PRESS RELEASE
Dataram Contact:
Mark Maddocks
Vice President-Finance, CFO
609-799-0071
info@dataram.com
DATARAM REPORTS FISCAL 2008 SECOND QUARTER FINANCIAL
RESULTS
Company Reports Net Earnings of $0.06 Per Share
Board of Directors Declares Regular Quarterly Dividend
PRINCETON, N.J. November 15, 2007 - Dataram Corporation (NASDAQ: DRAM) today
reported its financial results for its fiscal second quarter and six months
ended October 31, 2007. Revenues for the second quarter were $8.6 million,
which compares to $8.6 million in the first quarter of the current fiscal
year and $10.9 million in the comparable prior year period. Net earnings for
the second quarter and first six months of the current fiscal year were
$569,000, or $0.06 per diluted share and $975,000, or $0.11 per diluted
share, respectively. This compares to net earnings of $1,446,000, or $0.16
per diluted share and net earnings of $1,376,000, or $0.16 per diluted share
for the comparable prior year periods. Prior year second quarter and six
months net earnings included a payment of $2.3 million from a DRAM
manufacturer related to a settlement agreement. The payment was recorded as
other income in the Company's financial statements. The Company's earnings
from operations for the second quarter and first six months of the current
fiscal year totaled $671,000 and $1,093,000, respectively and compares to
operating losses of $125,000 and $468,000 for the comparable prior year
periods.
Robert V. Tarantino, Dataram's chairman and CEO commented, "Our second
quarter operating earnings and net earnings met our expectations and our
operating earnings have improved over last fiscal year's levels. However,
our revenues continue to be adversely impacted by reductions in our selling
prices as a result of the well-publicized decline in the price of DRAM
chips. The purchase cost of DRAM chips, which represents approximately 75
percent of our product cost declined by approximately 50 percent during the
first six months of the fiscal year. In spite of this decline, we have
managed to hold our revenue levels nearly constant for the past three
quarters. This is due to a shift in sales to larger capacity memory
products. As the price of the Company's higher capacity products have come
down as a result of lower chip costs, they have become a more affordable
option for customers with memory intensive applications. This has also had
a favorable impact on our gross margins which averaged 38% in the second
quarter as these high capacity products typically command higher margins."
The Company's operating expenses for the second quarter and first six months
of the current fiscal year totaled $2,571,000 and $5,187,000, respectively
and compares to operating expenses of $2,702,000 and $5,449,000 for the
comparable prior year periods. The decline in expense was the result of
costs reductions initiated at the end of the prior fiscal year as well as a
reduction in stock-based compensation expense.
The Company accrues federal and state income taxes at a combined rate of
approximately 37 percent. However, since the Company has a federal net
operating loss ("NOL") carryforward of approximately $5.1 million, the
Company actually pays income taxes at a rate of approximately 8 percent as
it utilizes the tax benefits of its NOL carryforward.
Mr. Tarantino concluded, "Our strong cash and working capital position
continued to improve. In the first half of the current fiscal year, cash
provided by operating activities totaled $1,739,000, and cash and
equivalents increased to $16,926,000. Working capital at the end of the
second quarter amounted to $22,534,000 and our current ratio is 11.8. Our
tangible book value per share is $2.70, of which cash and equivalents
constitutes $1.91 per share. Today, the Company's Board of Directors
declared a quarterly dividend of $0.06 per common share. The dividend will
be payable on December 14, 2007, to shareholders of record as of November 30,
2007. At October 31, 2007, there were 8,846,384 common shares issued and
outstanding."
ABOUT DATARAM CORPORATION
Dataram is a worldwide leader in the design and manufacture of high capacity,
reliable and innovative memory solutions. With over 40 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 OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Second Quarter Ended Six Months Ended
October 31, October 31,
____________________ ________________
2007 2006 2007 2006
Revenues $ 8,556 $ 10,902 $ 17,173 $ 20,207
Costs and expenses:
Cost of sales 5,314 8,325 10,893 15,226
Engineering and development 285 320 587 626
Selling, general
and administrative 2,213 2,265 4,434 4,572
Stock-based compensation
expense* 73 117 166 251
________ ________ ________ ________
7,885 11,027 16,080 20,675
________ ________ ________ ________
Earnings (loss)
from operations 671 (125) 1,093 (468)
Other income 229 2,436 448 2,672
________ ________ ________ ________
Earnings before income taxes 900 2,311 1,541 2,204
Income tax provision 331 865 566 828
________ ________ ________ ________
Net earnings $ 569 $ 1,446 $ 975 $ 1,376
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Net earnings per share:
Basic $ 0.06 $ 0.17 $ 0.11 $ 0.16
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Diluted $ 0.06 $ 0.16 $ 0.11 $ 0.16
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Weighted average number of
shares outstanding:
Basic 8,825 8,576 8,781 8,533
======== ======== ======== ========
Diluted 8,865 8,805 8,850 8,806
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*Stock-based compensation expense is recorded as a component of selling,
general and administrative expenses in the Company's financial statements
filed with the Securities and Exchange Commission on Form 10-Q.
DATARAM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
October 31, 2007 April 30, 2007
ASSETS
Current assets
Cash and cash equivalents $ 16,926 $ 14,138
Accounts receivable, net 4,376 4,717
Inventories 1,743 2,121
Deferred income taxes 1,149 1,149
Note receivable 0 1,537
Other current assets 429 231
________________________________________
Total current assets 24,623 23,893
Deferred income taxes 707 1,123
Property and equipment, net 592 784
Other assets 79 105
________________________________________
Total assets $ 26,001 $ 25,905
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LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities
Accounts payable $ 1,319 $ 1,597
Accrued liabilities 770 976
________________________________________
Total current liabilities 2,089 2,573
Stockholders' equity 23,912 23,332
________________________________________
Total liabilities and
stockholders' equity $ 26,001 $ 25,905
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