Dataram Reports Fourth Quarter and Fiscal Year 2016 Financial Results

- Sharpening Focus on International Growth and Revenue Generation in Challenging Memory Market

PRINCETON, N.J., Aug. 2, 2016 — (PRNewswire) —  Dataram Corporation (NASDAQ: DRAM), an independent manufacturer of memory products and provider of performance solutions, on July 29, 2016 reported its financial results for the fourth quarter and fiscal year ended April 30, 2016.

"While our efforts in 2016 built on the financial and operational initiatives established in 2015 to turn around and transform the memory business, we continue to face challenging and hypercompetitive conditions in the memory market," said Dataram Chairman and CEO Dave Moylan. "As before, we continue to take actions to address the current environment and strengthen business, and are implementing initiatives that continue to reduce costs and increase operating efficiencies while expanding our footprint and diversifying our business through acquisitions."

Financial Highlights:

  • Revenues for the fourth quarter were $5.2 million, down 7.4% compared to $5.6 million for the same period prior year
  • Revenues for the fiscal year ended April 30, 2016 were $25.2 million, down 11% compared to $28.3 million for the same period prior year
  • Prior-year revenues include revenues of $1.9 million from a discontinued product line
  • The Company reported a net loss of $0.7 million for the fourth quarter, which compares to net loss of $0.9 million in the comparable prior-year period
  • Net loss for the fiscal year ended April 30, 2016 totaled $1.2 million which compares to $3.8 million in the comparable prior year period. Prior-year net loss included expenses for amortization of debt discount of $750,000 thousand recorded as interest expense
  • On July 29, 2016, the Company filed its annual report on Form 10-K for its fiscal year ended April 30, 2016

Mr. Moylan continued, "In 2016, part of growth strategy centered on increasing international sales volume.  International revenue increased approximately 10% and shipments more than 40% during the reporting period.  We continued to strengthen our global footprint and increase brand awareness while expanding our distribution channels and partner network both domestically and internationally."

Even with international growth, Dataram's global revenues decreased slightly even after reflecting the revenue loss associated with the exit of the unprofitable consumer business and the pull back from the non-core brokering business.   The primary driver is that while the Company's overall unit shipments increased more than 35%, the average selling price for these shipments decreased more than 40% during the same period.  

The Company's operational and financial improvements over the last 18 months have helped reduce annual cash operating costs more than $4.5 million.  Of the $1.2 million loss in 2016, approximately $746,000 was due to stock based expenses and $166,000 was due to uncollectable receivables.   In January 2016, the Company eliminated nearly $680,000 in debt and an associated 8% note obligation and exchanged the Series A shares for Series B shares to extinguish the 8% preferred Series A dividend and anti-dilution protection in the Preferred Series A agreements.

On June 14, 2016, Dataram announced an agreement to acquire all of the outstanding shares of U.S. Gold Corp ("USGC") and USGC subsidiaries. USGC is a U.S.-focused gold exploration and development company advancing two high potential projects in mining friendly Nevada and Wyoming. Dataram believes that the acquisition will notably strengthen the balance sheet and working capital as well as improve the memory business margins through sharing of public company costs across business and reduction of duplicate costs. Additionally, the transaction is an all equity transaction and "turn-key" in that USGC has seasoned management team in place to execute. Closing of the acquisition of USGC is subject to usual and customary conditions, including the approval of shareholders.

Mr. Moylan concluded, "In 2017, we will continue our focus on improving the memory business while evaluating acquisitions to diversify the Company's business, reduce costs, and our increase portfolio of assets across sectors.  We will continue to pursue high-value opportunities with compelling value propositions while making and managing risk/reward tradeoffs.  We look forward to providing our shareholders updates to the closing of the USGC acquisition and believe this will significantly benefit our shareholders and future investors."

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

DATARAM CORPORATION and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)






Fourth Quarter Ended

April 30,


Twelve Months Ended

April 30,


2016


2015


2016


2015









Revenues

$     5,189


$   5,603


$   25,182


$   28,258









Costs and expenses:








      Cost of sales

4,383


4,874


20,464


24,068

      Engineering and development

56


192


191


767

      Selling, general and administrative

1,324


1,319


5,021


6,158

      Stock-based compensation expense*

80


5


746


14


5,843


6,390


$   26,422


$   31,007

Loss from operations

(654)


(787)


(1,240)


(2,749)

Other income (expense)

(17)


(107)


(168)


(1,077)

Loss before income taxes

(671)


(894)


(1,408)


(3,826)

Gain on sale of state NOL, (tax expense)

(3)


-


187


(3)

Net loss

$      (674)


$    (894)


$   (1,221)


$   (3,829)









Net loss per share:








       Basic **

$     (0.42)


$   (0.97)


$     (0.97)


$     (4.53)

Weighted average number of shares








outstanding:








       Basic **

1,624


925


1,255


846


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