Dataram: Fiscal 2Q10 Financial Results

Dataram Corporation reported its financial results for its fiscal second quarter ended October 31, 2009.

Revenues for the second quarter were $10.7 million, which compares to $7.1 million for the comparable prior year period. Revenues for the first six months of the current fiscal year were $19.9 million, which compares to $14.6 million for the comparable prior year period. The Company’s recently acquired Micro Memory Bank business unit generated approximately $3.6 million and $6.5 million in revenues, respectively, in the second quarter and first six months of the current fiscal year versus nil in the prior fiscal year.

John H. Freeman, Dataram’s president and CEO, commented: “During our fiscal second quarter, we have seen demand increase as the economy recovers from the worldwide financial crises. Our memory solutions business has improved performance to the point where it is operating at a near cash break even level. I am confident that our sales and marketing strategy will drive further profitable growth. The price of memory has been volatile and we are seeing significant price increases. The upward pricing was based on consolidation of manufacturers, reduced production by manufacturers and increased demand. We expect that memory pricing will continue to increase at a slower pace and in a less volatile manner.”

Mr. Freeman continued: “We recently announced at the Storage Networking World trade show, a unique intelligent SAN optimization solution, XcelaSAN. XcelaSAN is the industry’s first solution to deliver substantive application performance improvement to existing applications such as Oracle, SQL, Exchange and VMware. XcelaSAN augments existing storage systems by transparently applying intelligent caching algorithms that serve the most active block-level data from high-speed solid state storage, creating an intelligent, virtual solid state SAN. This breakthrough solution allows organizations to dramatically increase the performance of their existing business-critical applications without the costly hardware upgrades or over-provisioning of storage typically found in current solutions for increased performance. This product launch supports our corporate strategy to deliver data center solutions that optimize performance, leverage existing IT investments, and make measurable reductions in the total cost of ownership associated with these assets. On a limited basis this product is currently being shipped in our fiscal third quarter to select early install clients. We expect the product to be generally available early in 2010. Over the past 18 months, the Company has made significant investments in research and development, primarily associated with the development of this product. In the second quarter and first six months of the current fiscal year, we incurred approximately $1.6 million and $2.5 million, respectively of total expense in that area which compares to approximately $254,000 and $466,000 in the comparable prior year periods. Current year second quarter expenditures include approximately $402,000 of non-recurring expense related to the development of this product. We anticipate our third quarter research and development costs to be less than $1.0 million.”

The Company incurred a net loss for the second quarter of the current fiscal year of $1.6 million, or $0.18 per diluted share, which compares to a net loss of $393,000, or $0.04 per diluted share for the comparable prior year period. Current fiscal year six months net loss totaled approximately $2.6 million, or $0.29 per diluted share, which compares to an approximate net loss of $999,000, or $0.11 per diluted share in same prior year period. Last fiscal year’s six months net loss included a charge to selling, general and administrative expense of approximately $716,000 related to a retirement agreement entered into with the Company’s former chief executive officer.

Mr. Freeman concluded: "Our financial condition remains strong. Our current ratio is 3.8 and our book value is $2.13 per share. I look forward to reporting on our progress next quarter."