Datalink (Nasdaq: DTLK), a leading provider of data center infrastructure and services, today reported results for its first quarter that ended March 31, 2013. Revenues for the quarter increased 12% to a record first quarter $133.6 million compared to $119.1 million for the prior-year period.
GAAP Results
On a GAAP basis, the company reported net earnings of $1.1 million or $0.06 per diluted share for the first quarter ended March 31, 2013. This compares to net earnings of $2.2 million or $0.12 per diluted share in the first quarter of 2012.
Non-GAAP Results
Non-GAAP net earnings for the first quarter of 2013 were $3.2 million, or $0.18 per diluted share, compared to non-GAAP net earnings of $2.9 million, or $0.17 per diluted share, in the first quarter of 2012. Earnings from operations for the first quarter of 2013 were $5.5 million or 4.1% of revenues, compared to $4.9 million or 4.1% of revenues in the first quarter of 2012. See “Non-GAAP Details” tables included herein for a detailed reconciliation between GAAP and non-GAAP information.
The company’s results for the quarter ended March 31, 2013, include the results of operations from the acquisition of Strategic Technologies, Inc. (“StraTech”), which was completed on October 4, 2012.
“We had a strong first-quarter performance with a sales cadence that kept pace with the fourth quarter, and significant increases in key strategic areas of the business,” said Paul Lidsky, Datalink’s president and CEO. “We continue to realize the benefits of our portfolio diversification strategy, our focus on converging data center infrastructure, and our ability to provide a complete suite of products and services that simplifies sourcing, implementation and support for enterprises that are modernizing their data center technology.”
Key year-over-year growth areas included:
* A 5% increase in product revenues, reflecting ongoing expansion in the company’s product portfolio as well as new customer acquisition;
* A 26% increase in service revenues, with services moving from 33% to 37% of the revenue mix;
* A 33% increase in virtual data center orders and 34% increase in virtual data center revenues, capitalizing on the market shift to unified data center infrastructures;
* A 37% revenue increase from Datalink’s OneCall unified support service, which enables customers to call one number for issues with platform components from multiple vendors; and
* A 240% revenue increase in managed services, achieved in part because of ongoing expansion of the company’s managed services portfolio.
Outlook
Based on the company’s current backlog and sales pipeline, the company projects revenues of $143 million to $153 million for the second quarter of 2013 compared to $120 million for the second quarter of 2012. The company expects second quarter 2013 net earnings to be between $0.09 and $0.15 per diluted share on a GAAP basis, and net earnings of between $0.22 and $0.28 per diluted share on a non-GAAP basis. This compares to net earnings of $0.18 per diluted share and $0.23 per diluted share on a GAAP and non-GAAP basis, respectively, for the same period in 2012.
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 $0.13 per diluted share for the second quarter of 2013.
