DataMirror Corporation
NASDAQ : DMCX
TSX : DMC

DataMirror Corporation

May 25, 2005 16:00 ET

DataMirror Announces Record First Quarter Results

TORONTO, ON. and SANTA CLARA, Calif.--(CCNMatthews - May 25, 2005) - DataMirror Corporation (NASDAQ:DMCX-News; TSX:DMC-News), a leading real-time data integration company, today announced its financial results for the first quarter ended April 30, 2005. Please note that the Company changed its reporting currency to U.S. dollars effective February 1, 2005, accordingly all figures are in U.S. dollars unless stated otherwise. Comparative U.S. dollar financial statements for all the quarters of the fiscal year ended January 31, 2005 are included at the end of this press release.

Revenue for the first quarter rose 9 percent to a record Q1 level of $10.8 million from $9.8 million for the quarter ended April 30, 2004. License revenue increased 27 percent to $4.7 million, up from $3.7 million in the first quarter last year. GAAP net income was $800,000 or $0.08 per diluted share in Q1 F2006, compared to a net loss of $620,000 or ($0.05) per diluted share in Q1 last year. Cash flow from operations was $4.3 million, up from $1.5 million in Q1 last year. Cash, cash equivalents, and short-term investments stood at $33.3 million or $3.89 per common share outstanding at the end of the quarter.

"DataMirror delivered a record first quarter, with good license revenue growth, great cash flow and improved earnings, from the building momentum of our solutions.", Nigel Stokes, DataMirror CEO commented. "Our refocused effort on partnering with clients to deliver innovative business solutions that continuously transform data into information is beginning to show results. More than 2,000 clients are releasing new business potential and gaining tangible competitive advantage with DataMirror. In today's economy the best companies compete and win in real-time."

Highlights:

- License revenue growth of 27 percent compared to Q1 last year, operating cash flow of $4.3 million;

- New partnership with BusinessObjects to bring the power of DataMirror's real-time data integration solutions to BusinessObjects™ XI and deliver comprehensive real-time BI solutions to mid-market and Fortune 500 customers;

- New partnership with The Normandy Group, to offer real-time data integration, business continuity, and regulatory compliance solutions to Normandy Group clients. The partnership will leverage DataMirror's solutions to extend The Normandy Group's business intelligence, business process, and enterprise resource planning business practices. The Normandy Group is a Cognos Pinnacle Partner and was recently named ScanSource Partner of the Year;

- Successful completion of our substantial issuer bid that returned Cdn. $20 Million to shareholders who tendered to the offer;

- Signed repeat business with 88 existing clients and signed 30 new clients, with two transactions greater than $500,000;

- Tripled the performance of our innovative and comprehensive mainframe real-time data integration solution. DataMirror mainframe clients include leading companies in the retail, manufacturing, pharmaceutical, and financial services sectors that use TS 4.7 for z/OS to solve business problems that call for data to be distributed between diverse systems in real-time.

Business Outlook:

"Business visibility for DataMirror is improving," continued Mr. Stokes. "We finished Q1 with increased demand that we expect to continue both in Q2 and throughout fiscal 2006. I am proud of the integrity, passion and innovation of the DataMirror team and thank all of them for their focused commitment to the success of DataMirror."

Management offers the following outlook for the full fiscal year, ending January 31, 2006 and for the second quarter ending July 31, 2005:

- For the 2006 fiscal year, the Company expects revenue to grow 10%-15% and be in the range of $45.0 to $47.0 million with GAAP, diluted, net income in the range of $0.33 to $0.37 per share.

- In the second quarter of fiscal 2006, the Company expects revenue to grow year over year by 10%-15% and be in the range of $10.8 to $11.3 million with GAAP, diluted, net income in the range of $0.09 to $0.12 per share.

These estimates assume a tax rate of 45 percent and include the expensing of stock options.

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 25, 2005.

The conference call can be accessed via audio webcast at http://www.datamirror.com/investors. Participants should call 1-800-361-0912 using passcode 8178084. An online presentation is available by visiting https://datamirror.webex.com/datamirror and selecting the meeting "DataMirror Announces First Quarter Results". A replay of the conference call will be available at 8:00 p.m. EST via the DataMirror web site or by dialing 1-888-203-1112 using passcode 8178084.

About DataMirror

DataMirror (NASDAQ: DMCX - News; TSX: DMC - News), 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 information changes throughout the enterprise. DataMirror helps clients make better decisions by providing access to the continuous, accurate information they need to take timely action and move forward faster.

Over 2,000 companies have gained tangible competitive advantage from DataMirror software, including Debenhams, FedEx Ground, First American Bank, OshKosh B'Gosh, Priority Health, Tiffany & Co., and Union Pacific Railroad. DataMirror is headquartered in Markham, Canada and has offices around the globe. For more information, visit http://www.datamirror.com.

"Safe Harbour" Statement under the United States Private Securities Litigation Reform Act of 1995:

Forward-looking statements in this press release, including statements regarding DataMirror Corporation's business which are not historical facts, are made pursuant to the "safe harbour" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements of plans, objectives, strategies and expectations. The words "anticipate", "believe", "estimate" and "expect" and similar expressions are intended to identify forward-looking statements. Numerous important 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 statements made by, or on behalf of, DataMirror, and there can be no assurance that future results will meet expectations, estimates or projections. These factors include, but are not limited to, the following: the difficulty of developing, marketing and selling new products successfully; variability of quarterly operating results; dependence upon the continued growth and success of DataMirror's software products; competition; rapid technological change and new product introductions; dependence upon continued growth in the database and enterprise data integration markets; dependence upon relationships with complementary vendors and distribution channels; the ability to recruit and retain key personnel; risks of international operations, including currency exchange rate fluctuations and global economic conditions; possible software errors or defects; possible infringement claims by third parties; and other factors discussed in the DataMirror's Annual Information Form and other periodic filings with the United States Securities and Exchange Commission and other regulatory authorities. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those indicated in any forward-looking statements. DataMirror disclaims and does not assume any obligation to update these forward-looking statements.

Copyright 2005 DataMirror Corporation. All rights reserved. DataMirror is a registered trademark of DataMirror Corporation. All other brand or product names are trademarks or registered trademarks of their respective companies.



DataMirror Corporation
Consolidated Statements of Income (Loss)
(Thousands of US$, except per share data - unaudited)

Three Months Ended
April 30,
------------------------
2005 2004
------------------------

Revenue
Licence $4,683 $3,681
Maintenance 5,336 5,052
Services 731 1,112
------------------------
10,750 9,845
------------------------

Cost of revenue
Licence 45 47
Maintenance and services 2,088 2,556
------------------------
2,133 2,603
------------------------
Gross margin 8,617 7,242
------------------------

Operating expenses
Selling and marketing 3,096 4,087
Research and development 1,984 2,033
General and administration 1,847 1,484
Stock-based compensation 56 84
Amortization of intangibles 404 595
------------------------
7,387 8,283
------------------------
Operating income (loss) 1,230 (1,041)
Investment income, net 220 140
------------------------
Income (loss) before income taxes 1,450 (901)
Income tax expense (recovery) 650 (281)
------------------------
Net income (loss) $800 ($620)
------------------------
------------------------

Earnings (loss) per share
Basic $0.08 ($0.05)
Fully diluted $0.08 ($0.05)

Weighted average number of
shares outstanding (000's)
Basic 9,702 11,372
Fully diluted 9,756 11,372


DataMirror Corporation
Consolidated Balance Sheets
(Thousands of US$ - unaudited)

April 30, January 31,
2005 2005
--------------------------

Assets
Current assets
Cash and cash equivalents $33,320 $7,687
Short-term investments 0 38,707
Accounts receivable 4,402 8,055
Prepaid expenses 1,406 1,328
Future income taxes 2,248 2,426
--------------------------
41,376 58,203

Capital assets 2,699 2,754
Future income taxes 84 0
Intangibles 1,911 2,344
Goodwill 4,112 4,180
--------------------------
$50,182 $67,481
--------------------------
--------------------------

Liabilities
Current liabilities
Accounts payable and accrued liabilities $2,901 $2,989
Deferred revenue 16,746 17,838
Income taxes payable 958 750
--------------------------
20,605 21,577
Future income taxes 0 83
--------------------------
20,605 21,660
--------------------------

Shareholders' Equity
Share capital
Common shares (April 30, 2005 - 8,555,732
January 31, 2005 - 10,555,966) 32,854 42,250
Deficit (9,675) (2,953)
Contributed surplus 932 876
Cumulative translation adjustment 5,466 5,648
--------------------------
29,577 45,821
--------------------------
$50,182 $67,481
--------------------------
--------------------------


DataMirror Corporation
Consolidated Statements of Cash Flows
(Thousands of US$ - unaudited)

Three Months Ended
April 30,
--------------------------
2005 2004
--------------------------

Cash provided by (used in)

Operating activities
Net income (loss) $800 ($620)
Add (deduct) items not affecting cash:
Amortization of capital assets 223 217
Amortization of intangibles 404 595
Stock-based compensation 56 84
Future income taxes (28) (134)
Investment tax credits 0 (46)
--------------------------
1,455 96
Changes in non-cash working capital
balances 2,866 1,399
--------------------------
4,321 1,495
--------------------------
Investing activities
Capital asset additions (213) (219)
Sale of short-term investments 38,749 24,447
Investment in Idion 0 (72)
--------------------------
38,536 24,156
--------------------------

Financing activities
Capital lease payments 0 (14)
Issuance of share capital 10 489
Repurchase of share capital (16,928) (305)
--------------------------
(16,918) 170
--------------------------

Effect of exchange rate changes
on cash and cash equivalents (306) (848)
--------------------------
Increase in cash and cash equivalents 25,633 24,973

Cash and cash equivalents

Beginning of period 7,687 7,009
--------------------------
End of period $33,320 $31,982
--------------------------
--------------------------


DataMirror Corporation
Consolidated Statements of Income (Loss)
(Unaudited - thousands of US$, except per share data)

Year
Quarter Ended Ended
--------------------------------------------------------
30-Apr-04 31-Jul-04 31-Oct-04 31-Jan-05 31-Jan-05
--------------------------------------------------------

Revenue
Licence $3,681 $4,079 $4,271 $5,454 $17,485
Maintenance 5,052 4,986 5,042 5,165 20,245
Services 1,112 767 885 724 3,488
--------------------------------------------------------
9,845 9,832 10,198 11,343 41,218
--------------------------------------------------------

Cost of revenue
Licence 47 48 46 51 192
Maintenance
and services 2,556 2,199 2,232 2,157 9,144
--------------------------------------------------------
2,603 2,247 2,278 2,208 9,336
--------------------------------------------------------
Gross margin 7,242 7,585 7,920 9,135 31,882
--------------------------------------------------------

Operating expenses
Selling and
marketing 4,087 3,842 3,425 3,803 15,157
Research and
development 2,033 1,913 2,000 2,198 8,144
General and
administration 1,484 1,637 1,629 2,078 6,828
Stock-based
compensation 84 76 76 80 316
Amortization of
intangibles 595 546 554 584 2,279
--------------------------------------------------------
8,283 8,014 7,684 8,743 32,724
--------------------------------------------------------

Operating income
(loss) (1,041) (429) 236 392 (842)
Investment
income, net 140 202 223 217 782
Gain on sale
of investment 0 5,466 0 0 5,466
--------------------------------------------------------

Income (loss)
before income
taxes (901) 5,239 459 609 5,406
Income tax
expense
(recovery) (281) 1,368 218 399 1,704
--------------------------------------------------------
($620) $3,871 $241 $210 $3,702
--------------------------------------------------------
--------------------------------------------------------

Basic earnings
(loss) per share
Basic ($0.05) $0.35 $0.02 $0.02 $0.34
Fully-diluted ($0.05) $0.34 $0.02 $0.02 $0.33

Weighted average
number of
shares (000's)
Basic 11,372 11,196 10,917 10,625 11,026
Fully-diluted 11,372 11,285 10,980 10,660 11,192


DataMirror Corporation
Consolidated Balance Sheets
(Unaudited - thousands of US$)

Quarter Ended
--------------------------------------------------
30-Apr-04 31-Jul-04 31-Oct-04 31-Jan-05
--------------------------------------------------

Assets
Current assets
Cash and cash
equivalents $31,982 $42,754 $4,932 $7,687
Short-term investments 0 0 41,063 38,707
Accounts receivable 4,776 6,041 6,821 8,055
Prepaid expenses 1,388 1,369 1,501 1,328
Future income taxes 1,654 1,798 2,310 2,426
--------------------------------------------------
39,800 51,962 56,627 58,203
Capital assets 2,807 2,735 2,946 2,754
Investment tax credits
recoverable 788 141 0 0
Investments 8,959 0 0 0
Intangibles 3,692 3,251 2,958 2,344
Goodwill 3,775 3,893 4,239 4,180
--------------------------------------------------
$59,821 $61,982 $66,770 $67,481
--------------------------------------------------
--------------------------------------------------

Liabilities
Current liabilities
Accounts payable and
accrued liabilities $2,572 $2,328 $2,697 $2,989
Deferred revenue 13,937 14,094 15,575 17,838
Income taxes payable 183 153 594 750
Current portion of
capital lease
obligations 9 0 0 0
--------------------------------------------------
16,701 16,575 18,866 21,577

Future income taxes 456 345 234 83
--------------------------------------------------
17,157 16,920 19,100 21,660
--------------------------------------------------

Shareholders' Equity
Share capital 46,004 44,191 43,283 42,250
Cumulative translation
adjustment 329 2,288 6,266 5,648
Contributed surplus 644 720 796 876
Deficit (4,313) (2,137) (2,675) (2,953)
--------------------------------------------------
42,664 45,062 47,670 45,821
--------------------------------------------------
$59,821 $61,982 $66,770 $67,481
--------------------------------------------------
--------------------------------------------------


DataMirror Corporation
Consolidated Statements Of Cash Flows
(Unaudited - thousands of US$)

Year
Quarter Ended Ended
---------------------------------------------------------------------
30-Apr-04 31-Jul-04 31-Oct-04 31-Jan-05 31-Jan-05
---------------------------------------------------------------------
Cash provided
by (used in)

Operating
activities
Net income
(loss) ($620) $3,871 $241 $210 $3,702
Add (deduct) items
not affecting cash:
Amortization
of capital
assets 217 228 231 343 1,019
Amortization of
intangibles 595 546 554 584 2,279
Stock-based
compensation 84 76 76 80 316
Future income
taxes (134) (214) (470) (302) (1,120)
Sale of investment
in Idion 0 (5,466) 0 0 (5,466)
Investment tax
credits
recoverable (46) 659 147 0 760
---------------------------------------------------------------------
96 (300) 779 915 1,490
Changes in non-cash
working capital
balances 1,399 (1,665) 537 1,834 2,105
---------------------------------------------------------------------
1,495 (1,965) 1,316 2,749 3,595
---------------------------------------------------------------------
Investing activities
Capital asset
additions (219) (71) (200) (190) (680)
Sale of short-term
investments 24,447 0 0 1,734 26,181
Purchase of
short-term
investments 0 0 (39,391) 0 (39,391)
Sale of investment
in Idion 0 14,287 0 0 14,287
Investment in
Idion (72) (1) 0 0 (73)
---------------------------------------------------------------------
24,156 14,215 (39,591) 1,544 324
---------------------------------------------------------------------
Financing activities
Capital lease
payments (14) (10) 0 0 (24)
Issuance of share
Capital 489 20 85 12 606
Repurchase of share
capital (305) (3,527) (1,771) (1,513) (7,116)
---------------------------------------------------------------------
170 (3,517) (1,686) (1,501) (6,534)
---------------------------------------------------------------------
Effect of exchange
rate changes
on cash and cash
equivalents (848) 2,039 2,139 (37) 3,293
---------------------------------------------------------------------
Increase (decrease)
in cash and cash
equivalents 24,973 10,772 (37,822) 2,755 678
Cash and cash
equivalents
Beginning of
period 7,009 31,982 42,754 4,932 7,009
---------------------------------------------------------------------
End of period $31,982 $42,754 $4,932 $7,687 $7,687
---------------------------------------------------------------------
---------------------------------------------------------------------


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