Question-and-Answer Session
Operator
(Instructions). Your first question comes from the line of Jeff Evanson from Dougherty & Company. Please proceed.
Jeff Evanson - Dougherty & Company LLC
Good afternoon gentlemen. Thanks for taking my questions.
Joe Dunsmore
Hi Jeff.
Jeff Evanson - Dougherty & Company LLC
Congratulations on the acquisition. It sounds like a very compelling fit. Could you guys talk a little bit about where Sarian’s GMs will be this year and what your thoughts are on those GMs going into 2009?
Joe Dunsmore
Yes. We believe that the gross margin range percent will be somewhere in the 45% to 50% ballpark in the short term, and then long run, as we are able to get some purchasing power behind some of the volume, we’ll be able to drive that probably up above 50%, so my expectation would be over the long run, we could potentially drive it up into the mid 50s, but from a plan perspective, I’d say that we’re kind of looking at right now 45% to 50%.
Jeff Evanson - Dougherty & Company LLC
Okay, and Joe you mentioned your areas of sales that will turn around when the economy turns around are wireless and drop-in networking I think you said. Is that the reason for the revenue shortfall this quarter?
Joe Dunsmore
No, what I was saying was once we get into that time period where the economy gets back to normal GDP levels in the 3% to 4% range, that I would expect overall revenue to organically—not including Sarian—but organically to be in the 10% to 20% ballpark, and that the real big swinger in terms of whether we are at the lower end of that range or the high end of that range is going to be kind of the take rate on the wireless drop-in networking initiative and how quickly that deploys. But my expectation would be that once we get back to normal levels, we will see organic growth rates in the 10% to 20% range, and for your purposes Jeff, as you think about how you kind of look at the business, the way I would guide on that is generally speaking if we see the economy remain in kind of the recession that it is in today—if you listen to the economists and the Bush administration and even Warren Buffet today, they are saying that—the expectation in this kind of situation would be that our growth rates should probably be somewhere in the 0% to 5% range plus or minus. Now, once as we return, we’ll see it bump up to 10% to 20% with general Digi execution determining it is at the low end or high end of that range, and certainly the wireless drop-in networking piece being the most significant variable.
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