Datalink Earnings Rise

MINNEAPOLIS -- Datalink Corporation (Nasdaq:DTLK), a leading independent information storage architect, reported that revenues for the quarter ended December 31, 2006, rose 8 percent to $38.7 million from $35.9 million for the prior-year period. The company reported net earnings of $4.4 million, or $.38 per diluted share, compared to net earnings of $1 million or $.10 per diluted share in the 2005 fourth quarter.

For 2006, the company reported revenues of $146 million, a 25 percent increase over revenues of $117.1 million in 2005. Net earnings for 2006 were $8.5 million, or $.76 per diluted share, compared to a net loss of $2.9 million, or $.28 per diluted share for 2005.

Both 2006 and 2005 contain significant unusual charges. Net income for the fourth quarter and year ended December 31, 2006, includes a tax benefit of $2.2 million or $.19 per diluted share resulting principally from the reversal of the companys income tax valuation allowance. The net loss in the year ended December 31, 2005, included the previously announced non-cash charge of $3.5 million, or $.34 per diluted share, related to subleasing a portion of the company’s corporate headquarters facility. Excluding these unusual charges, fourth quarter 2006 net income was $2.2 million or $.19 per diluted share compared to $1 million or $.10 per fully diluted share in the fourth quarter of 2005. Net income for the year ended December 31, 2006, was $6.3 million or $.57 per diluted share compared $587,000 or $.06 per fully diluted share for the year ended December 31, 2005. As a result of reversing the income tax valuation allowance, in future quarters of earnings Datalink will provide an income tax provision.

Charlie Westling, Datalink’s president and CEO, commented, “We are pleased to report continued strong performance in 2006. Datalink accomplished the strategic initiatives we set for ourselves at the beginning of the year: to increase productivity, deliver storage solutions and professional services more effectively and strengthen our resources in key geographic locations.”

Datalink Corp.