DATARAM PRESS RELEASE Dataram Contact: Investor Contact: Mark Maddocks, Joe Zappulla Chief Financial Officer Wall Street Investor Relations Corp. 609-799-0071 212-714-2445 info@dataram.com JZappulla@WallStreetIR.com DATARAM REPORTS THIRD QUARTER FINANCIAL RESULTS o Company Reports Net Loss of $793,000 o Generates Free Cash Flow of $200,000 PRINCETON, N.J. February 19, 2003 -- Dataram Corporation (NASDAQ: DRAM) today reported its financial results for the third quarter ended January 31, 2003. Revenues for the third quarter were $12.8 million. This compares to revenues of $14.0 million for the previous quarter and $19.6 million for the third quarter of the previous fiscal year. The Company reported a net loss of $793,000 or $0.09 per share for the quarter compared to a net loss of $253,000 or $0.03 per share in the second quarter of the current fiscal year and a net loss of $4.8 million or $0.57 per share in the third quarter of last fiscal year. The prior year's net loss included a one-time charge of $5.3 million or $0.62 per share for intangible asset amortization. Free cash flow for the third quarter amounted to approximately $200,000. Nine month revenues were $41.0 million compared to $61.4 million for the same period of the prior fiscal year. Nine month selling, general and administrative costs declined $3.4 million or 21 percent from the comparable prior year period, which is in line with the savings projected from the Company's previously announced restructuring efforts. Net loss for the first nine months of the current fiscal year was $2.9 million or $0.34 per share versus a loss of $6.4 million or $0.75 per share for the comparable period of the prior fiscal year, which included the one-time intangible asset amortization charge of $5.3 million. Robert Tarantino, Dataram's president and CEO, commented, "Third quarter sales in the Pacific Rim and European markets were in line with our expectations. However, sales in the U.S. market were lower than anticipated. We attribute this to lowered levels of corporate spending on IT infrastructure in January as corporate spending authorizations were being deferred. Our efforts at managing costs relative to market demand enabled us to confront these challenges and continue to generate free cash flow." During the quarter, the Company introduced a number of new memory products to the market, some of which were first to market, including memory for industry leading and new generation servers from Hewlett-Packard, IBM, and Silicon Graphics. Dataram recently received CMTL's Advanced Memory Qualification for the first "cost effective" one-gigabyte monolithic low-profile memory module. During this fiscal year's third quarter, the Company announced the approval, by its Board of Directors, of a new 500,000 share open market repurchase program. The Company purchased 25,800 shares of its common stock at a total price of approximately $92,000 in the third quarter and will continue to repurchase its shares in the current quarter. Mark Maddocks, Dataram's CFO, added, "We continue to generate free cash flow and our balance sheet remains strong. In the third quarter, we paid off $500,000 in long term debt while increasing cash and equivalents by $500,000 to $3.1 million and we are presently debt free. We have increased our inventory and accounts receivable turns. With a current ratio of 3.3, we remain highly liquid." Mr. Tarantino concluded, "We feel very confident in the operational areas we can control or influence. Our ability to remain cash flow positive attests to the success of our efforts to manage our business relative to the economic environment. As external factors play themselves out, we remain positioned to grow our business profitability. Demand for server and workstation memory will increase and we remain confident in our long-term prospects and in our ability to weather the near-term uncertainty in the marketplace." Dataram will conduct a conference call at 11:00 a.m. (EST) today to present its third quarter financial results and to respond to investor questions. Interested shareholders may participate in the call by dialing 888-633-8343 and providing the following reservation number: 21124373. It is recommended that participants call 10 minutes before the conference call is scheduled to begin. The conference call can also be accessed over the Internet through Vcall at www.vcall.com. A replay of the call will be available approximately one hour after the completion of the conference call through Vcall and for 24 hours by dialing 800-633-8284 or 402-977-9140 and entering the reservation number listed above. ABOUT DATARAM CORPORATION Dataram Corporation, celebrating its 36th year in the computer industry, is a leading provider of computer memory. The Company offers a specialized line of gigabyte-class memory for entry- to enterprise-level servers, workstations and notebooks from Compaq, Dell, Fujitsu/Siemens, HP, IBM, Intel, SGI, Sun and Toshiba. Additional information is available on the Internet at www.dataram.com. The information provided in this press release may include forward-looking statements relating to future events, such as the development of new products, the commencement of production, or the future financial performance of the Company. Actual results may differ from such projections and are subject to certain risks including, without limitation, risks arising from: changes in the price of memory chips, changes in the demand for memory systems, increased competition in the memory systems industry, delays in developing and commercializing new products and other factors described in the Company's most recent Annual Report on Form 10-K, filed with the Securities and Exchange Commission, which can be reviewed at http://www.sec.gov. Financial Tables Follow DATARAM CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited) Three Months Ended Nine Months Ended 1/31/2003 1/31/2002 1/31/2003 1/31/2002 Revenues $ 12,758 $ 19,646 $ 41,010 $ 61,389 Costs and expenses: Cost of sales 9,286 12,547 29,796 40,224 Engineering and development 375 438 1,156 1,446 Selling, general and administrative 4,341 5,293 13,148 16,558 Intangible asset amortization 0 5,263 0 5,856 Restructuring charges 0 0 740 1,200 _________ _________ _________ _________ 14,002 23,541 44,840 65,284 Loss from operations (1,244) (3,895) (3,830) (3,895) Interest expense, net (2) (528) (56) (825) _________ _________ _________ _________ Loss before income taxes (1,246) (4,423) (3,886) (4,720) Income tax provision (benefit) (453) 360 (1,017) 1,664 _________ _________ _________ _________ Net loss $ (793) $ (4,783) $ (2,869) $ (6,384) ========= ========= ========= ========= Net loss per share: Basic $ (0.09) $ (0.57) $ (0.34) $ (0.75) ========= ========= ========= ========= Diluted $ (0.09) $ (0.57) $ (0.34) $ (0.75) ========= ========= ========= ========= Average number of shares outstanding: Basic 8,510 8,454 8,499 8,486 ========= ========= ========= ========= Diluted 8,510 8,454 8,499 8,486 ========= ========= ========= ========= DATARAM CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) (Unaudited) January 31, 2003 April 30, 2002 ________________ ______________ ASSETS Current assets: Cash and cash equivalents $ 3,097 $ 3,656 Trade receivables, net 5,892 12,177 Inventories 2,913 5,435 Other current assets 1,861 532 ________________ ______________ Total current assets 13,763 21,800 Property and equipment, net 6,842 9,210 Goodwill 11,144 11,144 Other assets 481 408 ________________ ______________ $ 32,230 $ 42,562 ================ ============== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 2,720 6,600 Accrued liabilities 1,398 1,687 ________________ ______________ Total current liabilities 4,118 8,287 Deferred income taxes 646 647 Long-term debt 0 3,800 Stockholders' equity 27,466 29,828 ________________ ______________ $ 32,230 $ 42,562 ================ ==============