Data Storage Corporation Reports 35% Increase in Revenue and Reports Profitability for the Third Quarter of 2023
November 14 2023 - 7:00AM
Data Storage Corporation (Nasdaq: DTST) (“DSC” and the “Company”),
a provider of diverse business continuity solutions for
disaster-recovery, cloud infrastructure, cyber-security, and IT
services, today provided a business update and reported financial
results for the three months ended September 30, 2023.
Chuck Piluso, CEO of Data Storage Corporation,
stated, “We continue to witness additional benefits of our business
growth initiatives that we have implemented over the last several
months, which has resulted in revenue increasing 35% and achieving
another quarter of profitability. Specifically, we launched a new
sales and marketing initiative that is designed to capitalize on
the growing demand for our products and services. This complements
other strategic programs underway that are proving effective, as
illustrated by our strong contract momentum. In fact, we continue
to secure new contracts as well as expand our relationship with
existing clients. For example, we recently announced expanding our
relationship with a large sports and entertainment organization to
provide additional services, validating our ability to serve
clients as they grow. In addition, we have secured new contracts
with clients that provide the opportunity to up-sell and cross-sell
our solutions, all of which we believe will assist in driving
revenue growth and long-term profitability.”
“We believe with continued execution of our
strategic plan, we are well positioned for long-term growth and
profitability, with a goal of maximizing value for our
shareholders. In addition, we have maintained a strong balance
sheet with over $11.5 million in cash and marketable securities
enabling us to deploy capital efficiently and effectively to
support our ongoing growth. Overall, we are extremely pleased with
our progress to date and look forward to witnessing additional
benefits of our initiatives over time.”
Conference Call
The Company plans to host a conference call at
10:00 am ET today, to discuss the Company's financial results for
the third quarter of 2023 which ended September 30, 2023, as well
as corporate progress and other developments.
The conference call will be available via telephone by dialing
toll-free 877-451-6152 for U.S. callers or for international
callers +1-201-389-0879. A webcast of the call may be accessed at
https://viavid.webcasts.com/starthere.jsp?ei=1639002&tp_key=e9b4b7c660,
or on the Company’s News & Events section of the website,
www.dtst.com/news-events.
A webcast replay of the call will be available on the Company’s
website (www.dtst.com/news-events) through November 14, 2024. A
telephone replay of the call will be available approximately three
hours following the call, through November 21, 2023, and can be
accessed by dialing 844-512-2921 for U.S. callers or +
1-412-317-6671 for international callers and entering conference
ID: 13742036.
About Data Storage CorporationData Storage
Corporation (Nasdaq: DTST) is a family of fully integrated
cloud-hosting, disaster-recovery, cyber security, and voice &
data companies, built around technical asset investments in
multiple regions, providing services to a broad range of domestic
and global customers, including Fortune 500 clients, across a wide
range of industries, such as government, education, and healthcare,
with a focus on the rapidly growing, multi-billion-dollar business
continuity market. A stable and emerging growth leader in cloud
infrastructure support, DTST companies operate regional data center
facilities across North America, sustainably servicing clients via
recurring subscription agreements. Additional information about the
Company is available at: www.dtst.com and on Twitter
(@DataStorageCorp).
Safe Harbor Provision
This press release contains “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995, as amended, that are intended to be covered by the safe
harbor created thereby. Forward-looking statements are subject to
risks and uncertainties that could cause actual results,
performance or achievements to differ materially from any future
results, performance or achievements expressed or implied by such
forward-looking statements. Statements preceded by, followed by or
that otherwise include the words “believes,” “expects,”
“anticipates,” “intends,” “projects,” “estimates,” “plans” and
similar expressions or future or conditional verbs such as “will,”
“should,” “would,” “may” and “could” are generally forward-looking
in nature and not historical facts, although not all
forward-looking statements include the foregoing. The forward
looking statements in this press release include statements such as
continuing to witness additional benefits of the Company’s business
growth initiatives, the Company’s new sales and marketing
initiative capitalizing on the growing demand for the Company’s
products and services, the Company’s other strategic programs
underway proving effective, continuing to secure new contracts as
well as expand the Company’s relationship with existing clients,
new contracts providing the opportunity to up-sell and cross-sell
the Company’s solutions, driving revenue growth and long-term
profitability, being well positioned for long-term growth and
profitability, maximizing value for shareholders, deploying capital
efficiently and effectively to support the Company’s ongoing growth
and witnessing additional benefits of the Company’s initiatives
over time.. Although the Company believes that the expectations
reflected in such forward-looking statements are reasonable, it can
provide no assurance that such expectations will prove to have been
correct. These forward-looking statements are based on management’s
expectations and assumptions as of the date of this press release
and are subject to a number of risks and uncertainties, many of
which are difficult to predict that could cause actual results to
differ materially from current expectations and assumptions from
those set forth or implied by any forward-looking statements.
Important factors that could cause actual results to differ
materially from current expectations include the Company’s ability
to continue to grow its subscription-based services. These risks
should not be construed as exhaustive and should be read together
with the other cautionary statements included in the Company’s
Annual Report on Form 10-K for the year ended December 31, 2022,
subsequent Quarterly Reports on Form 10-Q and Current Reports on
Form 8-K filed with the Securities and Exchange Commission. Any
forward-looking statement speaks only as of the date on which it
was initially made. Except as required by law, the Company assumes
no obligation to update or revise any forward-looking statements,
whether as a result of new information, future events, changed
circumstances or otherwise.
Contact:Crescendo Communications,
LLC212-671-1020DTST@crescendo-ir.com
DATA STORAGE CORPORATION AND SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
|
September 30, 2023 |
|
December 31, 2022 |
|
|
(Unaudited) |
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
Cash |
$ |
993,388 |
|
|
$ |
2,286,722 |
|
|
Accounts receivable (less allowance for credit losses of
$49,460 and $27,250 in 2023 and 2022,
respectively) |
|
2,344,343 |
|
|
|
3,502,836 |
|
|
Marketable securities |
|
10,531,921 |
|
|
|
9,010,968 |
|
|
Prepaid expenses and other current assets |
|
872,033 |
|
|
|
584,666 |
|
|
Total Current Assets |
|
14,741,685 |
|
|
|
15,385,192 |
|
|
|
|
|
|
|
|
|
|
|
Property and Equipment: |
|
|
|
|
|
|
|
|
Property and equipment |
|
7,540,204 |
|
|
|
7,168,488 |
|
|
Less—Accumulated depreciation |
|
(4,801,184 |
) |
|
|
(4,956,698 |
) |
|
Net Property and Equipment |
|
2,739,020 |
|
|
|
2,211,790 |
|
|
|
|
|
|
|
|
|
|
|
Other Assets: |
|
|
|
|
|
|
|
|
Goodwill |
|
4,238,671 |
|
|
|
4,238,671 |
|
|
Operating lease right-of-use assets |
|
89,547 |
|
|
|
226,501 |
|
|
Other assets |
|
48,437 |
|
|
|
48,437 |
|
|
Intangible assets, net |
|
1,767,231 |
|
|
|
1,975,644 |
|
|
Total Other Assets |
|
6,143,886 |
|
|
|
6,489,253 |
|
|
|
|
|
|
|
|
|
|
|
Total Assets |
$ |
23,624,591 |
|
|
$ |
24,086,235 |
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
$ |
2,858,724 |
|
|
$ |
3,207,577 |
|
|
Deferred revenue |
|
259,542 |
|
|
|
281,060 |
|
|
Finance leases payable short term |
|
266,937 |
|
|
|
359,868 |
|
|
Finance leases payable related party short term |
|
323,808 |
|
|
|
520,623 |
|
|
Operating lease liabilities short term |
|
90,979 |
|
|
|
160,657 |
|
|
Total Current Liabilities |
|
3,799,990 |
|
|
|
4,529,785 |
|
|
|
|
|
|
|
|
|
|
|
Operating lease liabilities |
|
— |
|
|
|
71,772 |
|
|
Finance leases payable |
|
79,652 |
|
|
|
281,242 |
|
|
Finance leases payable related party |
|
60,769 |
|
|
|
256,241 |
|
|
Total Long-Term Liabilities |
|
140,421 |
|
|
|
609,255 |
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities |
|
3,940,411 |
|
|
|
5,139,040 |
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies (Note 6) |
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity: |
|
|
|
|
|
|
|
|
Preferred stock, Series A par value $0.001; 10,000,000 shares
authorized; 0 and 0 shares issued and
outstanding in 2023 and 2022, respectively |
|
— |
|
|
|
— |
|
|
Common stock, par value $0.001; 250,000,000 shares
authorized; 6,859,627 and 6,822,127 shares issued and
outstanding in 2023 and 2022, respectively |
|
6,860 |
|
|
|
6,822 |
|
|
Additional paid in capital |
|
39,320,548 |
|
|
|
38,982,440 |
|
|
Accumulated deficit |
|
(19,430,878 |
) |
|
|
(19,887,378 |
) |
|
Total Data Storage Corporation Stockholders’ Equity |
|
19,896,530 |
|
|
|
19,101,884 |
|
|
Non-controlling interest in consolidated subsidiary |
|
(212,350 |
) |
|
|
(154,689 |
) |
|
Total Stockholder’s Equity |
|
19,684,180 |
|
|
|
18,947,195 |
|
|
Total Liabilities and Stockholders’ Equity |
$ |
23,624,591 |
|
|
$ |
24,086,235 |
|
|
|
DATA STORAGE CORPORATION AND SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(Unaudited) |
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
Sales |
$ |
5,986,625 |
|
|
$ |
4,419,285 |
|
|
$ |
18,770,739 |
|
|
$ |
17,904,233 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
3,656,271 |
|
|
|
2,566,984 |
|
|
|
11,771,886 |
|
|
|
11,847,460 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
2,330,354 |
|
|
|
1,852,301 |
|
|
|
6,998,853 |
|
|
|
6,056,773 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
2,316,213 |
|
|
|
2,075,525 |
|
|
|
6,918,982 |
|
|
|
7,129,595 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) from Operations |
|
14,141 |
|
|
|
(223,224 |
) |
|
|
79,871 |
|
|
|
(1,072,822 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income (expense), net |
|
143,597 |
|
|
|
(29,739 |
) |
|
|
318,968 |
|
|
|
(186,063 |
) |
|
Total Other Income (Expense) |
|
143,597 |
|
|
|
(29,739 |
) |
|
|
318,968 |
|
|
|
(186,063 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) before provision for income taxes |
|
157,738 |
|
|
|
(252,963 |
) |
|
|
398,839 |
|
|
|
(1,258,885 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefit from income taxes |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) |
|
157,738 |
|
|
|
(252,963 |
) |
|
|
398,839 |
|
|
|
(1,258,885 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss in Non-controlling interest of consolidated
subsidiary |
|
21,273 |
|
|
|
7,344 |
|
|
|
57,661 |
|
|
|
30,177 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) attributable to Data Storage
Corporation |
$ |
179,011 |
|
|
$ |
(245,619 |
) |
|
$ |
456,500 |
|
|
$ |
(1,228,708 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per Share – Basic |
$ |
0.03 |
|
|
$ |
(0.04 |
) |
|
$ |
0.06 |
|
|
$ |
(0.18 |
) |
|
Earnings per Share – Diluted |
$ |
0.02 |
|
|
$ |
(0.04 |
) |
|
$ |
0.06 |
|
|
$ |
(0.18 |
) |
|
Weighted Average Number of Shares - Basic |
|
6,847,264 |
|
|
|
6,822,127 |
|
|
|
6,834,811 |
|
|
|
6,759,247 |
|
|
Weighted Average Number of Shares - Diluted |
|
7,246,250 |
|
|
|
6,822,127 |
|
|
|
7,212,048 |
|
|
|
6,759,247 |
|
|
|
DATA STORAGE CORPORATION AND SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(Unaudited) |
|
|
Nine Months Ended September 30, |
|
|
2023 |
|
2022 |
|
Cash Flows from Operating Activities: |
|
|
|
|
|
|
|
|
Net Income (Loss) |
$ |
398,839 |
|
|
$ |
(1,258,885 |
) |
|
Adjustments to reconcile net income (loss) to net cash provided
by operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
928,180 |
|
|
|
932,328 |
|
|
Stock based compensation |
|
338,145 |
|
|
|
643,930 |
|
|
Changes in Assets and Liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
1,158,493 |
|
|
|
373,201 |
|
|
Other assets |
|
— |
|
|
|
(63,023 |
) |
|
Prepaid expenses and other current assets |
|
(287,368 |
) |
|
|
(331,618 |
) |
|
Right of use asset |
|
136,954 |
|
|
|
145,853 |
|
|
Accounts payable and accrued expenses |
|
(348,851 |
) |
|
|
147,487 |
|
|
Deferred revenue |
|
(21,518 |
) |
|
|
(295,822 |
) |
|
Operating lease liability |
|
(141,450 |
) |
|
|
(147,759 |
) |
|
Net Cash Provided by Operating Activities |
|
2,161,424 |
|
|
|
145,692 |
|
|
Cash Flows from Investing Activities: |
|
|
|
|
|
|
|
|
Capital expenditures |
|
(1,246,996 |
) |
|
|
(62,564 |
) |
|
Purchase of marketable securities |
|
(1,520,953 |
) |
|
|
— |
|
|
Net Cash Used in Investing Activities |
|
(2,767,949 |
) |
|
|
(62,564 |
) |
|
Cash Flows from Financing Activities: |
|
|
|
|
|
|
|
|
Repayments of finance lease obligations related party |
|
(392,287 |
) |
|
|
(644,209 |
) |
|
Repayments of finance lease obligations |
|
(294,522 |
) |
|
|
(299,954 |
) |
|
Cash received for the exercised of options |
|
— |
|
|
|
6,935 |
|
|
Net Cash Used in Financing Activities |
|
(686,809 |
) |
|
|
(937,228 |
) |
|
|
|
|
|
|
|
|
|
|
Decrease in Cash and Cash Equivalents |
|
(1,293,334 |
) |
|
|
(854,100 |
) |
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents, Beginning of Period |
|
2,286,722 |
|
|
|
12,135,803 |
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents, End of Period |
$ |
993,388 |
|
|
$ |
11,281,703 |
|
|
Supplemental Disclosures: |
|
|
|
|
|
|
|
|
Cash paid for interest |
$ |
48,471 |
|
|
$ |
100,482 |
|
|
Cash paid for income taxes |
$ |
— |
|
|
$ |
— |
|
|
Non-cash investing and financing activities: |
|
|
|
|
|
|
|
|
Assets acquired by finance lease |
$ |
— |
|
|
$ |
1,094,051 |
|
|
|
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