Dataram: Fiscal 4Q11 Financial Results

Dataram Corporation reported its financial results for its fiscal fourth quarter and year ended April 30, 2011.

Revenues for the fourth quarter and fiscal year ended April 30, 2011 were $11.3 million and $46.8 million, respectively, which compares to $11.9 million and $44.0 million for the comparable prior year periods.

The company’s incurred a pre-tax net loss for the fourth quarter of the current fiscal year of $0.8 million which compares to a pre-tax net loss of $1.6 million for the comparable prior year period. Fiscal year ended April 30, 2011 pre-tax net loss totaled $4.6 million versus $7.1 million for the comparable prior year.

John H. Freeman, Dataram’s president and CEO commented: "In fiscal 2011, our memory solutions business grew to $46.8 million. During the fiscal year, we continued our integration of MMB and our traditional memory business. In March, 2011, we completed the consolidation of our two manufacturing facilities and reduced our expenses by approximately $1.2 million annually as a result. The memory business is now operating profitably."

Mr. Freeman continued: "In the fourth quarter, we continued to invest in XcelaSAN development, quality assurance and testing. During this period, we successfully introduced and incorporated high availability functionality into the product which is unique in the industry and addresses a key customer requirement for storage. The product is currently installed and being evaluated for purchase at selected customer sites. XcelaSAN continues to provide significant performance improvements over traditional solutions at dramatically less cost. Many clients are reconsidering traditional computing paradigms requiring major technology refreshes every several years. Instead we have seen our clients seek out solutions which optimize the performance and extend the useful life of existing IT assets. By doing so, our clients realize substantial reductions in computing costs, eliminate business risks associated with the introduction of new technology, and avoid substantial resource overhead required to implement these new IT assets. We believe the timing of introducing XcelaSAN into the market is ideal as it provides exponential optimization of storage assets while also extending their useful life. In addition, as our clients deploy ‘tiered’ storage architectures designed to store data in the most logical and economical repository, XcelaSAN represents a critical component in leveraging and supporting that strategy."

The company’s net loss for the fourth quarter was $0.8 million, or $0.09 per share which compares to a net loss of $1.6 million, or $0.18 per share for the comparable prior year period. Fiscal year ended April 30, 2011 net loss totaled $4.6 million versus $10.7 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 $1.5 million of XcelaSAN software development costs in fiscal 2011 versus nil in fiscal 2010. The prior year net loss includes income tax expense of $3.6 million, and is comprised of a valuation allowance the company placed on its deferred income tax assets.

Mr. Freeman concluded: "We are investing in sales and marketing infrastructure for the XcelaSAN product line as well as research and development for future generations of the product. We recognized that we required external financing to continue these investments. On May 17, 2011, the company and certain investors closed a securities purchase agreement pursuant to which the company agreed to sell an aggregate of 1,775,000 shares of its common stock and warrants to purchase a total of 1,331,250 shares of its common stock to such investors. The aggregate net proceeds of such offering and sale, after deducting fees to the Placement Agent and other estimated offering expenses payable by the company, was approximately $3.0 million. 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."