Data Storage Corporation Reports 22% Year-Over-Year Revenue Growth and Achieves Profitability for the Second Quarter of 2023
14 August 2023 - 9:00PM
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 June 30, 2023.
Chuck Piluso, CEO of Data Storage Corporation,
stated, “I am pleased to report we achieved solid financial results
for the second quarter of 2023, with revenue increasing 22% and
reporting positive net income for the second consecutive quarter.
We are beginning to witness the benefits of our ongoing strategic
business initiatives focused on driving high-margin, recurring
revenues, while continuing to carefully manage our expenses.
Specifically, we have expanded our marketing programs and hosted
revenue-driven sales events. As a result of these efforts, we
continue to grow our subscription-based services, which we believe
will help ensure long-term profitability while driving value for
our shareholders.”
“Our momentum has continued heading into the
third quarter of 2023. For example, we recently secured a sizable,
subscription-based contract with one of the largest food
distributors in the United States. In addition, we were awarded a
multi-million-dollar project with one of the nation’s leading
sports and entertainment companies. At the same time, we have
maintained a strong balance sheet with over $10.6 million in cash
and short-term investments as of June 30, 2023. Overall, we are
excited about the outlook for the business and look forward to
achieving additional milestones in the near term.”
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 second quarter of 2023 which ended June 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=1622744&tp_key=44b279a647,
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 August 14, 2024. A
telephone replay of the call will be available approximately three
hours following the call, through August 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: 13739667.
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 investments in proprietary IT
solutions for 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 ProvisionThis 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 carefully manage our
expenses, continuing to grow the Company’s subscription-based
services, the growth of the subscription-based services helping to
ensure long-term profitability while driving value for Company’s
shareholders and achieving additional milestones in the near term.
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 manage its expenses and 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
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS |
|
|
|
|
|
|
|
|
|
|
|
June 30, 2023 |
|
December 31, 2022 |
|
|
(Unaudited) |
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
1,437,039 |
|
|
$ |
2,286,722 |
|
Accounts receivable (less allowance for credit losses of $39,622
and $27,250 in 2023 and 2022, respectively) |
|
|
2,221,602 |
|
|
|
3,502,836 |
|
Marketable securities |
|
|
9,230,254 |
|
|
|
9,010,968 |
|
Prepaid expenses and other current assets |
|
|
736,386 |
|
|
|
584,666 |
|
Total Current Assets |
|
|
13,625,281 |
|
|
|
15,385,192 |
|
|
|
|
|
|
|
|
|
|
Property and Equipment: |
|
|
|
|
|
|
|
|
Property and equipment |
|
|
7,458,932 |
|
|
|
7,168,488 |
|
Less—Accumulated depreciation |
|
|
(4,531,811 |
) |
|
|
(4,956,698 |
) |
Net Property and Equipment |
|
|
2,927,121 |
|
|
|
2,211,790 |
|
|
|
|
|
|
|
|
|
|
Other Assets: |
|
|
|
|
|
|
|
|
Goodwill |
|
|
4,238,671 |
|
|
|
4,238,671 |
|
Operating lease right-of-use assets |
|
|
124,475 |
|
|
|
226,501 |
|
Other assets |
|
|
48,436 |
|
|
|
48,437 |
|
Intangible assets, net |
|
|
1,836,378 |
|
|
|
1,975,644 |
|
Total Other Assets |
|
|
6,247,960 |
|
|
|
6,489,253 |
|
|
|
|
|
|
|
|
|
|
Total Assets |
|
$ |
22,800,362 |
|
|
$ |
24,086,235 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
2,088,477 |
|
|
$ |
3,207,577 |
|
Deferred revenue |
|
|
314,066 |
|
|
|
281,060 |
|
Finance leases payable |
|
|
279,461 |
|
|
|
359,868 |
|
Finance leases payable related party |
|
|
368,433 |
|
|
|
520,623 |
|
Operating lease liabilities short term |
|
|
117,627 |
|
|
|
160,657 |
|
Total Current Liabilities |
|
|
3,168,064 |
|
|
|
4,529,785 |
|
|
|
|
|
|
|
|
|
|
Operating lease liabilities |
|
|
9,226 |
|
|
|
71,772 |
|
Finance leases payable |
|
|
125,167 |
|
|
|
281,242 |
|
Finance leases payable related party |
|
|
100,426 |
|
|
|
256,241 |
|
Total Long-Term Liabilities |
|
|
234,819 |
|
|
|
609,255 |
|
|
|
|
|
|
|
|
|
|
Total Liabilities |
|
|
3,402,883 |
|
|
|
5,139,040 |
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
(Note 6) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity: |
|
|
|
|
|
|
|
|
Preferred stock, Series A par
value $.001; 10,000,000 shares authorized; 0 and 0 shares issued
and outstanding in 2023 and 2022, respectively |
|
|
— |
|
|
|
— |
|
Common stock, par value $.001;
250,000,000 shares authorized; 6,847,127 and 6,822,127 shares
issued and outstanding in 2023 and 2022, respectively |
|
|
6,847 |
|
|
|
6,822 |
|
Additional paid in
capital |
|
|
39,191,598 |
|
|
|
38,982,440 |
|
Accumulated deficit |
|
|
(19,609,889 |
) |
|
|
(19,887,378 |
) |
Total Data Storage Corp
Stockholders’ Equity |
|
|
19,588,556 |
|
|
|
19,101,884 |
|
Non-controlling interest in
consolidated subsidiary |
|
|
(191,077 |
) |
|
|
(154,689 |
) |
Total Stockholder’s
Equity |
|
|
19,397,479 |
|
|
|
18,947,195 |
|
Total Liabilities and
Stockholders’ Equity |
|
$ |
22,800,362 |
|
|
$ |
24,086,235 |
|
DATA STORAGE CORPORATION AND SUBSIDIARIESCONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
Sales |
|
$ |
5,904,391 |
|
|
$ |
4,827,749 |
|
|
$ |
12,784,114 |
|
|
$ |
13,484,948 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
|
3,325,637 |
|
|
|
3,269,187 |
|
|
|
8,115,615 |
|
|
|
9,280,476 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
|
2,578,754 |
|
|
|
1,558,562 |
|
|
|
4,668,499 |
|
|
|
4,204,472 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative |
|
|
2,472,010 |
|
|
|
2,594,204 |
|
|
|
4,602,769 |
|
|
|
5,054,070 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) from
Operations |
|
|
106,744 |
|
|
|
(1,035,642 |
) |
|
|
65,730 |
|
|
|
(849,598 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income (expense), net |
|
|
99,294 |
|
|
|
(113,664 |
) |
|
|
175,371 |
|
|
|
(156,324 |
) |
Total Other Income (Expense) |
|
|
99,294 |
|
|
|
(113,664 |
) |
|
|
175,371 |
|
|
|
(156,324 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) before provision
for income taxes |
|
|
206,038 |
|
|
|
(1,149,306 |
) |
|
|
241,101 |
|
|
|
(1,005,922 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefit from income taxes |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) |
|
|
206,038 |
|
|
|
(1,149,306 |
) |
|
|
241,101 |
|
|
|
(1,005,922 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss in Non-controlling
interest of consolidated subsidiary |
|
|
20,785 |
|
|
|
10,207 |
|
|
|
36,388 |
|
|
|
22,833 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) attributable
to Data Storage Corp |
|
$ |
226,823 |
|
|
$ |
(1,139,099 |
) |
|
$ |
277,489 |
|
|
$ |
(983,089 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per Share –
Basic |
|
$ |
0.03 |
|
|
$ |
(0.17 |
) |
|
$ |
0.04 |
|
|
$ |
(0.15 |
) |
Earnings per Share –
Diluted |
|
$ |
0.03 |
|
|
$ |
(0.17 |
) |
|
$ |
0.04 |
|
|
$ |
(0.15 |
) |
Weighted Average Number of
Shares - Basic |
|
|
6,834,627 |
|
|
|
6,758,238 |
|
|
|
6,828,446 |
|
|
|
6,727,108 |
|
Weighted Average Number of
Shares - Diluted |
|
|
7,022,275 |
|
|
|
6,758,238 |
|
|
|
7,016,094 |
|
|
|
6,727,108 |
|
DATA STORAGE CORPORATION AND SUBSIDIARIESCONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
|
2023 |
|
2022 |
Cash Flows from Operating
Activities: |
|
|
|
|
|
|
|
|
Net Income (Loss) |
|
$ |
241,101 |
|
|
$ |
(1,005,922 |
) |
Adjustments to reconcile net
income (loss) to net cash provided by (used in ) operating
activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
589,660 |
|
|
|
640,589 |
|
Stock based compensation |
|
|
209,183 |
|
|
|
551,892 |
|
Changes in Assets and Liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
1,281,234 |
|
|
|
(100,490 |
) |
Other assets |
|
|
— |
|
|
|
(211 |
) |
Prepaid expenses and other current assets |
|
|
(151,720 |
) |
|
|
(438,444 |
) |
Right of use asset |
|
|
102,026 |
|
|
|
96,573 |
|
Accounts payable and accrued expenses |
|
|
(1,119,100 |
) |
|
|
261,052 |
|
Deferred revenue |
|
|
33,006 |
|
|
|
(117,377 |
) |
Operating lease liability |
|
|
(105,576 |
) |
|
|
(95,744 |
) |
Net Cash Provided by (Used in)
Operating Activities |
|
|
1,079,814 |
|
|
|
(208,082 |
) |
Cash Flows from Investing
Activities: |
|
|
|
|
|
|
|
|
Capital expenditures |
|
|
(1,165,724 |
) |
|
|
(51,220 |
) |
Purchase of marketable securities |
|
|
(219,286 |
) |
|
|
— |
|
Net Cash Used in Investing
Activities |
|
|
(1,385,010 |
) |
|
|
(51,220 |
) |
Cash Flows from Financing
Activities: |
|
|
|
|
|
|
|
|
Repayments of finance lease obligations related party |
|
|
(308,005 |
) |
|
|
(487,403 |
) |
Repayments of finance lease obligations |
|
|
(236,482 |
) |
|
|
(181,597 |
) |
Cash received for the exercised of options |
|
|
— |
|
|
|
6,935 |
|
Net Cash Used in Financing
Activities |
|
|
(544,487 |
) |
|
|
(662,065 |
) |
|
|
|
|
|
|
|
|
|
Decrease in Cash and Cash
Equivalents |
|
|
(849,683 |
) |
|
|
(921,367 |
) |
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents,
Beginning of Period |
|
|
2,286,722 |
|
|
|
12,135,803 |
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents, End
of Period |
|
$ |
1,437,039 |
|
|
$ |
11,214,436 |
|
Supplemental Disclosures: |
|
|
|
|
|
|
|
|
Cash paid for interest |
|
$ |
41,062 |
|
|
$ |
76,874 |
|
Cash paid for income taxes |
|
$ |
— |
|
|
$ |
— |
|
Non-cash investing and
financing activities: |
|
|
|
|
|
|
|
|
Assets acquired by finance lease |
|
$ |
— |
|
|
$ |
1,094,051 |
|
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