Dataram Corp. (DRAM, Financial) filed Quarterly Report for the period ended 2011-01-31.
Dataram Corp. has a market cap of $19.9 million; its shares were traded at around $2.23 with and P/S ratio of 0.5.
activities totaled approximately $1,596,000. Net loss in the period was
approximately $3,792,000. Accounts payable decreased by approximately
$1,324,000, primarily as a result of a reduction in inventories of
approximately $1,764,000. The reduction in inventory is attributable to
higher availability of DRAM's resulting in shorter lead times. Accrued
liabilities decreased by approximately $1,033,000, primarily as a result of
payment of an accrued contingently payable acquisition price for MMB. Other
current assets increased by approximately $241,000. Depreciation and
amortization of approximately $780,000 was recorded in fiscal 2011's first
nine months. Trade receivables decreased by approximately $1,776,000.
Non-cash stock-based compensation expense of approximately $461,000 was also
recorded.
Three months ended Nine months ended
January 31, 2010 January 31, 2010
________________ ________________
United States $ 10,028,000 $ 26,308,000
Europe 1,258,000 3,634,000
Other (principally Asia Pacific Region) 998,000 2,205,000
________________ ________________
Consolidated $ 12,284,000 $ 32,147,000
= =
Research and development expense in fiscal 2011's third quarter and nine
months was $134,000 and $1,894,000, respectively, versus $892,000 and
$3,388,000 in the comparable prior year periods. Research and development
expense includes payroll, employee benefits, stock-based compensation
expense, and other headcount-related expenses associated with product
development. Research and development expense also includes third-party
development and programming costs. In the first quarter of the prior
fiscal year, the Company implemented a strategy to introduce new and
complementary products into its offerings portfolio. The Company is
currently focusing on the development of a line of high performance
storage caching products ("XcelaSAN"). XcelaSAN is a unique intelligent
Storage Area Network (SAN) optimization solution that delivers substantive
application performance improvement to applications such as Oracle, SQL and
VMware. XcelaSAN augments existing storage systems by transparently applying
intelligent caching algorithms that serve the most active block-level data
from high-speed storage, creating an intelligent, virtual solid state SAN.
As part of that strategy, in January 2009, the Company entered into a
software purchase and license agreement with another company whereby the
Company acquired the exclusive right to purchase specified software for a
price of $900,000 plus a contingent payment of $100,000. Fiscal 2010's
research and development expense includes $600,000 of expense related to the
Agreement, of which $300,000 was expensed in the first fiscal quarter and
$300,000 was expensed in the second fiscal quarter. The Company owns the
software. The software and the storage products, which incorporate the
software, are currently under development. On November 4, 2011, management
concluded that technological feasibility of the product was established.
In fiscal 2011's third quarter ended January 31, 2011 the Company
capitalized $768,000 of research and development costs. We expect to make
further investments in this area.
Selling, general and administrative (S,G&A) expense in fiscal 2011's third
quarter and nine months decreased by approximately $346,000 and $839,000,
respectively, from the comparable prior year periods. The reduction in this
year's third quarter is primarily the result of reduced stock option expense
recorded as a component of S,G&A. Stock option expense was approximately
$113,000 in the current fiscal year's third quarter compared to $345,000
in the same prior year period. Intangible asset amortization recorded as a
component of S,G&A expense was approximately $57,000 less than the prior
year's third quarter. There has been and overall reduction of S,G&A expense
in Fiscal 2011 compared to the prior year periods.
Other income (expense), net for the third quarter and nine months totaled
$179,000 and $339,000 of expense, respectively, for fiscal 2011. Fiscal
2010's third quarter and nine months totaled $11,000 of expense and
$11,000 income, respectively. Other expense in fiscal 2011's third quarter
consisted primarily of interest expense of $105,000 and $54,000 of foreign
currency transaction losses, primarily as a result of the EURO weakening
relative to the US dollar. Fiscal 2011's nine month other expense of
$339,000 consisted of $184,000 of interest expense and $139,000 of foreign
currency transaction losses, primarily as a result of the EURO weakening
relative to the US dollar. Other expense in fiscal 2010's third quarter
consisted primarily of $11,000 of foreign currency transaction losses,
primarily as a result of the EURO weakening relative to the US dollar. Nine
month other income of $11,000 consisted primarily of $10,000 of other
income related to a gain on an asset disposal. There was also $7,000 of net
interest income and $6,000 of foreign currency transaction losses,
primarily as a result of the EURO weakening relative to the US dollar.
Income tax expense for the three and nine months ended January 31, 2011
totaled approximately $5,000 and consisted of state minimum income tax
payments. Income tax expense for the same prior year periods totaled
$5,281,000 and $3,611,000, respectively. The Company utilizes the asset
and liability method of accounting for income taxes in accordance with
the provisions of the Expenses - Income Taxes Topic of the Financial
Accounting Standards Board (FASB) Accounting Standards Codification
(ASC)(Codification). Under the asset and liability method, 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. A valuation allowance is provided when the Company determines
that it is more likely than not that some portion or all of the deferred
tax assets will not be realized. The Company considers certain tax
planning strategies in its assessment as to the recoverability of its
tax assets. In each reporting period, the Company assesses, based on the
weight of all evidence, both positive and negative, whether a valuation
allowance on its deferred tax assets is warranted. Based on the assessment
conducted in the Company's reporting period ended January 31, 2010, the
Company concluded that such an allowance was warranted, and, accordingly,
recorded a valuation allowance of approximately $5.8 million in that
reporting period. Deferred tax assets and liabilities are measured using
enacted tax rates in effect for the year in which those temporary
differences or tax attributes are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates is
recognized in earnings in the period that the tax rate changes. As of
April 30, 2010 the Company had Federal and State net operating loss (NOL)
carry-forwards of approximately $11.5 million and $9.7 million,
respectively. These can be used to offset future taxable income and expire
between 2023 and 2030 for Federal tax purposes and 2016 and 2030 for state
tax purposes. As a result, the Company does not expect to record any income
tax expense (benefit) in fiscal 2011, other than statutory minimum State
corporate income taxes. The Company's NOL carry-forwards are a component of
its deferred tax assets which are reported net of a full valuation allowance
in the Company's consolidated financial statements at January 31, 2011 and
at April 30, 2010.
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Dataram Corp. has a market cap of $19.9 million; its shares were traded at around $2.23 with and P/S ratio of 0.5.
Highlight of Business Operations:
During the first nine months of fiscal 2011, net cash used in operatingactivities totaled approximately $1,596,000. Net loss in the period was
approximately $3,792,000. Accounts payable decreased by approximately
$1,324,000, primarily as a result of a reduction in inventories of
approximately $1,764,000. The reduction in inventory is attributable to
higher availability of DRAM's resulting in shorter lead times. Accrued
liabilities decreased by approximately $1,033,000, primarily as a result of
payment of an accrued contingently payable acquisition price for MMB. Other
current assets increased by approximately $241,000. Depreciation and
amortization of approximately $780,000 was recorded in fiscal 2011's first
nine months. Trade receivables decreased by approximately $1,776,000.
Non-cash stock-based compensation expense of approximately $461,000 was also
recorded.
Three months ended Nine months ended
January 31, 2010 January 31, 2010
________________ ________________
United States $ 10,028,000 $ 26,308,000
Europe 1,258,000 3,634,000
Other (principally Asia Pacific Region) 998,000 2,205,000
________________ ________________
Consolidated $ 12,284,000 $ 32,147,000
= =
Research and development expense in fiscal 2011's third quarter and nine
months was $134,000 and $1,894,000, respectively, versus $892,000 and
$3,388,000 in the comparable prior year periods. Research and development
expense includes payroll, employee benefits, stock-based compensation
expense, and other headcount-related expenses associated with product
development. Research and development expense also includes third-party
development and programming costs. In the first quarter of the prior
fiscal year, the Company implemented a strategy to introduce new and
complementary products into its offerings portfolio. The Company is
currently focusing on the development of a line of high performance
storage caching products ("XcelaSAN"). XcelaSAN is a unique intelligent
Storage Area Network (SAN) optimization solution that delivers substantive
application performance improvement to applications such as Oracle, SQL and
VMware. XcelaSAN augments existing storage systems by transparently applying
intelligent caching algorithms that serve the most active block-level data
from high-speed storage, creating an intelligent, virtual solid state SAN.
As part of that strategy, in January 2009, the Company entered into a
software purchase and license agreement with another company whereby the
Company acquired the exclusive right to purchase specified software for a
price of $900,000 plus a contingent payment of $100,000. Fiscal 2010's
research and development expense includes $600,000 of expense related to the
Agreement, of which $300,000 was expensed in the first fiscal quarter and
$300,000 was expensed in the second fiscal quarter. The Company owns the
software. The software and the storage products, which incorporate the
software, are currently under development. On November 4, 2011, management
concluded that technological feasibility of the product was established.
In fiscal 2011's third quarter ended January 31, 2011 the Company
capitalized $768,000 of research and development costs. We expect to make
further investments in this area.
Selling, general and administrative (S,G&A) expense in fiscal 2011's third
quarter and nine months decreased by approximately $346,000 and $839,000,
respectively, from the comparable prior year periods. The reduction in this
year's third quarter is primarily the result of reduced stock option expense
recorded as a component of S,G&A. Stock option expense was approximately
$113,000 in the current fiscal year's third quarter compared to $345,000
in the same prior year period. Intangible asset amortization recorded as a
component of S,G&A expense was approximately $57,000 less than the prior
year's third quarter. There has been and overall reduction of S,G&A expense
in Fiscal 2011 compared to the prior year periods.
Other income (expense), net for the third quarter and nine months totaled
$179,000 and $339,000 of expense, respectively, for fiscal 2011. Fiscal
2010's third quarter and nine months totaled $11,000 of expense and
$11,000 income, respectively. Other expense in fiscal 2011's third quarter
consisted primarily of interest expense of $105,000 and $54,000 of foreign
currency transaction losses, primarily as a result of the EURO weakening
relative to the US dollar. Fiscal 2011's nine month other expense of
$339,000 consisted of $184,000 of interest expense and $139,000 of foreign
currency transaction losses, primarily as a result of the EURO weakening
relative to the US dollar. Other expense in fiscal 2010's third quarter
consisted primarily of $11,000 of foreign currency transaction losses,
primarily as a result of the EURO weakening relative to the US dollar. Nine
month other income of $11,000 consisted primarily of $10,000 of other
income related to a gain on an asset disposal. There was also $7,000 of net
interest income and $6,000 of foreign currency transaction losses,
primarily as a result of the EURO weakening relative to the US dollar.
Income tax expense for the three and nine months ended January 31, 2011
totaled approximately $5,000 and consisted of state minimum income tax
payments. Income tax expense for the same prior year periods totaled
$5,281,000 and $3,611,000, respectively. The Company utilizes the asset
and liability method of accounting for income taxes in accordance with
the provisions of the Expenses - Income Taxes Topic of the Financial
Accounting Standards Board (FASB) Accounting Standards Codification
(ASC)(Codification). Under the asset and liability method, 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. A valuation allowance is provided when the Company determines
that it is more likely than not that some portion or all of the deferred
tax assets will not be realized. The Company considers certain tax
planning strategies in its assessment as to the recoverability of its
tax assets. In each reporting period, the Company assesses, based on the
weight of all evidence, both positive and negative, whether a valuation
allowance on its deferred tax assets is warranted. Based on the assessment
conducted in the Company's reporting period ended January 31, 2010, the
Company concluded that such an allowance was warranted, and, accordingly,
recorded a valuation allowance of approximately $5.8 million in that
reporting period. Deferred tax assets and liabilities are measured using
enacted tax rates in effect for the year in which those temporary
differences or tax attributes are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates is
recognized in earnings in the period that the tax rate changes. As of
April 30, 2010 the Company had Federal and State net operating loss (NOL)
carry-forwards of approximately $11.5 million and $9.7 million,
respectively. These can be used to offset future taxable income and expire
between 2023 and 2030 for Federal tax purposes and 2016 and 2030 for state
tax purposes. As a result, the Company does not expect to record any income
tax expense (benefit) in fiscal 2011, other than statutory minimum State
corporate income taxes. The Company's NOL carry-forwards are a component of
its deferred tax assets which are reported net of a full valuation allowance
in the Company's consolidated financial statements at January 31, 2011 and
at April 30, 2010.
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