Dataram Reports Fiscal 2016 Third Quarter and 9-Month Financial Results

Company records profit of approximately $119,000 in first 9 months of year before non-cash stock compensation and preferred dividends

PRINCETON, N.J., March 16, 2016 — (PRNewswire) — Dataram Corporation (NASDAQ: DRAM), a leading independent manufacturer of memory products and provider of performance solutions, reported its financial results for the three and nine months ended January 31, 2016. 

Mr. Dave Moylan, Dataram's Chairman and Chief Executive Officer, stated, "In January we worked with investors to convert nearly $700,000 in 8% debt and accrued interest to equity, contributing to an increase in the Company's current ratio from 1.2 at fiscal year ended April 30, 2015 to 1.6 at January 31, 2016. The Company also exchanged the Preferred Series A shares for Preferred Series B shares, eliminating the 8% dividend associated with the Preferred Series A shares.  Our cash balance on January 31, 2016 of approximately $701,000 and shareholder equity of approximately $3.5 million reflects Dataram's improved financial strength."

Revenues for the three and nine months ended January 31, 2016 were $6.6 million and $20.0 million, respectively, which compares to $8.1 million and $22.7 million for the comparable prior year periods. The decline in revenues for the three and nine months ended January 31, 2016 was attributable to management's decision to discontinue an agreement to manufacturer an OEM branded line of consumer memory and also a decline in average selling prices.  Average selling prices have declined over 20% in the last 12 months as cost of raw material has declined due to oversupply.  The OEM branded consumer memory agreement was not profitable and did not align with the corporate strategy. 

The Company's operating income for the first nine months of fiscal 2016 was approximately $119,000 before recording non-cash expenses of approximately $666,000 in stock based expenses and approximately $122,000 of preferred dividend expense.  After recording these, the Company posted a net loss of $669,000. This compares to a net loss for the nine months ended January 31, 2015 of approximately $4.6 million, which included non-cash charges of $1.6 million for preferred dividends and $750,000 of interest expense for amortization of debt discount.  At the end of Q3 FY16, the Company had approximately $701,000 in cash and $3.5 million in stockholder equity as compared to approximately $327,000 in cash and $2.1 million in stockholder equity for the prior fiscal year ended April 30, 2015.

"During the last quarter, management introduced customized pricing and upgrade programs, broadened our solutions to align with emerging needs, and continued our geographic expansion in both Europe and Asia," continued Moylan.  "Revenue in the Europe has grown nearly 35% when comparing the third quarter of this fiscal year to last year's third quarter. We have also identified and are now pursuing acquisitions candidates that will provide significant growth to our emerging business segments."

***** Financial Tables Follow *****

 

DATARAM CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)






Third Quarter Ended

January 31,


Nine Months Ended

January 31,


2016


2015


2016


2015









Revenues

$6,603


$8,051


$19,992


$22,655









Costs and expenses:








      Cost of sales

5,298


6,846


16,081


19,194

      Engineering and development

35


258


135


575

      Selling, general and administrative

1,285


1,532


3,696


4,834

      Stock-based compensation expense*

394


5


666


14


7,012


8,641


20,578


24,617

Loss from operations

(408)


(590)


(586)


(1,962)

Other expense

(42)


(78)


(151)


(970)

Loss before income taxes

(450)


(668)


(737)


(2,932)

Income tax expense (benefit)

-


-


(190)


3

Net loss

$ (450)


$ (668)


$ (547)


$ (2,935)

      Less preferred stock dividends

-


1,628


(122)


1,628

Net loss allocated to common shareholders

$ (450)


$ (2,296)


$ (669)


$  (4,563)









Net loss per share:








       Basic

$  (0.11)


$ (0.90)


$ (0.19)


$ (1.85)

       Diluted

$  (0.11)


$ (0.90)


$ (0.19)


$ (1.85)

Weighted average number of shares








outstanding:








       Basic

4,219


2,565


3,479


2,462

       Diluted

4,219


2,565


3,479


2,462


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