DataMirror's Sales Decline in Its Fiscal First Quarter

Published: May 30, 2006

by Timothy Prickett Morgan

High availability and clustering software maker DataMirror said last week that its first quarter of fiscal 2007, ended April 30, was weaker than the year-ago quarter, with sales down 8.4 percent to $10.3 million (Canadian), with net earnings of $700,000, down 36 percent.

The first quarter dip follows a fiscal 2006 where the company was able to increase sales by 2.6 percent to $44.7 million and statements by the company that it would be able to increase sales in 2007 by 10 to 15 percent, with sales expected in the range of $49 million to $52 million.

DataMirror, like Lakeview Technology and Vision Solutions, the other two long-time HA software vendors in the IBM midrange, have all experienced pressures on sales and profits because of the entry of iTera and Maximum Availability, and the intense level of competition that the three original HA vendors have always had with each other has only intensified since the upstarts entered the market five years ago and shook up the HA space with inexpensive products. To their credit, all of the HA vendors have responded with innovative product lines and more flexible pricing. But, that does not mean that business always goes smoothly.

Nigel Stokes, DataMirror's chief executive officer, took the revenue hit in stride. "DataMirror maintained its strong financial position this quarter," he said in a statement accompanying the financial results. "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." DataMirror's head count is roughly the same, at 215 people, and it has $37.9 million in cash and investments in the bank.

Looking ahead to the second fiscal quarter, DataMirror said it expected sales of between $11 million and $12 million and profits of 10 cents to 17 cents per share.