<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One) FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended April 30, 1996.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
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 of Incorporation) (I.R.S. Employer Identification No.)
P.O. Box 7528, Princeton, New Jersey 08543-7528
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (609) 799-0071
Securities registered pursuant to section 12(b) of the Act:
Title of each class Name of each exchange on which registered
Common Stock, $1.00 Par Value American Stock Exchange
Securities registered pursuant to section 12(g) of the Act: None
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 [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in the definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
The aggregate market value of the Common Stock held by non-affiliates of
the registrant on July 25, 1996 was $19,605,462.
The number of shares of Common Stock outstanding on July 25, 1996:
3,531,705 shares.
DOCUMENTS INCORPORATED BY REFERENCE:
(1) Definitive Proxy Statement for Annual Meeting of Shareholders to be
held on September 10, 1996 (the "Definitive Proxy Statement") to be filed
within 120 days of the end of the fiscal year.
(2) 1996 Annual Report.<PAGE>
DATARAM CORPORATION
INDEX
Part I Page
Item 1. Business . . . . . . . . . . . . . . . . . . . . 3
Item 2. Properties . . . . . . . . . . . . . . . . . . . 8
Item 3. Legal Proceedings . . . . . . . . . . . . . . . 9
Item 4. Submission of Matters to a Vote of
Security Holders . . . . . . . . . . . . . . . . 9
Part II
Item 5. Market for Registrant's Common Equity
and Related Stockholder Matters. . . . . . . . .10
Item 6. Selected Financial Data. . . . . . . . . . . . .10
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations. .10
Item 8. Financial Statements and Supplementary Data. . .11
Item 9. Changes In and Disagreements with Accountants
on Accounting and Financial Disclosure . . . . .14
Part III
Item 10. Directors and Executive Officers of
the Registrant . . . . . . . . . . . . . . . . .14
Item 11. Executive Compensation . . . . . . . . . . . . .14
Item 12. Security Ownership of Certain
Beneficial Owners and Management . . . . . . . .14
Item 13. Certain Relationships and Related
Transactions . . . . . . . . . . . . . . . . . .14
Part IV
Item 14. Exhibits, Financial Statement
Schedules, and Reports on Form 8-K . . . . . . .15
Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . .16<PAGE>
PART I
Item 1. BUSINESS
(a) General Development of Business.
Dataram develops, manufactures and markets computer add-in
memory products for use with workstations, servers and
minicomputers. The Company's add-in memory products expand the
capacity and extend the economic useful life of the installed
base of computers manufactured by Sun Microsystems, Inc. ("Sun"),
Hewlett-Packard Company ("HP"), Digital Equipment Corporation
("DEC"), Silicon Graphics and International Business Machines
Corporation ("IBM") (RS/6000 line). Dataram products are not
intended for use with high end mainframe computers.
In fiscal 1996 the Company saw a dramatic decline in the
price it pays for random access memory ("RAM"), which is the
principal component of the memory boards it sells. As a direct
consequence, the prices for the memory boards the Company sells
also dramatically declined. Thus, notwithstanding substantial
increases in units shipped, Company revenues increased only
slightly. The Company also saw a substantial increase in the
availability of RAM. Consequently, the Company no longer needed
to maintain large inventory levels to service its customers. As
a result of cost containment, the Company enjoyed positive
earnings in fiscal 1996 as compared with losses in fiscal 1995.
The Company was incorporated in New Jersey in 1967 and made
an initial public offering in 1968. Its Common Stock has been
listed for trading on the American Stock Exchange since 1981.
The Company's principal office is located at P.O. Box 7528,
Princeton, New Jersey 08543-7528 and its telephone number is
(609) 799-0071.
(b) Financial Information about Industry Segments.
The Company operates in one industry segment. For
information concerning revenues, net revenues, net earnings, and
identifiable assets, see Note 9 of Notes to Consolidated
Financial Statements, under the heading "Segment Information -
Operations and Assets by Geographic Locations."
(c) Narrative Description of Business.
Dataram develops, manufactures and markets a variety of
add-in memory products for use with workstations, servers and
minicomputers, including those sold by Sun, HP, DEC, Silicon
Graphics, and the RS/6000 line of workstations sold by IBM. The
Company sells add-in memory products both for new machines and
for the installed base of these classes of computers at prices
less than the computer manufacturer. The Company's customers are
primarily distributors, value added resellers and larger
end-users.
3<PAGE>
Industry Background
The market for independently manufactured add-in memory
began in the early 1970's with the introduction of core memory
expansions for DEC computers. During the late 1970's
semiconductor technology emerged as the dominant technology for
use in computer memories, displacing magnetic core memories.
The minicomputer was pioneered by DEC in the late 1960's and
early 1970's as a lower cost, localized system which could be
used to service a small department of a company and provide
independence from centralized mainframes. This decentralized
approach to satisfying computing needs gained immediate
popularity with the engineering and scientific community and
later with the general business community. A large installed
base of minicomputer systems remains in place, although this base
is now declining.
The workstation, like the PC, is designed to provide
computer resources to individual users. The workstation differs
from the PC in providing substantially greater computational
performance, input/output capability and graphic display. As
workstation technology has matured in recent years, the
capabilities for multiple users per workstation and multiple
workstations networked together have developed. As a result of
this networking capability, a new class of computer system, the
server, has emerged.
Servers are computer systems on a network which provide
dedicated functions accessible by all workstations and other
systems on the same network. Examples of different types of
servers in use today are: file servers, communication servers,
computation servers, database servers, print servers and storage
servers.
Dataram markets its add-in memory products to end users of
the installed base of workstations, minicomputers and servers
sold by Sun, HP, DEC, Silicon Graphics and the RS/6000 line of
workstations sold by IBM.
The "open system" philosophy espoused by the general
computer industry has played a part in enlarging the market for
third party vendors. Under the "open system" philosophy,
manufacturers adhere to industry design standards, enabling users
to "mix and match" hardware and software products from a variety
of vendors so that a system can be configured for the user's
application in the most economical manner with reduced concern
for compatibility and support. Memory products for workstations
and servers have become commodities with substantial competition
from OEMs and a number of independent memory manufacture
suppliers. As a result memory margins have severely eroded.
Generally, growth in add-in memory markets closely follows
both the growth in unit shipments of system vendors and the
4<PAGE>
growth of memory requirements per system. Dataram expects its
growth to be highest in the Sun and HP markets, primarily based
on the strong end-user market acceptance of those companies'
workstations and servers.
Business Strategy
In addition to taking advantage of the growing market for
workstations and servers, Dataram has a two pronged strategy to
increase sales.
Market Penetration
Management estimates that sales by system vendors constitute
75% of the add-in memory market. Thus, there is an opportunity
for growth through penetration of the system vendor's market
share. To successfully compete with system vendors, Dataram must
continue to respond to customers' needs in a short time frame.
To support customers' needs, the Company has established a
dedicated and highly automated manufacturing facility that is
designed to produce and ship customer orders within twenty four
hours or less.
Geographic Expansion
Approximately 70% of Dataram's fiscal 1996 revenues were
derived from sales in the United States with the remainder
principally in Western Europe, Canada and the Asian Pacific
region. The Company intends to capitalize on the system vendors'
growth of business in Europe and Asia by providing add-in memory
for the systems being sold in these markets.
Products
The Company's principal business is the development,
manufacture and marketing of memory boards and modules which can
be added to workstations, servers and minicomputers to upgrade or
expand the capabilities of such systems. When vendors produce
computer systems adhering to open system industry standards, the
development effort for Dataram and other independent memory
manufacturers is straightforward and allows for the use of many
standard components.
Distribution Channels
Dataram sells its add-in memory products in the United
States to distributors, value added resellers and larger
end-users principally through its telesales staff located in
Princeton, New Jersey. The Company also markets its add-in
memory products in Canada, Western Europe and the Asian Pacific
region through a network of independent distributors supported by
marketing offices in the U.K. and Singapore.
5 <PAGE>
Product Warranty and Service
Management believes that the Company's reputation for the
reliability of its add-in memory products and the confidence of
prospective purchasers in Dataram's ability to provide service
over the life of the product are important factors in making
sales. As a consequence, the Company adopted many years ago a
Lifetime Warranty program for its memory products. The economic
useful life of the computer systems to which Dataram's add-in
memory equipment is attached is almost always substantially less
than the physical useful life of the equipment itself. Thus,
memory systems are unlikely to "wear out." The Company's
experience is that less than 1% of all the products it sells are
returned under the Lifetime Warranty.
Engineering and Development
The Company's ability to compete successfully depends upon
its ability to identify new add-in memory needs of its customers.
To achieve this goal, the Company's engineering group continually
monitors computer system vendors' new product developments, and
the Company evaluates and tests major components as they become
available. Dataram designs prototype add-in memory products and
subjects them to reliability testing procedures. During its
fiscal year ended April 30, 1996, the Company incurred costs of
$1,584,000 for engineering and product development compared to
$2,484,000 in fiscal 1995 and $3,320,000 in fiscal 1994.
Manufacturing
The Company purchases standard dynamic random access memory
("DRAM") chips and single in-line memory module chips. The costs
of such chips is approximately 95% of the total manufacturing
cost of add-in memory products. Fluctuations in the availability
or prices of memory chips have an impact on the Company's profit.
Dataram has created close relationships with primary
suppliers while qualifying and developing alternate sources as a
back up. The qualification program consists of extensive
evaluation of process capabilities, on-time delivery performance
and financial stability of each supplier. Alternative sources
are qualified to normally assure supply in the event of a problem
with the primary source or to handle surges in demand. The
availability of parts within hours of a manufacturing release is
normally assured by means of bonded inventory of parts and
blanket procurements for items such as printed circuit boards and
DRAM chips.
The Company assembles its memory boards at a leased site
with management and workers provided by an independent
contractor. Memory boards are then rigorously tested in the
Company's quality assurance program.
6<PAGE>
Backlog
The Company expects that all backlog on hand will be filled
during the current fiscal year. The Company believes that
backlog is generally not material to its business since the
Company usually ships its add-in memory products on the same day
an order is received.
Competition
The intensely competitive computer industry is characterized
by rapid technological change and constant pricing pressures.
These characteristics are equally applicable to the third party
memory market, where pricing is a major consideration in the
buying decision. Dataram competes with Sun, HP, DEC, Silicon
Graphics and IBM, as well as with a number of third party memory
suppliers, including Kingston Technology.
Although many of Dataram's competitors possess significantly
greater financial, marketing and technological resources, the
Company competes favorably based on the buying criteria of
price/performance, time-to-market, product quality, reliability,
service/support, breadth of product line and compatibility with
computer system vendors' technology. Dataram's objective is to
continue to remain strong in all of these areas with particular
focus in price/performance and time-to-market, which management
believes are two of the more important criteria in the selection
of third party memory product suppliers. Market research and
analysis capability by the Company is necessary to ensure timely
information on new products and technologies coming from the
computer system vendors and from the overall memory market.
Dataram must continue low cost, high volume production while
remaining flexible to satisfy the time-to-market requirement.
The Company believes that its 29 year reputation for
providing quality products is an important factor to its
customers when making a purchase decision. To strengthen this
reputation, the Company has a comprehensive lifetime warranty and
service program which provides customers with added confidence in
buying from Dataram. See "Business-Product Warranty and
Service."
Patents, Trademarks and Licenses
The Company believes that its success depends primarily upon
the price and performance of its products rather than on
ownership of copyrights or patents.
Sale of add-in memory products for systems which use
proprietary memory design can from time to time give rise to
claims of copyright or patent infringement. In such instances
the Company has obtained the opinion of patent counsel that its
products do not violate such patents or copyrights.
7<PAGE>
To the best of the Company's knowledge and belief, no
Company product infringes any valid copyright or patent.
However, because of rapid technological development in the
computer industry with concurrent extensive patent coverage and
the rapid rate of issuance of new patents, questions of
infringement may continue to arise in the future. If such
patents or copyrights are perfected in the future, the Company
believes, based upon industry practice, that any necessary
licenses would be obtainable upon the payment of reasonable
royalties.
Employees
As of April 30, 1996, the Company had 42 full-time
employees. The Company believes it has satisfactory
relationships with its employees. None of the Company's
employees are covered by a collective bargaining agreement.
Environment
Compliance with federal, state and local provisions which
have been enacted or adopted to regulate the protection of the
environment does not have a material effect upon the capital
expenditures, earnings and competitive position of the Company.
The Company does not expect to make any material expenditures for
environmental control facilities in either the current fiscal
year (fiscal 1997) or the succeeding fiscal year (fiscal 1998).
(d) Financial Information about Foreign and Domestic
Operations and Export Sales.
For information regarding each of the past three fiscal
years with respect to net revenues to unaffiliated customers in
the United States and foreign countries, net earnings, and
identifiable assets located in the United States, see Note 9 of
Notes to Consolidated Financial Statements under the heading
"Segment Information - Operations and Assets by Geographic Loca-
tions."
Item 2. Properties
The Company leases approximately 48,050 square feet of
space for administrative, sales, research and development and
manufacturing support in West Windsor Township, New Jersey under
a lease expiring on June 30, 2001.
The Company leases an assembly plant in Northampton
Township, Pennsylvania. The lease is for three years and has a
one-year renewal option.
The Company also leases one sales office located in
California, a marketing office in England and a marketing office
in Singapore.
8<PAGE>
On September 29, 1980, the Company purchased approxi-
mately 81 acres of undeveloped property in West Windsor Township,
New Jersey. The purchase price of $875,000 was paid in cash.
This property is approximately five miles from the Company's
current leased facilities. The Company does not expect to use
this property in its business and it is currently for sale.
Item 3. Legal Proceedings
No material legal proceedings are pending.
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted to a vote of security holders
in the fourth quarter of the year covered by this report.
9<PAGE>
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters
Incorporated by reference herein is the information set
forth in the Company's 1996 Annual Report under the caption
"Common Stock Information" at page 5.
Item 6. Selected Financial Data
Incorporated by reference herein is the information set
forth in the 1996 Annual Report under the caption "Selected
Financial Data" at page 16.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Incorporated by reference herein is the information set
forth in the 1996 Annual Report under the caption "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" at page 3 through page 5.
10<PAGE>
Item 8. Financial Statements and Supplementary Data
Index to Consolidated Financial Statements and Schedules Page in
Annual
Report*
Consolidated Financial Statements:
Consolidated Balance Sheets as of April 30, 1996 and 1995. 6
Consolidated Statements of Operations - Years ended
April 30, 1996, 1995 and 1994. . . . . . . . . . . . 7
Consolidated Statements of Cash Flows -
Years ended April 30, 1996, 1995 and 1994. . . . . . 8
Consolidated Statements of Stockholders' Equity -
Years ended April 30, 1996, 1995 and 1994. . . . . . 9
Notes to Consolidated Financial Statements -
April 30, 1996, 1995 and 1994. . . . . . . . . . . . 10
Independent Auditors' Report on Financial Statements. . . 15
Page in
Financial Statement Schedules: 10-K
Valuation and Qualifying Accounts -
Years ended April 30, 1996, 1995 and 1994 . . . . . 12
Independent Auditors' Report on
Financial Statement Schedules . . . . . . . . . . . 13
All other schedules are omitted as the required information
is inapplicable or because the required information is shown in
the financial statements or notes thereto.
- --------------
*Incorporated herein by reference.
11<PAGE>
<TABLE>
Schedule VIII
DATARAM CORPORATION AND SUBSIDIARIES
Valuation and Qualifying Accounts
Years ended April 30, 1996, 1995 and 1994
Additions
charged Deduc-
Balance at to costs tions Balance
beginning and from at close
Description of period expenses reserves* of period
<S> <C>
Year ended April 30, 1994:
Allowance for doubtful accounts $ 665,000** 258,286 293,286 630,000
Reserve for inventory obsolescence $ - 330,000 - 330,000
Year ended April 30, 1995:
Allowance for doubtful accounts $ 630,000 422,207 357,207 695,000
Reserve for inventory obsolescence $ 330,000 - 30,000 300,000
Year ended April 30, 1996:
Allowance for doubtful accounts $ 695,000 485,000 380,000 800,000
Reserve for inventory obsolescence $ 300,000 - 300,000 -
*Represents write-offs of specifically identifiable amounts.
**Includes the effect of reclassifications of $375,000 from other accrued expense
account related to customer collections to conform to fiscal year 1996 presentation.
12
/TABLE
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholders
Dataram Corporation:
Under date of May 24, 1996, we reported on the consolidated
balance sheets of Dataram Corporation and subsidiaries as of
April 30, 1996 and 1995, and the related consolidated statements
of operations, stockholders' equity, and cash flows for each of
the years in the three-year period ended April 30, 1996, as
contained in the 1996 annual report to stockholders. These
consolidated financial statements and our report thereon are
incorporated by reference in the annual report on Form 10-K for
the year 1996. In connection with our audits of the
aforementioned consolidated financial statements, we also have
audited the related financial statement schedule as listed in the
accompanying index. This financial statement schedule is the
responsibility of the Company's management. Our responsibility
is to express an opinion on the financial statement schedule
based on our audits.
In our opinion, such financial statement schedule, when
considered in relation to the basic consolidated financial
statements taken as a whole, presents fairly, in all material
respects, the information set forth therein.
KPMG PEAT MARWICK LLP
Princeton, New Jersey
May 24, 1996
13<PAGE>
Item 9. Changes In and Disagreements with Accountants on
Accounting and Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
Incorporated by reference herein is the information set
forth in the Definitive Proxy Statement under the captions
"Executive Officers of the Company," "Nominees for Director" and
"Section 16 Compliance."
Item 11. Executive Compensation
Incorporated by reference herein is the information set
forth in the Definitive Proxy Statement under the caption
"Executive Compensation."
Item 12. Security Ownership of Certain Beneficial Owners and
Management
Incorporated by reference herein is the information set
forth in the Definitive Proxy Statement under the caption
"Security Ownership of Certain Beneficial Owners and Management."
Item 13. Certain Relationships and Related Transactions
Incorporated by reference herein is the information set
forth in the Definitive Proxy Statement under the captions
"Executive Compensation" and "Board of Directors."
14<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K
(a) The following documents are filed as part of this
report:
1. Financial Statements incorporated by
reference into Part II of this Report.
2. Financial Statement Schedules included in
Part II of this Report.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the last
quarter of the year covered by this report.
(c) Exhibits:
The Exhibit Index appears on page 17.
15<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Company has duly caused this
report to be signed on its behalf by the undersigned, thereunto
duly authorized.
DATARAM CORPORATION
(Registrant)
Date: July 26, 1996 By: ROBERT V. TARANTINO
________________________________
Robert V. Tarantino, President
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed by the following persons on
behalf of the Company and in the capacities and on the dates
indicated.
Date: July 26, 1996 By: ROBERT V. TARANTINO
________________________________
Robert V. Tarantino, President
Chief Executive Officer and
Director (Principal Executive
Officer)
Date: July 26, 1996 By: JOHN J. CAHILL
________________________________
John J. Cahill, Chairman of
the Board of Directors
Date: July 26, 1996 By: RICHARD HOLZMAN
________________________________
Richard Holzman, Director
Date: July 26, 1996 By: THOMAS A. MAJEWSKI
________________________________
Thomas A. Majewski,
Director
Date: July 26, 1996 By: BERNARD L. RILEY
________________________________
Bernard L. Riley, Director
Date: July 26, 1996 By: MARK E. MADDOCKS
________________________________
Mark E. Maddocks
Vice President, Finance
(Principal Financial
and Accounting Officer)
16<PAGE>
EXHIBIT INDEX
Page Page Page
of this of 1995 of 1994
Report 10-K 10-K
_______ _______ _______
3(a) Certificate of Incorporation 27
3(b) By-Laws 70
4(a) Loan Agreement with New Jersey 23
National Bank
4(b) 1995 Letter Amendments to Loan 93
Agreement
4(c) 1996 Letter Amendments to Loan
Agreement 18
10(a) 1992 Incentive and Non-Statutory
Stock Option Plan 127
10(b) Lease 133
10(c) Savings and Investment Retirement Plan 146
10(d) Employment Agreement of 227
Robert V. Tarantino
13(a) 1996 Annual Report 32
24(a) Independent Auditors' Consent for 21
S-8 Registration No. 33-56282
28(a) Earnings Press Release 23
28(b) Stock Repurchase Press Release 26
28(c) Second Stock Repurchase Press 28
Release
29 Financial Data Schedule 30
17
EXHIBIT 4(c)
1996 Letter Amendment to Loan Agreement
18<PAGE>
New Jersey National Bank
CN 1
Pennington NJ 08534-0001
609 771 5615
Stephen F. Bayer
Vice President
CoreStates
July 1, 1996
Mr. Mark Maddocks, VP-Finance
Dataram Corp
P.O. Box 7528
Princeton, NJ 08543-7528
Dear Mark:
New Jersey National Bank agrees to amend Covenant 6.26 on page 25
of the Loan Agreement dated October 27, 1994 by and between Dataram
Corporation and New Jersey National Bank to adjust the required
level of Tangible Net Worth downward, to reflect the effect of the
Treasury Stock arising from purchases announced on June 12, 1996
and July 1, 1996 of a total of 500,000 shares of the company's
common stock, not to exceed $3,500,000.
New Jersey National Bank
By: STEPHEN F. BAYER, VP
Stephen F. Bayer, VP
Accepted:
Attest: Dataram Corporation
DAWN M. CRAFT By: MARK MADDOCKS
Mark Maddocks, VP-Finance
19<PAGE>
New Jersey National Bank
CN 1
Pennington NJ 08534-0001
609 771 5615
Stephen F. Bayer
Vice President
CoreStates
New Jersey
National Bank
November 20, 1995
Mr. Mark Maddocks, Controller
Dataram Corporation
P.O. Box 7528
Princeton, NJ 08543-7528
Dear Mark:
New Jersey National Bank hereby amends the Loan Agreement dated
October 27, 1994, Section 6.21 (iii) to read as follows:
"Equipment Lease Payments not to exceed $500,000 per year; and"
All other terms continue in effect without amendment, except as
previously amended in writing by the Bank.
Sincerely,
STEPHEN F. BAYER, VP
Stepehn F. Bayer, VP
20<PAGE>
EXHIBIT 24(a)
INDEPENDENT AUDITOR'S CONSENT FOR S-8 REGISTRATION
NO. 33-56282
21<PAGE>
INDEPENDENT AUDITORS' CONSENT
The Board of Directors and Stockholders
Dataram Corporation:
We consent to incorporation by reference in the Registration Statement
(No. 33-56282) on Form S-8 of Dataram Corporation of our report dated
May 24, 1996, relating to the consolidated balance sheets of Dataram
Corporation and subsidiaries as of April 30, 1996 and 1995 and the
related consolidated statements of operations, stockholders' equity and
cash flows for each of the years in the three-year period ended April
30, 1996 and our report dated May 24, 1996 relating to the schedule as
listed in Item 8 of Form 10-K, which reports appear in the 1996 annual
report on Form 10-K of Dataram Corporation.
KPMG PEAT MARWICK LLP
Princeton, New Jersey
July 24, 1996
22<PAGE>
EXHIBIT 28(b)
STOCK REPURCHASE PRESS RELEASE
26<PAGE>
DATARAM
DATARAM STOCK REPURCHASE PLAN ANNOUNCED
PRINCETON, N.J., June 12 PRNewswire/ -- Robert V. Tarantino,
president and chief executive officer of Dataram Corporation (AMEX:
DTM), announced today that the Board of Directors approved an Open
Market Repurchase Plan.
Up to 250,000 shares of Dataram Common Stock may be repurchased
from time to time either on the American Stock Exchange or through
block purchases.
Tarantino said the Board of Directors believes that, given the
current trading prices of Dataram Common Stock, such repurchases
would be of long term benefit to the remaining shareholders of the
Corporation.
Dataram Corporation is a developer, manufacturer and marketer
of quality computer memory products.
-0- 6/12/96
/CONTACT: Mark Maddocks, Vice President, Finance of Dataram,
609-799-0071/
(DTM)
DATARAM CORPORATION. P.O. BOX 7528 PRINCETON, NJ 08543-7528
(609) 799-0071 fax (609) 799-6734
27<PAGE>
EXHIBIT 28(c)
SECOND STOCK REPURCHASE PRESS RELEASE
28<PAGE>
DATARAM
PRESS RELEASE
FOR IMMEDIATE RELEASE CONTACT Mark Maddocks
Vice President, Finance
Telephone: (609) 799-0071
DATARAM ANNOUNCES INCREASE IN STOCK REPURCHASE PLAN
PRINCETON, NJ, July 1, 1996 -- Dataram Corporation (AMEX: DTM)
Robert V. Tarantino, president and chief executive officer,
announced today that the Board of Directors has approved an
amendment to the Open Market Repurchase Plan announced on June 12,
1996. The ammendment increases the total number of shares which
may be repurchased under the plan to 500,000 shares from 250,000
shares previously announced. The shares may be repurchased from
time to time either on the American Stock Exchange or through block
purchases. Tarantino restated the Board of Director belief, that
given the current trading prices of Dataram Common Stock, such
repurchases would be of long term benefit to the remaining
shareholders of the Corporation.
Dataram Corporation is a developer, manufacturer and marketer
of quality computer memory products.
DATARAM CORPORATION. P.O. BOX 7528 PRINCETON, NJ 08543-7528
(609) 799-0071 FAX (609) 799-6734
29<PAGE>
<TABLE> <S> <C>
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<PERIOD-END> APR-30-1996
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<PAGE>
DATARAM CORPORATION
THE MEMORY SPECIALISTS
1996 ANNUAL REPORT
[DATARAM LOGO]
<PAGE>
CORPORATE PROFILE
Dataram is the leading independent manufacturer of memory boards
for computer workstations, servers and minicomputers. With
nearly 30 years of experience designing and manufacturing memory
boards for the industry, we offer a broad range of products for
Apple, Compaq, DEC, HP, IBM and Silicon Graphics computers. We
sell our products through distributors, VARs, resellers, system
integrators and OEMs into such diverse industries as
manufacturing, finance, government, telecommunications,
utilities, research and education. Our ability to respond
quickly to change -- in business conditions, technology and the
needs of memory users -- uniquely positions us for future growth
in markets throughout the world.
FINANCIAL HIGHLIGHTS
(Dollar figures in thousands, except per share amounts
Fiscal Year 1996 1995 1994 1993
_______ _______ ______ ______
Revenues $107,627 $103,028 $79,573 $58,564
Net earnings (loss) 1,450 (1,299) (732) 3,018
Net earnings (loss) per
common and common share
equivalent 0.38 (0.34) (0.19) 0.76
Working capital 16,803 14,061 15,540 16,699
Stockholders' equity 18,078 16,390 17,903 18,684
Long-term debt 0 0 0 0
Revenue per employee $ 2,031 $ 902 $ 527 $ 405
TABLE OF CONTENTS
1 Stockholders' Letter
3 Management's Discussion
and Analysis
6 Financial Review
16 Selected Financial Data<PAGE>
To Our Stockholders
In a year of rapid change and severe challenge, Dataram relied on
its experience and resiliency to restore profitability and
maintain its position as a leading participant in the computer
memory industry.
For the fiscal year ended April 30, 1996, Dataram achieved $1.45
million in net earnings, or $.38 per share, versus a loss of $1.3
million, or $.34 per share, for the year earlier period.
Earning a profit in the face of a 50 percent decline in selling
prices during the last four months of fiscal 1996 tested the
dedication of our entire organization.
Chip Price Decline
For the first six months of fiscal 1996, DRAM (dynamic random-
access memory) chips, which comprise about 95 percent of our
product cost, were in extremely short supply due to the sustained
dynamic growth of workstations, personal computers and servers.
We capitalized on our relationships with various suppliers to
ensure chip quantities sufficient to meet our customer demand for
our products. When DRAMs suddenly became readily available and
their prices declined dramatically in the third quarter, we were
obligated to value our inventory to reflect the new market
condition and at the same time reduce selling prices for our
computer memory products to remain competitive. As a result, we
incurred a loss during the third quarter.
Why did falling chip prices adversely affect product selling
prices? About three years ago, the emergence of simplified
memory boards for open system workstations virtually transformed
specialized memory products into commodity items. Consequently,
prices for these products were closely tied to their major cost
component -- DRAM chips.
Dataram successfully streamlined manufacturing operations last
year, restructuring the workforce and relocating production
capability to a highly automated facility located near our
Princeton headquarters. Today we are positioned to profitably
participate in a challenging, high-volume, low-margin industry.
A Return to Profitability
By reacting promptly to the changed reality of the DRAM
marketplace we restored profitability in the fourth quarter and
for fiscal 1996.
Our present ability to purchase chips on an as-needed basis has
enabled us to maintain a low inventory and still fulfill customer
orders on a same day basis. Inventories at the end of fiscal 1996
were $2.3 million, a 71 percent decrease from the previous year.
Dataram is growing at a faster rate than the computer memory
industry, estimated at 15 percent annually. Although selling
prices declined by approximately 40 percent during the fourth
quarter, revenues decreased by only 22 percent, confirming the
sustained strong demand for our memory products.
Pursuing Strategic Initiatives
Almost three decades of experience in the computer memory
business have seasoned and prepared us to overcome the challenges
inherent in a rapidly changing, technologically-driven growth
industry.
In last year's annual report, we disclosed our strategy to
continue growth into the foreseeable future. While responding
rapidly to daily business challenges, we retained our focus and
vision for the future. Thus, it is appropriate to restate these
objectives and the progress we made in fiscal 1996.
o Increase unit volume as a low cost producer. Unit volume
increased approximately 25 percent over the previous fiscal year.
State-of-the-art manufacturing capabilities, combined with a
streamlined, cost-efficient support structure, are enabling us to
contain costs and remain profitable.
o Increase revenues abroad by expanding into additional
foreign markets. During the year, Dataram broadened its global
reach by establishing relationships with successful Latin
American distributors. International revenues comprised 25
percent of total sales in fiscal 1995. Today, revenues from
foreign markets represent 30 percent of overall sales volume.
o Broaden our product line. Declining chip prices and
commensurate reductions to product selling prices present a
formidable challenge to stabilizing revenue. While continuing
our strong participation in the workstation and server markets,
we believe we can obtain a larger share of the personal computer
market. To this end, we have made strategic additions to
sales/marketing staff in efforts to increase our participation in
this market.
One<PAGE>
Utilizing the World Wide Web
Dataram is harnessing the power of the World Wide Web (WWW) which
has enabled us to facilitate sales and improve productivity.
For the last year, Dataram's WWW Home Page
(http://www.dataram.com) has provided customers and shareholders
with important information about the Company, including financial
results, product offerings and technical support. Our
distributors can download this information and add their own
logos, addresses and phone numbers to customize Dataram product
information to fit their needs.
Dataram recently established a Virtual Sales Office (VSO),
affording customers the opportunity to trace orders from initial
entry to type of shipment, specific carrier and time of arrival,
24 hours a day, seven days a week. VSO also provides the
mechanism for direct order entry by our strategic partners and
E-Mail communications between customers and our sales department,
further improving our capability to respond quickly to customer
needs. In addition to enhancing customer service, VSO's inherent
efficiency increases sales staff productivity.
Focused For Future Growth
We are writing this letter midway through the first quarter of
fiscal 1997, and are encouraged that the favorable financial
results achieved in the fourth quarter are continuing. We
believe we will continue to profitably participate in an
expanding computer memory marketplace by:
o Retaining our computer memory focus. As leading computer
memory specialists, future efforts to broaden our product line
will center on complementary products such as add-on memory for
personal computers.
o Sustaining our technological advantage. Dataram always has
been in the forefront of computer memory technological advances.
We plan to retain this strategic advantage. For example, Dataram
recently shipped memory products incorporating the next
generation of 64 megabit chip technology.
o Maintaining a strong financial condition. Dataram ended
fiscal 1996 with no debt, an unused $11 million line of credit
and a current ratio of 3.4 to 1. With strong operating cash flow
and minimal planned capital expenditures, Dataram enters fiscal
1997 with ample financial resources to finance and implement its
strategic growth initiatives.
Demonstrating confidence in management's ability to sustain
satisfactory operating results in a challenging environment, the
Board of Directors has approved an Open Market Repurchase Plan to
repurchase up to 500,000 shares of Dataram Common Stock. The
Board said it believes that, given the current trading prices of
our common stock, such repurchases would be of long-term benefit
to shareholders.
We extend deepest appreciation to our employees, who continued
working with diligence and dexterity in a difficult year; and to
our customers, who once again demonstrated their confidence in
our organization.
Sincerely,
JOHN J. CAHILL
John J. Cahill
Chairman
ROBERT V. TARANTINO
Robert V. Tarantino
President and Chief Executive Officer
July 14, 1996
Two<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Overview
Dataram is a developer, manufacturer and marketer of quality
computer memory products for use with computers, workstations and
servers. The Company's memory products, principally for
workstations and servers manufactured by Sun, Hewlett-Packard,
Digital Equipment Corporation, IBM, Apple, Compaq and Silicon
Graphics, are sold worldwide to distributors, value-added
resellers and large end users.
Computer memory products are produced by original equipment
manufacturers including those mentioned above, Dataram
Corporation and several other large independent memory
manufacturers as well as a number of small job shops and
specialty houses. Competition is fierce, and memory boards for
the computer workstation and server markets are commodity items
with low individual profit margins. The primary raw material
used in producing memory boards are dynamic random access memory
(DRAM) chips. The purchase cost of DRAM chips typically
represents approximately 95% of the total cost of a finished
workstation memory board. Consequently, average selling prices
for computer memory boards are extremely dependent on the pricing
and availability of DRAM chips.
<PAGE>
Results of Operations
The following table sets forth consolidated operating data
expressed as a percentage of revenues for the periods indicated.
Years Ended April 30, 1996 1995 1994
_____________________ ____ ____ ____
Revenues 100.0% 100.0% 100.0%
Cost of sales 90.0 88.1 81.7
_____ ______ _____
Gross profit 10.0 11.9 18.3
Engineering and development 1.5 2.4 4.2
Selling, general and administrative 6.2 11.1 15.9
_____ ______ _____
Earnings (loss) from operations 2.3 (1.6) (1.8)
Other income (expense), net (0.1) (0.4) 0.0
_____ ______ _____
Earnings (loss) before income taxes 2.2 (2.0) (1.8)
Income taxes (benefit) 0.9 (0.7) (0.9)
_____ ______ _____
Net earnings (loss) 1.3 (1.3) (0.9)
===== ====== ======
Fiscal 1996 Compared With Fiscal 1995
The computer memory market changed dramatically in fiscal 1996.
Up until late calendar 1995, DRAM chips had been in tight supply
for a period of approximately two and one-half years, primarily
because of the explosive growth in demand for personal computers.
Chip manufacturers allocated DRAMs to OEMs and the larger
independent memory manufacturers. Smaller manufacturers were
forced to obtain DRAMs on the spot market at premium prices.
Starting in late 1995, this situation changed. Chip manufacturers
had invested heavily in production capacity and the growth rate
for personal computers slowed modestly. Supply suddenly exceeded
demand. In the ensuing inventory correction, the supply of DRAMs
became plentiful and their prices plummeted. Competitive
pressures forced computer memory manufacturers to lower the
selling prices of memory boards as well. At present, most DRAMs
are readily available and are expected to remain so for the
foreseeable future. Consequently, average selling prices for
computer memory boards are likely to remain under pressure.
However, the workstation and server markets are expanding markets
and the unit volume growth rate for memory products remains high.
Revenues in 1996 totaled $107.6 million, an increase of 4.5% over
1995 revenues of $103.0 million. Revenues from the sale of
products for Sun and Hewlett-Packard manufactured workstations
and computers totalled 74.6% of revenue. Revenues for fiscal 1996
were negatively impacted in the fourth quarter by the decline in
average selling prices for memory boards associated with the
reduction in the price of DRAMs.
Cost of sales increased $6.2 million in fiscal 1996 from fiscal
1995. Cost of sales as a percentage of revenue increased by 1.9%
in fiscal 1996 from fiscal 1995. For most of the first three
quarters of fiscal 1996, cost of sales to support incremental
business was increased by the necessity of procuring DRAM chips
from sources of supply less competitively priced than the
Company's primary vendors.
Three<PAGE>
Engineering and development costs amounted to $1.6 million in
1996, a decrease of $0.9 million from fiscal 1995 expenditures of
$2.5 million. This was primarily the result of a work force
reduction implemented in the fourth quarter of fiscal 1995
associated with the previously announced decision to withdraw
from the storage product business. The Company intends to
maintain its commitment to timely introduction of new memory
products.
Selling, general and administrative costs decreased by 4.9% of
revenue to $6.7 million in fiscal 1996 from $11.5 million in
fiscal 1995. As a result of the decision to withdraw from the
storage product business in the fourth quarter of fiscal 1995,
the Company's general and administrative, sales and marketing
forces were significantly reduced.
Other expense, net of other income totaled $61,000 in 1996 versus
$364,000 in 1995. Fiscal 1996 expense consists primarily of net
interest expense. Included in 1995 expenses are $162,000 related
to disposals of fixed assets associated with the storage product
line. The balance of 1995 net other expense consists primarily of
interest expense offset by income from salvage of certain
obsolete equipment and inventory items.
Fiscal 1995 Compared With Fiscal 1994
Dataram announced in the fourth quarter of fiscal 1995 that it
was phasing out of its line of storage products. The phase out
resulted in a one time pre-tax charge to operations of $3.1
million for inventory write downs and disposals, severance
expenses and other costs related to storage operations. The
decision to withdraw from the storage business at this time was
primarily due to the fact that the rapidly changing demands of
the storage marketplace necessitated frequent product design
changes with little opportunity to recover development costs. It
was unclear as to when the Company's storage unit volumes could
reach a profitable level. The Company's computer memory business
accounted for 94% of total revenues in fiscal 1995 and was
profitable. As a result of the restructuring in fiscal 1995 and
1994, the Company substantially reduced its cost of doing
business. At the sales volume level of fiscal 1995, engineering
and development expense and selling, general and administrative
expenses are expected to be less than 10% of revenues.
Revenues in 1995 totaled $103.0 million, an increase of 29.5%
over 1994 revenues of $79.6 million. Revenues from the sale of
products for Sun and Hewlett-Packard workstations and computers
were the leading contributors, totaling 66.5% of revenue.
Revenues from the storage product line amounted to 6.2% of total
1995 revenues.
Cost of sales as a percentage of revenue increased by 6.4% or
$25.8 million in fiscal 1995 from fiscal 1994. Cost of sales for
memory products as a percentage of revenue for fiscal 1995 did
not change significantly from fiscal 1994 year end levels. Memory
product margins are not expected to improve in the foreseeable
future.
Engineering and development costs amounted to $2.5 million in
1995, a decrease of $0.8 million over fiscal 1994 expenditures.
This was primarily the result of a work force reduction
implemented in the fourth quarter of fiscal 1994. Today's less
complex workstation and server memories require less design
effort.
Selling, general and administrative costs decreased by 4.8% of
revenue to $11.5 million in fiscal 1995 from $12.7 million in
fiscal 1994. This decrease in costs was primarily the result of
work force restructuring made in the fourth quarter of fiscal
1994. During fiscal 1995, memory product sales were primarily
generated by the Company's internal sales team. As a result of
the decision to withdraw from the storage product business, the
Company's external sales and storage marketing force was
significantly reduced in the fourth quarter of fiscal 1995.
Other expense, net of other income totaled $364,000 in 1995
versus $8,000 in 1994. Fiscal 1995 expenses include $296,000 of
interest expense as well as $162,000 associated with the disposal
of fixed assets related to the storage product line offset by
income from salvage of certain obsolete equipment and inventory
items.
Four<PAGE>
Liquidity and Capital Resources
The Company maintained a strong financial condition throughout
1996. A line of credit was used during the year to deal with
peak cash demands. At the end of the year there was no
outstanding balance owed on the credit line. Working capital at
the end of fiscal 1996 amounted to $16.8 million, including cash
and cash equivalents of $8.5 million, compared to working capital
of $14.1 million, including cash of $0.7 million in fiscal 1995.
Current assets at year end were 3.4 times current liabilities
compared to 2.3 at the end of 1995.
Inventories at the end of 1996 were $2.3 million, a decrease of
71.3% over 1995 year-end inventories of $8.1 million. The
decrease in inventories was largely attributable to the change in
the DRAM marketplace which occurred in late 1995. Currently,
DRAMs are readily available, and customer delivery requirements
can be satisfied without maintaining large inventory levels.
Capital expenditures were $270,000 in 1996 compared to $581,000
in 1995. Capital expenditures for both years were primarily for
automated testing equipment and management information systems
upgrades. At the end of fiscal 1996, contractual commitments for
capital purchases were nil. Capital expenditures in fiscal 1997
are expected to be in the same range as fiscal 1996 expenditures.
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 purchase of up to 500,000 shares of the Company's
common stock.
Inflation has not had a significant impact on the Company's
revenue and operations.
At year-end, the Company had no long-term debt outstanding and
had available a committed line of credit providing for borrowings
of up to $11 million, of which $10 million is a revolving credit
facility and $1 million is a term loan facility. These facilities
are still in place.
Management believes that its working capital together with
internally generated funds and its bank line of credit are
adequate to finance the Company's stock repurchase plan,
operating needs and future capital requirements.
Common Stock Information
The Common Stock of the Company is traded on the American Stock
Exchange under the symbol "DTM". The following table sets forth,
for the periods indicated, the high and low closing prices for
the Common Stock as reported by the American Stock Exchange.
1996 1995
___________________ __________________
High Low High Low
___________________ __________________
1st Quarter 7 3/4 4 5/8 5 5/8 4 1/8
2nd Quarter 9 3/8 6 1/4 5 7/8 4 1/4
3rd Quarter 8 7/8 5 3/8 7 5/8 4 5/8
4th Quarter 7 4 1/8 7 4 1/2
At April 30, 1996 there were approximately 2,000 shareholders.
The Company has never paid a dividend and does not at present
have an intention to pay a dividend in the foreseeable future.
Five<PAGE>
DATARAM CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
April 30, 1996 and 1995
(In thousands, except share amounts)
1996 1995
______ ______
Assets
Current assets:
Cash and cash equivalents $ 8,482 $ 722
Trade receivables, less allowance for
doubtful accounts of $800 in 1996 and
$695 in 1995, respectively 12,078 14,721
Inventories:
Raw materials 1,435 4,726
Work in process 45 648
Finished goods 832 2,687
______ ______
2,312 8,061
Income tax receivable (note 4) 424 676
Deferred income taxes (note 4) 389 486
Other current assets 50 44
______ ______
Total current assets 23,735 24,710
______ ______
Property and equipment, at cost:
Land 875 875
Machinery and equipment 6,190 5,952
______ ______
7,065 6,827
Less accumulated depreciation 4,867 4,197
______ ______
Net property and equipment 2,198 2,630
Other assets 6 15
______ ______
$25,939 $27,355
====== ======
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 5,909 $ 8,780
Accrued liabilities (note 7) 1,023 1,869
______ ______
Total current liabilities 6,932 10,649
Deferred income taxes (note 4) 929 316
______ ______
Total liabilities 7,861 10,965
______ ______
<PAGE>
Stockholders' equity (note 5):
Common stock, par value $1.00 per share.
Authorized 18,000,000 shares; issued
and outstanding 3,824,305 in 1996
and 3,792,305 in 1995 3,824 3,792
Additional paid-in capital 3,425 3,219
Retained earnings 10,829 9,379
______ ______
Total stockholders' equity 18,078 16,390
______ ______
Commitments (note 6)
$25,939 $27,355
====== ======
See accompanying notes to consolidated financial statements.
Six<PAGE>
DATARAM CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
Years ended April 30, 1996, 1995 and 1994
(In thousands, except per share amounts)
1996 1995 1994
_______ _______ _______
Revenues $107,627 $103,028 $ 79,573
_______ _______ _______
Costs and expenses:
Cost of sales 96,929 90,758 64,996
Engineering and development 1,584 2,484 3,320
Selling, general and administrative 6,661 11,451 12,682
_______ _______ _______
105,174 104,693 80,998
_______ _______ _______
Earnings (loss) from operations 2,453 (1,665) (1,425)
Other income (expense):
Other income (expense), net (2) (68) 29
Interest income 41 - 16
Interest expense (100) (296) (53)
_______ _______ _______
(61) (364) (8)
_______ _______ _______
Earnings (loss) before income tax
expense (benefit) and cumulative
effect of change in accounting
for income taxes 2,392 (2,029) (1,433)
Income tax expense (benefit) (note 4) 942 (730) (583)
_______ _______ _______
Earnings (loss) before cumulative
effect of change in accounting
for income taxes 1,450 (1,299) (850)
Cumulative effect of change in
accounting for income taxes - - 118
_______ _______ _______
Net earnings (loss) $1,450 $(1,299) $ (732)
======= ======= =======
Earnings (loss) per common share:
Earnings (loss) before cumulative
effect of change in accounting
for income taxes .38 (.34) (.22)
Cumulative effect of change in
accounting for income taxes - - .03
_______ _______ _______
Net earnings (loss) per common share $ .38 $ (.34) $ (.19)
======= ======= =======
See accompanying notes to consolidated financial statements.
Seven<PAGE>
DATARAM CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Years ended April 30, 1996, 1995 and 1994
(In thousands)
1996 1995 1994
______ _____ ______
Cash flows from operating activities:
Net earnings (loss) $1,450 $(1,299) $ (732)
Adjustments to reconcile net earnings
(loss)to net cash provided by
(used in) operating activities:
Depreciation and amortization 693 876 825
Loss on disposition of property
and equipment 2 162 -
Bad debt expense 485 422 258
Cumulative effect of change in
accounting for income taxes - - (118)
Deferred income tax expense
(benefit) 710 (530) (139)
Write-off of inventory - 1,880 -
Changes in assets and liabilities:
(Increase) decrease in trade
receivables 2,333 (1,753) 81
(Increase) decrease in
inventories 5,749 1,866 (4,931)
(Increase) decrease in
income tax receivable 252 326 (1,002)
Increase in other current assets (6) (39) (3)
Decrease in other assets 9 6 15
Increase (decrease) in accounts
payable (2,871) (1,177) 5,413
Increase (decrease) in accrued
liabilities (1,021) 339 (345)
Decrease in income taxes
payable - - (666)
_____ _____ _____
Net cash provided by (used in)
operating activities 7,785 1,079 (1,344)
_____ _____ _____
Cash flows from investing activities:
Proceeds from sale of property
and equipment 7 - -
Purchase of property and equipment (270) (581) (865)
_____ _____ _____
Net cash used in investing activities (263) (581) (865)
_____ _____ _____<PAGE>
Cash flows from financing activities:
Purchase and subsequent cancellation of
shares of common stock - (469) (59)
Proceeds from sale of common shares
under stock option plan (including
tax benefits) 238 255 10
_____ _____ _____
Net cash provided by (used in)
financing activities 238 (214) (49)
_____ _____ _____
Net increase (decrease) in cash and
cash equivalents 7,760 284 (2,258)
Cash and cash equivalents at
beginning of year 722 438 2,696
_____ _____ _____
Cash and cash equivalents at end
of year $ 8,482 $ 722 $ 438
===== ===== =====
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest $ 125 $ 258 $ 53
Income taxes 582 - 472
===== ===== =====
Supplemental disclosures of noncash transactions:
Disposal of fully-depreciated
equipment $ - 348 -
===== ===== =====
See accompanying notes to consolidated financial statements.
Eight<PAGE>
DATARAM CORPORATION AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
Years ended April 30, 1996, 1995 and 1994
(In thousands, except share amounts)
Total
Additional Stock-
Common paid-in Retained holders'
stock capital earning equity
______ ________ _______ ________
Balance at April 30, 1993 $ 3,808 $ 3,113 $11,763 $18,684
Issuance of 5,000 shares
under stock option plan 5 5 - 10
Purchase and subsequent
cancellation of
7,000 shares (7) (11) (41) (59)
Net loss - - (732) (732)
______ ________ _______ ______
Balance at April 30, 1994 3,806 3,107 10,990 17,903
Issuance of 61,500 shares
under stock option plan 61 194 - 255
Purchase and subsequent
cancellation of 75,000 shares (75) (82) (312) (469)
Net loss - - (1,299) (1,299)
______ ________ _______ ______
Balance at April 30, 1995 3,792 3,219 9,379 16,390
Issuance of 32,000 shares
under stock option plan 32 206 - 238
Net earnings - - 1,450 1,450
______ ________ _______ ______
Balance at April 30, 1996 $ 3,824 $ 3,425 $10,829 $18,078
====== ======== ======= ======
See accompanying notes to consolidated financial statements.
Nine<PAGE>
Dataram Corporation and Subsidiaries
Notes to Consolidated Financial Statements
April 30, 1996, 1995 and 1994
(1) Significant Accounting Policies
Principles of consolidation:
The consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries, Dataram International
Sales Corporation (a Domestic International Sales Corporation
(DISC)) and DTM Development Corporation. DTM Development
Corporation was dissolved during 1995. All significant
intercompany transactions and balances have been eliminated.
Cash and cash equivalents.
Cash and cash equivalents consist of unrestricted cash, and in
1996 money market preferred stock and commercial paper purchased
with a maturity of three months or less.
Inventory valuation:
Inventories are valued at the lower of first-in first-out cost or
market.
Property and equipment:
Property and equipment is recorded at cost. Depreciation is
generally computed on the straight-line basis. Depreciation
rates are based on the estimated useful lives which range from
three to five years for machinery and equipment. When property
or equipment is retired or otherwise disposed of, related costs
and accumulated depreciation are removed from the accounts.
Repair and maintenance costs are charged to operations as
incurred.
Revenue recognition:
Revenue from product sales is recognized when the related goods
are shipped to the customer and all significant obligations of
the Company have been satisfied. Estimated warranty costs are
accrued.
Product development and related engineering:
The Company expenses product development and related engineering
costs as incurred. Engineering effort is directed to development
of new or improved products as well as ongoing support for
existing products.
<PAGE>
Income taxes:
Effective May 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109 (Statement 109), "Accounting for
Income Taxes" and has reported the cumulative effect of that
change in the method of accounting for income taxes in the 1994
consolidated statement of operations. Statement 109 requires a
change from the deferred method of accounting for income taxes
under APB Opinion 11 to the asset and liability method of
accounting for income taxes. Under the asset and liability
method of Statement 109, deferred tax assets and liabilities are
recognized for the estimated future tax consequences attributable
to differences between the financial statement carrying amounts
of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using
enacted tax rates in effect for the year in which those
temporary differences are expected to be recovered or settled.
Under Statement 109, the effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in
the period that the tax rate changes.
Concentration of credit risk:
Financial instruments that potentially subject the Company to
concentration of credit risk consist primarily of cash and cash
equivalents. The Company maintains its cash and cash equivalents
in financial institutions and brokerage accounts. To the extent
that such deposits exceed the maximum insurance levels, they are
uninsured. The Company performs ongoing evaluations of its
customers' financial condition and, generally, requires no
collateral from its customers.
Earnings (loss) per share:
Earnings (loss) per common and common equivalent share are based
on the weighted average number of shares outstanding and
equivalent shares from dilutive stock options. In 1995 and 1994,
the calculation was based solely on weighted average number of
shares outstanding, as all options were anti-dilutive.
The determination of such shares used in the computation of per
share data is as follows:
Weighted Equivalent
average number shares
of shares from dilutive Total
outstanding stock options shares
______________ _____________ __________
1996 3,816,261 19,097 3,835,358
1995 3,796,526 - 3,796,526
1994 3,806,291 - 3,806,291
<PAGE>
Use of estimates:
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Fair value of financial instruments:
Statement of Financial Accounting Standards SFAS No. 107,
"Disclosure about Fair Value of Financial Instruments", defines
the fair value of a financial instrument as the amount at which
the instrument could be exchanged in a current transaction
between willing parties. The Company believes that there is no
material difference between the fair value and the reported
amounts of financial instruments in the consolidated balance
sheets.
Stock options:
In October 1995, the Financial Accounting Standards Board issued
SFAS No. 123, "Accounting for Stock-based Compensation." This
statement requires companies to make pro forma disclosures in a
footnote of net income as if the fair value based method of
accounting for stock options, as defined in the statement, had
been applied. The accounting requirements of this statement are
effective for transactions entered into during 1996 and ensuing
years. However, the footnote disclosure requirement does not
begin until 1997, at which time the disclosure will present
information on a comparative basis. Management believes that the
adoption of this pronouncement will not have a material effect on
the consolidated financial statements.
Ten<PAGE>
Reclassification
Certain amounts in the 1995 and 1994 consolidated financial
statements have been reclassified to conform to the 1996
presentation.
(2) Long-term Debt
Through October 26, 1994, the Company had a revolving credit
facility with a bank which provided for borrowings up to
$10,000,000. On October 27, 1994, the Company terminated that
agreement and entered into a credit agreement with another bank
for a three year $ 10,000,000 revolving credit facility and a
$3,500,000 term loan facility. Borrowings under the term loan
facility must be repaid in equal installments for a term of no
longer than 60 months from the respective term loan date or may
be prepaid without penalty. The agreement provides for
Eurodollar rate loans, CD rate loans and base rate loans at an
interest rate no higher than the bank's base commercial lending
rate less 1/2%. The Company is required to pay a commitment fee
equal to 1/16 of one percent per annum on the unused commitment.
The agreement contains certain restrictive financial covenants
including a minimum current ratio, minimum tangible net worth
requirement, minimum interest coverage ratio, maximum debt to
equity ratio and certain other covenants, as defined by the
agreement. On April 28, 1995 the Company amended and restated
its credit facility with its bank dated October 27, 1994. Under
the amended agreement the Company reduced the term loan facility
to $1,500,000 and modified certain financial covenants. The
maximum and average balances outstanding at any time during 1996
were $5,500,000 and $1,200,000, respectively. The maximum and
average balances outstanding at any time during 1995 were
$7,200,000 and $3,800,000, respectively. The average interest
rate was 8% and 7.8% in fiscal years 1996 and 1995, respectively.
As of April 30, 1996 and 1995, there were no amounts outstanding
under these credit facilities. As of April 30, 1996, the amounts
available for borrowing under the revolving credit facility and
term loan facility were $10,000,000 and approximately $1,000,000,
respectively.
(3) Restructuring
In Fiscal years 1995 and 1994, the Company restructured certain
aspects of its business. During the fourth quarter of 1995, the
Company announced the phase-out of its storage product line. In
connection with this phase-out, the Company recorded a $3,132,000
pre-tax charge to 1995 operations consisting of approximately:
(1) $1,880,000 write-off of inventory; (2) $640,000 in severance
and other costs related to employee termination; (3) $162,000 for
disposal of machinery and equipment related to the storage
product line; and (4) $450,000 in accruals for estimated net
returns, warranty obligations, and other costs. These charges
are included in cost of sales, engineering and development,
selling, general and administrative, and other expense in the
accompanying 1995 consolidated statement of operations and
aggregated approximately $2,336,000, $150,000, $484,000 and
$162,000, respectively.
As of April 30, 1995, the Company had accrued approximately
$1,090,000 for probable future cash expenditures related to the
discontinued storage product line (of which none were paid as of
April 30, 1995). All amounts accrued as of April 30, 1995 were
paid out or otherwise satisfied during fiscal 1996.
During the third quarter of 1994, as a result of changes in the
computer memory industry, the Company initiated a plan to reduce
future operating costs through human resource and facility
restructuring.
In connection with this plan, the Company recorded a $1,213,000
pretax charge to 1994 operations consisting of: (1) $836,000 of
estimated costs relating to the Company's human resource
restructuring program; (2) $300,000 write-off of inventory
associated with the discontinuance of sub-contract manufacturing
at one facility; (3) $22,000 provision for equipment relating to
discontinued products; and (4) $55,000 for other restructuring
related charges. Restructuring charges are included in cost of
sales, engineering and development, and selling, general and
administrative in the accompanying 1994 consolidated statement of
operations and aggregated $698,000, $182,000 and $333,000,
respectively.
As of April 30, 1994, the Company had accrued approximately
$182,000 for probable future cash expenditures and had made
payments of approximately $709,000 of cash in 1994 related to the
aforementioned restructuring plan. The Company completed its
human resource and facility consolidation program in fiscal 1995,
which resulted in the payment of substantially all of the amounts
accrued for as of April 30, 1994.
Eleven<PAGE>
(4) Income Taxes
Income tax expense (benefit) for the years ended April 30
consists of the following:
(In thousands) 1996 1995 1994
____ ____ ____
Current:
Federal $ 232 $ (200) $ (444)
State - - -
____ ____ ____
232 (200) (444)
____ ____ ____
Deferred:
Federal 598 (474) (54)
State 112 (56) (85)
____ ____ ____
710 (530) (139)
____ ____ ____
Total expense (benefit) $ 942 $ (730) $ (583)
==== ==== ====
The actual income tax expense (benefit) differs from "expected"
tax expense (benefit) (computed by applying the U. S. corporate
tax rate of 34% to earnings (loss) before income taxes) as
follows:
(In thousands) 1996 1995 1994
____ ____ ____
Computed "expected' tax
expense (benefit) $ 813 $ (690) $ (487)
State income taxes (benefit)
(net of Federal income tax
benefit) 74 (37) (56)
Dividend exclusion - - (4)
Other 55 (3) (36)
____ ____ ____
$ 942 $ (730) $ (583)
==== ==== ====
The tax effect of temporary differences that give rise to
significant portions of the deferred tax assets and deferred tax
liabilities are presented below:
<PAGE>
(In thousands) 1996 1995
____ ____
Deferred tax assets:
Compensated absences, principally due
to accrual for financial reporting
purposes $ 73 $ 81
Accounts receivable, principally due
to allowance for doubtful accounts 316 198
Inventories, principally due to
reserve for obsolescence and
additional costs inventoried for
tax purposes pursuant to Tax Reform
Act of 1986 - 207
Net operating loss carryforwards 80 514
____ ____
Total gross deferred tax assets 469 1,000
Less valuation allowance - -
____ ____
Net deferred tax assets 469 1,000
____ ____
Deferred tax liabilities:
Investment in wholly-owned subsidiary,
principally due to unremitted
earnings of DISC (663) (663)
Property and equipment, principally
due to differences in depreciation (33) (74)
Other (313) (93)
____ ____
Total gross deferred tax liabilities (1,009) (830)
____ ____
Net deferred tax assets (liabilities) $(540) $ 170
==== ====
As of April 30, 1996, the Company has net operating loss
carryforwards for state income tax purposes of approximately
$1,500,000, which expire through the year 2001.
Twelve<PAGE>
(5) Stock Option Plans
During 1982, the Company adopted an incentive stock option plan.
In 1995, 1,500 options were exercised under this plan at an
exercise price of $1.625 per share. As of April 30, 1996, no
further options may be granted under the plan and options to
purchase 6,000 shares are outstanding and exercisable at an
exercise price of $3.567 per share.
In September 1992, the Company adopted an incentive and non-
statutory stock option plan for the purpose of permitting certain
key employees to acquire equity in the Company and to promote the
growth and profitability of the Company by attracting and
retaining key employees. In general, the plan allows granting of
up to 950,000 shares of the Company's common stock at an option
price to be no less than the fair market value of the stock on
the date such options are granted. The holder of the option may
purchase 20% of the common stock with respect to which the option
has been granted on or after the first anniversary of the date of
the grant and an additional 20% of such shares on or after each
of the four succeeding anniversary dates. At April 30, 1996,
139,500 of the outstanding options are exercisable.
The status of the 1992 plan for the three years ended April 30,
1996 is as follows:
Options Outstanding
___________________
Price
Shares per share
______ _________
Balance April 30, 1993 400,000 $ 7.125
Granted 20,000 7.125
Exercised - -
Cancelled (100,000) 7.125
_______
Balance April 30, 1994 320,000 7.125
Granted - -
Exercised - -
Cancelled - -
_______
Balance April 30, 1995 320,000 7.125
Granted 142,000 5.125-6.75
Exercised (32,000) 7.125
Cancelled (78,000) 7.125
_______
Balance April 30, 1996 352,000 $5.125-7.125
======= ============
In March 1990, the Company granted a total of 90,000 shares of
nonqualified stock options to three non-employee directors of the
Company. The options were granted for the purpose of retaining
the services of qualified directors who are not employees of the
Company and to provide additional incentive for such directors to
work to further the best interests of the Company and its
shareholders. The aforementioned options are exercisable at a
price of $4.21 per share, the fair market value at date of grant,
for a five-year period commencing at the date of grant. During
1995, 60,000 of these options were exercised and the remaining
30,000 options expired.
In November 1992, the Company granted options to acquire a total
of 120,000 shares to four non-employee directors of the Company.
These options were granted for the purpose of retaining the
services of directors who are not employees of the Company and to
provide additional incentive for such directors to work to
further the best interests of the Company and its shareholders.
The aforementioned options are exercisable at a price of $11.25
per share, the fair value at the date of grant, and expire five
years after date of grant. Of each option 25% is first
exercisable on or after the first anniversary of the date of the
grant and an additional 25% on each of three succeeding
anniversary dates. During 1996, 30,000 of these outstanding
options were canceled in accordance with the terms of the plan.
In March 1993, the Company granted an additional option to
acquire 30,000 shares to an officer of the Company upon the same
terms. This option was granted for the purpose of retaining the
services of this officer who is not an employee of the Company.
This option is exercisable at a price of $11.25 per share, which
exceeded the fair value at the date of grant and expires in
November 1997. At April 30, 1996, 90,000 of these outstanding
options were exercisable.
(6) Commitments
The Company and its subsidiaries occupy various facilities and
operate various equipment under operating lease arrangements.
Rents charged to operations amounted to approximately $555,000 in
1996, $449,000 in 1995 and $477,000 in 1994.
Minimum annual rental commitments for all noncancellable
operating leases as of April 30, 1996 are approximately as
follows:
(In thousands)
1997 $ 594
1998 579
1999 563
2000 563
2001 281
_____
$2,580
=====
<PAGE>
(7) Accrued Liabilities
Accrued liabilities consist of the following:
(In thousands) 1996 1995
____ ____
Payrolls, including
vacations $ 252 $1,084
Commissions 225 120
Other 546 665
______ ______
$1,023 $1,869
====== ======
(8) Employee Benefit Plan
The Company has a defined contribution plan (the Plan) which is
available to all qualified employees. Employees may elect to
contribute a portion of their compensation to the Plan, subject
to certain limitations. The Company contributes a percentage of
the employee's contribution, subject to a maximum of 6 percent of
the employee's eligible compensation, based on the employee's
years of service. The Company's matching contributions
aggregated approximately $127,000, $215,000 and $273,000 in 1996,
1995 and 1994, respectively.
Thirteen<PAGE>
(9) Segment Information - Operations and Assets by Geographic
Locations
The Company operates in one business segment and develops,
manufactures and markets a variety of memory systems for use with
workstations, minicomputers and servers which are manufactured by
various computer systems companies. Information for 1996, 1995
and 1994 about the Company's operations and identifiable assets
by geographic region is as follows:
(In thousands) Export
______________
1996 United States Europe Other Consolidated
_____________ ______ _____ ____________
Revenues -
unaffiliated customers $76,072 $21,630 $ 9,925 $107,627
_______ _______ _______ ________
Net revenues $76,072 $21,630 $ 9,925 $107,627
======= ======= ======= ========
Net earnings $ 1,450
========
Identifiable assets $ 25,939
========
(In thousands) Export
______________
1995 United States Europe Other Consolidated
_____________ ______ _____ ____________
Revenues -
unaffiliated customers $78,535 $14,654 $ 9,839 $103,028
_______ _______ _______ ________
Net revenues $78,535 $14,654 $ 9,839 $103,028
======= ======= ======= ========
Net earnings $ (1,299)
========
Identifiable assets $ 27,355
========
(In thousands) Export
______________
1994 United States Europe Other Consolidated
_____________ ______ _____ ____________
Revenues -
unaffiliated customers $59,900 $11,563 $ 8,110 $ 79,573
_______ _______ _______ ________
Net revenues $59,900 $11,563 $ 8,110 $ 79,573
======= ======= ======= ========
Net earnings $ (732)
========
Identifiable assets $ 30,135
========
Fourteen<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholders
Dataram Corporation:
We have audited the accompanying consolidated balance sheets of
Dataram Corporation and subsidiaries as of April 30, 1996 and
1995, and the related consolidated statements of operations,
stockholders' equity, and cash flows for each of the years in the
three year period ended April 30, 1996. These consolidated
financial statements arc the responsibility of the Company's
management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of Dataram Corporation and subsidiaries as of April 30,
1996 and 1995, and the results of their operations and their cash
flows for each of the years in the three-year period ended April
30, 1996, in conformity with generally accepted accounting
principles.
KPMG PEAT MARWICK LLP
Princeton, New Jersey
May 24, 1996
Fifteen<PAGE>
Selected Financial Data
(Not covered by independent auditors' report)
(In thousands, except per share amounts
Years Ended April 30, 1996 1995 1994 1993 1992
______________________ ____ ____ ____ ____ ____
Revenues $107,627 $103,028 $ 79,573 $ 58,564 $40,166
Net earnings (loss) 1,450 (1,299) (732) 3,018 3,033
Primary earnings
(loss) per share .38 (.34) (.19) .76 .80
Fully diluted earnings
(loss) per share .38 (.34) (.19) .76 .79
Current assets 23,735 24,710 27,027 23,784 18,523
Total assets 25,939 27,355 30,135 26,867 21,343
Current liabilities 6,932 10,649 11,487 7,085 4,648
Long-term debt 0 0 0 0 0
Total stockholders'
equity 18,078 16,390 17,903 18,684 15,645
Cash dividends - - - -
Note: Net loss for 1994 included income of $118,000 or $0.03 per share related
to adoption of SFAS 109, Accounting for Income Taxes
Quarterly Financial Data (Unaudited)
(In thousands, except per share amounts)
Quarter Ended
____________________________________________
Fiscal 1996 July 31 October 31 January 31 April 30
___________ _______ __________ __________ ________
Revenues $24,885 $32,331 $28,385 $22,026
Gross profit 3,031 3,405 1,475 2,787
Net earnings (loss) 537 708 (243) 448
Net earnings (loss) per common
and common equivalent share .14 .18 (.06) .12
Fiscal 1995 July 31 October 31 January 31 April 30
___________ _______ __________ __________ ________
Revenues $22,163 $27,361 $26,273 $27,231
Gross profit 3,676 4,573 3,796 225
Net earnings (loss) 268 526 215 (2,308)
Net earnings (loss) per common
and common equivalent share .07 .14 .06 (.61)
Sixteen
<PAGE>
DIRECTORS AND CORPORATE OFFICERS
Directors
John J. Cahill
Chairman of the Board of Directors
of Dataram Corporation
Private Investor
Robert V. Tarantino
President and Chief Executive Officer
of Dataram Corporation
Bernard L. Riley
Private Investor
Richard Holzman*
Private Investor
Thomas A. Majewski*
Principal, Walden Inc.
(Venture Capital)
*Member of Audit Committee
Corporate Officers
John J. Cahill
Chairman of the Board
Robert V. Tarantino
President and Chief Executive Officer
Mark E. Maddocks
Vice President, Finance and
Chief Financial Officer
Jeffrey H. Duncan
Vice President of Manufacturing
and Engineering
Hugh F. Tucker
Vice President, Sales and Marketing
Thomas J. Bitar
Secretary
Partner, Dillon, Bitar & Luther
(Law Firm)
Corporate Headquarters
Dataram Corporation
186 Princeton-Hightstown Road
West Windsor, NJ 08543
609-799-0071
Auditors
KPMG Peat Marwick LLP
Princeton, NJ
General Counsel
Dillon, Bitar & Luther
Morristown, NJ
Transfer Agent and Registrar
First Union National Bank
of North Carolina
Shareholders Services Group
230 South Tryon Street
11th Floor
Charlotte, NC 82288-1153
Stock Listing
Dataram's common stock is listed on
the American Stock Exchange with the
trading system DTM.
Annual Meeting
The annual meeting of shareholders
will be held on Tuesday, September 10,
1996, at 2:00 p.m. at Dataram's
corporate headquarters at:
186 Princeton-Hightstown Road
West Windsor Business Park
West Windsor, New Jersey.
Form 10-K
A copy of the Company's annual report
on Form 10-K filed with the Securities
& Exchange Commission is available
without charge to shareholders.
Address requests to:
Vice President, Finance
Dataram Corporation
P.O. Box 7528
Princeton, NJ 08543-7528<PAGE>
<PAGE>
DATARAM CORPORATION
CORPORATE HEADQUARTERS
P.O. BOX 7528
PRINCETON, NJ 08543-7528
TELEPHONE
800-DATARAM
609-799-0071
FAX
609-799-6734
WEB SITE
http://www/dataram.com
[DATARAM LOGO]
EXHIBIT 28(a)
EARNINGS PRESS RELEASE
23<PAGE>
DATARAM
DATARAM REPORTS IMPROVED EARNINGS
PRINCETON, N.J., May 29 / PR Newswire/ -- Dataram Corporation
(AMEX: DTM) reported improved earnings for the fourth quarter and
for fiscal 1996, Robert V. Tarantino, president and chief executive
officer, announced today.
Revenues for the fourth quarter ended April 30, 1996, were
$22.0 million versus $27.2 million for the comparable prior year
period. Net earnings were $446,000, or $.12 per share, compared to
a net loss of $2,308,000 or $.61 per share, for the comparable
prior year period.
For the fiscal year ended April 30, 1996, revenues totaled
$107.6 million compared to $103.0 million for the fiscal year ended
April 30, 1995. Net earnings were $1,450,000, or $.38 per hare,
versus a net loss of $1,299,000, or $.34 per share, for the prior
fiscal year.
"The price of dynamic random access memory (DRAM) chips --
which comprise approximately 95 percent of our memory product cost
- -- have declined more than 50 percent in the last four months as a
result of a sudden and dramatic worldwide oversupply situation.
Resulting competitive pressures in our marketplace have required us
to sharply reduce selling prices for our products, " Tarantino
stated. "We are pleased that we have achieved profitability in an
extremely challenging and unpredictable business environment."
Tarantino said that although selling prices have deteriorated,
unit volumes shipped in fiscal 1996 were at record levels both for
the fourth quarter and full year. He attributed Dataram's
profitable performance to a streamlined, cost-efficient
organization anchored by a highly automated, service-oriented
production facility which produces customer orders in 24 hours or
less. "This state-of-the-art facility enables us to satisfy
demanding customer requirements while attaining low inventory
levels," he added.
"The fact that fourth quarter revenues decreased by 19 percent
while selling prices declined by more than double that percentage
figure, attests to the continuing strong demand for our memory
products," Tarantino declared. "We face a major challenge in
finding ways to stabilize revenues in the face of continued
sustained pressure on selling prices."
Dataram develops, manufactures and markets qualify computer
memory products for workstations, servers and personal computers.
-more-
DATARAM CORPORATION. P.O. BOX 7528 PRINCETON, NJ 08543-7528
(609) 799-0071 fax (609) 799-6734
24<PAGE>
DATARAM CORPORATION AND SUBSIDIARY
Consolidated Summary Information
(In thousands except per share amounts)
Quarter Ended Twelve Months Ended
1996 1995 1996 1995
Revenues $22,026 $27,231 $l07,627 $l03,028
Net Earnings (Loss) $446 $(2,308) 1,450 $(1,299)
Net Earnings (Loss)
Per Share $.12 $(.61) $.38 $ (.34)
Average Shares
Outstanding 3,828 3,783 3,835 3.797
/deval/
- -0- 5/29/96
/CONTACT: Mark Maddocks, Vice President, Finance of Dataram,
609-799-0071
(DTM)
-0-
25<PAGE>
