Dataram Reports Fiscal 2012 Third Quarter Financial Results

PRINCETON, N.J.--()--Dataram Corporation (NASDAQ: DRAM) today reported its financial results for its fiscal third quarter and nine months ended January 31, 2012. Revenues for the third quarter and first nine months of fiscal 2012 were $8.4 million and $29.1 million, respectively, which compares to $11.9 million and $35.6 million for the comparable prior year periods. The Company incurred a tax net loss for the second quarter of the current fiscal year of $4.2 million which compares to a net loss of $0.8 million for the comparable prior year period. Nine month net loss totaled $6.2 million versus $3.8 million for the prior comparable period.

John H. Freeman, Dataram’s President and CEO commented, “In the third quarter, our revenues and gross margin continued to come under downward pricing pressure. Declining prices, worldwide industry softness along with one time charges related to XcelaSAN® were the primary contributors to our third quarter loss. SSD supply shortages and the delay in the availability of the Sandy Bridge technology impacted industry server sales which also impacts one of Dataram’s larger sales opportunities. We expect sales opportunities to improve during the next 90 days.”

Mr. Freeman continued, “In the third quarter, we established that the features and functions currently available in XcelaSAN® are robust and able to meet the needs of the marketplace. Based on this foundation we have further reduced our XcelaSAN® development costs to focus on client installations and our new Dell platform. The product is currently installed at selected customer sites and new customers are evaluating for purchase. Tests continue to affirm that XcelaSAN® provides significant performance improvements over traditional solutions at dramatically less cost. In addition to pursuing a traditional sales strategy for XcelaSAN®, management is also pursuing alternative means to monetize the Company’s investment in the XcelaSAN® product line.”

On March 9, 2012, Dataram received an offer to sell patents which were issued to Dataram over the past few years. The offer preserves the right for Dataram to use the patents. Dataram also retains the right to sell a transferable license to another company. The ability to use the patents and also have a transferable license satisfies our needs while providing a path to recoup a portion of our investment and increase value to our shareholders. This is the first time in Dataram’s 44 year history we have invested time and money to formally create, write and apply for patents. The patents protect XcelaSAN® and other storage architectures. Management expects to monetize the investment in patents.

Mr. Freeman concluded, “We are taking the necessary actions to ensure that our business rebounds to generate positive cash flow and growth. We have secured financing and instituted expense containment actions that we believe are necessary to sustain the Company.”

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.

DATARAM CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

   
Third Quarter Ended

January 31,

Nine Months Ended

January 31,

2012   2011 2012   2011
 
Revenues $ 8,420 $ 11,873 $ 29,096 $ 35,566
 
Costs and expenses:
Cost of sales 6,750 8,970 22,010 27,127
Engineering and development 169 237 523 723
Research and development - 112 - 1,825
Selling, general and administrative 3,025 2,954 9,515 8,556
Impairment of capitalized software 2,387 - 2,387 -
Stock-based compensation expense* 95 148 378 461
Intangible asset amortization*   41     107     123     322  
  12,467     12,528     34,936     39,014  
 
Loss from operations (4,047 ) (655 ) (5,840 ) (3,448 )
 
Other expense   (131 )   (179 )   (370 )   (339 )
 
Loss before income taxes (4,178 ) (834 ) (6,210 ) (3,787 )
 
Income tax expense   5     5     5     5  
 
Net loss $ (4,183 ) $ (839 ) $ (6,215 ) $ (3,792 )
 
Net loss per share:
Basic $ (0.39 ) $ (0.09 ) $ (0.59 ) $ (0.43 )
Diluted $ (0.39 ) $ (0.09 ) $ (0.59 ) $ (0.43 )
 

Weighted average number of shares outstanding:

Basic   10,703     8,928     10,600     8,920  
Diluted   10,703     8,928     10,600     8,920  

 

* 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)

 
  January 31, 2012     April 30, 2011
 
ASSETS
Current assets
Cash and cash equivalents $ 739 $ 345
Accounts receivable, net 2,763 4,630
Inventories 3,324 5,462
Other current assets   96   128
Total current assets 6,922 10,565
 
Property and equipment, net 783 962
 
Other assets 82 111
 
Intangible assets, net 337 1,940
 
Goodwill   1,453   1,242
 
Total assets $ 9,577 $ 14,820
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Note payable-revolving credit line $ 1,471 $ 2,154
Accounts payable 706 2,945
Accrued liabilities 858 840
Due to related party – current portion   233   1,500

Total current liabilities

3,268 7,439
 
Due to related party – long term   1,767   -
Total liabilities 5,035 7,439
 
Stockholders' equity   4,542   7,381
 
Total liabilities and stockholders' equity

$

9,577

$

14,820

Contacts

Dataram:
Marc Palker, CFO, 609-799-0071
info@dataram.com

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Contacts

Dataram:
Marc Palker, CFO, 609-799-0071
info@dataram.com