Dataram: Fiscal 3Q10 Financial Results

Dataram Corporation reported its financial results for its fiscal third quarter ended January 31, 2010.

Revenues for the third quarter were $12.3 million, which compares to $5.6 million for the comparable prior year period. Revenues for the first nine months of the current fiscal year were $32.1 million, which compares to $20.3 million for the comparable prior year period. The Company’s recently acquired Micro Memory Bank business unit generated approximately $3.6 million and $10.1 million in revenues, respectively, in the third quarter and first nine months of the current fiscal year versus nil in the prior fiscal year.

John H. Freeman, Dataram’s president and CEO commented: “We continued to grow our memory solutions business in our fiscal third quarter. This was accomplished in what has typically been a seasonally weak quarter in our industry. The implementation of our sales and marketing strategy is having a positive effect on demand for our products and our memory business has returned to being cash profitable. We have more work to do in this area and I am confident that as we continue the implementation of our strategy, we will drive further profitable growth in our memory business. Over the last nine months, the price of memory has been volatile and we have seen significant price increases. The upward pricing was driven by consolidation of manufacturers and reduced production by manufacturers coupled with increased demand. In our fiscal third quarter, memory pricing was more stable. During the period of rising prices, the Company made several purchases of inventory at favorable pricing. We expect that memory pricing will be stable or increase slightly in our fiscal fourth quarter. Our current inventory level is sufficient to support further growth and we expect our memory inventory level to stabilize or decline somewhat from current levels in the fourth quarter.”

Mr. Freeman continued: “As we have previously reported, the Company has announced a unique intelligent Storage Area Network (SAN) optimization solution, XcelaSAN. XcelaSAN is the industry’s first solution to deliver substantive application performance improvement to applications such as Oracle, SQL 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 business-critical applications without the costly hardware upgrades or over-provisioning of storage typically found in current solutions for increased performance. Over the past 24 months, the Company has made significant investments in research and development, primarily associated with the development of this product. XcelaSAN performance in customer environments continues to be excellent and customer interest remains very strong. We have begun shipping units to selected clients and single unit systems are currently available for sale. High Availability systems are expected to be available for sale later this year. We are continuing our investments in XcelaSAN by developing operational enhancements with our clients based on their feedback during early XcelaSAN installations. As we continue the development of our XcelaSAN product, we understand that we will require additional financial resources. Subsequent to the conclusion of our third quarter, we are entering into other financing agreements which should provide us with sufficient liquidity to meet our operating needs as XcelaSAN sales grow.”

The Company incurred a net loss for the third quarter of the current fiscal year of $769,000, or $0.09 per diluted share, which compares to a net loss of $1,024,000, or $0.12 per diluted share for the comparable prior year period. Current fiscal year nine months net loss totaled approximately $3.4 million, or $0.38 per diluted share, which compares to an approximate net loss of $2.0 million or $0.23 per diluted share in the same prior year period.

Mr. Freeman concluded: “The turnaround of our memory solutions business is on track. It is profitable and has been growing for each of the last three quarters. Our storage product has been introduced, is available for sale and planned enhancements are underway. I look forward to reporting on our progress next quarter.”