Minneapolis, MN, USA — Digi International reported on November 12 that a fire had significantly impacted the operations of SVI Public Company Ltd, a contract manufacturer near Bangkok, Thailand that it utilises. Digi has now provided an update on the situation and its anticipated impact on the company’s results.
The fire caused significant disruption to Digi International®‘s short-term manufacturing capacity, writes Jeremy Cowan, but efforts by Digi (NASDAQ: DGII) to redirect production requirements to other contract manufacturers, accelerate production in its own facility and resume limited production at another SVI facility have progressed better than was originally expected. “Further,” said a spokesperson, “we now expect the replacement cost of equipment we owned that was destroyed or irreparably damaged in the fire to be covered by insurance proceeds.”
Despite this progress, Digi anticipates that the fire will impact on its fiscal first quarter results. Specifically, it expects the revenue impact from the fire on the quarter ending December 31, 2014 to be in the range of US$1.5 million to $2.5 million. Digi expects the fire to impact earnings per share in the first quarter in the range of $0.03 to $0.04. The company does not expect the fire to impact upon its full fiscal year 2015 results.
Digi International specialises in machine-to-machine communications (M2M) solutions, combining products and services as end-to-end solutions to drive business efficiencies. It claims to provide the industry’s broadest range of wireless products, and offers a cloud computing platform tailored for devices and development services to help customers get to market fast with wireless devices and applications.
Steve Snyder (pictured above), Digi International’s chief financial officer said, “We are very pleased with our team’s quick response to this unexpected disruption. Our contract manufacturing partners and our suppliers have done a great job of meeting the challenge of minimising disruption to our customers.”
Customers can refer to www.digi.com/updates for the latest information on specific product availability.