Digi International Reports 19.8% Increase in Revenue for Fiscal 2007 Over Fiscal 2006

Digi International Reports 19.8% Increase in Revenue for Fiscal 2007 Over Fiscal 2006

November 29, 2007

    MINNETONKA, Minn., Nov. 29 /Xinhua-PRNewswire/ -- Digi
International(R) Inc. (Nasdaq: DGII) reported revenue of
$173.3 million for the fiscal year ended September 30, 2007
compared to $144.7 million for the fiscal year ended
September 30, 2006, an increase of $28.6 million, or 19.8%.
Other financial highlights for the quarter and the fiscal
year include:

    -- Digi¡¦s net sales of $45.1 million in the fourth
quarter of fiscal 
       2007 is the highest net sales achieved in the past
thirty-one 
       quarters, and represents a 9.8% increase over the
net sales for the 
       fourth quarter of fiscal 2006.

    -- Digi has reported net income for nineteen
consecutive quarters.

    -- Operating income for fiscal 2007 increased by 53.7%
over fiscal 2006.

    -- Net income for fiscal 2007 was $19.8 million, or
11.4% of net sales.  
       Net income for the fourth quarter of fiscal 2007 was
84.9% higher 
       than the fourth quarter of fiscal 2006, including
the impact of 
       discrete income tax benefits in both periods.

    -- Digi met its annual revenue and earnings per share
guidance, 
       generated strong cash from operations, and continued
to maintain a 
       healthy balance sheet in fiscal 2007. 
	
    Revenue from embedded products in the fourth quarter of
2007 was $20.6 million, an increase of $3.3 million, or
19.4%, compared to the fourth quarter of fiscal 2006.
Revenue from non-embedded products was $24.5 million in the
fourth quarter of fiscal 2007, an increase of $0.7 million,
or 2.9%, compared to the fourth quarter of fiscal 2006. 
MaxStream-branded product revenue was $5.6 million for the
fourth quarter of fiscal 2007 compared to $3.2 million for
the fourth quarter of fiscal 2006, which includes revenue
from the date of acquisition of July 27, 2006.

    Digi reported net income of $5.6 million for the fourth
quarter of fiscal 2007, or $0.21 per diluted share, compared
with $3.0 million in the fourth quarter of fiscal 2006, or
$0.12 per diluted share.  Reversals of tax reserves
associated with the settlements of foreign tax audits and
other discrete tax benefits increased earnings per diluted
share by $0.03 and $0.04 in the fourth quarter of fiscal
2007 and 2006, respectively.  In-process research and
development and other acquisition-related expenses
associated with MaxStream reduced earnings per diluted
share by $0.08 in the fourth quarter of fiscal 2006. 
Earnings per diluted share were $0.18 and $0.16 for the
fourth quarter of fiscal 2007 and 2006, respectively,
excluding the aforementioned items.
 
    Gross profit margin in the fourth quarter of fiscal
2007 was 52.8% compared with 52.4% during the same quarter
of fiscal 2006. Gross profit margin includes the
amortization of identifiable intangibles for purchased and
core technology, shown separately on our Condensed
Consolidated Statements of Operations.

    Total operating expenses were $17.6 million, or 39.1%
of net sales, in the fourth quarter of fiscal 2007 compared
to $18.1 million, or 44.2% of net sales, in the fourth
quarter of 2006. Operating expenses for fiscal 2006 include
a charge of $2.0 million for in-process research and
development associated with the acquisition of MaxStream. 
 
    For the fiscal years ended September 30, 2007 and 2006,
operating income was $20.3 million and $13.2 million,
respectively, or an increase of 53.7%. 

    Digi reported net income of $19.8 million in fiscal
2007, or $0.76 per diluted share, compared with $11.1
million, or $0.46 per diluted share, for fiscal 2006. Digi
recorded benefits associated with reversals of tax reserves
and other discrete tax benefits that increased earnings per
diluted share by $0.17 and $0.04 for fiscal 2007 and 2006,
respectively. Acquired in-process research and development
charges and other acquisition-related expenses reduced
earnings per diluted share by $0.09 in fiscal 2006. 
Earnings per diluted share were $0.59 and $0.51 for fiscal
2007 and 2006, respectively, excluding the aforementioned
items.
 
    Digi¡¦s cash and cash equivalents and marketable
securities balance, including long-term marketable
securities, was $87.6 million at September 30, 2007, an
increase of $28.7 million over the cash and cash
equivalents and marketable securities balance at the end of
fiscal 2006. At September 30, 2007, Digi¡¦s current ratio is
6.4 to 1, and the Company has no debt other than capital
lease obligations.

    "Fiscal 2007 was a very strong year for
Digi," said Joe Dunsmore, Digi¡¦s Chief Executive
Officer. "Our revenue growth of almost 20% and the
53.7% year over year improvement in our operating income
demonstrates a very strong positive momentum for our
business. As we move into fiscal 2008, we expect our
drop-in networking products will provide the impetus to
continue that momentum."

    Fiscal 2007 Business Highlights:

    -- Digi united wireless technologies to pioneer
"Drop-In Networking," 
       with the introduction of the ConnectPort X product
family, a line of 
       IP gateways that provide seamless connectivity of
Zigbee(R), Wi-Fi
       (R), cellular, and Ethernet traffic to centralized
applications and 
       databases.  Drop-In Networking solutions provide
end-to-end wireless 
       connectivity to commercial grade electronic devices
in locations 
       where wires don¡¦t exist or satisfy customer needs.

    -- Digi strengthened its leadership position in
easy-to-use Zigbee(R) 
       technology with the expansion of the MaxStream XBee
brand to include 
       an embedded product with full mesh networking
capabilities.

    -- Digi launched a Stand-Alone Wireless Modem product
line, based on 
       acquired MaxStream(R) technology, which provides
simple, low-cost 
       serial and Ethernet cable replacement.

    -- Digi extended its family of cellular routers with
support of the 
       latest 3G technologies, including HSDPA for
GSM-based carrier 
       networks and EVDO Rev A for CDMA-based carrier
networks.  These 
       latest generation routers are certified on the three
largest carrier 
       networks in the U.S., which include AT&T,
Sprint, and Verizon, as 
       well as numerous international networks.

    -- Digi moved the Rabbit brand strongly into the
embedded wireless 
       market with two new wireless RabbitCore(R) modules
and a new Rabbit 
       Wireless Control Application Kit.  The modules, one
with integrated 
       Wi-Fi(R) and the other with integrated Zigbee(R),
are the latest 
       addition to the popular family of pin-compatible
RabbitCore modules.

    -- Digi increased its access to embedded markets by
rolling out a new 
       approach to ARM embedded development.   Digi
JumpStart Kits(TM) are 
       sub $500 development kits that get design engineers
started in 
       developing complex NetOS, Linux, and WinCE based
embedded products 
       within 30 minutes.

    -- Digi expanded its strong embedded development
relationship with 
       Microsoft with two industry firsts.  The Digi
Connect ME Jumpstart 
       Kit for Microsoft .NET Micro Framework was the
industry¡¦s first 
       Ethernet networking solution for .NET Micro
Framework.  Digi was also 
       the first company to offer a Windows(R) Embedded CE
6.0 board support 
       package (BSP) for ARM processors and wireless
networking.  As a 
       Microsoft Gold Certified Partner, Digi is one of the
Microsoft 
       Business Partners who receives the highest level of
customer 
       endorsement.

    2008 Guidance 

    For fiscal year 2008, Digi projects revenue to be in
the range of $197 million to $207 million, or an increase
over fiscal year 2007 revenue of 14% to 19%.  Digi projects
earnings per diluted share to be in a range of $0.69 to
$0.87.  Projected fiscal 2008 earnings per diluted share of
$0.69 to $0.87 represents a 17% to 47% increase over fiscal
2007 earnings per diluted share, excluding the discrete tax
benefits of $0.17 recorded in fiscal 2007. 

    Fourth Quarter and Year-End 2007 Conference Call
Details

    Digi invites all those interested in hearing
management¡¦s discussion of its fourth quarter and year end
earnings results on Thursday, November 1, 2007 at 5:00 p.m.
EDT (4:00 p.m. CT), to join the call by dialing (800)
952-4645.  International participants may access the call
by dialing [phone].  A replay will be available two
hours after the completion of the call, and for one week
following the call, by dialing [phone] for domestic
participants or [phone] for international
participants and entering access code 21351615 when
prompted. Participants may also access a live webcast of
the conference call through the investor relations section
of Digi¡¦s website, http://www.digi.com .

    This release contains a non-GAAP disclosure for
earnings per diluted share for the three and twelve month
periods ended September 30, 2007 and 2006, excluding the
impact of acquisition-related expenses, the reversal of tax
reserves, and other discrete tax benefits associated with
the closure of tax audits and tax periods.  Additional
details related to these non-GAAP disclosures are provided
in the Form 8-K that Digi filed with the Securities and
Exchange Commission on the date of this earnings release.

    For the table provides a reconciliation of the non-GAAP
measures described above to the most directly comparable
GAAP measure, and the full financial tables, please refer
to: http://www.digi.com.cn/news/half_part.jsp .

    Press Contacts:	

    Asia Pacific
    Hokie Chan	
    Digi International Channel Marketing Manager 
    Tel:   [phone]
    Email: [e-mail]

    Beijing, China
    Caren Xiao
    Marketing Communication Specialist
    Tel:   [phone] ext 12
    Email: [e-mail]