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<SEC-DOCUMENT>0001001746-01-500026.txt : 20010914
<SEC-HEADER>0001001746-01-500026.hdr.sgml : 20010914
ACCESSION NUMBER:		0001001746-01-500026
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20010731
FILED AS OF DATE:		20010913

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			DATARAM CORP
		CENTRAL INDEX KEY:			0000027093
		STANDARD INDUSTRIAL CLASSIFICATION:	COMPUTER STORAGE DEVICES [3572]
		IRS NUMBER:				221831409
		STATE OF INCORPORATION:			NJ
		FISCAL YEAR END:			0430

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-08266
		FILM NUMBER:		1736424

	BUSINESS ADDRESS:	
		STREET 1:		P O BOX 7528
		CITY:			PRINCETON
		STATE:			NJ
		ZIP:			08543
		BUSINESS PHONE:		6097990071

	MAIL ADDRESS:	
		STREET 1:		PO BOX 7528
		CITY:			PRINCETON
		STATE:			NJ
		ZIP:			08543
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>qedgar.txt
<TEXT>


                     SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C. 20549


                                  FORM 10-Q

(Mark One)

/ X  /     Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.

For the quarterly period ended      7/31/01      or

/     /     Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934.

For the transition period from            to

Commission file number                1-8266

                 DATARAM CORPORATION
_____________________________________________________________
   (Exact name of registrant as specified in its charter)

     New Jersey                              22-1831409
(State or other jurisdiction of                 (I.R.S.  Employer
Identification No.)
             incorporation or organization)

     P.O. Box 7528, Princeton, NJ                    08543
_____________________________________________________________
 (Address of principal executive offices)         (Zip Code)

Registrant's telephone number, including area code: (609) 799-0071

_____________________________________________________________
 (Former name, former address and former fiscal year, if changed since last
  report)

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.

     Yes     X         No
           _____            _____

APPLICABLE ONLY TO CORPORATE ISSUERS:

     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the last practicable date.  Common Stock ($1.00 par
value):  As of September 5, 2000, there were 8,538,119 shares outstanding.


                           PART 1. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                        Dataram Corporation and Subsidiaries
                            Consolidated Balance Sheets
                         July 31, 2001 and April 30, 2001
                                   (Unaudited)


                                              July 31, 2001    April 30, 2001
Assets
Current Assets:
   Cash and cash equivalents                 $   11,871,035     $  10,235,321
   Trade receivables, less allowance
     for doubtful accounts and sales returns
     of $375,000 at July 31, 2001
     and $450,000 at April 30, 2001              11,369,263        17,641,248
   Inventories                                    4,374,412         5,924,738
   Other current assets                           1,124,576           888,353
                                                 __________        __________
     Total current assets                        28,739,286        34,689,660

Property and equipment, at cost:
   Land                                             875,000           875,000
   Machinery and equipment                       18,193,247        17,713,735
                                                 __________        __________
                                                 19,068,247        18,588,735

   Less: accumulated depreciation
     and amortization                             6,568,766         5,362,666
                                                 __________        __________
Net property and equipment                       12,499,481        13,226,069

Other assets                                        396,626           365,160

Goodwill                                         11,144,000        11,144,000
Intangible assets, less accumulated amortization  5,559,000         5,856,000
                                                 __________        __________

                                             $   58,338,393     $  65,280,889
                                                 ==========        ==========

Liabilities and Stockholders' Equity
Current liabilities:
   Current installments of obligations
     under capital leases                    $      978,000     $     978,000
   Current installments of long-term debt         2,000,000         2,000,000
   Accounts payable                               2,925,790         7,218,697
   Accrued liabilities                            3,820,394         3,960,495
                                                 __________        __________
     Total current liabilities                    9,724,184        14,157,192

Deferred income taxes                               948,000           948,000
Long-term debt, excluding current installments    7,500,000         8,000,000
Obligations under capital leases, excluding
     current installments                         3,820,000         4,133,000
                                                 __________        __________
     Total liabilities                           21,992,184        27,238,192

Stockholders' Equity:
   Common stock, par value $1.00 per share.
   Authorized 54,000,000 shares; issued and
      outstanding 8,538,119 at July 31, 2001
      and 8,492,219 at April 30, 2001             8,538,119         8,492,219
   Additional paid in capital                     4,199,939         4,064,708
   Retained earnings                             23,610,709        25,402,770
   Accumulated other comprehensive income (loss)     (2,558)           83,000
                                                 __________        __________

        Total stockholders' equity               36,346,209        38,042,697
                                                 __________        __________
                                              $  58,338,393     $  65,280,889
                                                 ==========        ==========

See accompanying notes to consolidated financial statements.


                        Dataram Corporation and Subsidiaries
                        Consolidated Statements of Operations
                      Three Months Ended July 31, 2001 and 2000
                                   (Unaudited)





                                                   2001              2000


Revenues                                     $  22,570,281      $  37,995,812

Costs and expenses:
   Cost of sales                                15,624,829         28,860,588
   Engineering and development                     594,182            372,021
   Selling, general and administrative           6,056,119          4,345,596
   Restructuring charges                         1,200,000                  0
   Intangible asset amortization                   297,000                  0
                                                __________         __________
                                                23,772,130         33,578,205

Earnings (loss) from operations                 (1,201,849)         4,417,607



Interest income (expense), net                    (154,513)           229,617

Earnings (loss) before income taxes             (1,356,362)         4,647,224

Income tax provision                               405,000          1,768,000
                                                __________         __________
Net earnings (loss)                          $  (1,761,362)      $  2,879,224
                                                ==========         ==========

Net earnings (loss) per share of common stock
   Basic                                     $        (.21)      $        .34
                                                ==========         ==========
   Diluted                                   $        (.21)      $        .29
                                                ==========         ==========


Weighted average number of common
   shares outstanding
   Basic                                         8,524,195          8,426,771
                                                ==========         ==========
   Diluted                                       8,524,195          9,958,790
                                                ==========         ==========


See accompanying notes to consolidated financial statements.


                         Dataram Corporation and Subsidiaries
                        Consolidated Statements of Cash Flows
                       Three Months Ended July 31,2001 and 2000
                                    (Unaudited)

                                                    2001               2000

Cash flows from operating activities:
   Net earnings (loss)                          $ (1,761,362)    $  2,879,224
   Adjustments to reconcile net earnings (loss)
     to net cash provided by
     operating activities:
       Depreciation and amortization               1,503,100          424,800
       Bad debt expense (recovery)                   (59,877)          96,866
       Changes in assets and liabilities:
         (Increase) decrease in trade receivables  6,331,862       (1,900,187)
         (Increase) decrease in inventories        1,550,326       (1,592,582)
         Increase in other current assets           (722,974)        (113,630)
         Increase in other assets                    (31,466)               0
         Increase (decrease) in accounts payable  (4,292,907)       1,738,228
         Decrease in accrued liabilities            (215,551)        (368,837)
         Increase in income taxes payable            472,000          610,599
                                                  __________       __________

    Net cash provided by
      operating activities                         2,773,151        1,774,481
                                                  __________       __________


Cash flows from investing activities-
   Purchase of property and equipment               (474,869)        (764,703)


Cash flows from financing activities:
   Principal payment on short-term portion of debt  (500,000)                0
   Principal payments under capital
      lease obligations                             (313,000)                0
   Proceeds from sale of common shares under
      stock option plan (including tax benefits)     201,675         1,593,314
   Purchase and subsiquent cancellation
      of common stock                                (51,243)                0

                                                  __________        __________
   Net cash provided by (used in) financing         (662,568)        1,593,314
      activities                                  __________        __________

Net increase in cash
   and cash equivalents                            1,635,714         2,603,092
Cash and cash equivalents at
   beginning of period                            10,235,321        13,649,601
                                                  __________        __________

Cash and cash equivalents at
   end of period                                $ 11,871,035      $ 16,252,693
                                                  ==========        ==========

Supplemental disclosures of cash flow information:
   Cash paid during the period for:
      Interest                                  $    282,169      $     32,603
      Income taxes                              $    230,000      $    250,000

See accompanying notes to consolidated financial statements.


                    Notes to Consolidated Financial Statements
                              July 31, 2001 and 2000
                                   (Unaudited)



Basis of Presentation

The information for the three months ended July 31, 2001 and 2000, is
unaudited but includes all adjustments (consisting only of normal recurring
adjustments) which, in the opinion of management, are necessary to state
fairly the financial information set forth therein in accordance with
accounting principles generally accepted in the United States of America. The
interim results are not necessarily indicative of results to be expected for
the full fiscal year. These financial statements should be read in conjunction
with the audited financial statements for the year ended April 30, 2001
included in the Company's Annual Report on Form 10-K filed with the Securities
and Exchange Commission.

Comprehensive Income (Loss)

Statement of Financial Accounting Standards No. 130, Reporting Comprehensive
Income ("SFAS No. 130") requires that items defined as other comprehensive
income, such as unrealized investment gains and losses and translation gains
and losses, be seperately classified in the consolidated financial statements
and that the accumulated balance of other comprehensive income (loss) be
reported separately from retained earnings and additional paid in capital in
the equity section of the consolidated balance sheet. Comprehensive loss for
the three months ended July 31, 2001 was $1,847,000 compared to comprehensive
income of $2,879,000 for the three months ended July 31, 2000.


Acquisition

On March 23, 2001, the Company acquired certain assets, principally including
inventory, accounts receivable and equipment of Memory Card Technology A/S
("MCT"), a corporation in suspension of payments under Danish bankruptcy law.
MCT designs and manufactures memory from its facility in Denmark and has sales
offices in Europe, Latin America and the Pacific Rim. The Company purchased
the assets from MCT for total consideration of approximately $32,006,000 of
which approximately $28,581,000 was paid in cash plus the assumption of
certain payables and accrued expenses, certain direct transaction cost and
certain MCT employee rationalization costs all of which total approximately
$3,425,000. The net assets acquired by the Company were recorded at their
respective fair values under the purchase method of accounting. Accordingly,
the excess of the purchase price over the fair value of identifiable net
tangible and identifiable intangible assets acquired in the amount of
$11,369,000 represents goodwill which includes approximately $1,100,000 which
had been assigned to the value of the workforce acquired. The results of
operations of MCT for the period from May 1, 2001 through July 31, 2001 have
been included in the consolidated results of operations of the Company.

Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America and
include the accounts of the Company and its wholly-owned subsidiaries. All
significant intercompany transactions and balances have been eliminated.

The Company's foreign subsidiaries' functional currency is the U.S. dollar as
all revenues are received in U.S. dollars and a majority of expenditures are
made in U.S. dollars. The Company and its foreign subsidiaries report in U.S.
dollars. For subsidiaries that maintain their accounts in currencies other
than the U.S. dollar, the Company uses the current method of translation
whereby the statements of operations are translated using the average exchange
rate and the assets and liabilities are translated using the year end exchange
rate. Foreign currency translation gains or losses are recorded as a separate
component of accumulated other comprehensive income or loss. Foreign currency
non-monetary assets and liabilities are translated using historical rates of
exchange. Foreign currency transaction  gains or losses are included in the
consolidated statement of earnings.

Restructuring charges

In fiscal 2002's first quarter, the Company initiated a restructuring of its
operations which resulted in a workforce reduction of approximately 25% and
certain other cost efficiencies. The Company recorded a restructuring charge
of $1,200,000, in the quarter ended July 31, 2001 which primarily relates to
severance payments. As of July 31, 2001, the Company had paid out
approximately $173,000 of the charges with the majority of the balance
expected to be paid in the Company's fiscal second quarter.

Inventory valuation

Inventories are valued at the lower of cost or market, with costs determined
by the first-in, first-out method. Inventories at July 31, 2001 and April 30,
2001 consist of the following categories:


                       July 31, 2001    April 30, 2001
                    ________________    ______________
Raw material        $      2,165,000    $    2,841,000
Work in process               74,000           236,000
Finished goods             2,135,000         2,848,000
                    ________________    ______________
                    $      4,374,000    $    5,925,000
                    ================    ==============

Derivative Financial Instruments

Effective May 1, 2001, the Company adopted SFAS 133.  This Statement requires
the recognition of all derivative instruments as either assets or liabilities
in the consolidated balance sheet, and the periodic adjustment of those
instruments to fair value.  The classification of gains and losses resulting
from changes in the fair values of derivatives is dependent on the intended
use of the derivative and its resultant designation.  In an effort to limit
its interest expense and cash flow exposure, the Company entered into an
interest rate swap agreement on and for the duration of the Company's
$10,000,000 term loan.

In accordance with the provisions in SFAS 133, the Company designated this
swap as a cash flow hedge and recorded the fair value of the instruments on
the balance sheet at that date, with a correspondening adjustment to
comprehensive earnings.  Due to the nature and characteristics of the
Company's designated hedging instruments, all adjustments to the fair values
of such instruments will be adjusted via comprehensive earnings.  The effect
of adopting SFAS 133 at May 1, 2001, and the amounts recorded related to its
derivative financial instruments as of and for the three month period ended
July 31, 2001, were not material to the Company's consolidated financial
position and did not impact the Company's consolidated results of operations
or cash flows.



New Accounting Standards

In July 2001, the FASB issued Statement No. 141, Business Combinations, and
Statement No. 142, Goodwill and Other Intangible Assets.  Statement 141
requires that the purchase method of accounting be used for all business
combinations initiated after June 30, 2001 as well as all purchase method
business combinations completed after June 30, 2001.  Statement 141 also
specifies criteria intangible assets acquired in a purchase method business
combination must meet to be recognized and reported apart from goodwill,
noting that any purchase price allocable to an assembled workforce may not be
accounted for separately.  Statement 142 requires that goodwill and intangible
assets with indefinite useful lives no longer be amortized, but instead tested
for impairment at least annually in accordance with the provisions of
Statement 142.  Statement 142 requires that intangible assets with definite
useful lives be amortized over their respective estimated useful lives to
their estimated residual values, and reviewed for impairment in accordance
with SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of.

The Company adopted the provisions of Statement 141 upon issuance.  The
Company has elected to adopt the provisions of Statement 142 in its first
fiscal quarter ended July 31, 2001, also as allowed by the statement.

Statement 141 requires upon adoption of Statement 142, that the Company
evaluate its existing intangible assets and goodwill that were acquired in a
prior purchase business combination, and to make any necessary
reclassifications in order to conform with the new criteria in Statement 141
for recognition apart from goodwill. Since the Company has adopted Statement
142, the Company has reassessed, as of May 1, 2001 the useful lives and
residual values of all intangible assets acquired in purchase business
combinations, and did not make any amortization period adjustments.  In
addition, to the extent an intangible asset is identified as having an
indefinite useful life, the Company tested the intangible asset for impairment
in accordance with the provisions of Statement 142 in the first interim
period. There was no impairment loss.

In connection with the transitional goodwill impairment evaluation, Statement
142 requires the Company to perform an assessment of whether there is an
indication that goodwill is impaired as of the date of adoption.  To
accomplish this the Company must identify its reporting units and determine
the carrying value of each reporting unit by assigning the assets and
liabilities, including the existing goodwill and intangible assets, to those
reporting units as of the date of adoption. The Company then has up to six
months from the date of adoption to determine the fair value of each reporting
unit and compare it to the reporting unit's carrying amount.  To the extent a
reporting unit's carrying amount exceeds its fair value, an indication exists
that the reporting unit's goodwill may be impaired and the Company must
perform the second step of the transitional impairment test. In the second
step, the Company must compare the implied fair value of the reporting unit's
goodwill, determined by allocating the reporting unit's fair value to all of
it assets (recognized and unrecognized) and liabilities in a manner similar to
a purchase price allocation in accordance with Statement 141, to its carrying
amount, both of which would be measured as of the date of adoption. This
second step is required to be completed as soon as possible, but no later than
the end of the year of adoption.  Any transitional impairment loss will be
recognized as the cumulative effect of a change in accounting principle in the
Company's statement of operations. The Company is in the process of completing
this task.

As of the date of adoption, the Company has unamortized goodwill in the amount
of $11,144,000 and unamortized identifiable intangible assets in the amount of
$5,856,000 all of which will be subject to the transition provisions of
Statements 141 and 142.  Amortization expense related to goodwill was $210,000
and $0 for the year ended April 30, 2001 and the three months ended July 31,
2001, respectively.  Because of the extensive effort needed to comply with
adopting Statement 142, it is not practicable to reasonably estimate the
impact of adopting this Statement on the Company's financial statements at the
date of this report, including whether any goodwill transitional impairment
losses will be required to be recognized as the cumulative effect of a change
in accounting principle.

Use of estimates

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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.



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS


     This Management's Discussion and Analysis of Financial Condition and
Results of Operations contains forward looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and section 21E of
the Securities and Exchange Act of 1934, as amended. Actual results could
differ materially from those projected in the forward looking statements.


Liquidity and Capital Resources

     As of July 31, 2001, working capital amounted to $19.0 million reflecting
a current ratio of 3.0 compared to working capital of $20.5 million and a
current ratio of 2.5 as of April 30, 2001.

     During fiscal 2001, the Company entered into a credit facility with its
bank which provided for a $10 million term loan and a $15 million revolving
credit line. The Company's prior $12 million revolving credit facility was
closed. The term loan matures in March 2006 and is payable in twenty equal
quarterly installments. In May 2001, the Company entered into an arrangement
with its bank which fixes the interest rate of the term loan at 7.16% for the
duration of the loan. The credit facility contains financial covenants as
defined in the agreement which the Company was not in compliance with at July
31, 2001, but for which it has received a waiver of compliance. At July 31,
2001 the amount outstanding under the term loan was $9.5 million. At July 31,
2001 the amount available for borrowing under the revolving credit line was
$15 million. Management believes that its working capital together with
internally generated funds and its bank line of credit are adequate to finance
the Company's operating needs and future capital requirements.





Results of Operations


     Revenues for the three month period ending July 31, 2001 were $22,570,000
compared to revenues of $37,996,000 for the comparable prior year period.
Revenues in this year's fiscal first quarter include $9,836,000 attributable
to the operations of the Company's acquisition which was completed in March,
2001. The decrease in revenues was primarily the result of decreased average
selling prices for the Company's products caused by the decline in price of
Dynamic Random Access Memory (DRAM) chips, the primary raw material used in
the Company's products. During the quarter ended July 31, 2001, DRAM prices
declined by more than 50% from the beginning of the quarter to the end of the
quarter and by approximately 90% from the first quarter of last fiscal year.
As a result of this decline, average selling prices for the Company's products
in this year's first quarter have declined by approximately 75% from the
comparable prior year period.

Cost of sales for the first quarter were 69% of revenues versus 76% for the
same prior year period. The decrease in cost of sales as a percentage of
revenues is attributable to the fact that the Company's average selling prices
for its products did not decline at the same rate that its primary raw
material (DRAM) costs declined.

     Engineering and development costs in fiscal 2002's first quarter were
$594,000 versus $372,000 for the same prior year period. Fiscal 2002's first
quarter includes $135,000 of engineering and development expense incurred by
the operations of the Company's acquisition. The Company intends to maintain
its commitment to the timely introduction of new memory products as new
workstations and computers are introduced.

     Selling, general and administrative costs in fiscal 2002's first quarter
increased to 27% of revenues from 11% for the same prior year period. Three
month total expenditures increased by $1,711,000 from the comparable prior
year period, of which approximately $2,400,000 is related to the Company's
acquired operations. Prior year fiscal first quarter expenses included
approximately $500,000 of variable compensation expenses, which were not
incurred in fiscal 2002's first quarter.

In fiscal 2002's first quarter, the Company initiated a restructuring of its
operations which resulted in a workforce reduction of approximately 25% and
certain other cost efficiencies. Accordingly, in the quarter ended July 31,
2001, the Company recorded a restructuring charge of $1,200,000, which
primarily relates to severance payments. As of July 31, 2001, the Company had
paid out approximately $173,000 of the charges with the majority of the
balance expected to be paid in the Company's fiscal second quarter. The
restructuring is expected to reduce future operating expenses by approximately
$4 million, annually.

     Intangible asset amortization recorded in fiscal 2002's first quarter was
$297,000 versus nil in fiscal 2001.

     Other income (expense),net totaled ($155,000) and $230,000 for fiscal
2002 and 2001 first quarter, respectively. Other income (expense), net in
fiscal 2002's first quarter consisted of interest expense of $250,000 and
interest income of $95,000. Fiscal 2001's first quarter other income
(expense), net of $230,000 consisted primarily of interest income on short
term investments.

     Income tax expense in fiscal 2002's first quarter was $405,000 versus
$1,768,000 in the comparable prior year period. For fiscal 2002, income tax
expense was recognized on income realized in the United States and no income
tax benefit was recognized for losses incurred in international subsidiaries.
Fiscal 2001's first quarter expense included only the Company's normal
combined federal and state tax expense with an effective rate of approximately
38%.


Safe Harbor Statement

     The information provided in this interim report 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
for workstations and servers, 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.



                          PART II: OTHER INFORMATION



ITEM 5.  EXHIBITS AND REPORTS ON FORM 8-K
A.  Exhibits

     27 (a). Press Release announcing restructuring of operations (Attached)

     27 (b). Press Release reporting results of First Quarter, Fiscal Year
2002 (Attached).


B.  Reports on Form 8-K

     No reports on Form 8-K have been filed during the current quarter.
      Two reports on Form 8-KA were filed during the current quarter.




Signatures

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                              DATARAM CORPORATION






Date:  September 13, 2001     By: MARK E. MADDOCKS
      ______________________      ____________________
                              Mark E. Maddocks
                              Vice President, Finance
                              (Principal Financial Officer)


	Page 8 of 8

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DATARAM

PRESS RELEASE

Dataram Contact:             Investor Contact:
Mark Maddocks,               Joe Zappulla
Chief Financial Officer      Wall Street Investor Relations Corp.
609-799-0071                 212-973-0883 or 301-907-4090
info@dataram.com             JZappulla@WallStreetIR.com





            DATARAM RESTRUCTURES GLOBAL OPERATIONS

  Measures Implemented by Company Expected to Save $4 Million Annually

PRINCETON, N.J.  August 3, 2001 - Dataram Corporation (NASDAQ: DRAM) today
announced that it has completed a company-wide restructuring as part of
its integration strategy for its recently acquired assets of Memory Card
Technology A/S.  The restructuring, which resulted in a 25 percent
reduction in workforce and other cost efficiencies, is expected to reduce
operating expenses by approximately $4 million, annually.  The Company
intends to record a pre-tax charge of approximately $1.1 million or $0.11
per diluted share as a result of the restructuring.

For the first quarter ended July 31, 2001, Dataram expects to report a net
loss per share in the range of $0.22 to $0.25. The projected loss
attributable to the operations of the acquisition is estimated to be $0.29
per share, after restructuring charges. Revenues for the quarter are
expected to be approximately $22 million compared to revenues of $25.9
million in the previous fiscal quarter.

Robert Tarantino, Dataram's chairman, president and CEO commented, "The
business downturn continues to make forecasting of revenues and profits
difficult in the short-term. Continued inventory right-sizing and reduced
capital spending by businesses worldwide, coupled with lower selling
prices resulting from declining DRAM prices has impacted our revenues and
earnings.  The spread of the economic slowdown into overseas markets has
hurt the performance of our recent acquisition, which has caused us to
accelerate our integration timetable."  Mr. Tarantino continued, "The
actions we have taken to streamline our Company and eliminate operational
redundancies position us to better serve our customers and preserve
profitability. Dataram will operate as one company, with an integrated
management team, marketing its products under one company brand."

Tarantino concluded, "The cost savings our customers realize by using
Dataram products becomes more critical during economically trying times.
We are taking advantage of the current market conditions to expand our
customer base and improve market share. Our long-term prospects remain
strong, especially in light of our expanded worldwide sales capabilities
and broadened product line."

Dataram expects to report its financial results for its first quarter
ended July 31, 2001 and conduct a conference call on August 22.
Conference call access information will be provided at a future date.


ABOUT DATARAM CORPORATION


Dataram Corporation, celebrating its 34th year in the computer industry, is
a leading provider of server, workstation and PC memory.  The Company
offers a specialized line of gigabyte-class memory for entry- to
enterprise-level servers and workstations from Compaq, HP, IBM, Intel,
Silicon Graphics and Sun as well as desktop, notebook and flash memory for
Acer, Apple, IBM, Dell, Compaq, Fujitsu/Siemens, and Toshiba products.
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.



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DATARAM

PRESS RELEASE

Dataram Contact:             Investor Contact:
Mark Maddocks,               Joe Zappulla
Chief Financial Officer      Wall Street Investor Relations Corp.
609-799-0071                 212-973-0883
info@dataram.com             JZappulla@WallStreetIR.com

        DATARAM REPORTS FIRST QUARTER FINANCIAL RESULTS


   o  Company reports pro forma loss of $0.06 per share
   o  Restructuring charges account for $0.11 per share of $0.21
      net loss per share

PRINCETON, N.J. August 22, 2001 - Dataram Corporation (NASDAQ: DRAM) today
reported its financial results for its fiscal first quarter ended July 31,
2001. Revenues for the first quarter were $22.6 million compared to $38.0
million for the first quarter of the previous fiscal year and $25.9
million for the previous sequential quarter.  The Company's pro forma net
loss, which excludes restructuring charges of $1.2 million and intangible
asset amortization of $297,000, was $511,000 or $0.06 per share. This
compares to net earnings of $2.9 million or $0.29 per diluted share for
the first quarter of the previous fiscal year and pro forma net earnings
of $801,000 or $0.08 per diluted share in the prior quarter. The net loss
for the first quarter, inclusive of restructuring charges and intangible
asset amortization, was $1.8 million or $0.21 per share.

(In 000's, except per share amounts)       First           Fourth
                                           Quarter         Quarter

                                    FY2002     FY2001      FY2001

Revenues                            $22,570    $37,996     $25,886

Pro forma* earnings
from operations                        $295     $4,418      $1,785

Pro forma* net earnings (loss)        $(511)    $2,879        $801

Net earnings (loss)                 $(1,761)    $2,879        $635

Net earnings (loss) per
share (diluted)                      $(0.21)     $0.29       $0.07

Shares outstanding (diluted)          8,524      9,959       9,585

* Pro forma amounts exclude restructuring charges and intangible asset
amortization.


During the quarter, the Company initiated a company-wide restructuring as
part of its integration strategy for its recently acquired assets of
Memory Card Technology A/S.  The restructuring, which resulted in a 25
percent reduction in workforce and other cost efficiencies, is expected to
reduce operating expenses by approximately $4 million, annually.  The
Company recorded a charge of  $1.2 million or approximately $0.11 per
share as a result of the restructuring.

Robert Tarantino, chairman and CEO, commented, "The economic slow down,
coupled with lower selling prices resulting from a more than 50 percent
decline in DRAM prices has impacted our revenues and earnings. The key to
adapting to this current environment is to implement decisions that ensure
profitability while continuing to support long term growth."   Mr.
Tarantino continued, "The changes we instituted during the first quarter
not only provide a basis for long term growth, but position Dataram to
market our products throughout the world without compromising our
reputation for outstanding customer service and product quality."

The Company issued a pre-announcement of its first quarter results on
August 3 which projected a net loss in the range of $0.22-$0.25 per shares
on revenues of approximately $22 million. The actual results came in
slightly better than expected at a $0.21 per share loss on revenues of
$22.6 million.

Mark Maddocks, Dataram's chief financial officer, commented on forward
guidance, "The continued unpredictability of the economic environment and
especially capital spending on information technology infrastructure, make
it difficult to provide guidance at this time. We are confident that our
recent actions will protect our profitability, strengthen our business and
our ability to grow. We will revisit company guidance when economic
developments and visibility provide a sounder base for projections."


Mr. Maddocks continued, "On July 23, 2001, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standard No. 142
(SFAS 142), Accounting for Goodwill and Other Intangible Assets. The
Company adopted SFAS 142 in this year's first fiscal quarter as allowed by
the statement. Adoption of SFAS 142 requires the Company to assess the
carrying value of goodwill and intangible assets on its balance sheet in
accordance with the new standard within twelve months of adoption of the
standard. It also eliminates the requirement to amortize goodwill, which
would amount to approximately $1.4 million annually. The Company expects
to report, in a future period, a change in the carrying value of its
goodwill and intangible assets as a result of SFAS 142."

Dataram will conduct a conference call at 11:00 a.m. (EDT) today to
present its first quarter financial results and to respond to investor
questions. Interested shareholders may participate in the call by dialing
800-701-4762 and providing the following reservation number: 19553830.  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 and entering
the reservation number listed above.

ABOUT DATARAM CORPORATION

Dataram Corporation, celebrating its 34th year in the computer industry, is
a leading provider of server, workstation, desktop, notebook and flash
memory.  The Company offers a specialized line of gigabyte-class memory
for entry- to enterprise-level servers and workstations from Compaq, HP,
IBM, Intel, SGI and Sun as well as desktop, notebook and flash memory for
Acer, Apple, IBM, Dell, Compaq, Fujitsu/Siemens, and Toshiba products.
Additional information is available on the Internet at www.dataram.com.

                      Financial Tables Follow


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


                                           Three Months ended July 31,
                                                  2001         2000


Revenues                                      $  22,570     $  37,996
Costs and expenses:

     Cost of sales                               15,625        28,860
     Engineering and development                    594           372
     Selling, general and administrative          6,056         4,346
     Intangible asset amortization                  297             0
     Restructuring charges                        1,200             0
                                              _________     _________
                                                 23,772        33,578

Earnings (loss) from operations                  (1,202)        4,418

Interest income (expense), net                     (154)          229
                                              _________     _________

Earnings (loss) before income taxes             (1,356)         4,647

Income taxes                                       405          1,768

Net earnings (loss)                           $ (1,761)     $   2,879


Net earnings (loss) per share:
     Basic                                    $  (0.21)     $    0.34
                                              ========      =========
     Diluted                                  $  (0.21)     $    0.29
                                              ========      =========


Average number of shares outstanding:
     Basic                                       8,524          8,427
                                              ========      =========
     Diluted                                     8,524          9,959
                                              ========      =========


                               -more-

               DATARAM CORPORATION AND SUBSIDIARIES
               CONDENSED CONSOLIDATED BALANCE SHEETS
                           (in thousands)


                                          (Unaudited)
                                         July 31, 2001     April 30, 2001

ASSETS
Current assets:
    Cash and cash equivalents            $    11,871       $   10,236
    Trade receivables, net                    11,369           17,641
    Inventories                                4,375            5,925
    Other current assets                       1,124              888
                                         ___________       __________
    Total current assets                      28,739           34,690

Property and equipment, net                   12,499           13,226

Goodwill and intangible assets, net           16,703 (1)       17,000

Other assets                                     397              365
                                         ___________       __________

                                         $    58,338       $   65,281
                                         ===========       ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Current portion of long-term debt     $     2,000       $    2,000
   Current portion of capital lease
    obligations                                  978              978
   Accounts payable                            2,926            7,219
   Accrued liabilities                         3,820            3,960
                                         ___________       __________
   Total current liabilities                   9,724           14,157

Deferred income taxes                            948              948
Long-term debt                                 7,500            8,000
Long-term capital lease obligations            3,820            4,133
                                         ___________       __________

Stockholders' equity                          36,346           38,043
                                         ___________       __________
                                         $    58,338       $   65,281
                                         ===========       ==========

   (1) Prior to completion of SFAS 142 assessment.


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.





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