Press Release
DATARAM REPORTS FOURTH QUARTER AND 2005 FISCAL YEAR
FINANCIAL RESULTS
Tuesday May 31, 6:30 am ET
PRINCETON, N.J. -- (BUSINESS WIRE) -- May 31, 2005 - Dataram Corporation
o Annual Revenues Grow 6% and Pretax Earnings Grow 63%
o Fiscal 2005 EPS reaches $0.74 (including one-time tax benefit)
o Board of Directors Initiates $0.05 Per Share Quarterly Dividend
Dataram Corporation (NASDAQ: DRAM - News) today reported its financial
results for its fiscal fourth quarter and full year ended April 30, 2005.
Revenues for the quarter were $15.1 million, which compares to $19.9 million
for the fourth quarter of fiscal year 2004 and $14.4 million for the third
quarter of fiscal 2005. Net earnings for the quarter were $3.9 million or
$0.44 per diluted share, which includes an income tax benefit of
approximately $2.9 million related to a reversal of Company's valuation
allowance for its net operating loss carryforwards and $460,000 off pretax
severance charges related to staff reductions. Excluding these items, the
Company's net earnings were $1.4 million or $0.16 per diluted share. This
compares with net earnings of $1.5 million or $0.17 per diluted share for the
comparable quarter in the previous fiscal year and $147,000 or $0.02 per
diluted share in this year's third quarter.
For the fiscal year ended April 30, 2005, the Company's revenues were $65.7
million compared to revenues of $62.0 million for the prior year. Net
earnings for fiscal 2005 were $6.7 million or $0.74 per diluted share, which
includes the income tax benefit and severance charges noted above. Excluding
these items, the Company's net earnings were $4.3 million or $0.47 per
diluted share, which compares to net earnings of $2.3 million or $0.25 per
diluted share for fiscal year 2004.
(In 000's,
except per Third
share amounts) Fourth Quarter Quarter Full Year
- -----------------------------------------------------------------------------
FY 2005(1) FY 2004 FY 2005 FY 2005(1) FY 2004
- -----------------------------------------------------------------------------
Net earnings as
reported $3,875 $1,530 $147 $6,715 $2,271
- -----------------------------------------------------------------------------
Provision for
severances $460 $0 $0 $460 $0
- -----------------------------------------------------------------------------
Tax valuation
allowance
reversal $(2,895) $0 $0 $(2,895) $0
- -----------------------------------------------------------------------------
Comparable net
earnings $1,440 $1,530 $147 $4,280 $2,271
- -----------------------------------------------------------------------------
Diluted EPS as
reported $0.44 $0.17 $0.02 $0.74 $0.25
- -----------------------------------------------------------------------------
Comparable
diluted EPS $0.16 $0.17 $0.02 $0.47 $0.25
- -----------------------------------------------------------------------------
(1) Assumes comparable effective tax rate of 6.5%.
During the fourth quarter, the Company repurchased 311,504 shares of its
common stock at a total price of approximately $1.5 million. Nevertheless,
the Company's cash increased to $9.3 million from $6.8 million at the end of
last year and $8.2 million at the end of the third quarter of this year. At
year-end, there were 8,361,500 common shares outstanding.
"Year-over-year, Dataram's revenues grew 6%, while selling, general and
administrative costs declined by approximately $1.3 million or 11%," said
Robert V. Tarantino, Dataram's chairman and CEO. In fiscal 2006, the
Company's expenses are expected to continue to decline. In the fourth
quarter, we implemented a limited staff reduction. We expect our expenses in
fiscal 2006 to be reduced by approximately $1.0 million from fiscal 2005
levels. We believe that our present infrastructure is more than sufficient
to support continued profitable growth."
Mark Maddocks, Dataram's vice president of finance and CFO, added, "Gross
margins during the fourth quarter were 28.4 percent compared to the third
quarter level of 21.0 percent and 25.1 percent for the fourth quarter of the
previous fiscal year. For fiscal 2005, gross margin were 24.2 percent versus
25.3 percent in the previous fiscal year. The Company considers 25% gross
margins with quarterly fluctuations of as much as 3% to be normal. The
Company's backlog at the end of the fiscal year was $3.7 million compared to
$4.7 million at April 30, 2004 and $1.7 million at the end of this year's
third quarter."
Mr. Maddocks continued, "After six successive quarters of profitability,
management has concluded that it is more likely than not that the Company
will utilize all of its net operating loss carryforwards and has reversed the
valuation allowance previously placed on them. As a result, the Company's
effective tax rate for financial reporting purposes in fiscal 2006 will be
approximately 37%. However, the Company will continue to make cash payments
for income taxes at an approximate rate of 6.5% of pretax earnings until it
utilizes all of its deferred tax assets."
Mr. Tarantino concluded, "Today, the Company's board of directors approved a
$0.05 per share quarterly dividend. As we looked at our cash management
choices and given our confidence in our ability to increase earnings, the
Company's directors concluded that our priority should be to provide a return
to our shareholders in the form of a regular cash payment. The Directors
intention is that this is the first in a series of regular quarterly $0.05
per share dividends. The dividend will be payable on June 29, 2005, to
shareholders of record as of June 15, 2005."
Dataram will conduct a conference call today at 4:30 p.m. (EDT) to present
its fourth quarter financial results and to respond to investor questions.
Interested shareholders may participate in the call by dialing 800-732-8470
providing the following reservation number: 21248121. 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 or 402-977-9140 and entering
the reservation number listed above.
USE OF NON-GAAP MEASURES
Management believes that "comparable" net earnings and "comparable" diluted
earnings per share, which are non-GAAP measurements, are meaningful to
investors because they provide a view of the Company with respect to ongoing
operating results. These results exclude significant charges or credits which
are important to an understanding of the Company's overall operating results
in the period presented. Such non-GAAP measurements are not recognized in
accordance with generally accepted accounting principles (GAAP) and should
not be viewed as an alternative to GAAP measures of performance. A
reconciliation of GAAP measurements to non- GAAP has been presented in this
press release.
ABOUT DATARAM CORPORATION
Dataram is a worldwide leader in the design and manufacture of high capacity,
reliable and innovative memory solutions. With over 38 years of experience,
Dataram provides customized memory solutions for OEMs and compatible memory
for leading brands including HP, Dell, IBM, SGI, Sun Microsystems and Intel.
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, 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, 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.
DATARAM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share amounts)
(Unaudited)
Fourth Quarter Ended Twelve Months Ended
April 30, April 30,
-------------------- -------------------
2005 2004 2005 2004
Revenues $15,140 $19,948 $65,684 $61,984
Costs and expenses:
Cost of sales 10,839 14,938 49,816 46,311
Engineering and
development 352 321 1,300 1,284
Selling, general and
administrative 2,894 2,947 10,653 11,985
------- ------- ------- -------
14,085 18,206 61,769 59,580
Earnings from operations 1,055 1,742 3,915 2,404
Other income (expense) 25 (33) 202 119
------- ------- ------- -------
Earnings before income
taxes 1,080 1,709 4,117 2,523
Income tax provision
(benefit) (2,795) 179 (2,598) 252
------- ------- ------- -------
Net earnings $3,875 $1,530 $6,715 $2,271
======= ======= ======= =======
Net earnings per share:
Basic $0.46 $0.18 $0.78 $0.27
======= ======= ======= =======
Diluted $0.44 $0.17 $0.74 $0.25
======= ======= ======= =======
Average number of shares
outstanding:
Basic 8,500 8,518 8,571 8,502
======= ======= ======= =======
Diluted 8,877 9,194 9,112 8,907
======= ======= ======= =======
DATARAM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
April 30, 2005 April 30, 2004
ASSETS
Current assets
Cash and cash equivalents $9,281 $6,806
Trade receivables, net 8,397 8,846
Inventories 2,369 2,537
Deferred income taxes 3,258 723
Other current assets 130 92
------- -------
Total current assets 23,435 19,004
Deferred income taxes (non-current) 630 0
Property and equipment, net 2,028 2,858
Other assets 54 50
------- -------
Total assets $26,147 $21,912
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $2,528 $3,862
Accrued liabilities 1,438 1,646
------- -------
Total current liabilities 3,966 5,508
Stockholders' equity 22,181 16,404
------- -------
Total liabilities and stockholders'
equity
$26,147 $21,912
======= =======
___________________
Contact:
Dataram Corporation
Mark Maddocks, 609-799-0071
info@dataram.com
or
Investors:
Wall Street Consultants Corp.
Joe Zappulla, 212-681-4100
JZapulla@WallStreetIR.com