EX-99 2 q2pr2008.txt PRESS RELEASE-SECOND QUARTER RESULTS 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 ======== ======== ======== ======== Net earnings per share: Basic $ 0.06 $ 0.17 $ 0.11 $ 0.16 ======== ======== ======== ======== Diluted $ 0.06 $ 0.16 $ 0.11 $ 0.16 ======== ======== ======== ======== Weighted average number of shares outstanding: Basic 8,825 8,576 8,781 8,533 ======== ======== ======== ======== Diluted 8,865 8,805 8,850 8,806 ======== ======== ======== ======== *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 ======================================== 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 ========================================