Data Storage Corporation (Nasdaq: DTST) (“DSC” and
the “Company”), a provider of diverse business continuity solutions
for disaster-recovery, cloud infrastructure, cyber-security and
data analytics solutions, today provided a business update and
reported financial results for the first quarter ended March 31,
2022.
Chuck Piluso, CEO of Data Storage Corporation, commented, “I am
pleased to report we have witnessed increased sales, as well as an
increase in monthly subscription services, which contributed to our
revenue growth from $2.6 million to $8.7 million, a year-over-year
increase of 236% for the first quarter of 2022. At the same time,
we achieved positive net income and generated over $600 thousand of
EBITDA (see reconciliation below). We continue to deliver
critically required information technology solutions to a niche
multi-billion-dollar market and have invested millions of dollars
to establish ourselves as a leader within the IBM Power cloud
infrastructure and disaster recovery industry. As anticipated, the
Flagship merger has positioned us as a comprehensive
one-stop-solutions provider with the ability to cross-sell
solutions across our respective clients. The synergies of the
merger are already evident, as illustrated by the
multi-million-dollar contract with a highly recognized national
sports team announced earlier this year, as well as our expanded
our partnership with the Professional Fighters League. The sports
industry represents just one of several key markets we are
targeting for our solutions. Importantly, we believe we are
extremely well positioned to take advantage of the ever increasing
market demand for cloud infrastructure services, disaster recovery,
cyber security, and data analytics/AI markets, which we believe
will translate to accelerated revenue growth, especially as more
companies migrate their IBM Power infrastructure to the cloud.”
“Overall, we continue to execute on our business growth
strategy, which has resulted in transformational acquisitions, as
well as significant contracts and new partnerships. We have built a
robust proposal pipeline to support our growth, while at the same
time, we are increasing our sales force, expanding our marketing
initiatives, as well as investing in highly skilled personnel and
infrastructure. With over $13 million in cash as of March 31, 2022
and no long-term debt, we are well positioned to take advantage of
the countless opportunities within this emerging
multi-billion-dollar market.”
Conference Call
The Company plans to host a conference call at
10:00 am Eastern Time today, May 16, 2022 to discuss the company's
financial results for the first quarter ended March 31, 2022, as
well as corporate progress and other developments.
The conference call will be available via telephone by dialing
toll-free 888-506-0062 for U.S. callers or for international
callers +1 973-528-0011 and using entry code: 708934. A webcast of
the call may be accessed
at https://www.webcaster4.com/Webcast/Page/2763/45417, or on the
Company’s Investor Relations section of the
website, ir.datastoragecorp.com.
A webcast replay of the call will be available on the Company’s
Investor Relations section of the website (ir.datastoragecorp.com)
through May 16, 2023. A telephone replay of the call will be
available approximately one hour following the call, through May
30, 2022, and can be accessed by dialing 877-481-4010 for U.S.
callers or +1 919-882-2331 for international callers and entering
conference ID: 45417.
About Data Storage
Corporation
The Company provides a broad range of premium
business continuity and analytics solutions from seven data center
facilities and two technical labs throughout the USA and Canada.
The Company serves its clients with cloud infrastructure, disaster
recovery, cyber security and data analytics. Clients look to Data
Storage Corporation to ensure disaster recovery, business
continuity, enhance cyber security, and meet increasing industry,
state, and federal regulations. The Company markets to businesses,
government, education, and the healthcare industry.
For more information, please visit
http://www.DTST.com/.
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. 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 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, 2021, 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
SOURCE: Data Storage Corporation
[Tables follow]
DATA STORAGE CORPORATION AND SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
|
|
|
|
|
|
March 31, 2022 |
|
December 31, 2021 |
|
|
(Unaudited) |
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
13,420,707 |
|
|
$ |
12,135,803 |
|
Accounts receivable (less allowance for credit losses of $47,523
and $30,000 in 2021 and 2020, respectively) |
|
|
3,524,464 |
|
|
|
2,384,367 |
|
Prepaid expenses and other current assets |
|
|
1,256,243 |
|
|
|
536,401 |
|
Total Current Assets |
|
|
18,201,414 |
|
|
|
15,056,571 |
|
|
|
|
|
|
|
|
|
|
Property and Equipment: |
|
|
|
|
|
|
|
|
Property and equipment |
|
|
7,502,490 |
|
|
|
6,595,236 |
|
Less—Accumulated depreciation |
|
|
(4,939,373 |
) |
|
|
(4,657,765 |
) |
Net Property and Equipment |
|
|
2,563,117 |
|
|
|
1,937,471 |
|
|
|
|
|
|
|
|
|
|
Other Assets: |
|
|
|
|
|
|
|
|
Goodwill |
|
|
6,560,671 |
|
|
|
6,560,671 |
|
Operating lease right-of-use assets |
|
|
374,356 |
|
|
|
422,318 |
|
Other assets |
|
|
78,045 |
|
|
|
103,226 |
|
Intangible assets, net |
|
|
2,184,836 |
|
|
|
2,254,566 |
|
Total Other Assets |
|
|
9,197,908 |
|
|
|
9,340,781 |
|
|
|
|
|
|
|
|
|
|
Total Assets |
|
$ |
29,962,439 |
|
|
$ |
26,334,823 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ DEFICIT |
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
4,335,372 |
|
|
$ |
1,343,391 |
|
Deferred revenue |
|
|
292,450 |
|
|
|
366,859 |
|
Finance leases payable |
|
|
395,324 |
|
|
|
216,299 |
|
Finance leases payable related party |
|
|
741,830 |
|
|
|
839,793 |
|
Operating lease liabilities short term |
|
|
206,231 |
|
|
|
205,414 |
|
Total Current Liabilities |
|
|
5,971,207 |
|
|
|
2,971,756 |
|
|
|
|
|
|
|
|
|
|
Operating lease liabilities |
|
|
177,348 |
|
|
|
226,344 |
|
Finance leases payable |
|
|
568,588 |
|
|
|
157,424 |
|
Finance leases payable related party |
|
|
434,050 |
|
|
|
364,654 |
|
Total Long Term Liabilities |
|
|
1,179,986 |
|
|
|
748,422 |
|
|
|
|
|
|
|
|
|
|
Total Liabilities |
|
|
7,151,193 |
|
|
|
3,720,178 |
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity: |
|
|
|
|
|
|
|
|
Common stock, par value $.001;
250,000,000 shares authorized; 6,697,127 and 6,693,793 shares
issued and outstanding in 2022 and 2021, respectively |
|
|
6,697 |
|
|
|
6,694 |
|
Additional paid in
capital |
|
|
38,314,591 |
|
|
|
38,241,155 |
|
Accumulated deficit |
|
|
(15,394,788 |
) |
|
|
(15,530,576 |
) |
Total Data Storage Corp
Stockholders’ Equity |
|
|
22,926,500 |
|
|
|
22,717,273 |
|
Non-controlling interest in
consolidated subsidiary |
|
|
(115,254 |
) |
|
|
(102,628 |
) |
Total Stockholder’s
Equity |
|
|
22,811,246 |
|
|
|
22,614,645 |
|
Total Liabilities and
Stockholders’ Equity |
|
$ |
29,962,439 |
|
|
$ |
26,334,823 |
|
DATA STORAGE CORPORATION AND SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(Unaudited) |
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
2022 |
|
2021 |
|
|
|
|
|
Sales |
|
$ |
8,657,199 |
|
|
$ |
2,574,691 |
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
|
6,011,289 |
|
|
|
1,420,899 |
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
|
2,645,910 |
|
|
|
1,153,792 |
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
|
2,459,866 |
|
|
|
1,118,407 |
|
|
|
|
|
|
|
|
|
|
Income from Operations |
|
|
186,044 |
|
|
|
35,385 |
|
|
|
|
|
|
|
|
|
|
Other Income (Expense) |
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
(62,882 |
) |
|
|
(35,045 |
) |
Total Other Expense |
|
|
(62,882 |
) |
|
|
(35,045 |
) |
|
|
|
|
|
|
|
|
|
Income before provision for income taxes |
|
|
123,162 |
|
|
|
340 |
|
|
|
|
|
|
|
|
|
|
Benefit from income taxes |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
Net Income |
|
|
123,162 |
|
|
|
340 |
|
|
|
|
|
|
|
|
|
|
Non-controlling interest in consolidated subsidiary |
|
|
12,626 |
|
|
|
1,759 |
|
|
|
|
|
|
|
|
|
|
Net Income attributable to Data Storage Corp |
|
|
135,788 |
|
|
|
2,099 |
|
|
|
|
|
|
|
|
|
|
Preferred Stock Dividends |
|
|
— |
|
|
|
(38,883 |
) |
|
|
|
|
|
|
|
|
|
Net Income (Loss) Attributable to Common Stockholders |
|
$ |
135,788 |
|
|
$ |
(36,784 |
) |
|
|
|
|
|
|
|
|
|
Earnings per Share – Basic |
|
$ |
0.02 |
|
|
$ |
(0.01 |
) |
Earning pers Share – Diluted |
|
$ |
0.02 |
|
|
$ |
(0.01 |
) |
Weighted Average Number of Shares - Basic |
|
|
6,695,966 |
|
|
|
3,213,485 |
|
Weighted Average Number of Shares - Diluted |
|
|
6,955,900 |
|
|
|
3,213,485 |
|
DATA STORAGE CORPORATION AND SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(Unaudited) |
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
2022 |
|
2021 |
Cash Flows from Operating Activities: |
|
|
|
|
|
|
|
|
Net Income |
|
$ |
123,162 |
|
|
$ |
340 |
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
351,338 |
|
|
|
267,189 |
|
Stock based compensation |
|
|
66,505 |
|
|
|
42,171 |
|
Changes in Assets and Liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(1,140,097 |
) |
|
|
(170,096 |
) |
Other assets |
|
|
25,180 |
|
|
|
(345 |
) |
Prepaid expenses and other current assets |
|
|
(719,842 |
) |
|
|
(290,018 |
) |
Right of use asset |
|
|
47,962 |
|
|
|
21,492 |
|
Accounts payable and accrued expenses |
|
|
2,991,981 |
|
|
|
558,679 |
|
Deferred revenue |
|
|
(74,409 |
) |
|
|
(59,489 |
) |
Operating lease liability |
|
|
(48,179 |
) |
|
|
(21,364 |
) |
Net Cash Provided by
Operating Activities |
|
|
1,623,601 |
|
|
|
348,559 |
|
Cash Flows from Investing
Activities: |
|
|
|
|
|
|
|
|
Capital expenditures |
|
|
(25,946 |
) |
|
|
(257,238 |
) |
Net Cash Used in Investing
Activities |
|
|
(25,946 |
) |
|
|
(257,238 |
) |
Cash Flows from Financing
Activities: |
|
|
|
|
|
|
|
|
Repayments of finance lease obligations related party |
|
|
(271,574 |
) |
|
|
(313,925 |
) |
Repayments of finance lease obligations |
|
|
(48,112 |
) |
|
|
(36,682 |
) |
Cash received for the exercised of options |
|
|
6,935 |
|
|
|
— |
|
Net Cash Used in Financing
Activities |
|
|
(312,751 |
) |
|
|
(350,607 |
) |
|
|
|
|
|
|
|
|
|
Increase (decrease) in Cash
and Cash Equivalents |
|
|
1,284,904 |
|
|
|
(259,286 |
) |
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents,
Beginning of Period |
|
|
12,135,803 |
|
|
|
893,598 |
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents, End
of Period |
|
$ |
13,420,707 |
|
|
$ |
634,312 |
|
Supplemental Disclosures: |
|
|
|
|
|
|
|
|
Cash paid for interest |
|
$ |
61,262 |
|
|
$ |
31,971 |
|
Cash paid for income taxes |
|
$ |
— |
|
|
$ |
— |
|
Non-cash investing and
financing activities: |
|
|
|
|
|
|
|
|
Accrual of preferred stock dividend |
|
$ |
— |
|
|
$ |
38,883 |
|
Assets acquired by finance lease |
|
$ |
881,308 |
|
|
$ |
50,000 |
|
DATA STORAGE CORPORATION AND SUBSIDIARIES |
NON-GAAP FINANCIAL MEASURES |
Adjusted EBITDA
To supplement our consolidated financial
statements presented in accordance with GAAP and to provide
investors with additional information regarding our financial
results, we consider and are including herein Adjusted EBITDA, a
Non-GAAP financial measure. We view Adjusted EBITDA as an operating
performance measure and, as such, we believe that the GAAP
financial measure most directly comparable to it is net income
(loss). We define Adjusted EBITDA as net income adjusted for
interest and financing fees, depreciation, amortization,
stock-based compensation, and other non-cash income and expenses.
We believe that Adjusted EBITDA provides us an important measure of
operating performance because it allows management, investors,
debtholders and others to evaluate and compare ongoing operating
results from period to period by removing the impact of our asset
base, any asset disposals or impairments, stock-based compensation
and other non-cash income and expense items associated with our
reliance on issuing equity-linked debt securities to fund our
working capital.
Our use of Adjusted EBITDA has limitations as an
analytical tool, and this measure should not be considered in
isolation or as a substitute for an analysis of our results as
reported under GAAP, as the excluded items may have significant
effects on our operating results and financial condition.
Additionally, our measure of Adjusted EBITDA may differ from other
companies’ measure of Adjusted EBITDA. When evaluating our
performance, Adjusted EBITDA should be considered with other
financial performance measures, including various cash flow
metrics, net income and other GAAP results. In the future, we may
disclose different non-GAAP financial measures in order to help our
investors and others more meaningfully evaluate and compare our
future results of operations to our previously reported results of
operations.
The following table shows our reconciliation of net income to
adjusted EBITDA for the three months ended March 31, 2022 and 2021,
respectively:
|
|
For the Three Months Ended |
|
|
March 31, |
|
March 31, |
|
|
2022 |
|
2021 |
|
|
|
|
|
Net income |
|
$ |
123,162 |
|
|
|
340 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
351,338 |
|
|
|
267,189 |
|
Flagship acquisition costs |
|
|
605 |
|
|
|
— |
|
Interest income and expense |
|
|
62,882 |
|
|
|
35,045 |
|
Stock based compensation |
|
|
66,505 |
|
|
|
42,171 |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
604,492 |
|
|
|
344,745 |
|
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