<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: June 30, 1996.
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____.
Commission file number: 0-17972
DIGI INTERNATIONAL INC.
----------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 41-1532464
-------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
11001 Bren Road East
Minnetonka, Minnesota 55343
-----------------------------------------------------
(Address of principal executive offices) (Zip Code)
(612) 912-3444
----------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
---- ----
On July 31, 1996, there were 13,308,297 shares of the registrant's $.01 par
value Common Stock outstanding.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1
<PAGE>
INDEX
PART I. FINANCIAL INFORMATION
------ ---------------------
ITEM 1. Financial Statements Page
----
Consolidated Condensed Statements of Operations
for the three months and nine months ended
June 30, 1996 and 1995 . . . . . . . . . . . . . . . . . . . . 3
Consolidated Condensed Balance Sheets as of
June 30, 1996 and September 30, 1995 . . . . . . . . . . . . . 4
Consolidated Condensed Statements of Cash
Flows for the nine months ended June 30, 1996 and 1995 . . . . 5
Notes to Consolidated Condensed Financial
Statements . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ITEM 2. Management's Discussion and Analysis of
Results of Operations and Financial Condition. . . . . . . . . 8
Forward-looking Statements . . . . . . . . . . . . . . . . . . 12
PART II. OTHER INFORMATION
------- -----------------
ITEM 1. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . 13
ITEM 2. Changes in Securities. . . . . . . . . . . . . . . . . . . . . 13
ITEM 3. Defaults Upon Senior Securities. . . . . . . . . . . . . . . . 13
ITEM 4. Submission of Matters to a Vote of Securities Holders. . . . . 13
ITEM 5. Other Information. . . . . . . . . . . . . . . . . . . . . . . 13
ITEM 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . 13
2
<PAGE>
PART I FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
DIGI INTERNATIONAL INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS FOR THE
THREE MONTHS AND NINE MONTHS ENDED JUNE 30, 1996 AND 1995
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30 NINE MONTHS ENDED JUNE 30
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales $ 50,316,572 $ 41,179,259 $ 142,681,110 $ 119,134,170
Cost of sales 25,191,439 19,048,547 67,760,818 56,089,539
------------- ------------ ------------- -------------
Gross margin 25,125,133 22,130,712 74,920,292 63,044,631
------------- ------------ ------------- -------------
Operating expenses:
Sales & marketing 12,667,204 8,422,648 30,837,838 23,320,218
Research & development 5,418,486 3,838,933 13,991,515 10,289,890
General & administrative 5,073,797 2,983,629 13,178,447 9,266,713
------------- ------------ ------------- -------------
Total operating expenses 23,159,487 15,245,210 58,007,800 42,876,821
------------- ------------ ------------- -------------
Operating income 1,965,646 6,885,502 16,912,492 20,167,810
Other income (expense), net (149,794) 610,450 394,841 1,428,656
AetherWorks Corporation net loss (1,203,625) (2,138,922)
------------- ------------ ------------- -------------
Income before income taxes 612,227 7,495,952 15,168,411 21,596,466
Provision for income taxes 663,457 2,648,560 6,078,106 7,664,014
------------- ------------ ------------- -------------
Net income (loss) $ (51,230) $ 4,847,392 $ 9,090,305 $ 13,932,452
------------- ------------ ------------- -------------
------------- ------------ ------------- -------------
Income per common and
common equivalent share $ - $ 0.35 $ 0.66 $ 0.99
------------- ------------ ------------- -------------
------------- ------------ ------------- -------------
Weighted average common and
common equivalent shares outstanding 13,841,154 14,035,180 13,828,104 14,035,939
------------- ------------ ------------- -------------
------------- ------------ ------------- -------------
</TABLE>
The accompanying notes to unaudited consolidated condensed financial
statements are an integral part of this financial statement.
3
<PAGE>
DIGI INTERNATIONAL INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
ASSETS JUNE 30, 1996 SEPTEMBER 30, 1995
------------- ------------------
Current assets: (unaudited)
Cash and cash equivalents $ 3,631,868 $ 5,103,731
Marketable securities 27,968,775
Accounts receivable, net 40,998,055 31,960,936
Inventories, net 38,136,462 27,019,085
Other 5,175,576 2,225,058
------------- -------------
Total current assets 87,941,961 94,277,585
Property, equipment and improvements, net 24,820,549 17,716,819
Intangible assets, net 11,380,416 11,633,305
Investment in AetherWorks Corporation 2,657,602
Other 4,306,240 2,415,755
------------- -------------
Total assets $ 131,106,768 $ 126,043,464
------------- -------------
------------- -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 17,516,008 $ 12,106,515
Accrued expenses 4,296,628 8,110,402
------------- -------------
Total current liabilities 21,812,636 20,216,917
Commitments
Stockholders' equity:
Preferred stock, $01 par value; 2,000,000
shares authorized; none outstanding
Common stock, $.01 par value; 60,000,000
shares authorized; 14,656,026 and
14,562,958 shares outstanding 146,560 145,630
Additional paid-in capital 42,786,478 41,306,320
Retained earnings 90,694,831 81,604,526
------------- -------------
133,627,869 123,056,476
Less unearned stock compensation (452,856) (598,387)
Treasury stock, at cost, 1,347,729 and
1,032,729 shares (23,880,881) (16,631,542)
------------- -------------
Total stockholders' equity $ 109,294,132 $ 105,826,547
------------- -------------
Total liabilities and stockholders'
equity $ 131,106,768 $ 126,043,464
------------- -------------
------------- -------------
The accompanying notes to unaudited consolidated condensed financial statements
are an integral part of this financial statement.
4
<PAGE>
DIGI INTERNATIONAL INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED JUNE 30, 1996 AND 1995
(UNAUDITED)
1996 1995
---- ----
Operating activities:
Net Income $ 9,090,305 $ 13,932,452
Adjustments to reconcile net income to
cash (used in) provided by operating
activities:
Depreciation and amortization 3,654,134 2,617,146
AetherWorks Corporation net loss 2,138,923
Provision for losses on accounts
receivable 323,838 113,927
Provision for inventory obsolescence 1,263,200 192,000
Stock compensation 158,031 106,461
Changes in operating assets and
liabilities (24,059,736) (2,936,231)
------------- -------------
Net cash (used in) provided by
operating activities (7,431,305) 14,025,755
------------- -------------
Investing activities:
Purchase of property, equipment and
improvements (11,417,259) (4,698,119)
Sale (purchase) of marketable securities,
net 27,968,775 (6,492,697)
Investment in AetherWorks Corporation (4,796,525)
------------- -------------
Net cash (used in) provided by
investing activities 11,754,991 (11,190,816)
------------- -------------
Financing activities:
Purchase of treasury stock (7,249,339) (5,930,313)
Stock option transactions, net 1,453,790 598,029
------------- -------------
Net cash used in financing activities (5,795,549) (5,332,284)
------------- -------------
Net decrease in cash and cash equivalents (1,471,863) (2,497,345)
Cash and cash equivalents, beginning of
period 5,103,731 13,849,017
------------- -------------
Cash and cash equivalents, end of period $ 3,631,868 $ 11,351,672
------------- -------------
------------- -------------
The accompanying notes to unaudited consolidated condensed financial statements
are an integral part of this financial statement.
5
<PAGE>
DIGI INTERNATIONAL INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The interim consolidated condensed financial statements included in this Form
10-Q/A have been prepared by the Company, without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission. Certain information
and footnote disclosures, normally included in financial statements prepared in
accordance with generally accepted accounting principles, have been condensed or
omitted, pursuant to such rules and regulations. These consolidated condensed
financial statements should be read in conjunction with the financial statements
and related notes thereto included in the Company's 1995 Annual Report and Form
10-K.
The consolidated condensed financial statements presented herein, as of June 30,
1996 and for the three month and nine month periods then ended, reflect, in the
opinion of management, all adjustments (which consist only of normal, recurring
adjustments) necessary for a fair presentation of financial position and the
results of operations and cash flows for the periods presented. The results of
operations for any interim period are not necessarily indicative of results for
the full year.
2. INVESTMENT IN AETHERWORKS CORPORATION
Through June 30, 1996, the Company purchased $4.8 million in secured convertible
notes from AetherWorks Corporation, a development stage company engaged in the
development of wireless and dial-up remote access technology. The Company is
obligated to purchase up to an additional $9 million secured convertible notes
from time to time at the request of AetherWorks, based on certain events. The
Company has reported its investment in AetherWorks on the equity method and has
recorded a $1,203,645 loss for the quarter ended June 30, 1996 and a $2,138,922
loss for the nine months ended June 30, 1996, which represents 100% of the
AetherWorks' net loss for such periods. The percentage of AetherWorks' net loss
included in the Company's financial statements is based upon the percentage of
financial support provided by the Company (versus other investors) to
AetherWorks during such periods.
6
<PAGE>
NOTES TO CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS (CONTINUED)
3. INVENTORIES
Inventories are stated at the lower of cost or market, with cost determined on
the first-in, first-out method. Inventories at June 30, 1996 and September 30,
1995 consist of the following:
June 30 September 30
------- ------------
Raw materials $20,979,410 $12,476,953
Work in process 11,246,767 7,645,002
Finished goods 5,910,285 6,897,130
----------- ------------
$38,136,462 $27,019,085
----------- ------------
----------- ------------
4. INCOME PER SHARE
Income per common share is computed by dividing net income by the weighted
average number of common shares and common equivalent shares outstanding during
the period. Common stock equivalents result from dilutive stock options.
5. COMMON STOCK
During the nine month period ended June 30, 1996, 93,068 shares of the Company's
common stock were issued upon the exercise of outstanding stock options for
97,959 shares. The difference between the shares issued and options exercised
results from the stock option plan's provision allowing the employees to elect
to pay their withholding obligations through share reduction. Withholding taxes
paid by the Company, as a result of the share reduction option, amounted to
$122,930.
On March 27, 1995, the Company's Board of Directors authorized a one million
share repurchase program, which will be funded by available cash balances over
an unspecified period of time. During the nine month period ended June 30, 1996,
$7,249,339 were used for treasury stock purchases. On January 31, 1996, the
Company's Board of Directors authorized a separate 500,000 share repurchase
program for the purpose of purchasing Common Stock for the Company's Employee
Stock Purchase Plan.
6. RESTATEMENT
The consolidated condensed financial statements for the three months and nine
months ended June 30, 1996, have been restated to reflect the accounting for the
Company's investment in AetherWorks Corporation on the equity method. (See Note
2.)
In addition, results for the three months ended June 30, 1996 also have been
restated to reflect additional third quarter costs related principally to
returned goods and inventory adjustments amounting to approximately $860,000
which were previously not included in operations for the period indicated.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
RESULTS OF OPERATIONS
NET SALES
Sales for the three month and nine month period ended June 30, 1996 increased by
$9,137,313 and $23,546,945 or 22.2% and 19.7%, respectively, over the
corresponding periods ended June 30, 1995. Sales in all product markets
increased over prior year periods, as set forth in the following table:
PRODUCT QUARTERLY NINE MONTH PERIOD PERCENT OF NINE
MARKET INCREASE INCREASE MONTH REVENUE
- ------ -------- -------- -------------
Multiuser 14.2% 14.4% 65.5%
Remote Access 50.3% 44.2% 16.3%
LAN Connect 30.8% 21.9% 18.2%
The Company believes that the revenues from sales of its Remote Access and LAN
Connect products will continue to grow as a result of the Company's efforts to
increase market awareness for products introduced earlier in fiscal year 1996,
the introduction of new products, and growth in the market for Remote Access and
LAN Connect products generally. The Company believes that sales of its
Multiuser products may grow at a reduced rate or even decline as the market for
such products continues to mature.
For the three month period ended June 30, 1996, sales to original equipment
manufacturer ("OEM") customers across all product markets increased to
$11,186,288, representing 15.1% increase over sales for the three month period
ended June 30, 1995, but decreased to 22.2% from 23.6% as a percent of total
sales for the respective quarters, due to increased sales to distributors. For
the nine month period ended June 30, 1996, OEM sales decreased by 1.6% from
sales for the corresponding period in 1995, and decreased to 19.2% from 23.4%,
respectively, as a percent to total sales for the period. The decrease in OEM
business for the nine month period was due primarily to industry-wide allocation
of components during the Company's first fiscal quarter. The Company expects
the increase in OEM sales experienced in its most recent quarter to continue,
based on firm orders and increased component availability.
International sales of the Company's products for the three month period ended
June 30, 1996 increased by 10.6% over the three month period ended June 30,
1995. International sales for the nine month period ended June 30, 1996
increased by 19.6% over the corresponding period in 1995. International sales
for the three month period ended June 30, 1996 accounted for approximately 18.1%
of total sales, down from 20.7% in the previous quarter. Total international
sales decreased 11.3% quarter to quarter, due primarily to softness in the
European market.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION (CONTINUED)
RESULTS OF OPERATIONS (CONTINUED)
GROSS MARGIN
Gross margin as a percent of net sales decreased to 49.9% for the three month
period ended June 30, 1996 from 53.7% for the three month period ended June 30,
1995. For the nine month period, gross margin as a percent of net sales was
52.5% for the period ended June 30, 1996 compared to 52.9% for the period ended
June 30, 1995. The decrease in gross margin percentage for the three month
period was due to increasing reserves for potential inventory obsolescence and
to increased sales in the LAN Connect product market, which are typically lower
margin products.
OPERATING EXPENSES
Operating expenses for the three month period ended June 30, 1996 increased
51.9% over operating expenses for the corresponding period ended June 30, 1995,
and increased as a percent of sales to 46.0% for the three month period ended
June 30, 1996 from 37.0% for the three month period ended June 30, 1995.
Operating expenses for the nine month period ended June 30, 1996, increased by
35.3% over the corresponding period ended June 30, 1995, and increased as a
percent of sales to 40.6% for the nine months ended June 30, 1996, from 36.0%
for the corresponding period in 1995. The period increases primarily were due
to the impact of expenditures planned for the previous quarter that were delayed
to the third quarter and to the third quarter planned increases in research and
development for new products and additional marketing costs in connection with
new product introductions. Also impacting the quarter were the continuing
programs for the establishment of the Company in the Remote Access and LAN
Connect markets, the consolidation, under the "Digi" brand, of products formerly
sold under the identities of subsidiaries of the Company, and to the expansion
of and upgrades to the Company's infrastructure. A significant portion of the
expenditures in connection with each of the foregoing was due to increases in
personnel required to support such efforts.
The increased level of operating expenses were to be compensated for by the
planned sales for the quarter which would have reduced operating expenses as a
percent of sales. The shortfall in planned sales was not identified until late
in the period, due to the fact that a majority of the Company's sales typically
occur in the last month of the quarter.
OTHER INCOME, (EXPENSE)
Other income (expense), net for the three month period ended June 30, 1996
decreased by $719,744. This change is primarily due to loss on the disposal of
fixed assets and lower interest income resulting from a decrease in invested
funds. For the nine month period ended June 30, 1996, other income (expense)
decreased to $394,841 from $1,428,656 for the corresponding period in 1995. The
period decreases are primarily the result of a decrease in funds invested.
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION (CONTINUED)
RESULTS OF OPERATIONS (CONTINUED)
AETHERWORKS CORPORATION NET LOSS
In connection with the purchase of secured convertible notes from AetherWorks
Corporation, a development stage company engaged in the development of wireless
and dial-up remote access technology, the Company has the ability, under certain
conditions, to convert its investment into a majority of AetherWorks' common
stock. The Company has reported its investment in AetherWorks on the equity
method and has recorded a $1,203,645 loss for the quarter ended June 30, 1996
and a $2,138,922 loss for the nine months ended June 30, 1996, which represents
100% of AetherWorks' net loss for such periods. The percentage of AetherWorks'
net loss included in the Company's financial statements is based upon the
percentage of financial support provided by the Company (versus other investors)
to AetherWorks during such periods.
INCOME TAXES
The Company's effective income tax rate for the three month and nine month
periods ended June 30, 1996 was 108% and 40%, respectively, compared to 35.3%
and 35.5%, respectively, in the corresponding periods in 1995. The period
increases are due to the non-deductibility of AetherWorks' losses. Excluding
the AetherWorks losses, the Company's effective tax rate would have been 36.5%
and 35.1% for the three and nine month periods ended June 30, 1996.
LIQUIDITY AND CAPITAL RESOURCES
The Company traditionally has financed its operations principally with funds
generated from operations and proceeds from public stock offerings. From the
time of its last public offering in 1991, the Company has financed its
operations almost exclusively through funds generated from operations. The
Company customarily holds excess funds generated from operations in the form of
cash and cash equivalents and marketable securities.
In the nine months ended June 30, 1996, the Company sold in excess of
$27,968,775 in marketable securities to finance growth in the Company's accounts
receivable and inventories, and its investment in AetherWorks, as well as the
acquisition of new product technology. The increase in accounts receivable was
due primarily to increased sales volume, particularly late in the quarter ended
June 30, 1996. The Company increased inventories in anticipation of additional
sales.
10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION (CONTINUED)
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
Investing activities for the nine month period ended June 30, 1996, consisted
primarily of redemption of maturing investments offset by purchases of property,
equipment and improvements and an increase in notes receivable. The increase in
other assets arose from the sale of the Company's former corporate headquarters
facility. The investment in AetherWorks Corporation resulted from the Company's
purchase of secured convertible notes from AetherWorks Corporation, a
development stage company engaged in the development of wireless and dial-up
remote access technology. The Company is obligated, under the terms of amended
and restated agreements, to purchase additional secured convertible notes
aggregating $9 million from time to time at the request of AetherWorks, based on
certain conditions. Secured convertible notes held by the Company are presently
convertible into 51% of AetherWorks' common stock, and the purchase of $9
million additional principal amount of secured convertible notes would increase
the Company's ownership position upon conversion to 62.7%, based on AetherWorks'
present capitalization. The Company has reported its investment in AetherWorks
on the equity method and has recorded a $1,203,625 loss for the quarter ended
June 30, 1996 and a $2,138,922 loss for the nine months ended June 30, 1996,
which represents 100% of the AetherWorks' net loss for such periods. The
percentage of AetherWorks' net loss included in the Company's financial
statements is based upon the percentage of financial support provided by the
Company (versus other investors) to AetherWorks during such periods. The
Company anticipates that the AetherWorks' losses will continue for fiscal 1996
and fiscal 1997 and that the 1997 levels will be greater than in 1996.
During the nine month period ended June 30, 1996, the Company made open market
purchases of the Company's common stock aggregating $7,249,339, pursuant to a
one million share repurchase program authorized by the Company's board of
directors on March 27, 1995. On January 31, 1996, the Company's Board of
Directors authorized a separate 500,000 share repurchase program for the purpose
of purchasing Common Stock to be utilized for the Company's Employee Stock
Purchase Plan, which purchase will be funded through employee withholding.
At June 30, 1996, the Company had working capital of $66.4 million and no debt.
The Company has negotiated a $5,000,000 unsecured line of credit with its bank.
The Company's management believes that current financial resources, cash
generated by operations and the Company's potential capacity for debt and/or
equity financing will be sufficient to fund current and anticipated business
operations.
The Financial Accounting Standards Board (FASB) has issued Statement No. 123,
"Accounting for Stock-Based Compensation." The Company plans to adopt this
Statement in fiscal year 1997. Although it has not made a definite
determination of its impact, the Company does not expect the adoption of
Statement No. 123 to have a materially adverse effect on its financial position
or results of operations.
11
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION (CONTINUED)
FORWARD-LOOKING STATEMENTS
Certain statements made above, which are summarized below, are forward-looking
statements that involve risks and uncertainties, and actual results may be
materially different. Factors that could cause actual results to differ include
those identified below:
- - CONTINUED GROWTH IN SALES OF THE COMPANY'S REMOTE ACCESS AND LAN CONNECT
PRODUCTS -- General market conditions and competitive conditions within
these markets, development and acceptance of new products offered by the
Company, and the introduction of products by competitors in these markets.
- - THAT SALES OF THE COMPANY'S MULTI-USER PRODUCTS MAY GROW AT A REDUCED RATE
OR EVEN DECLINE -- Potential market penetration in emerging third world
countries and the development of new applications for these products in
existing markets.
- - CONTINUED INCREASE IN OEM SALES -- OEM orders are subject to cancellation
at the option of the customer, and are subject to greater quarterly
fluctuations than sales through the Company's other channels, as well as
competitive conditions in markets served by the Company's OEM customers.
OEM sales could also be adversely impacted by component shortages.
- - THE EXPECTATION THAT TOTAL OPERATING EXPENSES WILL DECREASE IN ABSOLUTE
DOLLARS IN THE FOURTH QUARTER OF FISCAL 1996 AND THE FIRST QUARTER OF
FISCAL 1997 -- This expectation may be adversely impacted by presently
unanticipated expenses or opportunities.
- - THE EXPECTATION THAT OPERATING EXPENSES WILL FURTHER DECREASE AS A PERCENT
OF SALES -- Meeting this expectation depends upon the Company's ability to
control costs and achieving a higher level of sales, which may not occur
for a variety of reasons, including those stated above with regard to the
Company's Remote Access and LAN Connect products.
- - THE EXPECTATION THAT THE AETHERWORKS CORPORATION LOSSES FOR 1997 WILL BE
GREATER THAN 1996 LEVELS -- This expectation may be impacted by presently
unanticipated revenue opportunities or by unanticipated expenses.
12
<PAGE>
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
EXHIBIT NUMBER DESCRIPTION
3(a) RESTATED CERTIFICATE OF INCORPORATION OF THE
REGISTRANT*
3(b) AMENDED AND RESTATED BY-LAWS OF THE
REGISTRANT**
27 FINANCIAL DATA SCHEDULE
* INCORPORATED BY REFERENCE TO THE CORRESPONDING EXHIBIT NUMBER OF THE
COMPANY'S FORM 10-K FOR THE YEAR ENDED SEPTEMBER 30, 1992
(FILE NO. 0-17972).
** INCORPORATED BY REFERENCE TO THE CORRESPONDING EXHIBIT NUMBER OF THE
COMPANY'S REGISTRATION STATEMENT ON FORM S-1 (FILE NO.33-42384).
(b) Reports on Form 8-K:
There were no reports filed on form 8-K during the quarter ended
June 30, 1996.
13
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
DIGI INTERNATIONAL INC.
Date: December 23, 1996 By: /s/Jonathon E. Killmer
----------------------
Jonathon E. Killmer
Chief Financial Officer
(duly authorized officer and
Principal Financial Officer)
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> JUN-30-1996
<CASH> 3,631,868
<SECURITIES> 0
<RECEIVABLES> 40,998,055
<ALLOWANCES> 0
<INVENTORY> 38,136,462
<CURRENT-ASSETS> 87,941,961
<PP&E> 24,820,549
<DEPRECIATION> 0
<TOTAL-ASSETS> 131,106,768
<CURRENT-LIABILITIES> 21,812,636
<BONDS> 0
0
0
<COMMON> 146,560
<OTHER-SE> 109,147,572
<TOTAL-LIABILITY-AND-EQUITY> 131,106,768
<SALES> 142,681,110
<TOTAL-REVENUES> 142,681,110
<CGS> 67,760,818
<TOTAL-COSTS> 58,007,800
<OTHER-EXPENSES> 2,138,922<F1>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 15,168,411
<INCOME-TAX> 6,078,106
<INCOME-CONTINUING> 9,090,305
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,090,305
<EPS-PRIMARY> .66
<EPS-DILUTED> .66
<FN>
<F1>AETHERWORKS CORPORATION NET LOSS
</FN>
</TABLE>
