-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FhWpp/KybYTUKpslz2JP15ZH2Gf4eZWFUc9FOjFtfA87kNMSSz1udBmLIVk89DnS 2/2tZWSm8GyxUTY2CYviiQ== 0001001746-96-000012.txt : 19960314 0001001746-96-000012.hdr.sgml : 19960314 ACCESSION NUMBER: 0001001746-96-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960131 FILED AS OF DATE: 19960312 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: DATARAM CORP CENTRAL INDEX KEY: 0000027093 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER STORAGE DEVICES [3572] IRS NUMBER: 221831409 STATE OF INCORPORATION: NJ FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08266 FILM NUMBER: 96533777 BUSINESS ADDRESS: STREET 1: P O BOX 7528 CITY: PRINCETON STATE: NJ ZIP: 08543 BUSINESS PHONE: 6097990071 MAIL ADDRESS: STREET 1: PO BOX 7528 CITY: PRINCETON STATE: NJ ZIP: 08543 10-Q 1 PERIOD ENDING 01/31/96 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the quarterly period ended 01/31/96 or [ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the transition period from to Commission file number 1-8266 DATARAM CORPORATION (Exact name of registrant as specified in its charter) New Jersey 22-1831409 (State or other jurisdiction (I.R.S. Employer incorporation or organization) Identification No.) P.O. Box 7528, Princeton, NJ 08543 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (609) 799-0071 (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the last practicable date. Common Stock ($1.00 par value): As of February 28, 1996, there were 3,824,305 shares outstanding. PART 1: FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Dataram Corporation And Subsidiary Consolidated Balance Sheets January 31, 1996 and April 30, 1995 Unaudited Audited January 31, 1996 April 30, 1995 Current Assets: Cash and cash equivalents $ 388,287 $ 721,811 Trade receivables, less allow- ance for doubtful accounts and sales returns of $506,000 at January 31, 1996 and $495,000 at April 30, 1995 15,421,367 14,921,024 Inventories 5,483,938 8,060,807 Other current assets 851,977 1,129,630 __________ __________ Total current assets 22,145,569 24,833,272 __________ __________ Property and equipment, at cost: Land 875,000 875,000 Machinery and equipment 6,182,619 5,952,504 __________ __________ 7,057,619 6,827,504 Less: accumulated depreciation and amortization 4,697,899 4,197,158 __________ __________ Net property and equipment 2,359,720 2,630,346 Other assets 5,730 15,076 $24,511,019 $27,478,694 =========== =========== Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 5,177,583 $ 8,778,049 Accrued liabilities 947,958 2,069,348 __________ __________ Total current liabilities 6,125,541 10,847,397 __________ __________ Deferred income taxes 753,822 239,822 Stockholders' Equity: Common stock, par value $1.00 per share. Authorized 18,000,000 shares; issued 3,824,305 at January 31, 1996 and 3,792,305 at April 30, 1995 3,824,305 3,792,305 Additional paid-in capital 3,425,142 3,219,142 Retained earnings 10,382,209 9,380,028 __________ __________ Total stockholders' equity 17,631,656 16,391,475 __________ __________ $24,511,019 $27,478,694 ========== ========== See accompanying notes to consolidated financial statements Dataram Corporation and Subsidiary Consolidated Statements of Operations Three and Nine Months Ended January 31, 1996 and 1995 (Unaudited) 1995 1996 3rd Nine 3rd Nine Quarter Months Quarter Months _________ ________ _________ ________ Revenues $28,385,207 $85,601,073 $26,272,891 $75,797,153 Costs and expenses: Cost of sales 26,910,340 77,689,791 22,477,326 63,752,346 Engineering and development 365,935 1,254,249 613,824 1,919,597 Selling, general and adminis- trative 1,462,188 4,896,992 2,738,958 8,294,367 __________ __________ __________ __________ 28,738,463 83,841,032 25,830,108 73,966,310 Earnings (loss) from operations (353,256) 1,760,041 442,783 1,830,843 Other income (expense): Other income (expense), net 0 0 5,800 64,002 Interest expense (44,691) (101,860) (85,475) (215,037) ___________ __________ _________ _________ (44,691) (101,860) (79,675) (151,035) _________ __________ _________ __________ Net earnings (loss) before income taxes (397,947) 1,658,181 363,108 1,679,808 Income tax provision (benefit) (155,000) 656,000 148,000 671,000 _________ __________ _________ __________ Net earnings (loss) $ (242,947) $ 1,002,181 $ 215,108 $ 1,008,808 ========== ========== ========== ========== Net earnings (loss) per common and common equivalent share: Primary $ (.06) $ .26 $ .06 $ .26 =========== ========== ========== ========== Fully Diluted $ (.06) $ .26 $ .06 $ .26 Weighted average number of common and common equivalent shares outstanding: Primary 3,824,305 3,837,807 3,829,726 3,837,754 ========== ========== ========== ========== Fully Diluted 3,824,305 3,837,807 3,829,726 3,837,754 ========== ========== ========== ==========
See accompanying notes to consolidated financial statements Consolidated Statements of Cash Flows Nine Months Ended January 31, 1996 and 1995 (Unaudited) 1996 1995 Sources of working capital: Net earnings $ 1,002,181 $ 1,008,808 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 500,741 632,998 Bad debt expense 220,795 143,641 Changes in assets and liabilities: Increase in trade receivables (721,138) (3,354,995) Decrease(increase) in inventories 2,576,869 (342,260) Decrease in other current assets 277,653 1,112,933 Decease in other assets 9,346 5,577 Decrease in accounts payable (3,600,466) (1,436,084) Decrease in accrued liabilities (1,121,390) (168,538) Increase in deferred income taxes 514,000 0 _________ _________ Total adjustments (1,343,590) (3,406,728) Net cash used in operating activities (341,409) (2,397,920) _________ _________ Cash flows from investing activities: Purchase of fixed assets (230,115) (394,855) _________ _________ Net cash used in investing activities (230,115) (394,855) _________ _________ Cash flows from financing activities: Proceeds from sale of common shares under stock option plan 238,000 2,438 Purchase of treasury stock 0 (468,751) Increase in long-term debt 0 3,100,000 _________ _________ Net cash provided by financing activities 238,000 2,633,687 _________ _________ Net decrease in cash and cash equivalents (333,524) (159,088) Cash and cash equivalents at beginning of year 721,811 437,779 _________ _________ Cash and cash equivalents at end of period $ 388,287 $ 278,691 ========= ========= Supplemental disclosures of cash flow information: Cash paid during the period for: Interest $ 101,860 $ 215,037 Income taxes $ 582,000 $ 5,238 ========= ========= See accompanying notes to consolidated financial statements /TABLE Dataram Corporation and Subsidiary Notes to Consolidated Financial Statements January 31, 1996 and April 30, 1995 (1) Cash and cash equivalents consist of unrestricted cash, bankers acceptances, commercial paper and other short term investments. All investments are convertible to cash within a period of approximately thirty days or less. (2) Inventories consist of the following categories: 01/31/96 4/30/95 ________ _______ Raw Materials $ 2,698,000 $ 4,726,000 Work In Process 287,000 648,000 Finished Goods 2,499,000 2,687,000 _________ _________ $ 5,484,000 $ 8,061,000 ========= ========= (3) The Company has an agreement with a bank which provides for a total unsecured line of credit of $11,000,000 with interest at no higher than one-half percent below the bank's base commercial lending rate. Borrowings under the line of credit are at the convenience of Company management and may be repaid at any time. The line of credit agreement expires in October, 1997, unless otherwise amended or extended. (4) In 1982, the Company adopted an incentive stock option plan. As of January 31, 1996, no further options may be granted under the plan and options to purchase 6,000 shares were outstanding and exercisable at an excercise price of $3.57 per share. In September 1992, an incentive and nonstatutory stock option plan was adopted by the shareholders which provides for the granting of up to 950,000 shares of common stock to key employees. As of January 31, 1996, options to purchase 362,000 shares at prices ranging from $5.125 to $7.125 per share were outstanding. As of January 31, 1996 options to purchase 32,000 shares had been exercised and options to purchase 139,500 shares were exercisable. In November 1992 and March 1993, the Company granted to three non-employee directors of the Company and the Company's outside general counsel five year options to acquire a total of 120,000 shares of the Company's common stock at an exercise price of $11.25 per share. As of January 31, 1996, none of these options had been exercised and options to purchase 82,500 shares were exercisable. (5) Certain amounts in the fiscal year 1995 consolidated financial statements have been reclassified to conform to the fiscal year 1996 presentation. (6) Information furnished reflects all adjustments which are, in the opinion of management, necessary to a fair presentation of the results of this interim statement. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources As of January 31, 1996, working capital amounted to $16.0 million reflecting a current ratio of 3.6 compared to working capital of $14.0 million and a current ratio of 2.3 as of April 30, 1995. The Company's financial condition remains strong. The Company has a $11.0 million unsecured line of credit with a bank which expires in October 1997. The line of credit was used during the quarter to deal with peak cash demands. At the end of the quarter there was no amount outstanding under the line of credit. With its current working capital balance and the line of credit, management believes that it will be able to support its revenue growth and other capital needs for the foreseeable future. Results of Operations Revenues for the three month period ending January 31, 1996 were $28,385,000 compared to revenues of $26,272,000 for the comparable prior year period, an increase of 11%. Nine month revenues of $85,601,000 reflected an increase of 13% over the prior fiscal year's nine month revenues of $75,797,000. Cost of sales for the second quarter and nine months were 95% and 91% of revenues, respectively versus 86% and 84% for the same prior year periods. Included in this year's second quarter and nine months cost of sales is a $1,200,000 charge for a write down to market value primarily of 16 megabit dynamic random access memory (DRAM) chips in inventory. DRAMs are the primary raw material in computer memory boards and comprise approximately 95% of memory product cost. In the second half of the third quarter, the DRAM market underwent dramatic change. For approximately the last two years DRAMs have been in tight supply. Starting in late December, that situation changed. Spot market prices for 16 megabit DRAMs fell below contract prices indicating an oversupply situation. Contract prices for DRAMs also fell suddenly, approximately 15% from late December through January. The DRAM marketplace has not yet stabilized. Prices for DRAMs are continuing to fall. As a result of this change in the marketplace, the Company has been able to significantly reduced its inventory levels while still meeting its customer delivery requirements. Engineering and development costs in fiscal 1996's third quarter and nine months were $366,000 and $1,254,000 versus $614,000 $1,920,000 for the same prior year periods. Today's workstation, server and personal computer memories have simple design characteristics. The Company intends to maintain its commitment to timely introduction of new memory products as new workstations and computers are introduced. Selling, general and administrative costs in this year's second quarter and nine months declined to 5% and 6% of revenues, respectively from 10% and 11% for the same prior year periods. Three and nine month total expenditures decreased by $1,277,000 and $3,397,000, respectively from the prior year. This decrease is primarily the result of a restructuring of the Company's operations related to a discontinued product line which occurred at the end of the fourth quarter of last fiscal year. As a result of the restructuring, the Company's engineering and development expenses and selling, general and administrative expenses have been significantly reduced. Other income (expense), net for the third quarter and nine months of fiscal 1996 consisted primarily of interest expense associated with the Company's revolving credit line. Prior year other income (expense) consisted of interest expense offset by income from salvage of certain obsolete equipment and inventory items. PART II: OTHER INFORMATION ITEM 5. OTHER INFORMATION The Annual Meeting of Dataram Corporation was held on September 12, 1995. At that meeting, all of the directors nominated by the Board of Directors were elected and the shareholders ratified the selection of KPMG Peat Marwick LLP as the independent certified public accounts of the Company. The voting on the election of directors was as follows: NAME FOR WITHHELD Richard Holzman 3,495,810 20,952 John J. Cahill 3,495,932 20,855 Robert V. Tarantino 3,480,227 36,560 Thomas A. Majewski 3,495,210 21,552 Bernard L. Riley 3,486,515 30,247 The voting on the ratification of accountants was as follows: FOR: 3,502,672 AGAINST: 24,865 ABSTAIN: 16,800 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K A. Exhibits 27 (a). Financial Data Schedule (Attached) 28 (a). Press Release reporting results of Third Quarter, Fiscal Year 1996 (Attached). B. Reports on Form 8-K No reports on Form 8-K have been filed during the current quarter. Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. DATARAM CORPORATION Date: March 7, 1996 By: MARK E. MADDOCKS ___________________ Mark E. Maddocks Vice President, Finance (Principal Financial Officer) EX-27 2
5 9-MOS APR-30-1996 JAN-31-1996 388,287 0 15,927,367 506,000 5,483,938 22,145,569 7,057,619 4,697,899 24,511,019 6,125,541 0 0 0 3,824,305 13,807,351 24,511,019 28,385,207 28,385,207 26,910,340 26,910,340 365,935 77,024 44,691 (397,947) (155,000) (242,947) 0 0 0 (242,947) (.06) (.06)
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