DataMirror Announces Results for Second Quarter of Fiscal 2004

Business Wire, August 26, 2003

Business Editors/High-Tech Writers

TORONTO--(BUSINESS WIRE)--Aug. 26, 2003

DataMirror (Nasdaq:DMCX) (TSX:DMC)

-- GAAP earnings of $1.6 million or $0.14 per share

-- Revenue increase of 7% over previous quarter

DataMirror (Nasdaq:DMCX) (TSX:DMC), a leading provider of enterprise application integration and resiliency solutions, today announced its financial results for the second quarter of fiscal 2004.

Revenue for the quarter ended July 31, 2003 ("Q2 fiscal 2004") was $14.2 million, as compared to $14.8 million for the quarter ended July 31, 2002 ("Q2 fiscal 2003"), a decrease of 3.9%. Reported in US currency, revenue for Q2 fiscal 2004 was $10.4 million compared to $9.6 million for Q2 fiscal 2003, an increase of 8.0%. The GAAP net income for Q2 fiscal 2004 was $1.6 million or $0.14 per basic and fully-diluted share compared to a net loss of $0.2 million or ($0.02) per share for Q2 fiscal 2003. Cash flow from operations for Q2 fiscal 2004 was $0.5 million or $0.04 per share compared to $3.5 million or $0.31 per share in Q2 fiscal 2003. Cash, cash equivalents and short-term investments stood at $41.3 million or $3.65 per common share outstanding at the end of the quarter.

The overall gross margin for Q2 fiscal 2004 increased to 80.8% from 78.1% in Q2 fiscal 2003. Gross margin on maintenance and services was 65.6% in Q2 fiscal 2004, as compared to 54.7% in Q2 fiscal 2003. Operating expenses for Q2 fiscal 2004 were $9.9 million compared to $11.0 million for Q2 fiscal 2003, a decrease of 9.3%. Total costs, including costs of revenue, were $12.7 million for Q2 fiscal 2004, down significantly from $14.2 million in Q2 fiscal 2003 and up slightly from $12.5 million in the previous quarter. Total headcount was 275 at July 31, 2003 as compared to 324 at July 31, 2002 and up from 262 at the end of the previous quarter.

Revenue for the six months ended July 31, 2003 was $27.6 million, as compared to $29.0 million for the six months ended July 31, 2002, a decrease of 4.8%. Reported in US currency, revenue for the six months ended July 31, 2003 was $19.4 million compared to $18.5 million for the six months ended July 31, 2002, an increase of 4.6%. The GAAP net income for the six months ended July 31, 2003 was $2.3 million or $0.20 per basic and fully diluted share, as compared to a net loss of $1.1 million or ($0.10) per share for the six months ended July 31, 2002.

"The level of profitability for the second quarter increased significantly on both a year over year and quarter over quarter basis" said Peter Cauley, DataMirror CFO. "While year over year revenue growth continues to be constrained by the robust Canadian dollar and other factors, the Company's strong business model enabled us to leverage a 7% increase in revenue over the first quarter into a 144% increase in GAAP earnings."

During the second quarter the Company added 21 new customers to our global account base, who accounted for 50% of the quarter's licence revenue. Key customer wins included: ATH Costa Rica, Chittenden Trust Company, PSP Management AG, Rogers Communications Inc., Scottrade, Talbots, Inc., Total Fina ELF and Ziraat Bank International. Also, the Company signed a significant deal for iReflect, our Oracle 9i resiliency software, with a leading technology provider. Existing customers such as AmeriCold Logistics, Cardinal Health, Henry Schein Inc., JP Morgan Chase & Co., Office Depot and Paramount Pictures also made significant additional purchases of our software.

"New customers contributed over 50% of licence revenue in the second quarter and business profitability was excellent" commented DataMirror CEO, Nigel Stokes. "Licence revenue increased by 18% over the previous quarter and we were pleased that our new iReflect Oracle high availability product contributed 16% of licence revenue. Going forward, we continue to see early signs of business improvement in North America and expect that the key European regions will also improve in the second half of fiscal 2004."

Business Outlook:

In the third quarter of fiscal 2004, DataMirror expects to earn GAAP net income in the range of $0.14 to $0.16 per share.

DataMirror will hold a webcast and conference call to present the results for the first quarter at 5:00 p.m. EST today, May 27, 2003. The conference call can be accessed via audio web cast by visiting www.datamirror.com. Participants in the conference call are asked to call 1-800-289-0468 at approximately 4:55 p.m. EST on May 27th using reservation number 585344. Participants may also view an on-line presentation during the call by visiting datamirror.webex.com/webex/ and clicking on the meeting "DataMirror Announces First Quarter Results" hosted by Peter Cauley, CFO and Nigel Stokes, CEO, DataMirror. A replay of the conference call will be available until June 3, 2003 by dialing 1-888-203-1112 using reservation number 585344 or visiting www.datamirror.com/investors/.

About DataMirror

DataMirror (Nasdaq: DMCX; TSX: DMC), a leading provider of enterprise application integration and resiliency software, gives companies the power to manage, monitor and protect their corporate data in real-time. DataMirror's comprehensive family of LiveBusiness(TM) solutions enables customers to easily and cost-effectively capture, transform and flow data throughout the enterprise. DataMirror unlocks the experience of now(TM) by providing the instant data access, integration and availability companies require today across all computers in their business.