-----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, JN5BINIs1Cf6PqdnSp18eVNcrWDLLeVMGJqhqMaVVVxsMlSawUEnPK457+eW/+Fe wZNFfxmUyWcZpaQPZzAOFg== 0001001746-97-000073.txt : 19971210 0001001746-97-000073.hdr.sgml : 19971210 ACCESSION NUMBER: 0001001746-97-000073 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19971031 FILED AS OF DATE: 19971209 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: SEC FILE NUMBER: 001-08266 FILM NUMBER: 97734878 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 10/31/97 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 10/31/97 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 of (I.R.S. Employer Identification No.) incorporation or organization) 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 December 3, 1997, there were 2,922,805 shares outstanding. PART 1. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Dataram Corporation And Subsidiary Consolidated Balance Sheets October 31, 1997 and April 30, 1997 (Unaudited) (Audited) October 31, 1997 April 30, 1997 Assets Current Assets: Cash and cash equivalents $ 7,395,644 $ 6,835,671 Trade receivables, less allowance for doubtful accounts and sales returns of $647,000 at October 31, 1997 and $800,000 at April 30, 1997 9,824,276 8,473,228 Inventories 3,242,908 4,395,813 Other current assets 565,551 572,376 __________ __________ Total current assets 21,028,379 20,277,088 Property and equipment, at cost: Land 875,000 875,000 Machinery and equipment 7,845,959 6,840,378 __________ __________ 8,720,959 7,715,378 Less: accumulated depreciation and amortization 5,711,832 5,461,632 __________ __________ Net property and equipment 3,009,127 2,253,746 Other assets 7,380 5,730 __________ __________ $ 24,044,886 $ 22,536,564 ========== ========== October 31, 1997 April 30, 1997 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 5,601,534 $ 4,144,946 Accrued liabilities 575,637 1,093,380 __________ __________ Total current liabilities 6,177,171 5,238,326 Deferred income taxes 1,013,000 1,013,000 Stockholders' Equity: Common stock, par value $1.00 per share. Authorized 18,000,000 shares; issued 2,965,605 at October 31, 1997 and 3,077,449 at April 30, 1997 2,965,605 3,077,449 Additional paid-in capital 2,303,069 2,452,677 Retained earnings 11,586,041 10,755,112 __________ __________ Total stockholders' equity 16,854,715 16,285,238 __________ __________ $ 24,044,886 $ 22,536,564 ========== ========== See accompanying notes to consolidated financial statements.
Dataram Corporation and Subsidiary Consolidated Statements of Operations Three and Six Months Ended October 31, 1997 and 1996 (Unaudited) 1997 1996 2nd Quarter Six Months 2nd Quarter Six Months Revenues $ 20,067,735 $ 38,215,027 $ 17,167,956 $ 34,616,246 Costs and expenses: Cost of sales 15,402,781 30,037,758 13,332,847 27,220,820 Engineering and development 301,389 524,967 249,408 479,090 Selling, general and administrative 2,908,762 5,188,921 2,012,622 3,846,374 __________ __________ __________ __________ 18,612,932 35,751,646 15,594,877 31,546,284 Earnings from operations 1,454,803 2,463,381 1,573,079 3,069,962 Other income (expense), net Other income, net 0 2,000 16,607 16,607 Interest income, net 75,053 139,747 59,721 128,289 __________ __________ __________ __________ 75,053 141,747 76,328 144,896 Earnings before income taxes 1,529,856 2,605,128 1,649,407 3,214,858 Income tax provision 585,000 991,000 635,000 1,236,000 __________ __________ __________ __________ Net earnings $ 944,856 $ 1,614,128 $ 1,014,407 $ 1,978,858 ========== ========== ========== ========== Net earnings per share of common stock Primary $ .30 $ .51 $ .30 $ .56 ========== ========== ========== ========== Fully Diluted $ .30 $ .51 $ .30 $ .55 ========== ========== ========== ========== Weighted average number of common shares outstanding Primary 3,134,128 3,161,913 3,391,312 3,554,602 ========== ========== ========= ========= Fully Diluted 3,134,128 3,161,913 3,422,084 3,593,519 ========== ========== ========= ========= See accompanying notes to consolidated financial statements.
Dataram Corporation and Subsidiary Consolidated Statements of Cash Flows Six Months Ended October 31, 1997 and 1996 (Unaudited) 1997 1996 Cash flows from operating activities: Net earnings $ 1,614,128 $ 1,978,858 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: Depreciation and amortization 250,200 349,800 Bad debt expense 172,992 191,283 Changes in assets and liabilities: Decrease (increase) in trade receivables (1,524,040) 2,536,059 Decrease in inventories 1,152,905 107,046 Decrease in other current assets 6,825 401,963 Increase in other assets (1,650) 0 Increase (decrease)in accounts payable 1,456,588 (2,959,089) Increase (decrease) in accrued liabilities (517,743) 168,948 Increase in income taxes payable 0 177,169 __________ __________ Net cash provided by operating activities 2,610,205 2,952,037 __________ __________ Cash flows from investing activities: Purchase of property and equipment (1,005,581) (147,916) __________ __________ Net cash used in investing activities (1,005,581) (147,916) Cash flows from financing activities: Proceeds from sale of common shares under stock option plan 57,000 21,400 Purchase of and retirement of common shares (1,101,651) (3,571,539) __________ __________ Net cash used in financing activities (1,044,651) (3,550,139) __________ __________ Net increase (decrease) in cash and cash equivalents 559,973 (746,018) Cash and cash equivalents at beginning of year 6,835,671 8,482,447 __________ __________ Cash and cash equivalents at end of period $ 7,395,644 $ 7,736,429 ========== ========== Supplemental disclosures of cash flow information: Cash paid during the period for: Interest $ 0 $ 26,586 Income taxes $ 923,000 $ 560,000 See accompanying notes to consolidated financial statements.
Dataram Corporation and Subsidiary Notes to Consolidated Financial Statements October 31, 1997 and April 30, 1997 (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: 10/31/97 4/30/97 ________ ________ Raw Materials $ 1,683,000 $ 3,369,000 Work In Process 72,000 98,000 Finished Goods 1,488,000 929,000 _________ _________ $ 3,243,000 $ 4,396,000 ========= ========= (3) The Company has an agreement with a bank which provides for a total unsecured line of credit of $12,000,000 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, 1999, unless otherwise amended or extended. (4) In September 1992, an incentive 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 October 31, 1997, options to purchase 539,000 shares at prices ranging from $5.125 to $10.75 per share were outstanding. As of October 31, 1997 options to purchase 63,000 shares had been exercised and options to purchase 246,400 shares were exercisable. In November 1992, March 1993 and September 1996, the Company granted to four non-employee directors of the Company and the Company's outside general counsel five year options to acquire a total of 150,000 shares of the Company's common stock at prices ranging from $6.94 to $11.25 per share. In fiscal 1998, 30,000 of these outstanding options were cancelled in accordance with the terms of the plan. As of October 31, 1997, none of these options had been exercised and options to purchase 96,000 shares were exercisable. The Company has adopted the disclosure-only provisions of SFAS No. 123, and applies APB Opinion 25 in accounting for its plans and, accordingly, cost for stock option plans and stock purchase plans in its financial statements. Had the Company determined compensation cost based on the fair value at the grant date consistent with the provisions of SFAS No. 123, the Company's net earnings would have been reduced to the pro forma amounts indicated below: (In thousands, except per share amounts) Quarter ended: 10/31/97 10/31/96 -------- -------- Net earnings as reported $ 945 $ 1,014 Net earnings pro forma 904 989 Net earnings per share as reported .30 .30 Net earnings per share pro forma .29 .29 Six months ended: 10/31/97 10/31/96 -------- -------- Net earnings as reported $ 1,614 $ 1,979 Net earnings pro forma 1,532 1,929 Net earnings per share as reported .51 .55 Net earnings per share pro forma .48 .54 (5) In July of 1997, the Company announced an open market repurchase plan providing for the repurchase of up to 300,000 shares of the Company's common stock. As of October 31, 1997, 84,800 shares had been purchased under the plan. (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 October 31, 1997, working capital amounted to $14.9 million reflecting a current ratio of 3.4 compared to working capital of $15.0 million and a current ratio of 3.9 as of April 30, 1997. The Company's financial condition remains strong. The Company has a $12 million unsecured line of credit with a bank, of which $6 million was scheduled to expire in October 1997 and $6 million in October 1998. During the current quarter, the agreement was amended to extend the expiration dates to October 1998 and 1999. The line of credit has not been used during the current fiscal year. Management believes that the Company's working capital together with internally generated funds and its bank line of credit are sufficient to finance the Company's operating needs and future capital requirements. Results of Operations Revenues for the three month period ending October 31, 1997 were $20,068,000 compared to revenues of $17,168,000 for the comparable prior year period. Fiscal 1998 six month revenues totaled $38,215,000 versus six month revenues of $34,616,000 for the prior fiscal year. The increase in revenues was the result of increased unit volume offset by declining average selling prices for the Company's products reflecting a decrease in the price of dynamic random access memory chips (DRAMs)which are the primary raw material in memory boards. Total units shipped have increased by approximately 44% in this year's second quarter, versus the second quarter last year. Cost of sales for the second quarter and six months of fiscal 1998 were 77% and 79%, respectively of revenues versus 78% and 79% for the same prior year periods. Prices for the sixty four and sixteen megabit DRAM continued to decline during the quarter. To minimize the impact of the changes in raw material values, the Company has maintained tight control over inventory levels, while still meeting customer delivery requirements. Engineering and development costs in fiscal 1998's second quarter and six months were $301,000 and $525,000, respectively versus $249,000 and $479,000 for the same prior year periods. 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 six months increased to 14% of revenues from 13% and 11%% for the same prior year periods. Three month total expenditures increased by $896,000 from the comparable prior year period. Six month selling, general and administrative costs increased by $1,343,000 in fiscal 1998 versus fiscal 1997. These increases are primarily attributable to legal expenses incurred related to a Complaint filed by Sun Microsystems, Inc. Additionally, the Company has continued to strategically add to its sales department this year to accelerate our ability to service new and existing customers. Other income (expense),net for the second quarter and six months of fiscal 1998 and 1997 consisted primarily of interest income on short term investments. PART II: OTHER INFORMATION ITEM 5. EXHIBITS AND REPORTS ON FORM 8-K A. Exhibits 27 (a). Financial Data Schedule 99 (a). Press Release reporting results of Second Quarter, Fiscal Year 1998 (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 MARK E. MADDOCKS Date: December 8, 1997 By:_____________________________________ Mark E. Maddocks Vice President, Finance (Principal Financial Officer)
EX-27 2
5 6-MOS APR-30-1998 OCT-31-1997 7,395,644 0 10,471,276 647,000 3,242,908 21,028,379 8,720,959 5,711,832 24,044,886 6,177,171 0 0 0 2,965,605 13,889,110 24,044,886 38,215,027 38,215,027 30,037,758 30,037,758 524,967 172,992 0 2,605,128 991,000 1,614,128 0 0 0 1,614,128 .51 .51
EX-99 3 FOR IMMEDIATE RELEASE CONTACT: Mark Maddocks Vice-President, Finance Telephone: (609) 799-0071 DATARAM REPORTS SECOND QUARTER FISCAL 1998 OPERATING RESULTS PRINCETON, NJ, November 12, 1997 -- Dataram Corporation (AMEX: DTM) Benefiting from sustained strong volume in the UNIX and windows NT workstation and server memory market and strong demand for new product introductions, Dataram Corporation achieved higher revenues and solid earnings for the second quarter of fiscal 1998, Robert V. Tarantino, president and chief executive officer, announced today. For the second quarter ended October 31, 1997, Dataram reported revenues of $20.1 million compared to $17.2 million for the year earlier period. Net earnings were $945,000, or $.30 per share, versus $1,014,000, or $.30 per share, for last year's comparable quarter. For the six months ended October 31, 1997, Dataram reported revenues of $38.2 million compared to $34.6 million for the year earlier period. Net earnings were $1,614,000, or $.51 per share, versus $1,979,000, or $.55 per share for the comparable prior year period. Continued.... Dataram Earnings Release - Page 2 Operating results for the current quarter include approximately $500,000 in legal expense related to the Company's litigation with Sun Microsystems, Inc. "While the Company continues to incur legal expenses that it did not incur in the prior comparable periods, our profitable growth has enabled us to absorb these costs," Tarantino stated. "We will continue our strong defense against Sun's patent claims which we regard as overreaching. At the same time, we will vigorously pursue our antitrust, product disparagement and business interference counterclaims under which Dataram is seeking both compensatory and punitive damages as well as reimbursement of attorneys fees and other legal costs." "We increased revenues in spite of reduced product selling prices resulting from a decline in the price of DRAM chips," Tarantino said. Average unit selling prices have declined approximately 20% year over year. "Our market -- high performance workstations and servers -- continues to offer profitable opportunities for the Company's broadening array of memory products." "During the quarter, we continued the expansion of our sales team" he stated. "In addition, we increased capacity at our domestic manufacturing facility and establishing a distribution facility in the United Kingdom to cost efficiently accommodate increased European Community demand. These expenditures are an integral part of our strategy to maximize the many opportunities available to us in our growing market." Continued.... Dataram Earnings Release - Page 3 An expanded sales force is rapidly increasing Dataram's customer base in U.S. and foreign markets, Tarantino remarked. Higher volume, combined with economies of scale achieved at the Company's automated manufacturing facility, has improved margins. Dataram also has benefited from being "first to market" with several products, he added. Tarantino announced that, during the quarter, the Company signed a licensing agreement with Silicon Graphics (SGI) to manufacture memory upgrades for certain SGI high performance servers and workstations. "This is an important step in our continuing efforts to further broaden the customer base for our high-end computer memory products." Tarantino said the Company maintained its solid financial condition, with strong operating cash flow, no debt and an unsecured $12 million line of credit. In continuing efforts to enhance shareholder value, the Company, as of October 31, 1997, has repurchased 84,800 of the 300,000 shares of Dataram common stock authorized by the Board of Directors in July, 1997. The purchases were financed from operating cash flow. "I'm confident that Dataram will sustain its momentum and achieve solid operating gains for the remainder of fiscal 1998," Tarantino concluded. Dataram develops, manufactures and markets gigabyte memory boards for high performance workstations and servers. Continued.... Dataram Earnings Release - Page 4 Dataram Corporation and Subsidiary Consolidated Summary Information (In thousands except per share amounts) Quarter Ended Six Months Ended October 31 October 31 1997 1996 1997 1996 _______ _______ _______ ______ Revenues $20,068 $17,168 $38,215 $34,616 Net Earnings $945 $1,014 $1,614 $1,979 Net Earnings Per Share $.30 $.30 $.51 $.55 Average Shares Outstanding 3,134 3,422 3,162 3,594 -----END PRIVACY-ENHANCED MESSAGE-----