DATARAM PRESS RELEASE
Dataram Contact:
Mark Maddocks
Vice President-Finance, CFO
609-799-0071
intro @dataram.com
Investor Contact:
Joe Zappulla
Wall Street Consultants Corp.
212-618-4100
JZappulla @WallStreetIR.com
DATARAM REPORTS 2006 FOURTH QUARTER AND FISCAL YEAR
FINANCIAL RESULTS
Board of Directors Declares Regular Quarterly $0.06 Per Share
Dividend
PRINCETON, N.J. May 31, 2006 ? Dataram Corporation (NASDAQ: DRAM)
today reported its financial results for its fiscal fourth quarter
and full year ended April 30, 2006. Revenues for the quarter were
$8.8 million, which compares to $15.1 million for the fourth quarter
of the prior fiscal year. Revenues for fiscal 2006 were $41.8 million
versus $65.7 million for the prior fiscal year. Prior fiscal year
fourth quarter and full year revenues included sales of approximately
$3.7 million and $21.9 million, respectively, to one customer
compared to zero and $3.0 million for the comparable current year
periods.
Net earnings for the fourth quarter were $83,000 or $0.01 per diluted
share, compared to $3.9 million or $0.44 per diluted share for the
fourth quarter of fiscal 2005, which included (i) an income tax
benefit of approximately $2.9 million related to a reversal of the
Company?s valuation allowance for its net operating loss
carryforwards and (ii) $460,000 of pretax severance charges related
to staff reductions. For fiscal 2006, the Company reported net
earnings of $2.8 million or $0.31 per diluted share, which includes a
pre-tax gain of $1.9 million from the sale of the Company?s
undeveloped land. This compares to prior year net earnings of $6.7
million or $0.74 per diluted share, which included the income tax
benefit and severance charges noted above.
Gross margins during the fourth quarter and current fiscal year were
approximately 28 percent and 30 percent, respectively, which compares
to 28 percent and 24 percent for the comparable prior periods. 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 $3.2 million during fourth quarter of the
prior fiscal year. Fiscal 2006 engineering and selling, general and
administrative costs totaled $10.3 million versus $12.0 million in
fiscal 2005.
Mark Maddocks, Dataram?s vice president of finance and CFO, stated,
?The Company?s backlog increased to $964,000 from $635,000 in the
third quarter of fiscal 2006. Our balance sheet remains strong with
a current ratio of 8.9 and includes $14 million or $1.65 per share in
cash and cash equivalents. As we utilize the remainder of our
deferred tax assets, we will continue to make cash payments for
income taxes at an approximate rate of 7 percent of pretax earnings
in the upcoming fiscal year while we use an effective tax rate for
financial reporting purposes of approximately 38 percent. At April
30, 2006, there were 8,487,396 common shares outstanding.?
Robert V. Tarantino, Dataram?s chairman and CEO commented, ?Our order
rate in the fourth quarter was consistent with the prior quarter as
evidenced by the increase in our backlog. We recognize that our
Company has significant operating leverage and that achieving top
line growth is our most important priority. To that end, we have
focused our sales and marketing resources back on the underlying
principals that built Dataram?s compatible memory business. From a
resource standpoint, we have expanded our domestic sales team, adding
eight professionals. We will utilize the additional capacity to
reinforce our value proposition at the end-user level. This level of
customer relationship is key to facilitating the role of our value-
added resellers by creating demand at the source. With this strategy
and additional capacity we expect to expand our customer base of
large corporate end users and value-added resellers. While we have
increased our selling capacity, our overall cost structure will
remain materially unchanged.?
Mr. Tarantino concluded, ?Our financial condition is strong and we
are highly liquid. Today, the Company?s board of directors declared a
quarterly dividend of $0.06 cents per common share. The dividend will
be payable on June 28, 2006, to shareholders of record as of June 14,
2006.?
As announced in a press release dated May 24, 2006, Dataram will
conduct a conference call today at 4:30 p.m. (EDT) to present its
fourth quarter and full year financial results and to respond to
investor questions. Interested shareholders may participate in the
call by dialing 877-690-6769 providing the following reservation
number: 21293802. 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 39
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
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share amounts)
(Unaudited)
Fourth Quarter Ended Twelve Months Ended
April 30, April 30,
_____________________ ___________________
2006 2005 2006 2005
Revenues $ 8,773 $ 15,140 $ 41,795 $ 65,684
Costs and expenses:
Cost of sales 6,306 10,839 29,458 49,816
Engineering and development 289 352 1,136 1,300
Selling general and administrative 2,244 2,894 9,194 10,653
________ __________ __________ __________
8,839 14,085 39,788 61,769
Earnings (loss) from operations (66) 1,055 2,007 3,915
Other income 181 25 2,431 202
________ __________ __________ __________
Earnings before income taxes 115 1,080 4,438 4,117
Income tax provision (benefit) 32 (2,795) 1,666 (2,598)
________ __________ __________ ___________
Net earnings $ 83 $ 3,875 $ 2,772 $ 6,715
========== ========== ========== ==========
Net earnings per share:
Basic $ 0.01 $ 0.46 $ 0.33 $ 0.78
========== ========== ========== ==========
Diluted $ 0.01 $ 0.44 $ 0.31 $ 0.74
========== ========== ========== ==========
Average number of shares
outstanding:
Basic 8,487 8,500 8,447 8,571
========== ========== ========== ==========
Diluted 8,838 8,877 8,821 9,112
========== ========== ========== ==========
DATARAM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
April 30, 2006 April 30, 2005
ASSETS
Current assets
Cash and cash equivalents $ 14,044 $ 9,281
Trade receivables, net 4,893 8,397
Inventories 2,189 2,369
Deferred income taxes 1,365 3,258
Note receivable 1,538 0
Other current assets 80 130
______________ ______________
Total current assets 24,109 23,435
Deferred income taxes 1,176 630
Property and equipment, net 846 2,028
Other assets 105 54
______________ ______________
Total assets $ 26,236 $ 26,147
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LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities
Accounts payable $ 2,057 $ 2,528
Accrued liabilities 653 1,438
______________ ______________
Total current liabilities 2,710 3,966
Stockholders equity 23,526 22,181
______________ ______________
Total liabilities and stockholders equity $ 26,236 $ 26,147
============== ==============