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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
/ X / Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the quarterly period ended 7/31/95 or
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/____/ Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the transition period from to
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Commission file number 1-8266
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DATARAM CORPORATION
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(Exact name of registrant as specified in its charter)
NEW JERSEY 22-1831409
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
P.O. BOX 7528, PRINCETON, NJ 08543
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (609) 799-0071
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(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
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APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the last practicable date. Common Stock ($1.00 par
value): As of SEPTEMBER 11, 1995, there were 3,824,305 shares outstanding.
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PART 1: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATMENTS
Dataram Corporation And Subsidiary
Consolidated Balance Sheets
July 31, 1995 and April 30, 1995
Unaudited Audited
Assets July 31, 1995 April 30, 1995
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Current Assets:
Cash and cash equivalents $ 515,827 $ 721,811
Trade receivables, less allowance for
doubtful accounts of $345,000 at July 31, 1995
and $320,000 at April 30, 1995 13,796,890 15,096,024
Inventories 7,647,556 8,060,807
Other current assets 851,961 1,129,630
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Total current assets 22,812,234 25,008,272
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Property and equipment, at cost:
Land 875,000 875,000
Machinery and equipment 6,044,712 5,952,504
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6,919,712 6,827,504
Less: accumulated depreciation
and amortization 4,363,699 4,197,158
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Net property and equipment 2,556,013 2,630,346
Other assets 6,155 15,076
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$ 25,374,402 $ 27,653,694
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Liabilities and Stockholders' Equity
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Current liabilities:
Accounts payable $ 7,285,310 $ 8,778,049
Accrued liabilities 920,482 2,244,348
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Total current liabilities 8,205,792 11,022,397
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Deferred income taxes 239,822 239,822
Stockholders' Equity:
Common stock, par value $1.00 per share.
Authorized 18,000,000 shares; issued
3,792,305 at July 31, 1995
and 3,792,305 at April 30, 1995 3,792,305 3,792,305
Additional paid-in capital 3,219,142 3,219,142
Retained earnings 9,917,341 9,380,028
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Total stockholders' equity 16,928,788 16,391,475
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$ 25,374,402 $ 27,653,694
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See accompanying notes to consolidated financial statements
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Dataram Corporation and Subsidiary
Consolidated Statements of Earnings
Three Months Ended July 31, 1995 and 1994
(Unaudted)
1995 1994
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Revenues $ 24,884,747 $ 22,162,957
Costs and expenses:
Cost of sales 21,853,895 18,486,831
Engineering and development 434,963 628,870
Selling, general and administrative 1,691,045 2,597,197
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23,979,903 21,712,898
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Earnings from operations 904,844 450,059
Other income (expense):
Other income, net 0 33,202
Interest expense (18,531) (36,140)
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(18,531) (2,938)
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Earnings before income taxes 886,313 447,121
Income tax provision 349,000 179,000
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Net earnings $ 537,313 $ 268,121
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Net earnings per share of common stock $ .14 $ .07
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Weighted average number of common
shares outstanding 3,821,810 3,818,550
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See accompanying notes to consolidated financial statements
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Dataram Corporation and Subsidiary
Consolidated Statements of Cash Flows
Three Months Ended July 31,1995 and 1994
(Unaudited)
1995 1994
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Sources of working capital:
Net earnings $ 537,313 $ 268,120
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 167,100 210,999
Bad debt expense 58,097 58,198
Changes in assets and liabilities:
Decrease (increase) in trade receivables 1,241,037 (1,070,131)
Decrease (increase) in inventories 413,251 (3,651,317)
Decrease in other current assets 277,669 474,566
Decrease (increase) in other assets 8,921 (10)
Decrease in accounts payable (1,492,739) (43,744)
Decrease in accrued liabilities (1,323,866) (382,976)
Increase in income taxes payable 0 169,045
Decrease in deferred income taxes 0 (47,087)
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Total adjustments (650,530) (4,282,457)
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Net cash used in operating activities (113,217) (4,014,337)
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Cash flows from investing activities:
Purchase of fixed assets (92,208) (129,733)
Disposal of fixed assets (559) 0
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Net cash used in investing activities (92,767) (129,733)
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Cash flows from financing activities:
Long-term debt 0 3,800,000
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Net cash provided by financing activities 0 3,800,000
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Net decrease in cash and cash equivalents (205,984) (344,070)
Cash and cash equivalents at beginning of year 721,811 437,779
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Cash and cash equivalents at end of period $ 515,827 $ 93,709
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Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 18,531 $ 33,140
Income taxes $ 0 $ 0
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See accompanying notes to consolidated financial statements.
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DATARAM CORPORATION AND SUBSIDIARY
Notes to Consolidated Financial Statements
July 31, 1995 and April 30, 1995
(1) Cash and cash equivalents consist of unrestricted cash, bankers
acceptances, commercial paper and other short term investments. All
investments are convertible to cash within a period of approximately
thirty days or less.
(2) Inventories consist of the following categories:
7/31/95 4/30/95
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Raw Materials $4,826,000 $ 4,726,000
Work In Process 712,000 648,000
Finished Goods 2,110,000 2,687,000
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$7,648,000 $ 8,061,000
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(3) The Company has an agreement with a bank which provides for a total
unsecured line of credit of $11,000,000 with interest at no higher than
one-half percent below the bank's base commercial lending rate. Borrowings
under the line of credit are at the convenience of Company management and
may be repaid at any time. The line of credit agreement expires in
October, 1997, unless otherwise amended or extended.
(4) In 1982, the Company adopted an incentive stock option plan. As of July
31, 1995, no further options may be granted under the plan and options to
purchase 6,000 shares are outstanding and exercisable at an excercise
price of $3.57 per share.
In September 1992, an incentive and nonstatutory stock option plan was
adopted by the shareholders which provides for the granting of up to
950,000 shares of common stock to key employees. As of July 31, 1995,
options to purchase 374,000 shares at prices ranging from $5.125 to $7.125
per share are outstanding. As of July 31, 1995 no options had been
exercised and options to purchase 125,000 shares were exercisable.
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In November 1992 and March 1993, the Company granted to four non-employee
directors of the Company and the Company's outside general counsel five
year options to acquire a total of 150,000 shares of the Company's common
stock at an exercise price of $11.25 per share. As of July 31, 1995, none
of these options had been exercised and options to purchase 75,000 shares
were exercisable.
(5) Information furnished reflects all adjustments which are, in the opinion
of management, necessary to a fair presentation of the results of this
interim statement.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
As of July 31, 1995, working capital amounted to $14.6 million reflecting
a current ratio of 2.8 compared to working capital of $14.0 million and a
current ratio of 2.3 as of April 30, 1995.
The Company's financial condition remains strong. The Company has a $11.0
million unsecured line of credit with a bank which expires in October 1997. The
line of credit was used during the quarter to deal with peak cash demands. At
the end of the quarter no amount was outstanding under the line of credit. With
its current working capital balance and the line of credit, management believes
that it will be able to support its revenue growth and other capital needs for
the foreseeable future.
Results of Operations
Revenues for the three month period ending July 31, 1995, were $24,885,000
compared to revenues of $22,163,000 for the comparable prior year period, an
increase of 12%. Revenues for computer memory products increased by 17% over
the prior year first quarter as prior year revenues included $912,000 from a
discontinued product line.
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Cost of sales for the first quarter of fiscal 1996 and 1995 were 88% and
83% of revenues, respectively. Computer memory products have become commodity
items and as such command low operating margins. As a result of recent
restructurings, the Company has successfully transformed its organizational
structure to compete in a computer memory market characterized by high volume,
pricing pressures and low operating margins. Dynamic rams, the primary raw
material in memory boards, continue to be in short supply and prices have risen
from fourth quarter fiscal 1995 levels. To date, the Company has been able to
acquire and expects to continue to be able to acquire sufficient quantities of
DRAMs to fill its needs.
Engineering and development costs in fiscal 1996's first quarter were
$435,000 versus $629,000 in last year's first quarter. Today's workstation,
server and personal computer memories have simple design characteristics. The
Company intends to maintain its commitment to timely introduction of new memory
products as new workstations and computers are introduced.
Selling, general and administrative costs in this year's first quarter
declined to 7% of revenues from 12% for the same prior year period. Total
expenditures decreased by $906,000 from the same prior year period. This
decrease is primarily the result of the restructuring of the Company's
operations related to a discontinued product line which occurred at the end of
the fourth quarter of last fiscal year. As a result of the restructuring, the
Company's engineering and development expenses and selling, general and
administrative expenses total less than 10% of revenues and are expected to
remain below 10% on comparable revenues.
Other income (expense), for the first quarter of fiscal 1996 consisted
primarily of interest expense associated with the Company's revolving credit
line. Prior year other income (expense) consisted of interest expense offset by
income from salvage of certain obsolete equipment and inventory items.
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PART II: OTHER INFORMATION
ITEM 5. OTHER INFORMATION
A. Backlog
The Company's backlog released for shipment as of July 31, 1995, was $0.6
million compared to a backlog of $3.5 million on July 31, 1994. The Company
normally fills most of its orders within one day or less after receipt and its
backlog at any point in time is not necessarily indicative of future financial
performance.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits
27. Financial Data Schedule
28 (a). Press Release reporting results of First Quarter, Fiscal Year 1996
(Attached).
B. Reports on Form 8-K
No reports on Form 8-K have been filed during the current quarter.
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DATARAM CORPORATION
DATE: 9/11/95 BY: /s/ BERNARD L. RILEY
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Bernard L. Riley
Vice President, Finance
(Principal Financial Officer)
DATE: 9/11/95 BY: /s/ MARK E. MADDOCKS
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Mark E. Maddocks
Controller
(Principal Accounting Officer)