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 year ended December 31, 2023.
Chuck Piluso, CEO of Data Storage Corporation,
stated, “We are proud to report record revenue of $25.0 million for
the 2023 fiscal year which we believe is a direct result of the
strategic growth initiatives we implemented throughout the year.
Through our innovative marketing programs and highly attended
events, we had continued success in securing one time equipment
sales, however, our primary emphasis has been on our recurring
subscription based services, which increased 17% over the prior
year. Notably, gross profit grew 18.5% with gross profit margin
increasing to 38.4% in 2023 from 33.9% in 2022—validating that our
strategies are working. Importantly, we achieved profitability for
the 2023 fiscal year and anticipate that as our revenue continues
to grow, we will witness continued improvement in both our margins
and overall profitability in 2024 and beyond.”
“We are witnessing strong contract momentum as
evidenced by the several contract announcements made throughout the
year. Specifically, we secured contracts with new clients as well
as expanded relationships with existing clients, which we believe
demonstrates our ability to meet the evolving needs of our clients.
Furthermore, our newly implemented sales and marketing program is
proving effective and strategically complements our Major Accounts
Program, where we are capitalizing on the vast opportunities for
upselling and cross-selling of our products and services.”
“We believe that by executing and advancing our
growth strategies, including the CloudFirst and Flagship merger, as
well as expanding distribution channels, enhancing digital and
direct marketing efforts, refining lead generation processes, and
investigating strategic M&A prospects, we can sustainably boost
revenue and optimize long-term profitability. At the same time, we
have preserved a strong balance with over $12.7 million in cash and
marketable securities as of December 31, 2023. Overall, we believe
we are at an inflection point where we are well positioned to
further establish our leadership and capitalize on the vast and
growing multibillion-dollar market opportunities our services
address within the disaster-recovery, cloud infrastructure,
cyber-security, and IT markets.”
Conference Call
The Company plans to host a conference call at
11:00 am ET today, to discuss the Company's financial results for
the 2023 fiscal year ended December 31, 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=1654217&tp_key=1962ffb408,
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 March
28, 2025. A telephone replay of the call will be available
approximately three hours following the call, through April 4,
2024, 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: 13744138.
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 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 reporting record revenue of $25.0
million for the 2023 fiscal year being a direct result of the
strategic growth initiatives the Company implemented throughout the
year, witnessing continued improvement in both the Company’s
margins and overall profitability in 2024 and beyond as revenue
continues to grow, capitalizing on the vast opportunities for
upselling and cross-selling of the Company’s products and services,
sustainably boosting revenue and optimizing long-term profitability
by executing and advancing the Company’s growth strategies,
including the CloudFirst and Flagship merger, as well as expanding
distribution channels, enhancing digital and direct marketing
efforts, refining lead generation processes, and investigating
strategic M&A prospects and being at an inflection point where
the Company is well positioned to further establish its leadership
and capitalize on the vast and growing multibillion-dollar market
opportunities its services address within the disaster-recovery,
cloud infrastructure, cyber-security, and IT markets. 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 and the
Company’s ability to execute and advance its growth strategies.
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, 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
[Tables to Follow]
CONSOLIDATED BALANCE SHEETS |
|
|
|
|
|
|
|
|
|
|
|
December 31, 2023 |
|
December 31, 2022 |
ASSETS |
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
1,428,730 |
|
|
$ |
2,286,722 |
|
Accounts receivable (less allowance for credit losses of $7,915 and
$27,250 in 2023 and 2022, respectively) |
|
|
1,259,972 |
|
|
|
3,502,836 |
|
Marketable securities |
|
|
11,318,196 |
|
|
|
9,010,968 |
|
Prepaid expenses and other current assets |
|
|
513,175 |
|
|
|
584,666 |
|
Total Current Assets |
|
|
14,520,073 |
|
|
|
15,385,192 |
|
|
|
|
|
|
|
|
|
|
Property and Equipment: |
|
|
|
|
|
|
|
|
Property and equipment |
|
|
7,838,225 |
|
|
|
7,168,488 |
|
Less—Accumulated depreciation |
|
|
(5,105,451 |
) |
|
|
(4,956,698 |
) |
Net Property and Equipment |
|
|
2,732,774 |
|
|
|
2,211,790 |
|
|
|
|
|
|
|
|
|
|
Other Assets: |
|
|
|
|
|
|
|
|
Goodwill |
|
|
4,238,671 |
|
|
|
4,238,671 |
|
Operating lease right-of-use assets |
|
|
62,981 |
|
|
|
226,501 |
|
Other assets |
|
|
48,436 |
|
|
|
48,437 |
|
Intangible assets, net |
|
|
1,698,084 |
|
|
|
1,975,644 |
|
Total Other Assets |
|
|
6,048,172 |
|
|
|
6,489,253 |
|
|
|
|
|
|
|
|
|
|
Total Assets |
|
$ |
23,301,019 |
|
|
$ |
24,086,235 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’
DEFICIT |
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
2,608,938 |
|
|
$ |
3,207,577 |
|
Deferred revenue |
|
|
336,201 |
|
|
|
281,060 |
|
Finance leases payable |
|
|
263,600 |
|
|
|
359,868 |
|
Finance leases payable related party |
|
|
235,944 |
|
|
|
520,623 |
|
Operating lease liabilities short term |
|
|
63,983 |
|
|
|
160,657 |
|
Total Current Liabilities |
|
|
3,508,666 |
|
|
|
4,529,785 |
|
|
|
|
|
|
|
|
|
|
Operating lease liabilities |
|
|
— |
|
|
|
71,772 |
|
Finance leases payable |
|
|
17,641 |
|
|
|
281,242 |
|
Finance leases payable related party |
|
|
20,297 |
|
|
|
256,241 |
|
Total Long-Term Liabilities |
|
|
37,938 |
|
|
|
609,255 |
|
|
|
|
|
|
|
|
|
|
Total Liabilities |
|
|
3,546,604 |
|
|
|
5,139,040 |
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
(Note 7) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity: |
|
|
|
|
|
|
|
|
Preferred stock, Series A par
value $.001; 10,000,000 shares authorized;0 shares issued and
outstanding in 2023 and 2022 |
|
|
— |
|
|
|
— |
|
Common stock, par value $.001;
250,000,000 shares authorized; 6,880,460 and 6,822,127 shares
issued and outstanding in 2023 and 2022, respectively |
|
|
6,881 |
|
|
|
6,822 |
|
Additional paid in
capital |
|
|
39,490,285 |
|
|
|
38,982,440 |
|
Accumulated deficit |
|
|
(19,505,803 |
) |
|
|
(19,887,378 |
) |
Total Data Storage Corp
Stockholders’ Equity |
|
|
19,991,363 |
|
|
|
19,101,884 |
|
Non-controlling interest in
consolidated subsidiary |
|
|
(236,948 |
) |
|
|
(154,689 |
) |
Total Stockholder’s
Equity |
|
|
19,754,415 |
|
|
|
18,947,195 |
|
Total Liabilities and
Stockholders’ Equity |
|
$ |
23,301,019 |
|
|
$ |
24,086,235 |
|
DATA STORAGE CORPORATION AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF OPERATIONS |
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
2023 |
|
2022 |
|
|
|
|
|
Sales |
|
$ |
24,959,576 |
|
|
$ |
23,870,837 |
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
|
15,383,251 |
|
|
|
15,787,544 |
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
|
9,576,325 |
|
|
|
8,083,293 |
|
|
|
|
|
|
|
|
|
|
Impairment of goodwill |
|
|
— |
|
|
|
2,322,000 |
|
Selling, general and
administrative |
|
|
9,744,736 |
|
|
|
9,837,308 |
|
|
|
|
|
|
|
|
|
|
Loss from Operations |
|
|
(168,411 |
) |
|
|
(4,076,015 |
) |
|
|
|
|
|
|
|
|
|
Other Income (Expense) |
|
|
|
|
|
|
|
|
Interest income |
|
|
542,229 |
|
|
|
10,969 |
|
Interest expense |
|
|
(74,502 |
) |
|
|
(141,056 |
) |
Impairment of deferred offering costs and financing costs
associated with canceled financing efforts |
|
|
— |
|
|
|
(127,343 |
) |
Other expense |
|
|
— |
|
|
|
(75,418 |
) |
Total Other Income (Expense) |
|
|
467,727 |
|
|
|
(332,848 |
) |
|
|
|
|
|
|
|
|
|
Income (Loss) before provision
for income taxes |
|
|
299,316 |
|
|
|
(4,408,863 |
) |
|
|
|
|
|
|
|
|
|
Provision from (Benefit from)
income taxes |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) |
|
|
299,316 |
|
|
|
(4,408,863 |
) |
|
|
|
|
|
|
|
|
|
Loss in Non-controlling
interest in consolidated subsidiary |
|
|
82,259 |
|
|
|
52,061 |
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) Attributable
to Common Stockholders |
|
$ |
381,575 |
|
|
$ |
(4,356,802 |
) |
|
|
|
|
|
|
|
|
|
Earnings (loss) per Share –
Basic |
|
$ |
0.06 |
|
|
$ |
(0.64 |
) |
Earnings (loss) per Share –
Diluted |
|
$ |
0.05 |
|
|
$ |
(0.64 |
) |
Weighted Average Number of
Shares – Basic |
|
|
6,841,094 |
|
|
|
6,775,140 |
|
Weighted Average Number of
Shares – Diluted |
|
|
7,215,069 |
|
|
|
6,775,140 |
|
DATA STORAGE CORPORATION AND
SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
2023 |
|
2022 |
Cash Flows from Operating
Activities: |
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
299,316 |
|
|
$ |
(4,408,863 |
) |
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
1,301,594 |
|
|
|
1,225,911 |
|
Stock based compensation |
|
|
506,205 |
|
|
|
734,479 |
|
Impairment of deferred offering costs and financing costs
associated with canceled financing efforts |
|
|
— |
|
|
|
127,343 |
|
Impairment of goodwill |
|
|
— |
|
|
|
2,322,000 |
|
Changes in Assets and Liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
2,242,864 |
|
|
|
(1,118,469 |
) |
Other assets |
|
|
— |
|
|
|
54,788 |
|
Prepaid expenses and other current assets |
|
|
71,491 |
|
|
|
(48,265 |
) |
Right of use asset |
|
|
163,520 |
|
|
|
195,817 |
|
Accounts payable and accrued expenses |
|
|
(598,638 |
) |
|
|
1,864,188 |
|
Deferred revenue |
|
|
55,141 |
|
|
|
(85,799 |
) |
Operating lease liability |
|
|
(168,446 |
) |
|
|
(199,329 |
) |
Net Cash Provided by Operating
Activities |
|
|
3,873,047 |
|
|
|
663,801 |
|
Cash Flows from Investing
Activities: |
|
|
|
|
|
|
|
|
Capital expenditures |
|
|
(1,545,017 |
) |
|
|
(127,257 |
) |
Purchase of marketable securities |
|
|
(2,307,228 |
) |
|
|
(9,010,968 |
) |
Net Cash Used in Investing
Activities |
|
|
(3,852,245 |
) |
|
|
(9,138,225 |
) |
Cash Flows from Financing
Activities: |
|
|
|
|
|
|
|
|
Repayments of finance lease obligations related party |
|
|
(520,624 |
) |
|
|
(867,741 |
) |
Repayments of finance lease obligations |
|
|
(359,869 |
) |
|
|
(386,509 |
) |
Payments for deferred offering costs |
|
|
— |
|
|
|
(127,341 |
) |
Cash received for the exercise of stock options |
|
|
1,699 |
|
|
|
6,934 |
|
Net Cash Used in Financing
Activities |
|
|
(878,794 |
) |
|
|
(1,374,657 |
) |
|
|
|
|
|
|
|
|
|
Decrease in Cash and Cash
Equivalents |
|
|
(857,992 |
) |
|
|
(9,849,081 |
) |
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents,
Beginning of Period |
|
|
2,286,722 |
|
|
|
12,135,803 |
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents, End
of Period |
|
$ |
1,428,730 |
|
|
$ |
2,286,722 |
|
Supplemental Disclosures: |
|
|
|
|
|
|
|
|
Cash paid for interest |
|
$ |
65,057 |
|
|
$ |
127,871 |
|
Cash paid for income taxes |
|
$ |
— |
|
|
$ |
— |
|
Non-cash investing and
financing activities: |
|
|
|
|
|
|
|
|
Assets acquired by finance lease |
|
$ |
— |
|
|
$ |
1,094,051 |
|
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