PRESS RELEASE Dataram Contact: Mark Maddocks Vice President-Finance, CFO 609-799-0071 info@dataram.com DATARAM REPORTS FISCAL 2011 SECOND QUARTER FINANCIAL RESULTS PRINCETON, N.J. December 7, 2010 - Dataram Corporation (NASDAQ: DRAM) today reported its financial results for its fiscal second quarter and six months ended October 31, 2010. Revenues for the second quarter and first six months of fiscal 2011 were $10.9 million and $23.7 million, respectively, which compares to $10.7 million and $19.9 million for the comparable prior year periods. The Company incurred a pre-tax net loss for the second quarter of the current fiscal year of $1.7 million which compares to a pre-tax net loss of $2.7 million for the comparable prior year period. Six month pre-tax net loss totaled $3.0 million versus $4.3 million for the prior sequential period. John H. Freeman, Dataram's president and CEO commented, "In the second quarter, our revenues and gross margin came under downward pricing pressure. Declining prices, along with our R&D investment in XcelaSAN were the primary contributors to our second quarter loss. Average selling prices in our memory business were lower by approximately 13 percent, when compared to first quarter levels. This was primarily due to the well-publicized industry wide decline in the price of memory. We are initiating actions to align our costs with our revenues. Those actions include the consolidation of our manufacturing facilities by the end of the current fiscal year as well as reducing our S, G & A expenses. Although we project continued growth in our memory solutions business, these actions should position the memory solutions business to operate profitably at current revenue levels." Mr. Freeman continued, "The release schedule and development of our XcelaSAN product line is on track. In the second quarter, we released a product with enhanced features and functionality which increases its ease of use, ease of installation and interoperability. We have sold the first unit of our newly released version of XcelaSAN and have delivered and successfully installed systems at other clients. High Availability systems are scheduled for testing at customers this month and will be generally available in January. We anticipate that our enhancements and the shipment of High Availability systems will accelerate product sales and broaden market adoption. XcelaSAN is a unique intelligent Storage Area Network (SAN) optimization solution that delivers substantive application performance improvement to applications such as Oracle, SQL and VMware. XcelaSAN augments existing storage systems by transparently applying intelligent caching algorithms that serve the most active block-level data from high-speed storage, creating an intelligent, virtual solid state SAN. This breakthrough solution allows organizations to dramatically increase the performance of their business-critical applications without the costly hardware upgrades or over-provisioning of storage typically found in current solutions for increased performance." The Company's net loss for the second quarter was $1.7 million, or $0.19 per share which compares to a net loss of $1.6 million, or $0.18 per share for the comparable prior year period. Six month net loss totaled $3.0 million versus $2.6 million for the prior sequential period. The prior fiscal year's second quarter and six month net loss includes an income tax benefit of $1.0 million and $1.7 million, respectively, on which the Company subsequently placed a 100% valuation allowance in its third quarter of fiscal 2010. Mr. Freeman concluded, "We are taking the necessary actions to ensure that our memory solutions business is generating positive cash flow and growing. Our outlook for XcelaSAN is very robust, particularly as High Availability systems come to market." ABOUT DATARAM CORPORATION Founded in 1967, Dataram is a worldwide leader in the manufacture of high-quality computer memory, storage and software products. Our products and services deliver IT infrastructure optimization, dramatically increase application performance and deliver substantial cost savings. Dataram solutions are deployed in 70 Fortune 100 companies and in mission-critical government and defense applications around the world. 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 CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited) Second Quarter Ended Six Month Ended October 31, October 31, ____________________ _______________ 2010 2009 2010 2009 Revenues $ 10,949 $ 10,673 $ 23,693 $ 19,863 Costs and expenses: Cost of sales 8,536 7,937 18,157 14,592 Engineering and development 225 259 486 512 Research and development 842 1,621 1,714 2,495 Selling, general and administrative 2,748 3,113 5,602 5,842 Stock-based compensation expense* 155 225 313 380 Intangible asset amortization 107 164 214 328 _________ ________ ________ ________ 12,613 13,319 26,486 24,149 _________ ________ ________ ________ Loss from operations (1,664) (2,646) (2,793) (4,286) Other income (expense) (51) (12) (161) 22 _________ ________ ________ ________ Loss before income taxes (1,715) (2,658) (2,954) (4,264) Income tax benefit 0 (1,042) 0 (1,670) _________ ________ ________ ________ Net loss $ (1,715) $ (1,616) $ (2,954) $ (2,594) ========= ======== ======== ======== Net loss per share: Basic $ (0.19) $ (0.18) $ (0.33) $ (0.29) ========= ======== ======== ======== Diluted $ (0.19) $ (0.18) $ (0.33) $ (0.29) ========= ======== ======== ======== Weighted average number of shares outstanding: Basic 8,918 8,869 8,918 8,869 ========= ======== ======== ======== Diluted 8,918 8,869 8,918 8,869 ========= ======== ======== ======== *Items are recorded as a component of operating costs and 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, 2010 April 30, 2010 ASSETS Current assets Cash and case equivalents $ 614 $ 2,507 Accounts receivable, net 4,867 5,344 Inventories 5,296 6,872 Other current assets 252 87 _______________________________________ Total current assets 11,029 14,810 Property and equipment, net 831 1,117 Other assets 86 105 Intangible assets, net 652 867 Goodwill 1,124 754 _______________________________________ Total assets $ 13,722 $ 17,653 ======================================= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 1,350 $ 3,523 Accrued liabilities 1,087 1,738 Notes payable 2,533 1,000 _______________________________________ Total current liabilities 4,970 6,261 Stockholders' equity 8,752 11,392 _______________________________________ Total liabilities and stockholders' equity $ 13,722 $ 17,653 =======================================