DataMirror Corporation
TSX : DMC

DataMirror Corporation

March 29, 2006 16:00 ET

DataMirror Provides Update on Reporting Delay and Announces Partial Fourth Quarter and Year End Results

TORONTO, ON. and SANTA CLARA, Calif.--(CCNMatthews - March 29, 2006) - DataMirror Corporation (TSX:DMC - News ), a leading provider of real-time data integration, protection and java database solutions, today provided an update on the delay in reporting its financial results for the quarter and year ended January 31, 2006 and announced partial financial results for the quarter and year ended January 31, 2006.

Delay in Reporting

In the normal course of preparing its financial statements for the fiscal year ended January 31, 2006, the Company reviewed its revenue recognition policies as compared to guidance contained in the American Institute of Certified Public Accountants Statement of Position 97-2, Software Revenue Recognition, and Statement of Position 98-9, Modification of SOP 97-2, Software Revenue Recognition, With Respect To Certain Transactions, with respect to determining vendor-specific-objective-evidence ("VSOE") of fair value of the elements of its multi-element software licensing arrangements, and more specifically the allocation and timing of recognition of revenues derived from those software and maintenance arrangements. Following discussions with the Company's Audit Committee and consultation with the Company's independent auditors, the Company determined that it will change its policy with respect to the determination of VSOE on certain transactions. The Company will apply this change in policy retroactively, and as a result will restate its financial statements for the fiscal year ended January 31, 2005, and the interim quarterly periods for fiscal 2005 and through October 31, 2005. As a result of the change in policy, the Company will reallocate revenues between license fees and maintenance and make an adjustment to the timing of the recognition of those revenues, which generally will have the effect of deferring revenue previously recognized until later periods. Application of the new policy will not impact the Company's current or prior years' liquidity or cash flow, nor will it impact total revenue, profits or cash flow associated with the contracts in question over the life of the contracts.

Partial Financial Results for the Quarter and Year Ended January 31, 2006

For the quarter ended January 31, 2006, the Company generated cash flow from operations of $4.6 million or $0.55 per share compared to $2.7 million or $0.26 per share in the fourth quarter of fiscal 2005. For the year ended January 31, 2006, the Company generated cash flow from operations of $7.5 million or $0.85 per share compared to $3.6 million or $0.32 per share in fiscal 2005. Cash, cash equivalents, and short and long-term investments stood at $37.0 million or $4.46 per common share outstanding at the end of the quarter. All these amounts are expressed in U.S. dollars. Had the Company accounted for the fourth quarter of fiscal 2006 using the allocation methods for licence and maintenance revenue historically used by the Company, revenue and earnings for the fourth quarter and full 2006 fiscal year would have exceeded the guidance given at the end of the third quarter of fiscal 2006.

"Business execution continued to improve in the fourth quarter," Nigel Stokes, DataMirror CEO commented. "We reached a new milestone of more than 2,100 customers and added two new large customers in the Q4 while expanding our relationship with several important existing customers."

Quarterly Highlights

- New support for IBM Series i5/OS V5R4 operating system;

- New 5.4 version of PointBase that expands support in the mobile marketplace;

- Breakthrough IBM Data Integration Benchmark of more than two Billion transactions per hour;

- Significant new business traction in the Telecom vertical.

The Company expects to release the results for the fiscal year ended January 31, 2006 as well as the restated results for the fiscal year January 31, 2005, and the interim quarterly periods for fiscal 2005 and through October 31, 2005, on or before May 1, 2006, within its statutory filing deadlines. The Company will not be issuing guidance on future expectations until that time.

DataMirror management will hold a webcast and conference call to discuss the contents of this press release at 5:00 p.m. EST today.

The conference call can be accessed via audio webcast at http://www.datamirror.com/investors. Participants are asked to dial 1-800-289-0494 approximately five minutes before the call using passcode 9504547. 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 9504547.

About DataMirror

DataMirror (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.

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.

Note to Readers: This press release contains a statement relating to the Company's expectation to release financial results and restatements within statutory deadlines. Such statement constitutes a forward-looking statement within the meaning of applicable securities laws, including the Private Securities Litigation Reform Act of 1995 ("forward-looking statement"). Such forward-looking statement involves known and unknown risks, uncertainties and other factors that may cause the Company not to make its filings by such deadlines. Such forward-looking statement is based on assumptions about the Company's ability to make its filings by such deadlines, including the availability of management, as well as legal and accounting advisors to the Company. DataMirror cautions you not to place undue reliance upon such forward-looking statement, which speaks only as of the date it is made. The word "expects" is intended to identify such forward-looking statement. Numerous important factors could cause DataMirror not to meet statutory filing deadlines. These factors include, but are not limited to, the availability of management to devote the requisite time to review the filings, the availability of legal and accounting advisors to the Company to review and provide comments with respect to such filings or any event that could divert management attention. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statement prove incorrect, the Company may not make its filings within the statutory deadlines. DataMirror disclaims and does not assume any obligation to update this forward-looking statement.

Copyright 2006 DataMirror Corporation. All rights reserved. DataMirror, LiveBusiness and The experience of now are trademarks or registered trademarks of DataMirror Corporation. All other brand or product names are trademarks or registered trademarks of their respective companies.

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