DataMirror Corporation
TSX : DMC

DataMirror Corporation

May 23, 2006 16:00 ET

DataMirror Releases Results for First Quarter of Fiscal 2007

TORONTO, ON. and SANTA CLARA, Calif.--(CCNMatthews - May 23, 2006) - DataMirror® (TSX:DMC) today announced its financial results for the quarter ended April 30, 2006.

Revenue for Q1 fiscal 2007 was $10.3 million compared to $11.3 million for Q1 fiscal 2006, a decrease of 8.4%. Net income for Q1 fiscal 2007 was $0.7 million or $0.09 per basic and fully diluted share, compared to net income of $1.1 million or $0.11 per basic and fully diluted share for Q1 fiscal 2006. Cash flow from operations for Q1 fiscal 2007 was $0.4 million or $0.04 per share compared to $4.3 million or $0.45 per share in Q1 fiscal 2006. Cash, cash equivalents and short- and long-term investments stood at $37.9 million or $4.57 per common share outstanding at the end of the quarter.

The overall gross margin for Q1 fiscal 2007 was 82.9%, compared to 81.1% for Q1 fiscal 2006. Gross margin on maintenance and services was 74.7% in Q1 fiscal 2007, compared to 68.8% in Q1 fiscal 2006. Total costs, including costs of revenue, were $9.4 million for Q1 fiscal 2007, down 2.5% from $9.6 million in Q1 fiscal 2006. Total headcount was 215 at April 30, 2006, compared to 217 at April 30, 2005 and 220 at the end of the previous quarter.

"DataMirror maintained its strong financial position this quarter," commented Nigel Stokes, CEO. "We successfully reached out to customers in both North America and Europe with a series of regional Transcend customer events. New investments in Sales and Marketing are building business pipelines and are expected to lead to higher growth in the second half of fiscal 2007."

Business Outlook

During the second quarter of fiscal 2007, the Company expects revenue of between $11.0 million and $12.0 million, with net income in the range of $0.10 to $0.17 per share. These estimates assume a tax rate of 40%.

DataMirror management will hold a webcast and conference call to present the results for the first quarter and to outline the prospects for the business going forward at 5:00 p.m. EST today, May 23, 2006.

Conference call participants are asked to dial 1-800-289-0494 approximately five minutes before the call using reservation number 1228348. Participants may also view an online presentation during the call by visiting https://datamirror.webex.com/datamirror and selecting the meeting "DataMirror Announces First Quarter Results." Alternatively, the conference call can be accessed via audio webcast at http://www.datamirror.com/investors.

For those who are unable to attend the conference call, a replay will be available via the DataMirror Web site or by dialing 1-888-203-1112, using the same reservation number indicated above (1228348). The replay and online presentation will be available from May 23, 2006, 8:00 p.m. EST, until May 29, 2006, 12:00 midnight EST.

About DataMirror

DataMirror (TSX:DMC), a leading provider of real-time data integration, protection and java database solutions, improves the integrity and reliability of information across all of the systems that create and store data. DataMirror's flexible and affordable integration solutions allow customers to easily and continuously detect, translate, and communicate all information changes throughout the enterprise. DataMirror helps customers make better decisions by providing access to the continuous, accurate information they need to take timely action and move forward faster.

More than 2,100 companies have gained tangible competitive advantage from DataMirror software. DataMirror is headquartered in Markham, Canada, and has offices around the globe. For more information, visit www.datamirror.com.

"Safe Harbour" Statement:

Forward-looking information in this press release, including statements regarding DataMirror's business which are not historical facts, are made pursuant to the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995, applicable Canadian securities laws and pursuant to National Instrument 51-102 and other rules, regulations and policies of Canadian securities regulatory authorities. Forward-looking information include statements of estimates, expectations, objectives and plans (financial and otherwise). The words "anticipate", "believe", "estimate", "expect" and similar expressions are intended to identify forward-looking information. Such information contains statements that are forward looking and reflect the current views of DataMirror with respect to future events and are subject to certain risks, uncertainties and assumptions. An investment in DataMirror's common shares involves certain risks and uncertainties which should be carefully considered. Numerous factors affect DataMirror's operating results and could cause DataMirror's actual results to differ materially from the results indicated by this press release or by any forward-looking information given by, or on behalf of, DataMirror, and there can be no assurance that future results will meet expectations, estimates or projections. Important factors that could cause a material difference between this forward-looking information and actual events include, but are not limited to, those set forth under the heading "Risks and Uncertainties" of our fiscal 2006 Management Discussion and Analysis dated April 28, 2006, which section is incorporated herein by reference, and other periodic filings with the United States Securities and Exchange Commission, the Ontario Securities Commission, other Canadian securities commissions, and other regulatory authorities. These factors include, but are not limited to, the following:
variability of quarterly operating results; dependence upon the continued growth and success of DataMirror's software products; competition; the ability to develop, market, support and acquire new products in an environment of rapidly changing technology; dependence upon continued growth in the database and enterprise data integration markets; dependence upon relationships with complementary vendors and distribution channels; pursuing, completing and integrating acquisitions could divert resources and may not achieve the intended business objectives; the ability to recruit and retain key personnel; risks of international operations, currency exchange rate fluctuations and global economic conditions; possible software errors or defects; possible infringement claims by third parties; and other factors. Each of these factors could have a material adverse effect on DataMirror's business, results of operations and financial condition, and on the value or market price of DataMirror's common shares, and should be considered carefully. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated or expected. DataMirror does not intend, and does not assume any obligation, to update forward-looking information.

Copyright 2006 DataMirror Corporation. DataMirror and the DataMirror family of related marks are registered trademarks of DataMirror Corporation. DataMirror and the DataMirror logo are registered in the U.S. Patent and Trademark office, the Canadian Intellectual Property Office, and may be pending or registered in other countries. All other products and services mentioned are trademarks of their respective companies.



DataMirror Corporation
Consolidated Statements of Income
(Thousands of U.S.$, except per share data - unaudited)

Three Months Ended
April 30,
----------------------
2006 2005
--------- --------

Revenue
Licence $3,528 $4,568
Maintenance 5,933 5,939
Services 857 761
--------- --------
10,318 11,268
--------- --------

Cost of revenue
Licence 44 45
Maintenance and services 1,717 2,088
--------- --------
1,761 2,133
--------- --------
Gross margin 8,557 9,135
--------- --------

Operating expenses
Selling and marketing 3,483 3,112
Research and development 2,083 1,984
General and administration 1,933 1,928
Stock-based compensation 44 56
Amortization of intangibles 68 404
--------- --------
7,611 7,484
--------- --------
Operating income 946 1,651

Investment income 250 220
--------- --------
Income before income taxes 1,196 1,871

Income tax expense 453 800
--------- --------
Net income $743 $1,071
--------- --------
--------- --------
Earnings per share
Basic $0.09 $0.11
Fully diluted $0.09 $0.11

Weighted average number of
shares outstanding (000's)
Basic 8,292 9,702
Fully diluted 8,336 9,756



DataMirror Corporation
Consolidated Balance Sheets
(Thousands of U.S.$ - unaudited)

April 30, January 31,
2006 2006
--------- -----------
Assets
Current assets
Cash and cash equivalents $5,311 $5,115
Short-term investments 30,530 29,832
Accounts receivable 6,725 9,040
Prepaid expenses 951 1,195
Future income taxes 3,706 3,401
--------- -----------
47,223 48,583

Capital assets 2,496 2,471
Long-term investments 2,057 2,058
Future income taxes 1,601 1,798
Intangibles 747 802
Goodwill 4,509 4,426
--------- -----------
$58,633 $60,138
--------- -----------
--------- -----------
Liabilities
Current liabilities
Accounts payable and accrued liabilities $3,461 $4,685
Deferred revenue 18,606 19,651
Income taxes payable 15 342
--------- -----------
22,082 24,678

Long-term deferred revenue 9,165 9,389
--------- -----------
31,247 34,067
--------- -----------
Shareholders' Equity
Share capital
Common shares (April 30, 2006 - 8,294,140
January 31, 2006 - 8,281,280) 31,677 31,657
Deficit (11,944) (12,687)
Contributed surplus 1,185 1,141
Cumulative translation adjustment 6,468 5,960
--------- -----------
27,386 26,071
--------- -----------
$58,633 $60,138
--------- -----------
--------- -----------



DataMirror Corporation
Consolidated Statements of Cash Flows
(Thousands of U.S.$ - unaudited)

Three Months Ended
April 30,
----------------------
2006 2005
--------- --------
Cash provided by (used in)

Operating activities
Net income $743 $1,071
Add (deduct) items not affecting cash:
Amortization of capital assets 197 223
Amortization of intangibles 68 404
Stock-based compensation 44 56
Future income taxes (10) (873)
--------- --------
1,042 881
Changes in non-cash working capital
balances (689) 3,441
--------- --------
353 4,322
--------- --------
Investing activities
Capital asset additions (176) (213)
Maturity of investments 9,693 38,749
Purchase of investments (9,789) 0
--------- --------
(272) 38,536
--------- --------
Financing activities
Issuance of share capital 19 10
Repurchase of share capital 0 (16,928)
--------- --------
19 (16,918)
--------- --------
Effect of exchange rate changes
on cash and cash equivalents 96 (307)
--------- --------
Increase in cash and cash equivalents 196 25,633

Cash and cash equivalents

Beginning of period 5,115 7,687
--------- --------
End of period $5,311 $33,320
--------- --------
--------- --------



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