DATARAM
PRESS RELEASE
Dataram Contact: Investor Contact:
Mark Maddocks, Joe Zappulla
Chief Financial Officer Wall Street Investor Relations Corp.
609-799-0071 212-714-2445
info@dataram.com JZappulla@WallStreetIR.com
DATARAM REPORTS THIRD QUARTER FINANCIAL RESULTS
o Generates $0.09 proforma earnings per share
o Prepays $9.8 million of debt
PRINCETON, N.J. February 20, 2002 -- Dataram Corporation NASDAQ: DRAM)
today reported its financial results for its fiscal third quarter ended
January 31, 2002. Revenues for the third quarter were $19.6 million
compared to $19.2 million in the prior fiscal quarter and $26.8 million for
the third quarter of the previous fiscal year. The Company's proforma net
earnings, which excludes one-time charges totaling approximately $5.7
million for intangible asset amortization and interest expense associated
with early debt retirement, was $880,000 or $0.09 per diluted share. This
compares to proforma net earnings of $456,000 or $0.05 per diluted share in
the prior quarter and net earnings of $2.0 million or $0.21 per diluted
share for the third quarter of the previous fiscal year. After one-time
charges, the current year's third quarter net loss was $4.8 million or
$0.57 per share.
During this year's third quarter, the Company prepaid its term loan and
capital lease obligations, incurring approximately $400,000 in incremental
interest expense associated with the prepayment. This action is expected to
result in a reduction of future net interest expense of approximately
$600,000 annually.
Also, consistent with its previous statements, the Company conducted an
evaluation of its goodwill and intangible assets in the third quarter of
this fiscal year. The evaluation of the carrying value of the Company's
goodwill resulted in no change to that value. The evaluation of intangible
assets has resulted in a one-time non-cash charge of approximately $5.3
million. As a result, the Company will no longer incur future intangible
asset amortization charges, which amounted to approximately $1.4 million,
annually.
Second Third Nine
(In 000's, except per share amounts) Quarter Quarter Months
FY2002 FY2002 FY2001 FY2002* FY2001
Revenues $19,173 $19,646 $26,829 $61,389 $104,691
Proforma net earnings (loss) $456 $880 $2,030 $(128) $7,961
Proforma EPS $0.05 $0.09 $0.21 $(0.02) $0.81
Proforma shares outstanding 9,291 9,334 9,745 8,486 9,842
Amortization of intangible assets $296 $5,263 -- $5,856 --
Interest expense on debt prepayment -- $400 -- $400 --
Net earnings (loss) $160 $(4,783) $2,030 $(6,384) $7,961
EPS $0.02 $(0.57) $0.21 $(0.75) $0.81
Shares outstanding 9,291 8,454 9,745 8,486 9,842
* Includes restructuring charges of $1.2 million
Mark Maddocks, Dataram's chief financial officer, commented, "The current
low interest rate environment provided an opportunity to significantly
reduce our cost of capital. Using cash on hand and $3.9 million of our
$15.0 million revolving credit line, we retired our term debt and capital
lease obligations, which totaled $13.7 million. While we incurred extra
interest expense this quarter as a result of the prepayment, the payback
period is short and the Company will benefit from significantly lower
interest charges in the future. Our balance sheet remains strong and we
have the liquidity and capital resources in place to finance our future
operating and capital needs."
Mr. Maddocks continued, "We stated in prior quarters that we anticipated
the requirement to perform an evaluation of the carrying value of our
goodwill and intangible assets. We conducted the analysis this quarter and
concluded that no adjustment was necessary to the carrying value of our
goodwill. The Company's intangible assets consisted of the carrying value
of our fiscal 2001 acquisition's customer base as it existed on the date of
acquisition. As a result of our integration activities, the customer base
has changed and the future cash flows expected to be generated by the
acquired customer base as it existed at the date of acquisition no longer
supports a carrying value for those assets. Accordingly, we have fully
amortized those assets this fiscal quarter."
Robert Tarantino, Dataram's chairman and CEO stated, "The value in our
Company lies in our ability to utilize our expanded sales team to market
plug compatible workstation and server memory as well as in utilizing our
manufacturing expertise and assets to service the memory needs of new and
existing OEM customers. We are pleased with the integration of our
worldwide sales team, product offering and manufacturing assets and we are
on target for our international operations to be accretive to earnings in
the current fourth quarter. While we believe, given the current economic
environment, domestic customers will continue to be conservative with their
near term capital spending on information technology, we remain confident
in Dataram's ability grow profitably as the economy recovers."
Dataram will conduct a conference call at 4:15 p.m. (EST) today to present
its third quarter financial results and to respond to investor questions.
Interested shareholders may participate in the call by dialing 800-205-6214
and providing the following reservation number: 20350743. It is recommended
that participants call 10 minutes before the conference call is scheduled
to begin. The conference call can also be accessed over the Internet
through Vcall at www.vcall.com. A replay of the call will be available
approximately one hour after the completion of the conference call through
Vcall and for 24 hours by dialing 800-633-8284 and entering the reservation
number listed above.
ABOUT DATARAM CORPORATION
Dataram Corporation, celebrating its 35th year in the computer industry, is
a leading provider of computer memory. The Company offers a specialized
line of gigabyte-class memory for entry- to enterprise-level servers,
workstations and notebooks from Compaq, Dell, Fujitsu/Siemens, HP, IBM,
Intel, SGI, Sun and Toshiba. Additional information is available on the
Internet at www.dataram.com.
Financial Tables Follow
DATARAM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
1/31/2002 1/31/2001 1/31/2002 1/31/2001
Revenues $ 19,646 $ 26,829 $ 61,389 $ 104,691
Costs and expenses:
Cost of sales 12,547 19,838 40,224 79,453
Engineering and development 438 386 1,446 1,173
Selling, general and
administrative 5,293 3,728 16,558 12,134
Intangible asset amortization 5,263 0 5,856 0
Restructuring charges 0 0 1,200 0
_________ _________ _________ _________
23,541 23,952 65,284 92,760
Earnings (loss) from operations (3,895) 2,877 (3,895) 11,931
Interest income (expense), net (528) 317 (825) 839
_________ _________ _________ _________
Earnings (loss) before income
taxes (4,423) 3,194 (4,720) 12,770
Income taxes 360 1,164 1,664 4,809
_________ _________ _________ _________
Net earnings (loss) $ (4,783) $ 2,030 $ (6,384) $ 7,961
========= ========= ========= =========
Net earnings (loss) per share:
Basic $ (0.57) $ .24 $ (.75) $ .94
========= ========= ========= =========
Diluted $ (0.57) $ .21 $ (.75) $ .81
========= ========= ========= =========
Average number of shares outstanding:
Basic 8,454 8,515 8,486 8,500
========= ========= ========= =========
Diluted 8,454 9,745 8,486 9,842
========= ========= ========= =========
DATARAM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(Unaudited)
January 31, 2002 April 30, 2001
ASSETS
Current assets:
Cash and cash equivalents $ 2,838 $ 10,236
Trade receivables, net 11,521 17,641
Inventories 6,568 5,925
Other current assets 1,610 888
_________ _________
Total current assets 22,537 34,690
Property and equipment, net 10,336 13,226
Goodwill 11,144 9,957
Intangible assets, net 0 7,043
Other assets 385 365
_________ _________
$ 44,401 $ 65,281
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 0 $ 2,000
Current portion of capital lease
obligations 0 978
Accounts payable 6,547 7,219
Accrued liabilities 1,943 3,960
_________ _________
Total current liabilities 8,490 14,157
Deferred income taxes 948 948
Long-term debt 3,900 8,000
Long-term capital lease obligations 0 4,133
Stockholders' equity 31,063 38,043
44,401 65,281
The information provided in this press release may include forward-looking
statements relating to future events, such as the development of new
products, the commencement of production, 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,
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.