EX-99 2 q1pr2011.txt PRESS RELEASE-FIRST QUARTER RESULTS PRESS RELEASE Dataram Contact Mark Maddocks Vice President-Finance, CFO 609-799-0071 info@dataram.com DATARAM REPORTS FISCAL 2011 FIRST QUARTER FINANCIAL RESULTS PRINCETON, N.J. September 2, 2010 - Dataram Corporation (NASDAQ: DRAM) today reported its financial results for its fiscal first quarter ended July 31, 2010. Revenues for the first quarter were $12.7 million, which compares to $9.2 million for the comparable prior year period and also compares to $11.9 million for the prior sequential quarter. The Company incurred a pre-tax net loss for the first quarter of the current fiscal year of $1.2 million which compares to a pre-tax net loss of $1.6 million for the comparable prior year period and a pre-tax net loss of $1.6 million for the prior sequential period. John H. Freeman, Dataram's president and CEO commented, "Our memory solutions business continued to grow in our fiscal first quarter. The implementation of our sales and marketing strategy coupled with the gradual economic recovery is having a positive effect on demand for our products and our memory business is increasingly cash profitable." Mr. Freeman stated, "The release schedule and development of our XcelaSAN product line is on track. Subsequent to the first quarter, we released the product with enhanced features and functionality which increases its ease of use, ease of installation and interoperability. We have accepted our first purchase order for this released version of XcelaSAN and have delivered and successfully installed the system. High Availability systems are still expected to be available for sale in December. 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. Mr. Freeman continued, "We are continuing our investments in research and development in XcelaSAN and recognized that we required external financing to continue these investments. In July 2010, we entered into an agreement with a financial institution for secured debt financing of up to $5.0 million. Also in July 2010, we entered into an agreement with a related party vendor to consign up to $3.0 million of certain inventory into our manufacturing facilities. This will allow us to substantially reduce our inventory carrying requirements while still maintaining our ability to service our customers. We expect that these two agreements together with cash generated from our memory solutions business will generate sufficient liquidity for us to meet our operating plans for fiscal 2011." The Company's net loss for the first quarter was of $1,239,000, or $0.14 per share which compares to net loss of $978,000, or $0.11 per share for the comparable prior year period. The prior fiscal year's first quarter net loss includes an income tax benefit of $628,000 on which the Company subsequently placed a 100% valuation allowance in its third quarter of fiscal 2010. Mr. Freeman concluded, "The turnaround of our memory solutions business is on track. Our memory solutions business is generating positive cash flow and growing. Our outlook for XcelaSAN is very robust, particularly as we move into High Availability systems later this year. We expect that the enhancements under development will further strengthen our value proposition and sales." 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 AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited) First Quarter Ended July 31 ___________________________ 2010 2009 Revenues $ 12,744 $ 9,190 Costs and expenses: Cost of sales 9,621 6,655 Engineering and development 261 253 Research and development 871 874 Selling, general and administrative 2,855 2,728 Stock-based compensation expense* 158 156 Intangible asset amortization expense: 107 164 _________ ________ 13,783 10,830 _________ ________ Loss from operations (1,129) (1,640) Other income (expense) (109) 34 _________ ________ Loss before income taxes (1,239) (1,606) Income tax benefit 0 (628) _________ ________ Net loss $ (1,239) $ (978) ========= ======== Net loss per share: Basic $ (0.14) $ (0.11) ========= ========= Diluted $ (0.14) $ (0.11) ========= ========= Weighted average number of shares outstanding: Basic 8,918 8,869 ========= ======== Diluted 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) July 31, 2010 April 30, 2010 ASSETS Current assets Cash and cash equivalents $ 786 $ 2,507 Accounts receivable, net 5,495 5,344 Inventories 5,748 6,872 Other current assets 209 87 __________________________________ Total current assets 12,238 14,810 Property and equipment, net 942 1,117 Other assets 100 105 Intangible assets, net 760 867 Goodwill 1,020 754 __________________________________ Total assets $ 15,060 $ 17,653 ================================== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 2,015 $ 3,523 Accrued liabilities 1,734 1,738 Note payable to related party 1,000 1,000 __________________________________ Total current liabilities 4,749 6,261 Stockholders' equity 10,311 11,392 __________________________________ Total liabilities and stockholders' equity $ 15,060 $ 17,653 ==================================