Digi International Reports 8% Revenue Increase for Third Fiscal Quarter of 2008 Compared...

Digi International Reports 8% Revenue Increase for Third Fiscal Quarter of 2008 Compared to Third Fiscal Quarter of 2007

-- Revenue and Net Income Per Diluted Share Exceed Street
Consensus Estimates

-- Share Repurchase Authority Raised to 1.5 Million Shares
MINNEAPOLIS--(Business Wire)--
Digi International(R) Inc. (NASDAQ: DGII, http://www.digi.com)
reported revenue of $47.0 million for the third fiscal quarter of
2008, compared with $43.5 million for the third fiscal quarter of
2007, an increase of $3.5 million, or 8.0%. Sarian Systems, Ltd. was
acquired on April 28, 2008; revenue from Sarian-branded products was
$2.4 million for the third fiscal quarter of 2008 from date of
acquisition.

Digi reported operating income for the third fiscal quarter of
2008 of $3.0 million on a generally accepted accounting principles
(GAAP) basis and operating income on a non-GAAP basis of $5.2 million
for the same period. Net income and net income per diluted share were
$2.0 million and $0.08, respectively, on a GAAP basis, and $3.9
million and $0.15 on a non-GAAP basis for the same period. See
footnotes below.

-0-
*T

----------------------------------------------------------------------
GAAP Results
----------------------------------------------------------------------
(in thousands, except per share amounts) Q3 2008 Q3 2007
----------------------------------------------------------------------
Net Sales $46,995 $43,527
----------------------------------------------------------------------
Operating Income $2,985 $5,098
----------------------------------------------------------------------
Net Income $1,985 $6,798
----------------------------------------------------------------------
Net Income per Diluted Share $0.08 $0.26
----------------------------------------------------------------------

----------------------------------------------------------------------
Non-GAAP Results
----------------------------------------------------------------------
(in thousands, except per share amounts) Q3 2008 Q3 2007
----------------------------------------------------------------------
Operating Income $5,230 (1) $5,098
----------------------------------------------------------------------
Net Income $3,873 (2) $3,871 (3)
----------------------------------------------------------------------
Net Income per Diluted Share $0.15 (2) $0.15 (3)
----------------------------------------------------------------------
*T

(1) Non-GAAP operating income for the third fiscal quarter of 2008
exclude a charge for in-process research and development and other
acquisition-related expenses totaling $2.2 million

(2) Non-GAAP net income and net income per diluted share for the
third fiscal quarter of 2008 excludes a charge for in-process research
and development of $1.9 million and other acquisition-related expenses
of $0.2 million, net of taxes, or $0.08 per diluted share, and a tax
benefit of $0.2 million for the reversal of tax reserves, or $0.01 per
diluted share.

(3) Non-GAAP net income and net income per diluted share for the
third fiscal quarter of 2007 exclude a tax benefit of $2.9 million for
the reversal of tax reserves, or $0.11 per diluted share.

More detailed reconciliations between GAAP operating income and
non-GAAP operating income, and between GAAP net income and net income
per diluted share to non-GAAP net income and net income per diluted
share, are provided below in this earnings release.

"We are pleased with our third quarter 2008 results which over
achieved the Street concensus estimates for both revenue and
profitability and we look forward to finishing the year with what we
expect to be another good quarter," said Joe Dunsmore, Digi's Chief
Executive Officer. "Strong international growth, fueled by our recent
acquisition of Sarian, continues to offset the weakness that we are
currently experiencing in the North American markets."

Revenue from embedded products in the third fiscal quarter of 2008
was $20.7 million compared to $18.8 million in the third fiscal
quarter of 2007, an increase of $1.9 million, or 10.1%. Revenue from
non-embedded products was $26.3 million in the third fiscal quarter of
2008 compared to $24.8 million in the third fiscal quarter of 2007, an
increase of 1.5 million, or 6.4%. Revenue from non-embedded products
includes all Sarian-branded revenue of $2.4 million for the third
fiscal quarter of 2008 from date of acquisition.

Revenue in North America was $26.1 million in the third fiscal
quarter of 2008 compared to $28.0 million in the third fiscal quarter
of 2007, a decrease of $1.9 million, or 6.6%. Revenue in Europe was
$14.5 million in the third fiscal quarter of 2008, including all
Sarian-branded revenue of $2.4 million, compared to $10.7 million in
the comparable quarter a year ago, an increase of $3.8 million, or
36.1%. Revenue in the Asia Pacific region was $5.1 million in the
third fiscal quarter of 2008 compared to $3.8 million in the third
fiscal quarter of 2007, an increase of $1.3 million, or 33.0%. Other
international revenue was $1.3 million in the third fiscal quarter of
2008, compared to $1.1 million in the comparable quarter a year ago,
an increase of $0.2 million, or 18.5%.

The gross profit margin, as a percentage of net sales, was 52.9%
in the third fiscal quarter of 2008 compared to 52.8% in the third
fiscal quarter of 2007. The favorable product mix from both embedded
and non-embedded products was offset by a decrease in gross profit
margin from Sarian-branded products which provide lower gross profit
margins. In addition, the gross profit margin was slightly higher than
the comparable quarter a year ago due to decreased amortization of
purchased and core technology.

Total operating expenses in the third fiscal quarter of 2008 were
$21.9 million, or 46.5% of revenue, compared to $17.9 million, or
41.1% of revenue, in the third fiscal quarter of 2007. The increase in
operating expenses in the third fiscal quarter of 2008 is primarily
due to a charge of $2.1 million for in-process research and
development and other acquisition-related expenses, as well as
incremental ongoing operating expenses for Sarian from the date of
acquisition of $0.6 million. In addition, operating expenses increased
compared to the third quarter of fiscal 2007 as a result of Digi's
Drop-In Networking initiative.

Digi reported operating income of $3.0 million, or 6.4% of net
sales, in the third fiscal quarter of 2008 compared to $5.1 million,
or 11.7% of net sales, in the third fiscal quarter of 2007. Operating
income for the third fiscal quarter of 2008 was $5.2 million, or 11.1%
of net sales, excluding the charge for in-process research and
development and other acquisition-related expenses.

Net income was $2.0 million in the third fiscal quarter of 2008,
or $0.08 per diluted share, compared to $6.8 million, or $0.26 per
diluted share, in the third fiscal quarter of 2007. The charge of $1.9
million for in-process research and development and other
acquisition-related expenses of $0.2 million, net of tax, reduced net
income per diluted share by $0.08 in the third quarter of fiscal 2008,
which was partially offset by a tax benefit of $0.2 million resulting
from the reversal of tax reserves associated with the closure of a
prior tax year, equating to an increase in net income per diluted
share of $0.01. In the third fiscal quarter of 2007, Digi recorded a
tax benefit of $2.9 million associated with the closing of a domestic
tax return and the settlement of a foreign tax audit, which allowed
for the reversal of previously established tax reserves equating to
$0.11 per diluted share. Net income and net income per diluted share
for the third fiscal quarter of 2008 were $3.9 million, or $0.15 per
diluted share, excluding the charges for in-process research and
development and other acquisition-related expenses and the reversal of
tax reserves. Net income and net income per diluted share for the
third fiscal quarter of 2007 were $3.9 million, or $0.15 per diluted
share, excluding the reversal of tax reserves.

Results for the Nine Months Ended June 30, 2008

For the nine months ended June 30, 2008, Digi reported revenue of
$134.6 million compared to revenue of $128.2 million for the nine
months ended June 30, 2007, an increase of $6.4 million or 5.0%.
Revenue from embedded products in the first nine months of fiscal 2008
was $63.1 million, compared to $53.8 million in the first nine months
of fiscal 2007, an increase of $9.3 million, or 17.2%. Revenue from
non-embedded products, including Sarian-branded products, was $71.5
million in the first nine months of 2008, compared to $74.4 million in
the comparable period in 2007, a decrease of $2.9 million, or 3.8%.

Revenue in North America was $78.2 million in the first nine
months of fiscal 2008 compared to $83.5 million in the same period a
year ago, a decrease of $5.3 million, or 6.4%. Revenue in Europe,
including all Sarian-branded products revenue, was $38.4 million for
the first nine months of fiscal 2008 compared to $30.6 million in the
comparable period a year ago, an increase of $7.8 million, or 25.8%.
Revenue in the Asia Pacific region was $14.2 million in the first nine
months of fiscal 2008 compared to $11.0 million in the first nine
months of fiscal 2007, an increase of $3.2 million, or 29.0%. Other
international revenue was $3.8 million in the first nine months of
fiscal 2008 compared to $3.1 million in the first nine months of
fiscal 2007, an increase of $0.7 million, or 22.9%.

Digi reported operating income of $11.2 million, or 8.3% of net
sales, in the first nine months of fiscal 2008 compared to $14.1
million, or 11.0% of net sales, in the first nine months of fiscal
2007. Operating income for the first nine months of fiscal 2008 was
$13.5 million, or 10.0% of net sales, excluding the charge for
in-process research and development and other acquisition-related
expenses.

For the nine months ended June 30, 2008, Digi reported net income
of $8.8 million, or $0.33 per diluted share, compared to net income
for the nine months ended June 30, 2007, of $14.2 million, or $0.55
per diluted share. Net income and net income per diluted share for the
first nine months of fiscal 2008 were $10.7 million and $0.40,
respectively, excluding the impact of in-process research and
development and other acquisition-related expenses, net of taxes, and
the reversal of tax reserves. Net income and net income per diluted
share for the first nine months of fiscal 2007 were $10.8 million and
$0.41, respectively, excluding the impact of the reversal of tax
reserves and other discrete income tax benefits.

Digi's cash and cash equivalents and marketable securities
balance, including long-term marketable securities, was $77.5 million
at June 30, 2008, a decrease of $10.1 million over the cash and cash
equivalents and marketable securities balance at September 30, 2007.
Digi spent $30.9 million on the acquisition of Sarian, excluding cash
acquired of $3.1 million, during the third quarter of fiscal 2008. At
June 30, 2008, Digi's current ratio was 6.1 to 1, and the Company had
no debt other than capital lease obligations.

Third Fiscal Quarter 2008 Business Highlights:

Digi continues to expand its wireless Drop-In Networking product
family, with several announcements:

-- Digi International and TXU Energy partnered with Comverge,
Inc., to launch the nation's first ZigBee-Enabled demand
response program over broadband Internet. This technology
allows customers to manage their energy consumption over the
Internet using a smart thermostat from Comverge.

-- Digi introduced XBee(R) sensors - battery powered, long life
wireless sensors for easy integration into Drop-in Networking
applications or ZigBee networks. This technology allows
customers to easily collect real-time data from multiple nodes
across a ZigBee network and is ideal for applications in
building automation, security, energy management, food
management, freight/vehicle monitoring and many more.

-- Digi again extended its line of Drop-in Networking gateways
with the introduction of industrial-grade cellular gateway and
wireless adapters. The industrial-grade versions of the
ConnectPort(TM) X4 gateway and XBee(R) adapters extend
performance and reliability in outdoor applications.

-- With the XBee-PRO(R) XSC, Digi introduced a powerful,
cost-effective 900 MHz embedded RF module that provides up to
fifteen miles RF line-of-sight transmission in the
postage-stamp sized XBee form factor. The XBee-PRO XSC is
ideal for wireless solutions requiring long-range performance
in a cost-optimized, easy-to-deploy module solution.

Other announcements during the quarter included:

-- Digi acquired Sarian Systems, Limited., a privately held U.K.
based corporation and a leader in the European wireless router
market. The acquisition extended Digi's wireless portfolio and
solidified the company's position as a global leader in
commercial grade cellular/wireless routers.

-- Digi CEO Joe Dunsmore was named a winner for the Ernst & Young
Entrepreneur of the Year 2008 Award in the Upper Midwest
Region.

-- Sarian Systems, a Digi company, announced that EDF Energy, one
of the largest energy companies in the UK, is deploying
Sarian's mobile routing technology to remotely monitor the
performance of four hundred of its electricity substations
across London and southeast England.

-- Digi introduced the industry's first microprocessors, the
NS9215 and NS9210, to include Flexible Interface Modules
(FIMS) that provide different hardware interfaces based on the
needs of the product or application. FIMs reduce product
design complexity and cost by cutting the number of electronic
components in a product.

-- Rabbit released an updated version of the Secure Embedded Web
Application Kit. The Rabbit(R) 4000 based-kit combines new
security sample programs and software tools, allowing
customers to implement web and data security easily into their
embedded application.

-- Digi announced the release of the low power XBee ZB and
extended range XBee-PRO(R) ZB ZigBee modules based upon the
ZigBee PRO feature set. The ZigBee PRO feature set enables
deployment of larger, more stable and interoperable ZigBee
networks with advanced features.

Reconciliation Tables:

-0-
*T
Reconciliation of Operating Income to Operating Income
excluding In-Process Research and Development and
Other Acquisition-Related Expenses

Three months ended June Nine months ended June 30,
30,
% of % of % of % of
net net net net
(In thousands) 2008 sales 2007 sales 2008 sales 2007 sales
-------------------------- ---------------------------

Operating
income for the
three months
and nine
months ended
June 30 (GAAP
basis) $2,985 6.4% $5,098 11.7% $11,237 8.3% $14,117 11.0%

Purchase
accounting
inventory
adjustment
included in
cost of sales 162 - 162 -

In-process
research and
development
and other
acquisition
-related
expenses
included in
total
operating
expenses 2,083 - 2,083 -
------ ------- ------- -------

Operating
income
excluding in-
process
research and
development
and other
acquisition
-related
expenses, net
of taxes (Non-
GAAP basis) $5,230 11.1% $5,098 11.7% $13,482 10.0% $14,117 11.0%
====== ======= ======= =======

Reconciliation of Net Income and Net Income per
Diluted Share to Net Income and Net Income per
Diluted Share, Excluding In-Process Research and
Development and Other Acquisition-Related Expenses
and Reversal of Tax Reserves and Other Discrete Tax
Benefits

Three months ended June Nine months ended June 30,
30,
(In thousands,
except per
share amounts) 2008 2007 2008 2007
------------ ------------- ------------- -------------

Net income and
net income per
common share,
diluted (GAAP
basis) $1,985 $0.08 $6,798 $0.26 $8,752 $0.34 $14,197 $0.55

Acquisition-
related
expenses
included in
cost of sales 87 0.00 - 101 0.00 -

In-process
research and
development
and other
acquisition
-related
expenses
included in
total
operating
expenses 1,998 0.08 - 2,015 0.08 -

Reversal of tax
reserves and
other discrete
tax benefits (197)(0.01) (2,927)(0.11) (197)(0.01) (3,432)(0.13)
------------ ------------- ------------- -------------

Net income and
net income per
common share,
diluted,
adjusted for
in-process
research and
development
and other
acquisition
-related
expenses, net
of taxes, and
reversal of
tax reserves
and other
discrete tax
benefits (Non-
GAAP basis) $3,873 $0.15 $3,871 $0.15 $10,671 $0.40 $10,765 $0.41
============ ============= ============= =============
*T

Guidance

With respect to both revenue and net income per diluted share,
Digi affirms the current street consensus estimates for the fiscal
year of $184.2 million and $0.40 per diluted share, respectively. In
addition, Spectrum Design Solutions expects to generate approximately
$0.6 million in revenue from the date of acquisition. Spectrum Design
Solutions expects to contribute a net loss of $0.01 to $0.02 per
diluted share. The acquisition of Spectrum was announced in a separate
press release today.

Additional 500,000 Share Repurchase Authorization Announced; New
Total is 1.5 Million Shares

Digi also announced that it has added an additional 500,000 shares
to its existing 1 million share repurchase authorization. Joe Dunsmore
stated, "We believe our shares are currently undervalued. Our share
repurchase initiative demonstrates our Board's confidence in our
strategy for the company and our future. Even though it's been our
strategy to utilize our financial resources and strong cash flow for
acquisitions and other growth initiatives, we believe that buying our
own shares at current prices is a sensible and sound move for the
benefit of our shareholders."

Third Fiscal Quarter 2008 Conference Call Details

Digi invites all those interested in hearing management's
discussion of its quarter, on Wednesday, July 23, 2008 after market
close at 5:00 p.m. EDT (4:00 p.m. CDT), to join the call by dialing
(866) 202-1971 and entering passcode 12573847. International
participants may access the call by dialing (617) 213-8842 and
entering passcode 12573847. A replay will be available two hours after
the completion of the call, and for one week following the call, by
dialing (888) 286-8010 for domestic participants or (617) 801-6888 for
international participants and entering access code 28469204 when
prompted. Participants may also access a live webcast of the
conference call through the investor relations section of Digi's
website, www.digi.com.

About Digi International

Digi International, based in Minneapolis, is the leader in device
networking for business. Digi develops reliable products and
technologies that enable companies to connect and securely manage
local or remote electronic devices over the network or via the web.

Forward-Looking Statements

This press release contains statements that constitute
"forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, which generally can be identified by
the use of forward-looking terminology such as "anticipate,"
"believe," "target," "estimate," "may," "will," "expect," "plan,"
"project," "should," or "continue" or the negative thereof or other
variations thereon or similar terminology. Such statements are based
on information available to management as of the time of such
statements and relate to, among other things, expectations of the
business environment in which the Company operates, projections of
future performance, perceived opportunities in the market and
statements regarding the Company's mission and vision. Such statements
are not guarantees of future performance and involve certain risks,
uncertainties and assumptions, including risks related to the highly
competitive market in which the Company operates, rapid changes in
technologies that may displace products sold by the Company, declining
prices of networking products, the Company's reliance on distributors,
delays in the Company's product development efforts, uncertainty in
consumer acceptance of the Company's products, continued or increasing
weakness in North America and developing weakness in other regions due
to changes in economic conditions, and changes in the Company's level
of revenue or profitability. These and other risks, uncertainties and
assumptions identified from time to time in the Company's filings with
the Securities and Exchange Commission, including without limitation,
its annual report on Form 10-K for the year ended September 30, 2007
and its quarterly reports on Form 10-Q, could cause the Company's
future results to differ materially from those expressed in any
forward-looking statements made by or on behalf of the Company. Many
of such factors are beyond the Company's ability to control or
predict. These forward-looking statements speak only as of the date
for which they are made. The Company disclaims any intent or
obligation to update publicly any forward-looking statements, whether
as a result of new information, future events or otherwise.

This release includes non-GAAP operating income, non-GAAP net
income and earnings per diluted share data.

Management understands that there are material limitations on the
use of non-GAAP measures. Non-GAAP measures are not substitutes for
GAAP measures, such as operating income or net income, for the purpose
of analyzing financial performance. The disclosure of these measures
does not reflect all charges and gains that were actually recognized
by the Company. These non-GAAP measures are not in accordance with, or
an alternative for measures prepared in accordance with, generally
accepted accounting principles and may be different from non-GAAP
measures used by other companies. In addition, these non-GAAP measures
are not based on any comprehensive set of accounting rules or
principles. Digi believes that non-GAAP measures have limitations in
that they do not reflect all of the amounts associated with Digi's
results of operations as determined in accordance with GAAP and that
these measures should only be used to evaluate Digi's results of
operations in conjunction with the corresponding GAAP measures.

Digi believes that providing operating income and net income and
earnings per diluted share exclusive of the impact of in-process
research and development and other acquisition-related expenses, and
the impact of the reversal of tax reserves and other discrete tax
benefits permits investors to compare results with prior periods that
did not include these items. Management uses the aforementioned
non-GAAP measures to monitor and evaluate ongoing operating results
and trends and to gain an understanding of the comparative operating
performance of the Company. In addition, shareholders in the Company
have expressed an interest in seeing financial performance measures
exclusive of the impact of decisions relating to acquisitions and
taxes, which while important are not central to the core operations of
Digi's business.

For more information, visit Digi's Web site at www.digi.com, or
call 877-912-3444 (U.S.) or 952-912-3444 (International).

-0-
*T
Digi International Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)

Three months Nine months ended
ended June 30, June 30,
---------------- -----------------
2008 2007 2008 2007
------- -------- -------- --------
Net sales $46,995 $43,527 $134,639 $128,193
Cost of sales (exclusive of
amortization of purchased and core
technology shown separately below) 21,200 19,392 59,729 57,257
Amortization of purchased and core
technology 938 1,132 2,981 3,409
------- -------- -------- --------
Gross profit 24,857 23,003 71,929 67,527

Operating expenses:
Sales and marketing 9,493 8,517 27,213 25,102
Research and development 6,995 6,039 20,113 18,079
General and administrative 2,994 2,688 9,711 8,243
Intangibles amortization 490 661 1,755 1,986
Acquired in-process research and
development 1,900 - 1,900 -
------- -------- -------- --------
Total operating expenses 21,872 17,905 60,692 53,410
------- -------- -------- --------

Operating income 2,985 5,098 11,237 14,117
Interest income, net 712 855 2,760 2,385
------- -------- -------- --------
Income before income taxes 3,697 5,953 13,997 16,502
Income tax provision 1,712 (845) 5,245 2,305
------- -------- -------- --------

Net income $ 1,985 $ 6,798 $ 8,752 $ 14,197
======= ======== ======== ========

Net income per common share, basic $ 0.08 $ 0.27 $ 0.34 $ 0.56
======= ======== ======== ========

Net income per common share,
diluted $ 0.08 $ 0.26 $ 0.33 $ 0.55
======= ======== ======== ========

Weighted average common shares,
basic 25,742 25,294 25,683 25,186
======= ======== ======== ========

Weighted average common shares,
diluted 26,079 26,152 26,353 26,032
======= ======== ======== ========
*T

-0-
*T
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)

June 30, September 30,
2008 2007
------------ -------------
ASSETS

Current assets:
Cash and cash equivalents $ 16,751 $ 18,375
Marketable securities 52,877 67,111
Accounts receivable, net 26,032 21,022
Inventories 28,529 26,130
Other 4,885 4,961
------------ -------------
Total current assets 129,074 137,599

Marketable securities, long-term 7,921 2,081
Property, equipment and improvements, net 15,382 19,987
Identifiable intangible assets, net 32,951 24,214
Goodwill 82,831 66,817
Restricted cash - non-current 421 -
Other 1,035 1,128
------------ -------------

Total assets $ 269,615 $ 251,826
============ =============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Capital lease obligations, current
portion $ 278 $ 379
Accounts payable 10,667 6,554
Accrued compensation 5,015 7,080
Other accrued expenses 3,982 4,727
Income taxes payable 1,183 3,156
------------ -------------
Total current liabilities 21,125 21,896

Capital lease obligations, net of current
portion 135 358
Net deferred tax liabilities 7,596 6,667
Income taxes payable - long-term 3,983 -
Deferred gain on building sale - leaseback 1,120 -
------------ -------------

Total liabilities 33,959 28,921

Total stockholders' equity 235,656 222,905
------------ -------------

Total liabilities and stockholders'
equity $ 269,615 $ 251,826
============ =============
*T

-0-
*T
Digi International Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

Three months Nine months
ended ended
June 30, 2008 June 30, 2008
-------------- --------------
Operating activities:
Net income $ 1,985 $ 8,752
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation of property, equipment
and improvements 601 1,894
Amortization of identifiable
intangible assets and other assets 1,534 5,033
Gain on sale of property, equipment
and improvements 26 (94)
Excess tax benefits from stock-
based compensation (12) (177)
Stock-based compensation 926 2,702
Deferred income taxes (776) (2,696)
In-process research and development 1,900 1,900
Other 70 222
Changes in operating assets and
liabilities:
Accounts receivable 206 (2,903)
Inventories (172) (924)
Other assets 16 253
Accounts payable and accrued
expenses (1,134) (156)
Income taxes payable 524 1,221
-------------- --------------
Net cash provided by operating
activities 5,694 15,027
-------------- --------------

Investing activities:
Purchase of held-to-maturity
marketable securities (5,582) (57,273)
Proceeds from maturities of held-to-
maturity marketable securities 18,486 65,667
Acquisition of Sarian, Inc., net of
cash acquired (27,811) (27,811)
Contingent purchase price payments
related to business acquisitions - (1,315)
Increase in restricted cash - non-
current - (392)
Proceeds from the sale of property,
equipment, improvements 421 6,915
Purchase of property, equipment,
improvements and certain
other intangible assets (659) (2,567)
-------------- --------------
Net cash provided by (used in)
investing activities (15,145) (16,776)
-------------- --------------

Financing activities:
Payments on capital lease obligations (105) (293)
Borrowing on note payable 25,000 25,000
Payment on note payable (25,000) (25,000)
Excess tax benefits from stock-based
compensation 12 177
Proceeds from stock option plan
transactions 43 1,679
Proceeds from employee stock purchase
plan transactions 454 802
-------------- --------------
Net cash provided by financing
activities 404 2,365

Effect of exchange rate changes on cash
and cash equivalents (1,337) (2,240)
-------------- --------------
Net increase in cash and cash
equivalents (10,384) (1,624)
Cash and cash equivalents, beginning of
period 27,135 18,375
-------------- --------------
Cash and cash equivalents, end of period $ 16,751 $ 16,751
============== ==============
*T

Digi International
S. (Kris) Krishnan, 952-912-3125
s_krishnan@digi.com
or
The Investor Relations Group
Erika Moran, 212-825-3210
mail@investorrelationsgroup.com

Copyright Business Wire 2008