Datalink Updates 4Q08 Guidance

Datalink Corporation revised its financial guidance for the fourth quarter ended December 31, 2008. The company anticipates revenues for the fourth quarter of 2008 of approximately $48 million.

On the basis of generally accepted accounting principles (GAAP), Datalink anticipates net earnings in the range of $0.05 to $0.06 per diluted share. The company’s non-GAAP net earnings per share is expected to range from $0.07 to $0.08 per diluted share for the 2008 fourth quarter. In October, Datalink provided fourth quarter guidance of revenue between $49 million and $53 million, with GAAP net earnings ranging from $0.08 to $0.12 per diluted share and non-GAAP earnings in the range of $0.10 to $0.14 per diluted share.

“Although we continued to see reasonable bookings activity and customer spending levels in the fourth quarter, we received many of the orders later in the quarter than we had anticipated, which did not allow us time to ship, install and test the solutions. As a result, we were not able to recognize the revenue on these projects by December 31, and therefore we expect Datalink’s revenue and earnings for the fourth quarter to be below our October guidance,” commented Charlie Westling, Datalink’s president and CEO. “The current economic challenges are impacting customer spending decisions. However, we still believe that the long-term trends for storage growth remain compelling, as businesses generate more data in multiple formats, requiring updated storage products, services and solutions. While the fourth quarter shortfall caused by the timing of orders was disappointing, our backlog entering the first quarter of 2009 is approximately $33 million, a record for Datalink. This compares to $31 million of backlog entering the 2008 fourth quarter.”