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PRESS RELEASE
Dataram Contact:
Mark Maddocks
Vice President-Finance, CFO
609-799-0071
info@dataram.com
DATARAM REPORTS FISCAL 2011 SECOND QUARTER FINANCIAL
RESULTS
PRINCETON, N.J. December 7, 2010 - Dataram Corporation (NASDAQ: DRAM) today
reported its financial results for its fiscal second quarter and six months
ended October 31, 2010. Revenues for the second quarter and first six
months of fiscal 2011 were $10.9 million and $23.7 million, respectively,
which compares to $10.7 million and $19.9 million for the comparable prior
year periods. The Company incurred a pre-tax net loss for the second quarter
of the current fiscal year of $1.7 million which compares to a pre-tax net
loss of $2.7 million for the comparable prior year period. Six month pre-tax
net loss totaled $3.0 million versus $4.3 million for the prior sequential
period.
John H. Freeman, Dataram's president and CEO commented, "In the second
quarter, our revenues and gross margin came under downward pricing pressure.
Declining prices, along with our R&D investment in XcelaSAN were the
primary contributors to our second quarter loss. Average selling prices in
our memory business were lower by approximately 13 percent, when compared to
first quarter levels. This was primarily due to the well-publicized industry
wide decline in the price of memory. We are initiating actions to align our
costs with our revenues. Those actions include the consolidation of our
manufacturing facilities by the end of the current fiscal year as well as
reducing our S, G & A expenses. Although we project continued growth in our
memory solutions business, these actions should position the memory
solutions business to operate profitably at current revenue levels."
Mr. Freeman continued, "The release schedule and development of our XcelaSAN
product line is on track. In the second quarter, we released a product with
enhanced features and functionality which increases its ease of use, ease of
installation and interoperability. We have sold the first unit of our newly
released version of XcelaSAN and have delivered and successfully installed
systems at other clients. High Availability systems are scheduled for
testing at customers this month and will be generally available in January.
We anticipate that our enhancements and the shipment of High Availability
systems will accelerate product sales and broaden market adoption. XcelaSAN
is a unique intelligent Storage Area Network (SAN) optimization solution
that delivers substantive application performance improvement to
applications such as Oracle, SQL and VMware. XcelaSAN augments existing
storage systems by transparently applying intelligent caching algorithms
that serve the most active block-level data from high-speed storage,
creating an intelligent, virtual solid state SAN. This breakthrough solution
allows organizations to dramatically increase the performance of their
business-critical applications without the costly hardware upgrades or
over-provisioning of storage typically found in current solutions for
increased performance."
The Company's net loss for the second quarter was $1.7 million, or $0.19 per
share which compares to a net loss of $1.6 million, or $0.18 per share for
the comparable prior year period. Six month net loss totaled $3.0 million
versus $2.6 million for the prior sequential period. The prior fiscal year's
second quarter and six month net loss includes an income tax benefit of $1.0
million and $1.7 million, respectively, on which the Company subsequently
placed a 100% valuation allowance in its third quarter of fiscal 2010.
Mr. Freeman concluded, "We are taking the necessary actions to ensure that
our memory solutions business is generating positive cash flow and growing.
Our outlook for XcelaSAN is very robust, particularly as High Availability
systems come to market."
ABOUT DATARAM CORPORATION
Founded in 1967, Dataram is a worldwide leader in the manufacture of
high-quality computer memory, storage and software products. Our products
and services deliver IT infrastructure optimization, dramatically increase
application performance and deliver substantial cost savings. Dataram
solutions are deployed in 70 Fortune 100 companies and in mission-critical
government and defense applications around the world. For more information
about Dataram, visit www.dataram.com.
The information provided in this press release may include forward-looking
statements relating to future events, such as the development of new
products, pricing and availability of raw materials or the future financial
performance of the Company. Actual results may differ from such projections
and are subject to certain risks including, without limitation, risks
arising from: changes in the price of memory chips, changes in the demand
for memory systems, increased competition in the memory systems industry,
order cancellations, delays in developing and commercializing new products
and other factors described in the Company's most recent Annual Report on
Form 10-K, filed with the Securities and Exchange Commission, which can be
reviewed at http://www.sec.gov.
Financial Tables Follow
DATARAM CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Second Quarter Ended Six Month Ended
October 31, October 31,
____________________ _______________
2010 2009 2010 2009
Revenues $ 10,949 $ 10,673 $ 23,693 $ 19,863
Costs and expenses:
Cost of sales 8,536 7,937 18,157 14,592
Engineering and development 225 259 486 512
Research and development 842 1,621 1,714 2,495
Selling, general and
administrative 2,748 3,113 5,602 5,842
Stock-based compensation
expense* 155 225 313 380
Intangible asset amortization 107 164 214 328
_________ ________ ________ ________
12,613 13,319 26,486 24,149
_________ ________ ________ ________
Loss from operations (1,664) (2,646) (2,793) (4,286)
Other income (expense) (51) (12) (161) 22
_________ ________ ________ ________
Loss before income taxes (1,715) (2,658) (2,954) (4,264)
Income tax benefit 0 (1,042) 0 (1,670)
_________ ________ ________ ________
Net loss $ (1,715) $ (1,616) $ (2,954) $ (2,594)
========= ======== ======== ========
Net loss per share:
Basic $ (0.19) $ (0.18) $ (0.33) $ (0.29)
========= ======== ======== ========
Diluted $ (0.19) $ (0.18) $ (0.33) $ (0.29)
========= ======== ======== ========
Weighted average number of
shares outstanding:
Basic 8,918 8,869 8,918 8,869
========= ======== ======== ========
Diluted 8,918 8,869 8,918 8,869
========= ======== ======== ========
*Items are recorded as a component of operating costs and expenses in the
Company's financial statements filed with the Securities and Exchange
Commission on Form 10-Q.
DATARAM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
October 31, 2010 April 30, 2010
ASSETS
Current assets
Cash and case equivalents $ 614 $ 2,507
Accounts receivable, net 4,867 5,344
Inventories 5,296 6,872
Other current assets 252 87
_______________________________________
Total current assets 11,029 14,810
Property and equipment, net 831 1,117
Other assets 86 105
Intangible assets, net 652 867
Goodwill 1,124 754
_______________________________________
Total assets $ 13,722 $ 17,653
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 1,350 $ 3,523
Accrued liabilities 1,087 1,738
Notes payable 2,533 1,000
_______________________________________
Total current liabilities 4,970 6,261
Stockholders' equity 8,752 11,392
_______________________________________
Total liabilities and
stockholders' equity $ 13,722 $ 17,653
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