DATARAM Dataram Contact: Investor Contact:
Mark Maddocks, Joe Zappulla
Vice President-Finance, CFO Wall Street Investor
Relations
PRESS RELEASE 609-799-0071 212-681-4100
info@dataram.com JZappulla@WallStreetIR.com
DATARAM REPORTS THIRD QUARTER
FISCAL 2006 FINANCIAL RESULTS
Board of Directors Approves 20% Increase in Quarterly Dividend
PRINCETON, N.J. February 27, 2006 -- Dataram Corporation (NASDAQ: DRAM) today
reported its financial results for its third quarter ended January 31, 2006.
Revenues for the third quarter of the current fiscal year were $9.2 million,
which compares to $14.4 million for the third quarter of the prior fiscal
year and $9.9 million in this year's second quarter. Revenues for the first
nine months of the current fiscal year were $33.0 million versus $50.5
million for the comparable prior year period. Prior fiscal year third quarter
and nine month revenues included sales of approximately $4.1 million and
$18.2 million, respectively, to one customer compared to $13,000 and $3.1
million for the comparable current year periods.
Earnings before income taxes for the third quarter were $2.3 million, which
includes a gain of $1.9 million from the sale of the Company's undeveloped
land. This compares to earnings before income taxes of $157,000 for the third
quarter of the previous fiscal year and $565,000 for the second quarter of
the current fiscal year.
Net earnings for the third quarter were $1.4 million or $0.16 per diluted
share compared to net earnings of $147,000 or $0.02 per diluted share for
last fiscal year's third quarter and $352,000 or $0.04 per diluted share for
the second quarter of this fiscal year. The Company has net operating loss
(NOL) carryforwards totaling approximately $10.9 million. The Company's tax
rate for financial reporting purposes in the current fiscal year is
approximately 38 percent, although he Company will continue to pay taxes at
an approximate rate of 7 percent until it utilizes all of its NOL
carryforwards. In fiscal 2005, the Company's effective tax rate for financial
reporting purposes had been approximately 7 percent.
Fiscal year to date earnings before income taxes were $4.3 million (inclusive
of the gain from the real estate transaction) compared to $3.0 million for
the nine month period in the prior fiscal year. Net earnings for the first
nine months of the current fiscal year were $2.7 million or $0.30 per diluted
share versus $2.8 million or $0.31 per diluted share for the comparable
period in fiscal 2005.
Gross margins during the third quarter were approximately 29 percent, which
compares to approximately 30 percent in the second quarter and 21 percent for
the third quarter of the prior fiscal year. The Company considers 25 percent
gross margins with quarterly fluctuations of as much as 3 percent to be
normal. Engineering and selling, general and administrative costs were $2.5
million in the current quarter, down from $3.0 million during third quarter
of the prior fiscal year. The Company's backlog at the end of the third
quarter was $635,000 compared to $770,000 at the end of the previous quarter.
During the third quarter, the Company closed on its contract of sale for its
undeveloped land. The purchase price was $3,075,000 of which half, or
$1,537,500, was paid in the form of a one-year mortgage, which accrues
interest at 5% per annum. Of the remainder $250,000 had been previously paid
as deposits and $1,287,500 was received at closing in cash.
Cash and equivalents increased $2.3 million from the previous quarter to
approximately $15.0 million or $1.77 per share. This also represents an
increase of $5.7 million from the beginning of the fiscal year. The
Company's current ratio has grown to 10.7 and the Company's book value is now
$2.82 per share. As of January 31, 2006, there were 8,475,396 common shares
outstanding.
Robert V. Tarantino, Dataram's chairman and CEO commented, "While we
experienced our typical seasonal slowness in the third quarter, we generated
significant cash flow from operating activities in addition to the cash
realized from the sale of the land. Today, the Company's board of directors
declared a quarterly dividend of $0.06 cents per common share, an increase of
20 percent, or $0.01 per share, over the previous quarterly payment. The
dividend will be payable on March 22, 2006, to shareholders of record as of
March 9, 2006."
As announced in a press release dated February 15, 2006, Dataram will conduct
a conference call today at 4:30 p.m. (EST) to present its third quarter
financial results and to respond to investor questions. Interested
shareholders may participate in the call by dialing 800-729-5806 and
providing the following reservation number: 21284075. 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.
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, 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 AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
(In thousands, except per share amounts)
(Unaudited)
Third Quarter Nine Months
Ended January 31, Ended January 31,
________________ ________________
2006 2005 2006 2005
Revenues $ 9,220 $14,431 $33,022 $50,544
Costs and expenses:
Cost of sales 6,520 11,420 23,152 38,977
Engineering and development 287 317 847 947
Selling, general
and administrative 2,175 2,636 6,950 7,760
_______ _______ _______ _______
8,982 14,373 30,949 47,684
_______ _______ _______ _______
Earnings from operations 238 58 2,073 2,860
Other income 2,030 99 2,249 177
_______ _______ _______ _______
Earnings before income taxes 2,268 157 4,322 3,037
Income tax provision 863 10 1,634 197
_______ _______ _______ _______
Net earnings $ 1,405 $ 147 $ 2,688 $ 2,840
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Net earnings per share:
Basic $ 0.17 $ 0.02 $ 0.32 $ 0.33
======= ======= ======= =======
Diluted $ 0.16 $ 0.02 $ 0.30 $ 0.31
======= ======= ======= =======
Weighted average number of shares
outstanding:
Basic 8,472 8,621 8,431 8,594
======= ======= ======= =======
Diluted 8,831 9,176 8,825 9,223
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DATARAM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
January 31, 2006 April 30, 2005
ASSETS
Current assets
Cash and cash equivalents $ 14,979 $ 9,281
Trade receivables, net 4,171 8,397
Inventories 1,874 2,369
Note receivable 1,537 0
Deferred income taxes 1,462 3,258
Other current assets 148 130
__________ __________
Total current assets 24,171 23,435
Deferred income taxes 1,130 630
Property and equipment, net 765 2,028
Other assets 105 54
__________ __________
Total assets $ 26,171 $ 26,147
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 1,422 $ 2,528
Accrued liabilities 833 1,438
__________ __________
Total current liabilities 2,255 3,966
Stockholders' equity 23,916 22,181
__________ __________
Total liabilities and stockholders' equity $ 26,171 $ 26,147
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