Dataram Reports Second Quarter Fiscal 2006 Financial Results; Board of Directors Declares Regular Quarterly $0.05 Per Share Dividend.PRINCETON Princeton, borough (1990 pop. 12,016) and surrounding township (1990 pop. 13,198), Mercer co., W central N.J.; settled late 1600s, borough inc. 1813, township est. 1838. A leading education center, it is the seat of Princeton Univ. , N.J. -- Dataram Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : DRAM) today reported its financial results for its fiscal second quarter ended October October: see month. 31, 2005. Revenues for the second quarter of the current fiscal year were $9.9 million, which compares to $20.3 million for the second quarter of the prior fiscal year and $13.9 million in this year's first quarter. Last year's fiscal second quarter and this year's first quarter included approximately $8.4 million and $3.2 million, respectively of revenues from shipments to a single OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and customer. In the second quarter of this fiscal year, the Company derived no revenues from shipments to that customer. Revenues for the first six months of the current fiscal year were $23.8 million versus $36.1 million for the comparable prior year period. Prior year revenues included approximately $14.1 million in revenue derived from shipments to the same customer. This customer has been undergoing a restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). of their business including reducing their procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. costs for goods and services In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility (unless the "good" is a "bad"). It is often used when referring to a Goods and Services Tax. . Consequently, the Company only competes for their business on a selective basis making it uncertain whether the Company will be receiving or accepting new orders from this customer in the near future. Earnings before income taxes were $565,000 compared to $1.5 million for the first quarter of the current fiscal year and $1.6 million for the second quarter of the previous fiscal year. Net earnings for the second quarter were $352,000 or $0.04 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share. This compares to net earnings of $931,000 or $0.11 per diluted share for the first quarter of the current fiscal year and $1.5 million or $0.17 per diluted share for last year's second quarter. Earnings in the second quarter of last fiscal year were taxed at an effective rate of 6.5%, while the Company's effective tax rate for financial reporting purposes in fiscal 2006 is approximately 37.5%. For the first six months of the current fiscal year, the Company's net earnings totaled $1.3 million or $0.15 per diluted share compared to net earnings of $2.7 million or $0.29 per diluted share for the comparable prior year period. The Company has net operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. (NOL NOL - Never Offline ) carryforwards Carryforwards Tax losses allowed to be applied to offset future income in some specified number of future years. totaling approximately $10.8 million and the Company will continue to make cash payments for income taxes at an approximate rate of 6.5% of pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern earnings until it utilizes all of its NOL carryforwards. Utilizing the Company's current effective tax rate of 37.5%, comparable diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of were $0.11 and $0.19, respectively for the second quarter and six months of last fiscal year. A reconciliation of GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). to comparable net earnings and comparable diluted earnings per share for the second quarter and six months of last fiscal year is presented in the following table:
(In 000s except
per share amounts) Quarter Ended Six Months Ended
----------------------------------------------------------------------
Oct. 31 Oct. 31 July 31 Oct. 31 Oct. 31
2005 2004 2005 2005 2004
----------------------------------------------------------------------
Earnings before income taxes $565 $1,632 $1,489 $2,055 $2,880
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Income tax expense as
reported 213 106 558 771 187
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Adjustment to income tax
expense(1) 0 506 0 0 893
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Comparable income tax
expense(1) 213 612 558 771 1,080
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Comparable net earnings(1) $352 $1,020 $931 $1,284 $1,800
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Comparable diluted EPS(1) $0.04 $0.11 $0.11 $0.15 $0.19
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(1)Assumes comparable effective tax rate of 37.5%.
Gross margins during the second quarter were approximately 30 percent, which compares to approximately 30 percent in the first quarter and compares to approximately 22 percent for the second quarter of the prior fiscal year. Margins have been higher than the Company's historical norm and reflect a higher than normal shipment percentage of larger capacity memory, which typically command higher margins. The Company considers 25 percent gross margins with quarterly fluctuations of as much as 3 percent to be normal. The Company's backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. at the end of the second quarter was $770,000 compared to $1.5 million at the end of the previous quarter. During the second quarter, the Company paid approximately $421,000 in cash dividends. Nevertheless, the Company's cash and cash equivalents has increased to $12.7 million from $10.5 million at the end of the first quarter and $9.3 million at the beginning of the fiscal year. As of October 31, 2005, there were 8,465,146 common shares outstanding. Robert V. Tarantino, Dataram's chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. commented, "Our business model and current cost structure allow us to operate profitably, even in a down quarter. We generated significant cash flow from operating activities in the second quarter and expect our quarterly operating results to improve as we move forward. Today, the Company's board of directors approved a $0.05 per share regular quarterly dividend. The dividend will be payable on December 14, 2005, to shareholders of record as of November 30, 2005." As announced in a press release dated November 9, 2005, Dataram will conduct a conference call today at 4:30 p.m. (EST EST electroshock therapy. EST abbr. electroshock therapy ) to present its second quarter financial results and to respond to investor questions. Interested shareholders may participate in the call by dialing 800-263-9160 and providing the following reservation number: 21268898. It is recommended that participants call 10 minutes before the conference call is scheduled to begin. The conference call can also be accessed over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the through Vcall at www.vcall.com. A replay of the call will be available approximately one hour after the completion of the conference call through Vcall and for 24 hours Adv. 1. for 24 hours - without stopping; "she worked around the clock" around the clock, round the clock by dialing 800-633-8284 or 402-977-9140 and entering the reservation number listed above. USE OF NON-GAAP MEASURES Management believes that "comparable" net earnings and "comparable" diluted earnings per share, which are non-GAAP measurements, are meaningful to investors because they provide a view of the Company with respect to ongoing operating results. These results exclude significant charges or credits which are important to an understanding of the Company's overall operating results in the period presented. Such non-GAAP measurements are not recognized in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP) and should not be viewed as an alternative to GAAP measures of performance. A reconciliation of GAAP measurements to non- non- word element [L.]not . non- pref. Not: noninvasive. GAAP has been presented in this press release. ABOUT DATARAM CORPORATION Dataram is a worldwide leader in the design and manufacture of high capacity, reliable and innovative memory solutions. With over 38 years of experience, Dataram provides customized memory solutions for OEMs and compatible memory for leading brands including HP, Dell, IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) , SGI (SGI, Sunnyvale, CA, www.sgi.com) A manufacturer of workstations and servers, founded in 1982 by Jim Clark. The company was founded as Silicon Graphics, Inc., but changed to its acronym in 1999. , Sun Microsystems Sun Microsystems, Inc. (NASDAQ: JAVA[3]) is an American vendor of computers, computer components, computer software, and information-technology services, founded on 24 February 1982. and Intel. For more information about Dataram, visit www.dataram.com The information provided in this press release may include forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , filed with the Securities and Exchange Commission, which can be reviewed at http://www.sec.gov.
DATARAM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
(In thousands, except per share amounts)
(Unaudited)
Second Quarter Ended Six Months Ended
October 31, October 31,
-------------------- --------------------
2005 2004 2005 2004
Revenues $9,858 $20,322 $23,802 $36,114
Costs and expenses:
Cost of sales 6,886 15,816 16,632 27,557
Engineering and
development 293 312 559 631
Selling, general and
administrative 2,282 2,575 4,775 5,123
---------- -------- ----------- --------
9,461 18,703 21,966 33,311
---------- -------- ----------- --------
Earnings from operations 397 1,619 1,836 2,803
Other income 168 13 219 77
---------- -------- ----------- --------
Earnings before income taxes 565 1,632 2,055 2,880
Income tax provision 213 106 771 187
---------- -------- ----------- --------
Net earnings $352 $1,526 $1,284 $2,693
========== ======== =========== ========
Net earnings per share:
Basic $0.04 $0.18 $0.15 $0.31
========== ======== =========== ========
Diluted $0.04 $0.17 $0.15 $0.29
========== ======== =========== ========
Weighted average number of
shares outstanding:
Basic 8,441 8,599 8,411 8,581
========== ======== =========== ========
Diluted 8,941 9,216 8,829 9,265
========== ======== =========== ========
DATARAM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
October 31, 2005 April 30, 2005
ASSETS
Current assets
Cash and cash equivalents $12,710 $9,281
Trade receivables, net 5,052 8,397
Inventories 1,980 2,369
Deferred income taxes 2,191 3,258
Other current assets 330 130
---------------- ----------------
Total current assets 22,263 23,435
Deferred income taxes (non-current) 1,130 630
Property and equipment, net 1,784 2,028
Other assets 60 54
---------------- ----------------
Total assets $25,237 $26,147
================ ================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $1,404 $2,528
Accrued liabilities 933 1,438
---------------- ----------------
Total current liabilities 2,337 3,966
Stockholders' equity 22,900 22,181
---------------- ----------------
Total liabilities and stockholders'
equity $25,237 $26,147
================ ================
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