Exhibit (d)(9)
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NEWS RELEASE
For Immediate Release CONTACT: Naresh C. Kapahi, CFO, Ext. 4570
(408) 745-6200
Digital Link Announces Third Quarter Results
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SUNNYVALE, California, October 11, 1999--Digital Link Corporation (Nasdaq:DLNK)
today announced financial results for its third quarter ended September 30,
1999.
For the third quarter 1999, net sales increased 24% to $16,400,000, compared to
net sales of $13,271,000 for the same period of the prior year. Year-to-date,
net sales for the first nine months of 1999 were $47,254,000 compared to
$40,587,000 for the same period of the prior year, an increase of 16%.
Net income for the third quarter of 1999 was $1,838,000 or $0.22 per share,
diluted, compared to a net loss of $4,273,000 or $0.74 per share for the third
quarter of 1998. Net income for the first nine months of 1999 was $3,655,000 as
compared to a net loss of $6,910,000 for the same period of the prior year.
The results above include a reversal of the restructuring charge in the pre-tax
amount of $424,000 for the three and nine month periods ended September 30,
1999. Also, the 1998 earnings reported above include a pre-tax restructuring
charge of $2,506,000 for the three and nine month periods ended September 30,
1998 and a pre-tax purchased research and development charge of $2,299,000 for
the nine month period ended September 30, 1998.
Excluding the effect of these special charges and reversals, earnings per share,
diluted, for the third quarter of 1999 were $0.18, compared to a loss of $0.30
per share for the third quarter of 1998 and earnings per share, diluted, for the
first nine months of 1999 were $0.40 compared to a loss of $0.31 per share for
the first nine months of 1998.
"We have made progress over the last nine months, and continued progress will
depend in part on the acceptance by the market of our new products and in the
short-term our profitability will be dependent on the level of revenues and the
relative mix of broadband and narrowband products," said Vinita Gupta, chief
executive officer and chairperson of the board of Digital Link.
This release contains forward-looking statements, including statements related
to the Company's progress, the introduction of new products, and their impact on
the Company's revenue and profit growth. These statements are subject to risks
and uncertainties that may cause actual future events and results to differ
materially, including, but not limited to, the impact of competitive products
and pricing, and the loss of, or difference in actual from anticipated levels of
purchases from, the Company's major customers. Readers are referred to documents
filed by Digital Link with the Securities and Exchange Commission, specifically
the most recent reports on Form 10-K and Form 10-Q, which further discuss these
and other important risk factors.
ABOUT DIGITAL LINK
Digital Link Corporation is a leading provider of high-performance,
cost-effective, digital network access products for both narrowband and
broadband applications. The company offers access solutions that increase the
level of intelligence at the demarcation point where LANs and WANs meet. These
products are used by Internet service providers and carriers as infrastructure
equipment, and by enterprises for connectivity to WAN services. Digital Link is
headquartered in Sunnyvale, California, and offers its products worldwide.
Additional information is available at Digital Link's website:
HTTP://WWW.DL.COM.
DIGITAL LINK CORPORATION
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
SEPTEMBER 30, DECEMBER 31,
1999 1998
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(UNAUDITED)
ASSETS
Current Assets:
Cash and short-term marketable securities......................................... $ 10,147 16,034
Accounts receivable............................................................... 6,343 4,767
Inventories....................................................................... 3,099 4,306
Prepaids and other current assets................................................. 1,045 998
Income taxes receivable........................................................... 0 2,501
Deferred income taxes............................................................. 3,069 3,069
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Total current assets............................................................ 23,703 31,675
Long-term marketable securities................................................... 28,210 18,696
Property and equipment, net....................................................... 2,173 2,582
Deferred income taxes............................................................. 1,560 1,560
Other assets...................................................................... 50 393
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Total assets.................................................................... $ 55,696 $ 54,906
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable.................................................................. $ 2,781 $ 2,365
Accrued payroll expense........................................................... 2,611 2,168
Other accrued liabilities......................................................... 4,890 4,764
Income taxes payable.............................................................. 288 243
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Total current liabilities....................................................... 10,570 9,540
Shareholders' equity................................................................ 45,126 45,366
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Total liabilities and shareholders' equity...................................... $ 55,696 $ 54,906
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DIGITAL LINK CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
QUARTER ENDED YEAR-TO-DATE
SEPTEMBER 30, SEPTEMBER 30,
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1999 1998 1999 1998
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(UNAUDITED) (UNAUDITED)
Net sales............................................................. $ 16,400 $ 13,271 $ 47,254 $ 40,587
Cost of sales......................................................... 7,057 10,168 21,400 24,203
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Gross profit........................................................ 9,343 3,103 25,854 16,384
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Expenses:
Research & development.............................................. 2,978 3,856 8,163 10,245
Selling, general & administrative................................... 4,802 4,413 14,646 14,401
Purchased research & development.................................... 0 0 0 2,299
Restructuring charges............................................... *(424) 2,506 *(424) 2,506
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Total operating expenses.......................................... 7,356 10,775 22,385 29,451
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Operating income (loss)........................................... 1,987 (7,672) 3,469 (13,067)
Interest income....................................................... 464 551 1,404 1,619
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Income (loss) before provision for income taxes..................... 2,451 (7,121) 4,873 (11,448)
Provision (benefit) for income taxes.................................. 613 (2,848) 1,218 (4,538)
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Net income (loss)................................................... $ 1,838 $ (4,273) $ 3,655 $ (6,910)
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Net income (loss) per share, basic.................................. $ 0.23 $ (0.47) $ 0.45 $ (0.74)
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Shares used in computing per share amounts, basic................... 8,013 9,129 8,122 9,311
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Net income (loss) per share, diluted................................ $ 0.22 $ (0.47) $ 0.44 $ (0.74)
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Shares used in computing per share amounts, diluted................. 8,243 9,129 8,254 9,311
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* Adjustment due to reversal of restructuring charges.
DIGITAL LINK CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
EXCLUDING RESTRUCTURING CHARGES AND PURCHASED RESEARCH AND DEVELOPMENT
(IN THOUSANDS, EXCEPT PER SHARE DATA)
QUARTER ENDED YEAR-TO-DATE
SEPTEMBER 30, SEPTEMBER 30,
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1999 1998 1999 1998
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(UNAUDITED) (UNAUDITED)
Net sales............................................................. $ 16,400 $ 13,271 $ 47,254 $ 40,587
Cost of sales......................................................... 7,057 10,168 21,400 24,203
--------- --------- --------- ---------
Gross profit........................................................ 9,343 3,103 25,854 16,384
--------- --------- --------- ---------
Expenses:
Research & development.............................................. 2,978 3,856 8,163 10,245
Selling, general & administrative................................... 4,802 4,413 14,646 14,401
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Total operating expenses........................................ 7,780 8,269 22,809 26,946
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Operating income (loss)......................................... 1,563 (5,166) 3,045 (8,262)
Interest income....................................................... 464 551 1,404 1,619
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Income (loss) before provision for income taxes..................... 1,099 (4,615) 4,449 (6,643)
Provision (benefit) for income taxes.................................. 498 (1,846) 1,112 (2,634)
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Net income (loss)................................................... $ 1,520 $ (2,769) $ 3,337 $ (4,009)
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Net income (loss) per share, basic.................................. $ 0.19 $ (0.30) $ 0.41 $ (0.31)
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Shares used in computing per share amounts, basic................... 8,013 9,129 8,122 9,311
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Net income (loss) per share, diluted................................ $ 0.18 $ (0.30) $ 0.40 $ (0.31)
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Shares used in computing per share amounts, diluted................. 8,243 9,129 8,254 9,311
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