systems. Digi will also connect Siemens AG Smart Meters across Europe via Digi X-Grid™ Solutions.
- Expanding its list of North American energy management deployments, Digi wirelessly enabled the CIMCON street light management system on St. John, U.S. Virgin Islands.
iDigi Device Cloud
- Showing further penetration of iDigi within the medical sector and a stronger relationship with Freescale Semiconductor, Digi launched a telehealth application kit featuring the Freescale Home Health Hub reference design that allows customers to easily create cloud-connected medical devices using the iDigi Device Cloud.
- Digi expanded its relationship with Sprint by certifying its ConnectCore 3G system on module. This allows customers to easily add 3G Sprint connectivity to their devices and out-of-the-box cloud connectivity with the iDigi Device Cloud.
Key Wireless Product Announcements
- Digi launched the Digi TransPort WR21, a new cellular router featuring high-end functionality for the price of a basic modem.
Digi International is making wireless M2M easy by developing reliable products and solutions to connect and securely manage local or remote electronic devices over the network or via the Web. Digi offers the highest levels of performance, flexibility and quality, and markets its products through a global network of distributors and resellers, systems integrators and original equipment manufacturers (OEMs). For more information, visit Digi’s website at www.digi.com