<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the quarterly period ended 07/31/96 or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the transition period from ________ to ________
Commission file number: 1-8266
DATARAM CORPORATION
(Exact name of registrant as specified in its charter)
New Jersey 22-1831409
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O. Box 7528, Princeton, NJ 08543
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (609)799-0071
_____________________________________________________________
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the last practicable date. Common Stock ($1.00 par
value): As of September 5, 1996, there were 3,330,305 shares outstanding.
<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Dataram Corporation And Subsidiary
Consolidated Balance Sheets
July 31, 1996 and April 30, 1996
(Unaudited) (Audited)
July 31, 1996 April 30, 1996
Assets
Current Assets:
Cash and cash equivalents $ 8,901,431 $ 8,482,447
Trade receivables, less allowance
for doubtful accounts and sales returns
of $890,000 at July 31, 1996
and $800,000 at April 30, 1996 9,338,894 12,077,714
Inventories 1,599,339 2,311,897
Other current assets 372,923 862,709
__________ __________
Total current assets 20,212,587 23,734,767
Property and equipment, at cost:
Land 875,000 875,000
Machinery and equipment 6,251,786 6,190,426
__________ __________
7,126,786 7,065,426
Less: accumulated depreciation
and amortization 5,042,126 4,867,226
__________ __________
Net property and equipment 2,084,660 2,198,200
Other assets 5,730 5,730
__________ __________
$ 22,302,977 $ 25,938,697
========== ==========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 3,499,365 $ 5,909,262
Accrued liabilities 882,215 1,022,404
__________ __________
Total current liabilities 4,381,580 6,931,666
Deferred income taxes 929,000 929,000
Stockholders' Equity:
Common stock, par value $1.00 per share.
Authorized 18,000,000 shares; issued
3,830,305 at July 31, 1996
and 3,824,305 at April 30, 1996 3,830,305 3,824,305
Treasury stock, 323,400 shares (2,071,485) 0
Additional paid-in capital 3,440,542 3,425,142
Retained earnings 11,793,035 10,828,584
__________ __________
Total stockholders' equity 16,992,397 18,078,031
__________ __________
$ 22,302,977 $ 25,938,697
========== ==========
See accompanying notes to consolidated financial statements.<PAGE>
Dataram Corporation and Subsidiary
Consolidated Statements of Earnings
Three Months Ended July 31, 1996 and 1995
(Unaudited)
1996 1995
Revenues $ 17,448,290 % 24,884,747
Costs and expenses:
Cost of sales 13,887,973 21,853,895
Engineering and development 229,682 434,963
Selling, general and administrative 1,833,752 1,691,045
__________ __________
15,951,407 23,979,903
Earnings from operations 1,496,883 904,844
Other income (expense), net
Interest income 68,568 0
Interest expense 0 (18,531)
__________ __________
68,568 (18,531)
Earnings before income taxes 1,565,451 886,313
Income tax expense 601,000 349,000
__________ __________
Net earnings $ 964,451 $ 537,313
========== ==========
Net earnings per share of common stock $ .26 $ .14
========== ==========
Weighted average number of common
shares outstanding 3,721,093 3,821,810
========== ==========
See accompanying notes to consolidated financial statements.
<PAGE>
Dataram Corporation and Subsidiary
Consolidated Statements of Cash Flows
Three Months Ended July 31,1996 and 1995
(Unaudited)
1996 1995
Cash flows from operating activities:
Net earnings $ 964,451 $ 537,313
Adjustments to reconcile net earnings
to net cash provided by (used in)
operating activities:
Depreciation and amortization 174,900 167,100
Bad debt expense 220,795 58,097
Changes in assets and liabilities:
Decrease in trade receivables 2,518,025 1,241,037
Decrease in inventories 712,558 413,251
Decrease in other current assets 489,786 277,669
Decrease in other assets 0 8,921
Decrease in accounts payable (2,409,897) (1,492,739)
Decrease in accrued liabilities (140,189) (1,323,866)
__________ __________
Net cash provided by (used in)
operating activities 2,530,429 (113,217)
__________ __________
Cash flows from investing activities:
Purchase of property and equipment (61,360) (92,208)
Disposal of fixed assets 0 (559)
__________ __________
Net cash used in investing activities (61,360) (92,767)
Cash flows from financing activities:
Proceeds from sale of common shares under
stock option plan 21,400 0
Purchase of treasury stock (2,071,485) 0
__________ __________
Net cash used in financing activities (2,050,085) 0
__________ __________
Net increase (decrease) in cash
and cash equivalents 418,984 (205,984)
Cash and cash equivalents at
beginning of year 8,482,447 721,811
__________ __________
Cash and cash equivalents at
end of period $ 8,901,431 $ 515,827
========== ==========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 0 $ 18,531
Income taxes $ 0 $ 0
See accompanying notes to consolidated financial statements. <PAGE>
Dataram Corporation and Subsidiary
Notes to Consolidated Financial Statements
July 31, 1996 and April 30, 1996
(1) Cash and cash equivalents consist of unrestricted cash, bankers
acceptances, commercial paper and other short term investments. All investments
are convertible to cash within a period of approximately thirty days or less.
(2) Inventories consist of the following categories:
7/31/96 4/30/96
Raw Materials $ 1,005,000 $ 1,435,000
Work In Process 50,000 45,000
Finished Goods 544,000 832,000
_________ _________
$ 1,599,000 $ 2,312,000
========= =========
(3) The Company has an agreement with a bank which provides for a total
unsecured line of credit of $11,000,000 with interest at no higher than one
- -half percent below the bank's base commercial lending rate. Borrowings under
the line of credit are at the convenience of Company management and may be
repaid at any time. The line of credit agreement expires in October, 1997,
unless otherwise amended or extended.
(4) In 1982, the Company adopted an incentive stock option plan. As of July
31, 1996, no further options may be granted under the plan and options to
purchase 6,000 shares were exercised in the first quarter of fiscal 1997 at an
exercise price of $3.57 per share and no further options remain outstanding.
In September 1992, an incentive and nonstatutory stock option plan was
adopted by the shareholders which provides for the granting of up to 950,000
shares of common stock to key employees. As of July 31, 1996, options to
purchase 342,000 shares at prices ranging from $5.125 to $7.125 per share were
outstanding. As of July 31, 1996 options to purchase 32,000 shares had been
exercised and options to purchase 151,900 shares were exercisable.
In November 1992 and March 1993, the Company granted to three non-employee
directors of the Company and the Company's outside general counsel five year
options to acquire a total of 120,000 shares of the Company's common stock at
an exercise price of $11.25 per share. As of July 31, 1996, none of these
options had been exercised and options to purchase 90,000 shares were
exercisable.
(5) In June of 1996, the Company announced an open market repurchase plan
providing for the repurchase of up to 250,000 shares of the Company's common
stock. In July of 1996, the plan was amended to provide for the repurchase of
up to 500,000 shares of the Company's common stock. As of July 31, 1996,
323,400 shares had been repurchased under the plan. On September 3, 1996, the
Company announced that the repurchase plan had been completed. A total of
500,000 shares have been repurchased at a total cost of $3,346,000.
(6) Information furnished reflects all adjustments which are, in the
opinion of management, necessary to a fair presentation of the results of this
interim statement.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
As of July 31, 1996, working capital amounted to $15.8 million reflecting
a current ratio of 4.6 compared to working capital of $16.8 million and a
current ratio of 3.4 as of April 30, 1996.
The Company's financial condition remains strong. The Company has an $11.0
million unsecured line of credit with a bank which expires in October 1997. At
the end of the quarter there was no amount outstanding under the line of
credit. With its current working capital balance and the line of credit,
management believes that it will be able to support its growth and other
capital needs for the foreseeable future.
Results of Operations
Revenues for the three month period ending July 31, 1996 were $17,448,000
compared to revenues of $24,885,000 for the comparable prior year period. The
decline in revenues was the result of declining average selling prices for the
Company's products reflecting a seventy five percent decrease in the price of
dynamic random access memory chips (DRAMs)which are the primary raw material in
memory boards. As a result of competitive conditions in the memory board
marketplace, the Company passed these cost savings through to our customers.
Increased unit volume partially offset the reduction in selling prices. Total
megabytes shipped have increased by approximately 110% in the first quarter
versus the same period last year.
Cost of sales for the first quarter were 80% of revenues versus 88% for
the same prior year period. The increase in operating margins is the result of
increase unit volume which created significant economies of scale, combined
with aggressive purchasing and materials management. Prices for the four and
sixteen megabit, the primary raw material in computer memory boards, decrease
by approximately 55% during the quarter. To minimize the impact of the changes
in raw material values, the company has maintained tight control over inventory
levels, while still meeting customer delivery requirements. The price of DRAMS
has continued to decline and it is uncertain as to when prices will stabilize.
Engineering and development costs in fiscal 1997's first quarter were
$230,000 versus $435,000 for the same prior year period. The decrease in cost
was due to modest reductions in staff, and an overall control of cost primarily
associated with lower product design costs of today's simplified memory boards.
The Company intends to maintain its commitment to timely introduction of new
memory products as new workstations and computers are introduced.
Selling, general and administrative costs in this year's first quarter
increased to 11% of revenues from 7% for the same prior year period. Three
month total expenditures increased by $143,000 from the prior year period. This
increase is primarily the result of planned marketing and promotional
expenditures. The company has also strategically added to our sales department
this quarter to accelerate our ability to service new and existing customers.
<PAGE>
Other income (expense),net for the first quarter of fiscal 1997 consisted
primarily of interest income on short term investments. Prior year other income
(expense) consisted of interest expense associated with the Company's revolving
credit line.
PART II: OTHER INFORMATION
ITEM 5. EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits
27 (a). Financial Data Schedule
28 (a). Press Release reporting results of First Quarter, Fiscal Year 1997
(Attached).
28 (b). Press Release reporting completion of stock repurchase program
(Attached).
B. Reports on Form 8-K
No reports on Form 8-K have been filed during the current quarter.
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DATARAM CORPORATION
Date: September 4, 1996 By: MARK E. MADDOCKS
____________________
Mark E. Maddocks
Vice President, Finance
(Principal Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-30-1997
<PERIOD-END> JUL-31-1996
<CASH> 8,901,431
<SECURITIES> 0
<RECEIVABLES> 10,228,894
<ALLOWANCES> 890,000
<INVENTORY> 1,599,339
<CURRENT-ASSETS> 20,212,587
<PP&E> 7,126,786
<DEPRECIATION> 5,042,126
<TOTAL-ASSETS> 22,302,977
<CURRENT-LIABILITIES> 4,381,580
<BONDS> 0
0
0
<COMMON> 3,830,305
<OTHER-SE> 13,162,092
<TOTAL-LIABILITY-AND-EQUITY> 22,302,977
<SALES> 17,448,290
<TOTAL-REVENUES> 17,448,290
<CGS> 13,887,973
<TOTAL-COSTS> 13,887,973
<OTHER-EXPENSES> 229,682
<LOSS-PROVISION> 118,356
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,565,451
<INCOME-TAX> 601,000
<INCOME-CONTINUING> 964,451
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 964,451
<EPS-PRIMARY> .26
<EPS-DILUTED> .26
</TABLE>
FOR IMMEDIATE RELEASE CONTACT: Mark Maddocks
Vice-President, Finance
Telephone: (609) 799-0071
DATARAM REPORTS IMPROVED
FIRST QUARTER FISCAL '97 EARNINGS
PRINCETON, NJ, August 8, 1996 -- Dataram Corporation (AMEX: DTM)
reported higher earnings on increased unit volume for the first
quarter of fiscal 1997, Robert V. Tarantino, president and chief
executive officer, announced today.
Net earnings for the first quarter ended July 31, 1996 were
$964,000, or $.26 per share, compared to $537,000, or $.14 per
share, for the comparable prior year period. Revenues were $17.4
million versus $24.9 million.
"We are pleased with our ability to achieve profitable
performance during a period of declining selling prices in the
memory industry," Tarantino stated. "The price of DRAM chips
which account for approximately 90 to 95 percent of our product
cost has declined by more than 75 percent in the past year.
Competitive conditions have compelled us to pass these cost
savings through to our customers. Increased unit volume has
partially offset the reduction in selling prices. Total megabytes
shipped have increased by approximately 110% in the first quarter
versus the same period last year."
Tarantino attributed the improved operating performance to
tenacious purchasing and materials management. Volume increases
are also creating significant economies of scale.
Continued....<PAGE>
Dataram Earnings Release - Page 2
"We are also exploring new marketing avenues to stabilize
revenues," Tarantino declared. "While maintaining tight control
of our operating expenses, we have made strategic additions to
our sales staff to accelerate our ability to service new and
existing customers."
Dataram purchased 323,400 shares of its common stock as part
of a previously announced stock repurchase plan intended to
enhance shareholder value. "Shareholders will realize most of the
benefit in the reduction in shares outstanding starting in the
second quarter," Tarantino said. The Company has maintained a
strong financial position, with no outstanding debt, $8.9 million
cash on hand and an available $11 million credit line.
"The computer memory industry is sustaining its dynamic
growth and Dataram is capitalizing on its reputation and thirty
years of industry experience and expertise to obtain a healthy
share of this growth. We are favorably positioned to maintain
our momentum in an industry currently experiencing high volume
and lower selling prices."
Dataram develops, manufactures and markets quality computer
memory products for workstations, servers and personal computers.
Continued.... <PAGE>
Dataram Earnings Release - Page 3
Dataram Corporation and Subsidiary
Consolidated Summary Information
(In thousands except per share amounts)
Quarter Ended
July 31,
1996 1995
Revenues $17,448 $24,885
Net Earnings $964 $537
Net Earnings Per Share $.26 $.14
Average Shares Outstanding 3,721 3,822
FOR IMMEDIATE RELEASE CONTACT: Mark Maddocks
Vice-President, Finance
Telephone: (609) 799-0071
DATARAM ANNOUNCES COMPLETION OF STOCK REPURCHASE PLAN
PRINCETON, NJ, September 3, 1996 -- Dataram Corporation (AMEX:
DTM)
Robert V. Tarantino, president and chief executive officer,
announced today that the Open Market Repurchase Plan announced on
June 12, 1996 and amended on July 1, 1996 which provided for the
repurchase of up to 500,000 shares of the Company's common stock
has been completed. The Company has repurchased the full 500,000
shares at a total cost of $3,346,000. Reflecting completion of
the repurchase plan, there were 3,330,305 shares of the Company's
common stock issued and outstanding as of September 1, 1996.
"Shareholders will realize most of the earnings per share benefit
in the reduction in shares outstanding starting in the current
quarter," Tarantino said.
Dataram Corporation is a developer, manufacturer and
marketer of quality computer memory products.
