EX-99 2 q3pr2008.txt PRESS RELEASE-THIRD QUARTER RESULTS PRESS RELEASE Dataram Contact: Mark Maddocks Vice President-Finance, CFO 609-799-0071 info@dataram.com DATARAM REPORTS FISCAL 2008 THIRD QUARTER FINANCIAL RESULTS Company Reports Net Earnings of $0.03 Per Share Board of Directors Declares Regular Quarterly Dividend PRINCETON, N.J. February 19, 2008 - Dataram Corporation (NASDAQ: DRAM) today reported its financial results for its fiscal third quarter and nine months ended January 31, 2008. Net earnings for the third quarter of the current fiscal year were $233,000, or $0.03 per diluted share, which compares to a net loss of $298,000, or $0.03 per diluted share for the third quarter of the prior fiscal year. Net earnings for the first nine months of the current fiscal year were $1,208,000, or $0.14 per diluted share, which compares to net earnings of $1,079,000, or $0.12 per diluted share for the comparable prior year period. Prior year nine months net earnings included a one-time payment of $2.3 million from a DRAM manufacturer related to a settlement agreement. The Company's earnings from operations for the third quarter and first nine months of the current fiscal year totaled $214,000 and $1,307,000, respectively, and compares to operating losses of $684,000 and $1,151,000 for the comparable prior year periods. Revenues for the third quarter and first nine months of the current fiscal year were $6.7 million and $23.8 million, respectively, which compares to $9.4 million and $29.6 million for the comparable prior year periods. Robert V. Tarantino, Dataram's chairman and CEO commented, "While we experienced typical seasonal slowness in our third quarter, our year over year performance continues to improve. Our third quarter and year to date operating earnings and net earnings met our planned profit objectives and our operating earnings have improved significantly over last fiscal year's loss levels." Mr. Tarantino continued, "Our third quarter revenues reflected a seasonal decline in business from some of our key customers. This was not unusual and we expect to experience the typical improvement in our business level with these customers in our fiscal fourth quarter. Additionally, our revenues this entire fiscal year have been adversely impacted by reductions in our selling prices as a result of the well-publicized decline in the price of DRAM chips, the primary raw material in our products. Typically, the average selling price (ASP) of DRAMs decline by approximately 25 percent per year. Industry reports estimate the industry decline in ASP to be 31 percent in the last quarter alone. Over the last twelve months, the Company's purchase price of the DRAMs used in our products has declined by approximately 50 percent. This has resulted in a much larger than anticipated reduction in our selling prices as we passed our cost savings through to our customers. The DRAM market is a volatile, global commodity market and we have no control over the price dynamics of that market. We do see signs that the rate of price decline of DRAMs is abating and are hopeful that the recent price trends we have seen will continue." The Company's operating expenses for the third quarter and first nine months of the current fiscal year totaled $2,430,000 and $7,616,000, respectively, and compare to operating expenses of $2,545,000 and $7,995,000 for the comparable prior year periods. The decline in expenses was the result of cost 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 39 percent. However, since the Company entered the fiscal year with a federal net operating loss ("NOL") carryforward of approximately $4.7 million, the Company actually pays income taxes at a rate of approximately 10 percent as it utilizes the tax benefits of its NOL carryforward. Mr. Tarantino concluded, "We are meeting our profit objectives and our strong cash and working capital position continued to improve. In the first nine months of the current fiscal year, cash provided by operating activities totaled $3,543,000, and cash and equivalents increased to $18,156,000. Working capital at the end of the third quarter amounted to $22,345,000 and our current ratio is 16.0. Our tangible book value per share is $2.67, of which, cash and equivalents constitutes $2.05 per share. The Company's Board of Directors has declared a quarterly dividend of $0.06 per common share. The dividend will be payable on March 14, 2008, to shareholders of record as of February 29, 2008. At January 31, 2008, there were 8,869,184 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) Third Quarter Ended Nine Months Ended January 31 January 31 ___________________ _________________ 2008 2007 2008 2007 Revenues $ 6,676 $ 9,366 $ 23,848 $ 29,574 Costs and expenses: Cost of sales 4,032 7,505 14,925 22,730 Engineering and development 313 295 900 922 Selling, general and administrative 2,051 2,155 6,485 6,727 Stock-based compensation expense* 66 95 231 346 ________ ________ ________ ________ 6,462 10,050 22,541 30,725 ________ ________ ________ ________ Earnings (loss) from operations 214 (684) 1,307 (1,151) Other income 233 213 681 2,885 ________ ________ ________ ________ Earnings (loss) before income taxes 447 (471) 1,988 1,734 Income tax provision (benefit) 214 (173) 780 655 ________ ________ ________ ________ Net earnings (loss) $ 233 $ (298) $ 1,208 $ 1,079 ======== ======== ======== ======== Net earnings (loss) per share: Basic $ 0.03 $ (0.03) $ 0.14 $ 0.13 ======== ======== ======== ======== Diluted $ 0.03 $ (0.03) $ 0.14 $ 0.12 ======== ======== ======== ======== Weighted average number of shares outstanding: Basic 8,869 8,669 8,811 8,549 ======== ======== ======== ======== Diluted 8,875 8,669 8,851 8,800 ======== ======== ======== ======== *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) January 31, 2008 April 30, 2007 ASSETS Current assets Cash and cash equivalents $ 18,156 $ 14,138 Accounts receivable, net 2,629 4,717 Inventories 1,710 2,121 Deferred income taxes 1,134 1,149 Note receivable 0 1,537 Other current assets 207 231 ________________________________________ Total current assets 23,836 23,893 Deferred income taxes 675 1,123 Property and equipment, net 587 784 Other assets 79 105 ________________________________________ Total assets $ 25,177 $ 25,905 ======================================== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 757 $ 1,597 Accrued liabilities 734 976 ________________________________________ Total current liabilities 1,491 2,573 Stockholders' equity 23,686 23,332 ________________________________________ Total liabilities and stockholders' equity $ 25,177 $ 25,905 ========================================