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Datalink Corporation (ticker: DTLK, exchange: Nasdaq) News Release – April 16, 2008

DATALINK REPORTS 2008 FIRST-QUARTER OPERATING RESULTS
Record First Quarter Revenues of $47.7 million, up 17% from First Quarter 2007

MINNEAPOLIS – April 16, 2008 - Datalink Corporation (Nasdaq: DTLK), a leading independent information storage architect, reported that revenues for the quarter ended March 31, 2008, were $47.7 million compared to $40.9 million for the prior-year period, an increase of 17 percent. Datalink’s results for the 2008 and 2007 first quarters include three months and two months, respectively, of Midrange Computer Solutions, Inc. (MCSI) results of operations following the acquisition which closed on January 31, 2007.

GAAP Results
On a GAAP basis, the company reported net earnings of $505,000 or $0.04 per diluted share for the first quarter ended March 31, 2008. This compares to a net loss of $719,000 or $0.06 per diluted share in the first quarter of 2007.

Non-GAAP Results
Non-GAAP net earnings for the first quarter of 2008 were $769,000 or $0.06 per diluted share compared to a non-GAAP net loss of $153,000 or $0.01 per diluted share in the first quarter of 2007. A detailed reconciliation between GAAP and non-GAAP information is contained in the tables included herein.

Charlie Westling, Datalink’s President and CEO, commented, “We are pleased with our strong first quarter performance and that the company was able to report results that were at the high end of our previous revenue and earnings guidance range. This performance is a result of a solid product and service backlog entering the quarter, continued favorable customer spending activity during the quarter and higher gross margins on products and services. Highlights for the quarter included:

• An overall gross margin of 27.3%, which represents the highest gross margin since the fourth quarter of 2004;

• A record level of services revenue totalling $19.2 million;

• Improved levels of productivity, as gross profit dollars per employee on an annualized basis increased to $260,000 in the first quarter of 2008, up 20% from $217,000 in the first quarter of 2007;

• A strong cash and investment position of $26.4 million at the end of the first quarter, up from $25.2 million at the end of 2007.”

Westling continued, “As we head into the second quarter of 2008 we believe that we can build off our strong performance from the last three quarters and continue our profitable growth this year by executing on our key initiatives. Datalink’s priorities are:

• Continuing to increase employee productivity by leveraging investments in field and customer support areas;

• Further penetrating the enterprise customer base;

• Targeting high growth market segments and deploying new technologies;

• Delivering greater value to customers through more solutions and services; and

• Pursuing acquisitions that will enable the company to build critical mass in key locations and provide additional services to our customers.”

Outlook
The company ended the quarter with a backlog of $30 million compared to $23 million at the end of the first quarter of 2007. Based on Datalink’s current backlog and opportunities that Datalink is currently seeing across its customer base, the company expects revenue to be between $48 million and $52 million, with GAAP net earnings to be between $0.05 and $0.09 per diluted share in the second quarter of 2008. On a non-GAAP basis, the company expects second quarter earnings to be in the range of $0.07 to $0.11 per diluted share. This compares with revenues of $40.3 million in the second quarter of 2007 and a loss of $0.03 per diluted share and breakeven earnings per diluted share on a GAAP and non-GAAP basis, respectively. Non-GAAP earnings per share exclude the effect of purchase accounting adjustments to deferred revenue, stock-based compensation expense, amortization of intangible assets, and the related effects on income taxes. The company estimates this total effect will be $.02 per diluted share for the second quarter.


Conference Call and Webcast Today

Datalink will hold a conference call today at 4:00 p.m. Central Time when Datalink’s president and chief executive officer, Charlie Westling, and vice president of finance and chief financial officer, Greg Barnum, will discuss company results and provide a business overview. Participants can access the conference call by dialing (866) 863-7084 (no later than 3:55 p.m. Central Time). Participants will be asked to identify the Datalink conference and provide the designated identification number (40728445). A live Webcast of the conference call can be heard via Datalink’s Website at www.datalink.com.

Datalink Corporation is an information storage architect. The company analyzes, designs, implements and supports information storage infrastructures that store, protect and provide continuous access to information. Datalink's specialized capabilities and solutions span storage area networks, network-attached storage, direct-attached storage and IP-based storage, using industry-leading hardware, software and technical services.

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for certain forward-looking statements. This press release contains forward-looking statements, including our internal projections of anticipated 2008 results, which reflect our views regarding future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties, including those identified below, which could cause actual results to differ materially from historical results or those anticipated. The words “aim, “believe,” “expect,” “anticipate,” “intend,” “estimate” and other expressions which indicate future events and trends identify forward-looking statements. Actual future results and trends may differ materially from historical results or those anticipated depending upon a variety of factors, including, but not limited to: the level of continuing demand for storage, including the effects of current economic conditions; competition and pricing pressures and timing of our installations that may adversely affect our revenues and profits; fixed employment costs that may impact profitability if we suffer revenue shortfalls; revenue recognition policies that may unpredictably defer reporting of our revenues; our ability to hire and retain key technical and sales personnel; our dependence on key suppliers; our ability to adapt to rapid technological change; risks associated with integrating possible future acquisitions; fluctuations in our quarterly operating results; future changes in applicable accounting rules; and volatility in our stock price. Further, our revenues for any particular quarter are not necessarily reflected by our backlog of contracted orders, which also may fluctuate unpredictably.

Non-GAAP Details

Non-GAAP financial measures exclude the impact from purchase accounting adjustments to deferred revenue, stock-based compensation expense, amortization of intangible assets, integration costs related to acquisitions and the related effects on income taxes. Annualized gross profit is based upon the quarterly profit multiplied by four. These non-GAAP measures are not in accordance with, or an alternative for measures prepared in accordance with, GAAP 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. Datalink believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Datalink’s results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Datalink’s results of operations in conjunction with the corresponding GAAP measures.

These non-GAAP financial measures facilitate management's internal comparisons to the Datalink's historical operating results and comparisons to competitors' operating results. We include these non-GAAP financial measures in our earnings announcement because we believe they are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making, such as employee compensation planning. Datalink believes that the presentation of these non-GAAP measures when shown in conjunction with the corresponding GAAP measures provides useful information to investors and management regarding financial and business trends relating to its financial condition and results of operations.

Financial Statements

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