Dataram: Fiscal 3Q11 Financial Results

Dataram Corporation reported its financial results for its fiscal third quarter and nine months ended January 31, 2011.

Revenues for the third quarter and first nine months of fiscal 2011 were $11.9 million and $35.6 million, respectively, which compares to $12.3 million and $32.1 million for the comparable prior year periods. The Company incurred a pre-tax net loss for the third quarter of the current fiscal year of $0.8 million which compares to a pre-tax net loss of $1.3 million for the comparable prior year period. Nine month pre-tax net loss totaled $3.8 million versus $5.5 million for the comparable prior year period.

John H. Freeman, Dataram’s president and CEO commented:"The release schedule and development of our XcelaSAN product line is on track. We have completed our coding and testing of High Availability functionality. Systems with High Availability functionality are shipping to customers this quarter."

Walker Blount, a storage systems analyst at Web-Feet Research, a memory and storage research firm said:" The subtle beauty of the Dataram XcelaSAN Model 100 is mid-level enterprise users have the most cost-effective and true plug-and-play fast storage appliance (450,000 IOPS), resulting in ease of integration for existing enterprise architectures. It can be up and running in less than two hours in a Fibre Channel server system. Users are looking for solutions that are easy to implement and that provide real cost savings – XcelaSAN delivers on both."

Mr. Freeman continued:" In the third quarter, our revenues and gross margin recovered from the decline we experienced in our second quarter and were in line with our expectations. Nonetheless, we are proceeding with our plan to improve profitability and minimize the impact of periodic downward market fluctuations. We will complete the consolidation of our manufacturing facilities by the end of the current fiscal year and have already reduced our S, G & A expenses in our memory solutions business. We project continued growth in our memory solutions business. Our actions should position this business unit to operate more profitably at current revenue levels."

The Company’s net loss for the third quarter was $0.8 million, or $0.09 per share which compares to a net loss of $6.5 million, or $0.73 per share for the comparable prior year period. Nine month net loss totaled $3.8 million versus $9.1 million for the prior comparable period. In the third quarter of the current fiscal year the Company’s XcelaSAN development project met the accounting requirements of having established technological feasibility, and accordingly, the Company capitalized approximately $0.8 million of XcelaSAN development costs. The net loss for the prior year three and nine months comparable periods includes income tax expense of $5.3 million and $3.6 million, respectively, and is comprised of a valuation allowance the Company placed on its deferred income tax assets.

Mr. Freeman concluded:" We have taken the necessary actions to ensure that our memory solutions business is profitable and growing. Our outlook for XcelaSAN is strong, particularly as High Availability functionality is now a reality."