Datalink Corp. (DTLK, Financial) filed Quarterly Report for the period ended 2009-06-30.
Datalink Corporation is an information storage architect. The company analyzes designs implements and supports information storage infrastructures that store protect and provide continuous access to information. Datalink\'s specialized capabilities and solutions span storage area networks network-attached storage direct-attached storage and IP-based storage using industry-leading hardware software and technical services. Datalink Corp. has a market cap of $45 million; its shares were traded at around $3.48 with a P/E ratio of 28.9 and P/S ratio of 0.2.
General and Administrative. General and administrative expenses include wages for administrative personnel, professional fees, depreciation, communication expenses and rent and related facility expenses. General and administrative expenses were $2.8 million, or 6.5% of net sales for the quarter ended June 30, 2009, compared to $2.9 million, or 5.8% of net sales for the second quarter in 2008. General and administrative expenses were $5.8 million, or 6.9% of net sales for the six months ended June 30, 2009, compared to $6.1 million or 6.2% of net sales for the comparable period in 2008.
General and administrative expenses decreased $66,000 for the three months ended June 30, 2009, as compared to the same period in 2008. We attribute this primarily to a decrease in travel and entertainment expense of $70,000 due to our cost reduction initiatives. General and administrative expenses decreased $309,000 for the six months ended June 30, 2009, as compared to the same period in 2008. We attribute this primarily to the cancellation of our annual sales meeting resulting in savings of $205,000 and a decrease in training expenses of $130,000.
Engineering. Engineering expenses include employee wages, bonuses and travel, hiring and training expenses for our field and customer support engineers and technicians. Engineering expenses were $3.0 million, or 6.8% of net sales for the quarter ended June 30, 2009, compared to $2.8 million, or 5.6% of net sales for the second quarter in 2008. Engineering expenses were $5.8 million, or 6.9% of net sales for the six months ended June 30, 2009, compared to $6.0 million, or 6.1% of net sales for the comparable period in 2008.
Engineering expenses increased $163,000 for the three months ended June 30, 2009, as compared to the same period in 2008. This is primarily due to a decrease in our allocation of engineering costs associated with installation and configuration services and with consulting services to our cost of service sales of $532,000. This was offset by a decrease in travel and entertainment expense of $129,000 and variable compensation expense of $29,000. Engineering expenses decreased $175,000 for the six months ended June 30, 2009, as compared to the same period in 2008. This is primarily due to a decrease in travel and entertainment expense of $194,000.
Earnings (Loss) from Operations. We had earnings from operations of $383,000 for the three months ended June 30, 2009 and earnings from operations of $1.5 million for the three months ended June 30, 2008. The second quarter 2009 and 2008 earnings from operation are a result of higher revenues and margins with a decrease in operating expenses for 2009 and a limited increase in operating expenses for 2008. We had a loss from operations of $473,000 for the six months ended June 30, 2009 and earnings from operations of $2.2 million for the six months ended June 30, 2008. The loss from operations for the six month period ended June 30, 2009 is a result of a decrease in our revenues and margins due to the current economic downturn. The earnings from operations for the six month period ended June 30, 2008 is a result of higher revenues and margins with a limited increase in operating expenses.
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Datalink Corporation is an information storage architect. The company analyzes designs implements and supports information storage infrastructures that store protect and provide continuous access to information. Datalink\'s specialized capabilities and solutions span storage area networks network-attached storage direct-attached storage and IP-based storage using industry-leading hardware software and technical services. Datalink Corp. has a market cap of $45 million; its shares were traded at around $3.48 with a P/E ratio of 28.9 and P/S ratio of 0.2.
Highlight of Business Operations:
Net Sales. Our total net sales decreased by $6.0 million for the three months ended June 30, 2009, or 12.1%, from $49.7 million for the comparable quarter in 2008. Our total net sales decreased by $13.9 million for the six months ended June 30, 2009, or 14.2%, from $97.4 million for the comparable period in 2008. Our product sales decreased $6.1 million, or 21.1%, to $22.9 million for the three months ended June 30, 2009, from $29.1 million for the comparable quarter in 2008. Our product sales decreased $15.4 million for the six months ended June 30, 2009, or 26.8%, from $57.6 million for the comparable period in 2008. Our service sales increased $127,000, or 6.1%, to $20.8 million for the three months ended June 30, 2009 from $20.7 million for the comparable quarter in 2008. Our service sales increased $1.5 million, or 3.9%, to $41.4 million for the six months ended June 30, 2009 from $39.9 million for the comparable period in 2008.General and Administrative. General and administrative expenses include wages for administrative personnel, professional fees, depreciation, communication expenses and rent and related facility expenses. General and administrative expenses were $2.8 million, or 6.5% of net sales for the quarter ended June 30, 2009, compared to $2.9 million, or 5.8% of net sales for the second quarter in 2008. General and administrative expenses were $5.8 million, or 6.9% of net sales for the six months ended June 30, 2009, compared to $6.1 million or 6.2% of net sales for the comparable period in 2008.
General and administrative expenses decreased $66,000 for the three months ended June 30, 2009, as compared to the same period in 2008. We attribute this primarily to a decrease in travel and entertainment expense of $70,000 due to our cost reduction initiatives. General and administrative expenses decreased $309,000 for the six months ended June 30, 2009, as compared to the same period in 2008. We attribute this primarily to the cancellation of our annual sales meeting resulting in savings of $205,000 and a decrease in training expenses of $130,000.
Engineering. Engineering expenses include employee wages, bonuses and travel, hiring and training expenses for our field and customer support engineers and technicians. Engineering expenses were $3.0 million, or 6.8% of net sales for the quarter ended June 30, 2009, compared to $2.8 million, or 5.6% of net sales for the second quarter in 2008. Engineering expenses were $5.8 million, or 6.9% of net sales for the six months ended June 30, 2009, compared to $6.0 million, or 6.1% of net sales for the comparable period in 2008.
Engineering expenses increased $163,000 for the three months ended June 30, 2009, as compared to the same period in 2008. This is primarily due to a decrease in our allocation of engineering costs associated with installation and configuration services and with consulting services to our cost of service sales of $532,000. This was offset by a decrease in travel and entertainment expense of $129,000 and variable compensation expense of $29,000. Engineering expenses decreased $175,000 for the six months ended June 30, 2009, as compared to the same period in 2008. This is primarily due to a decrease in travel and entertainment expense of $194,000.
Earnings (Loss) from Operations. We had earnings from operations of $383,000 for the three months ended June 30, 2009 and earnings from operations of $1.5 million for the three months ended June 30, 2008. The second quarter 2009 and 2008 earnings from operation are a result of higher revenues and margins with a decrease in operating expenses for 2009 and a limited increase in operating expenses for 2008. We had a loss from operations of $473,000 for the six months ended June 30, 2009 and earnings from operations of $2.2 million for the six months ended June 30, 2008. The loss from operations for the six month period ended June 30, 2009 is a result of a decrease in our revenues and margins due to the current economic downturn. The earnings from operations for the six month period ended June 30, 2008 is a result of higher revenues and margins with a limited increase in operating expenses.
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