Dataram Reports Fiscal 2016 Second Quarter Financial Results

Achieves Net Profit in Q2; posts 1H profit of approximately $175,000 prior to non-cash, stock based compensation expenses

PRINCETON, N.J., Dec. 16, 2015 — (PRNewswire) — Dataram Corporation (NASDAQ: DRAM), a leading independent manufacturer of memory products and provider of performance solutions, reported its financial results for its three and six months ended October 31, 2015.  Revenues for the three and six months ended October 31, 2015 were $6.1 million and $13.4 million respectively, which compares to $6.9 million and $14.6 million for the comparable prior year periods. The decline in revenues for the three and six months ended October 31, 2015 is primarily attributable to management's decision to discontinue an agreement to manufacturer an OEM branded line of consumer memory. That agreement was not profitable and did not align with the corporate strategy. 

The Company had a net profit of approximately $20,000 in the three months ended October 31, 2015 before recording a non-cash preferred dividend of approximately $59,000. For the six months ended October 31, 2015, the Company had a net loss of $97,000 before recording a non-cash preferred dividend of approximately $122,000. This compares to a net loss for the three months ended October 31, 2014 of approximately $1.5 million, which included $617,000 of interest expense for amortization of debt discount. The loss for the six months ended October 31, 2014 totaled approximately $2.3 million and included $750,000 of interest expense for amortization of debt discount.

Dave Moylan, Dataram's Chairman and Chief Executive Officer, stated "Dataram's operational and financial transformation has helped the Company establish the foundation for global growth, while intending to maximize long-term shareholder value.  In the first half of fiscal 2016, Dataram began realizing the quantifiable results of that transformation.  In Q2, we posted a profit of $80,000 before accounting for approximately $60,000 in non-cash stock based compensation expenses.  In the first half of 2016, we posted a profit of approximately $175,000 prior to accounting for the approximately $272,000 in non-cash, stock based compensation expenses.  Additionally, the Company recently launched a new line of low-cost, industry-standard memory modules aimed at system builders, integrators, and end-users who want to purchase RAM that meets precise specifications while better managing overall costs, and, subsequent to the end of Q2, completed the sale of the tax benefits for its State of New Jersey specific NOLs (Net Operating Losses).  The tax benefits were estimated at $204,000 and as a result, Dataram executed a contract of sale to a large NJ based profitable company and received proceeds of approximately $190,000 (93% of value) on December 9, 2015." 

"These efforts have helped establish a foundation from which to grow," continued Mr. Moylan.  "We continue to look for ways to improve business performance by engaging partners to extend sales operations into geographies and segments where Dataram does not have an active presence, and assist the company further penetrate principal territories and segments where it has a presence.  We continue to focus on our strategic priorities which include pursuit of organic and inorganic growth opportunities, to maximize long-term shareholder value."

Dataram also reaffirmed its guidance for FY2016 in which the Company projects gross, operating revenues of between $28.0 to $34.0 million, and operating results between a net loss of $100,000 and net profit of $250,000, in each case exclusive of the impact of one-time charges and events to include stock based compensation expenses.

 

DATARAM CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)


Second Quarter Ended

October 31,


Six Months Ended

October 31,


2015


2014


2015


2014









Revenues

$6,051


$6,880


$13,388


$14,605









Costs and expenses:








      Cost of sales

4,848


5,872


10,782


12,348

      Engineering and development

46


152


100


318

      Selling, general and administrative

1,220


1,662


2,412


3,302

      Stock-based compensation expense*

60


5


272


9


6,174


7,691


13,566


15,977

Loss from operations

(123)


(811)


(178)


(1,372)

Other expense

(47)


(696)


(109)


(892)

Loss before income taxes

(170)


(1,507)


(287)


(2,264)

Income tax expense ( benefit )

(190)


-


(190)


3

Net profit (loss)

$  20


$ (1,507)


$ (97)


$ (2,267)

      Less preferred stock dividends

(59)


-


(122)


-

Net loss allocated to common shareholders

$ (39)


$ (1,507)


$ (219)


$  ( 2,267)









Net loss per share:








       Basic

$ (0.01)


$ (0.63)


$ (0.07)


$ (0.94)

       Diluted

$ ( 0.01)


$ (0.63)


$ (0.07)


$ (0.94)

Weighted average number of shares








outstanding:








       Basic

3,536


2,411


3,108


2,411

       Diluted

3,536


2,411


3,108


2,411


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