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posted on 20 February 2008 12:21

PRINCETON, N.J.--(BUSINESS WIRE)--Dataram Corporation (NASDAQ: DRAM - News) today reported its financial results for its fiscal third quarter and nine months ended January 31, 2008.

Net earnings for the third quarter of the current fiscal year were $233,000, or $0.03 per diluted share, which compares to a net loss of $298,000, or $0.03 per diluted share for the third quarter of the prior fiscal year. Net earnings for the first nine months of the current fiscal year were $1,208,000, or $0.14 per diluted share, which compares to net earnings of $1,079,000, or $0.12 per diluted share for the comparable prior year period. Prior year nine months net earnings included a one-time payment of $2.3 million from a DRAM manufacturer related to a settlement agreement. The Company’s earnings from operations for the third quarter and first nine months of the current fiscal year totaled $214,000 and $1,307,000, respectively, and compares to operating losses of $684,000 and $1,151,000 for the comparable prior year periods.

Revenues for the third quarter and first nine months of the current fiscal year were $6.7 million and $23.8 million, respectively, which compares to $9.4 million and $29.6 million for the comparable prior year periods.

Robert V. Tarantino, Dataram’s chairman and CEO commented, “While we experienced typical seasonal slowness in our third quarter, our year over year performance continues to improve. Our third quarter and year to date operating earnings and net earnings met our planned profit objectives and our operating earnings have improved significantly over last fiscal year’s loss levels.”

Mr. Tarantino continued, “Our third quarter revenues reflected a seasonal decline in business from some of our key customers. This was not unusual and we expect to experience the typical improvement in our business level with these customers in our fiscal fourth quarter. Additionally, our revenues this entire fiscal year have been adversely impacted by reductions in our selling prices as a result of the well-publicized decline in the price of DRAM chips, the primary raw material in our products. Typically, the average selling price (ASP) of DRAMs decline by approximately 25 percent per year. Industry reports estimate the industry decline in ASP to be 31 percent in the last quarter alone. Over the last twelve months, the Company’s purchase price of the DRAMs used in our products has declined by approximately 50 percent. This has resulted in a much larger than anticipated reduction in our selling prices as we passed our cost savings through to our customers. The DRAM market is a volatile, global commodity market and we have no control over the price dynamics of that market. We do see signs that the rate of price decline of DRAMs is abating and are hopeful that the recent price trends we have seen will continue.”

The Company’s operating expenses for the third quarter and first nine months of the current fiscal year totaled $2,430,000 and $7,616,000, respectively, and compare to operating expenses of $2,545,000 and $7,995,000 for the comparable prior year periods. The decline in expenses was the result of cost reductions initiated at the end of the prior fiscal year as well as a reduction in stock-based compensation expense.

The Company accrues federal and state income taxes at a combined rate of approximately 39 percent. However, since the Company entered the fiscal year with a federal net operating loss (“NOL”) carryforward of approximately $4.7 million, the Company actually pays income taxes at a rate of approximately 10 percent as it utilizes the tax benefits of its NOL carryforward.

Mr. Tarantino concluded, “We are meeting our profit objectives and our strong cash and working capital position continued to improve. In the first nine months of the current fiscal year, cash provided by operating activities totaled $3,543,000, and cash and equivalents increased to $18,156,000. Working capital at the end of the third quarter amounted to $22,345,000 and our current ratio is 16.0. Our tangible book value per share is $2.67, of which, cash and equivalents constitutes $2.05 per share. The Company’s Board of Directors has declared a quarterly dividend of $0.06 per common share. The dividend will be payable on March 14, 2008, to shareholders of record as of February 29, 2008. At January 31, 2008, there were 8,869,184 common shares issued and outstanding.”

ABOUT DATARAM CORPORATION

Dataram is a worldwide leader in the design and manufacture of high capacity, reliable and innovative memory solutions. With over 40 years of experience, Dataram provides customized memory solutions for OEMs and compatible memory for leading brands including HP, Dell, IBM, SGI, Sun Microsystems and Intel. For more information about Dataram, visit www.dataram.com