Dataram Reports Fiscal 2011 Fourth Quarter Financial Results

Dataram Corporation (NASDAQ: DRAM) today reported its financial results for its fiscal fourth quarter and year ended April 30, 2011. Revenues for the fourth quarter and fiscal year ended April 30, 2011 were $11.3 million and $46.8 million, respectively, which compares to $11.9 million and $44.0 million for the comparable prior year periods. The Company’s incurred a pre-tax net loss for the fourth quarter of the current fiscal year of $0.8 million which compares to a pre-tax net loss of $1.6 million for the comparable prior year period. Fiscal year ended April 30, 2011 pre-tax net loss totaled $4.6 million versus $7.1 million for the comparable prior year.

John H. Freeman, Dataram’s president and CEO commented, “In fiscal 2011, our memory solutions business grew to $46.8 million. During the fiscal year, we continued our integration of MMB and our traditional memory business. In March, 2011, we completed the consolidation of our two manufacturing facilities and reduced our expenses by approximately $1.2 million annually as a result. The memory business is now operating profitably.”

Mr. Freeman continued, “In the fourth quarter, we continued to invest in XcelaSAN development, quality assurance and testing. During this period, we successfully introduced and incorporated high availability functionality into the product which is unique in the industry and addresses a key customer requirement for storage. The product is currently installed and being evaluated for purchase at selected customer sites. XcelaSAN continues to provide significant performance improvements over traditional solutions at dramatically less cost. Many clients are reconsidering traditional computing paradigms requiring major technology refreshes every several years. Instead we have seen our clients seek out solutions which optimize the performance and extend the useful life of existing IT assets. By doing so, our clients realize substantial reductions in computing costs, eliminate business risks associated with the introduction of new technology, and avoid substantial resource overhead required to implement these new IT assets. We believe the timing of introducing XcelaSAN into the market is ideal as it provides exponential optimization of storage assets while also extending their useful life. In addition, as our clients deploy “tiered” storage architectures designed to store data in the most logical and economical repository, XcelaSAN represents a critical component in leveraging and supporting that strategy.”

The Company’s net loss for the fourth quarter was $0.8 million, or $0.09 per share which compares to a net loss of $1.6 million, or $0.18 per share for the comparable prior year period. Fiscal year ended April 30, 2011 net loss totaled $4.6 million versus $10.7 million for the prior comparable period. In the third quarter of the current fiscal year the Company’s XcelaSAN development project met the accounting requirements of having established technological feasibility, and accordingly, the Company capitalized approximately $1.5 million of XcelaSAN software development costs in fiscal 2011 versus nil in fiscal 2010. The prior year net loss includes income tax expense of $3.6 million, and is comprised of a valuation allowance the Company placed on its deferred income tax assets.

Mr. Freeman concluded, “We are investing in sales and marketing infrastructure for the XcelaSAN product line as well as research and development for future generations of the product. We recognized that we required external financing to continue these investments. On May 17, 2011, the Company and certain investors closed a securities purchase agreement pursuant to which the Company agreed to sell an aggregate of 1,775,000 shares of its common stock and warrants to purchase a total of 1,331,250 shares of its common stock to such investors. The aggregate net proceeds of such offering and sale, after deducting fees to the Placement Agent and other estimated offering expenses payable by the Company, was approximately $3.0 million. We have taken the necessary actions to ensure that our memory solutions business is profitable and growing. Our outlook for XcelaSAN is strong, particularly as high availability functionality is now a reality.”

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)
 

Fourth Quarter Ended

April 30,

Fiscal Year Ended

April 30,
2011     2010 2011     2010
 
Revenues $ 11,281 $ 11,873 $ 46,847 $ 44,020
 
Costs and expenses:
Cost of sales 8,650 8,918 35,777 32,408
Engineering and development 256 265 980 997
Research and development 0 877 1,843 4,265
Selling, general and administrative 2,927 2,959 11,483 11,810
Stock-based compensation expense* 142 192 585 918
Intangible asset amortization*   85   145   407   637
  12,060   13,356   51,075   51,035
 
Loss from operations (779) (1,483) (4,228) (7,015)
 
Other income (expense)   (62)   (128)   (401)   (117)
 
Loss before income taxes (841) (1,611) (4,629) (7,132)
 
Income tax expense   0   0   5   3,611
 
Net loss $ (841) $ (1,611) $ (4,634) $ (10,743)
 
Net loss per share:
Basic $ (0.09) $ (0.18) $ (0.52) $ (1.21)
Diluted $ (0.09) $ (0.18) $ (0.52) $ (1.21)
 
Weighted average number of shares
outstanding:
Basic   8,928   8,918   8,923   8,891
Diluted   8,928   8,918   8,923   8,891
 

* Items are recorded as a component of operating costs and expenses in the Company’s financialstatements filed with the Securities and Exchange Commission on Form 10-Q.
       

DATARAM CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)
 
April 30, 2011 April 30, 2010
 
ASSETS
Current assets
Cash and cash equivalents $ 345 $ 2,507
Accounts receivable, net 4,630 5,344
Inventories 5,462 6,872
Other current assets   127     87
Total current assets 10,564 14,810
 
Property and equipment, net 963 1,117
 
Other assets 111 105
 
Intangible assets, net 1,940 867
 
Goodwill   1,242     754
 
Total assets $ 14,820   $ 17,653
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Note payable-revolving credit line $ 2,154 $ 0
Accounts payable 2,945 3,523
Accrued liabilities 840 1,738
Notes payable   1,500     1,000
Total current liabilities 7,439 6,261
 
 
Stockholders' equity   7,381     11,392
 
Total liabilities and stockholders' equity

$

14,820
 

$

17,653

Copyright Business Wire 2010

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