Assessing Impact to Operations and Financial Performance
(Minneapolis, MN, October 26, 2011) - Digi International® Inc. (NASDAQ: DGII, www.digi.com) today announced that the operations of a contract manufacturer it utilizes near Bangkok, Thailand has been significantly impacted due to flooding. The flooding is causing problems with the region’s infrastructure, including facilities, transportation and utilities. On October 22, the flooding breached a levy and inundated the majority of the operations of the manufacturer, whose ability to serve Digi’s needs will remain uncertain until the disaster’s extent is known. The contract manufacturer is conducting a full assessment of its ability to meet its customer requirements.
All operations in Thailand that service Digi are currently suspended. Digi is assessing its ability to meet customer requirements by utilizing other existing contract manufacturing partners, new contract manufacturers, its own US facility, and existing inventory. Digi is also assessing the potential financial impact of the production constraints caused by the flooding, and believes its revenue and gross margin will be impacted in the first quarter of fiscal 2012. The extent of this impact is being evaluated.
Digi will provide further updates on this situation on its earnings conference call scheduled for November 3, 2011.
About Digi International
Digi International is making wireless M2M easy by developing reliable products and solutions to connect and securely manage local or remote electronic devices over the network or via the Web. Digi offers the highest levels of performance, flexibility and quality, and markets its products through a global network of distributors and resellers, systems integrators and original equipment manufacturers (OEMs). For more information, visit Digi's Web site at www.digi.com, or call 877-912-3444.
This press release contains forward-looking statements that are based on management's current expectations and assumptions. These statements often can be identified by the use of forward-looking terminology such as "anticipate," "believe," "estimate," "may," "will," "expect," "plan," "project," "should," or "continue" or the negative thereof or other variations thereon or similar terminology. Among other items, these statements relate to expectations of the business environment and circumstances in which the company operates, projections of future performance, perceived marketplace opportunities and statements regarding our mission and vision. Such statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, including risks related to the impact of the flooding in Thailand such as the extent of damage to our supplier's facilities and capacity to service our needs, damage to any tooling, equipment or inventory at the supplier's facilities, uncertainties as to the timeline for flood waters to recede and the supplier's ability to restore its capacity to provide any services to us, uncertainties as to the availability of alternative sources of manufacturing for the lost capacity in Thailand and the terms and conditions associated with our utilization of those alternative sources, uncertainties concerning the availability and cost of commodity materials and product components that we do not make internally, actions by our competitors in response to the impact of the flooding and other risks, uncertainties and assumptions identified from time to time in our filings with the United States Securities and Exchange Commission, including without limitation, our annual report on Form 10-K for the year ended September 30, 2010 and subsequent quarterly reports on Form 10-Q and other filings. These risks, uncertainties and assumptions could cause future results to differ materially from those expressed in any forward-looking statements made by us or on our behalf. Many of such factors are beyond our ability to control or predict. These forward-looking statements speak only as of the date for which they are made. We disclaim any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.