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Last Update: 05-Oct-12 09:13 ET
Datalink shares fall 16% following downside third quarter guidance
Datalink (DTLK $7.19 -1.39) issues downside guidance for the third quarter with lowered EPS to $0.15-0.16, excluding non-recurring items, from $0.20-0.25 versus $0.23 consensus and lowered revenues to $105-106 million from $117-122 million versus the $119.08 million consensus. "we also continue to see our customers remain cautious regarding large capital expenditures, especially with the uncertainty surrounding the current economic environment. As a result, we saw expected contracts push out as much as 90 days or more. This customer behavior has caused us to miss our previous guidance" Datalink will report its third quarter financial results and hold an investor conference call after the market closes on October 25, 2012. Datalink closed the purchase of StraTech for ~$13.2 million in cash and the issuance of 269,802 shares of Datalink common stock, assumed ~$20.8 million of StraTech's liabilities and acquired ~$16.0 million of assets, subject to a final audit expected to be performed within 90-120 days after the closing. With the addition of StraTech, Datalink will be positioned to close 2012 with an anticipated annualized run rate of more than $500 million and a workforce of over 450 employees. Datalink anticipates that, based on its internal projections, the transaction will become accretive to net income within one quarter. Datalink expects the full effect of cost synergies to take effect in the first quarter of 2013.
