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Data Storage Corporation Reports 20% Increase in Revenue and Again Achieves Profitability for the 2024 First Quarter

Data Storage Corp.
Data Storage Corp.

MELVILLE, N.Y., May 15, 2024 (GLOBE NEWSWIRE) -- 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 March 31, 2024.

Chuck Piluso, CEO of Data Storage Corporation, stated, “We continue to execute on our business growth strategy, including new contracts with high profile clients, as well as streamlined operations for improved operations. As a result of our efforts, we witnessed a 20% increase in revenue to $8.2 million for the first quarter of 2024. Notably, our gross profit grew 42% with gross profit margin increasing to 36% for the first quarter of 2024 from 30% for the same period in 2023--demonstrating the success and scalability of our business model. Furthermore, we achieved profitability for the first quarter of 2024 and believe as we continue to execute on our strategic initiatives, we will continue to grow revenue and increase profitability.”

“Importantly, we began the year with the consolidation of our CloudFirst and Flagship subsidiaries. This strategic decision combines the unique strengths and expertise of the respective business units, positioning us to optimize operations, leverage our technical teams, realize greater efficiencies, and improve internal resource allocation, while allowing us to capitalize on cross-selling and upselling opportunities among our customers. As further validation of this strategy, we announced two meaningful contracts during the quarter. We expanded a contract with an existing client, a major global telecommunications company, while also securing a new contract with one of the largest insurance companies in the United States. We believe these are just the first of such announcements that will come from the efforts of the combined organizations.”

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“In addition, we are actively advancing our international growth plan, including the recent opening of our London office to serve the European and other global markets. We moved to our new and expanded headquarter location in Melville, NY, which will help support our anticipated growth. These new offices are strategically designed to bolster our growth plans, including expanded technical, sales, and marketing initiatives.”

“Overall, we have developed a robust business strategy that we believe will drive growth and secure sustainable profitability, while maximizing long term value for shareholders. At the same time, we have a strong balance sheet with over $11.9 million in cash and marketable securities as of March 31, 2024, allowing us to deploy capital efficiently. We are proud of our continued progress and look forward to providing meaningful updates to shareholders as developments unfold,” concluded Mr. Piluso.

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 first quarter of 2024 which ended March 31, 2024, 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=1654219&tp_key=c586e78999, 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 May 15, 2025. A telephone replay of the call will be available approximately three hours following the call, through May 22, 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: 13744139.

About Data Storage Corporation
Data 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 grow revenue and increase profitability as the Company executes on its strategic initiatives, the consolidation of the CloudFirst and Flagship subsidiaries positioning the Company to optimize operations, leverage its technical teams, realize greater efficiencies, and improve internal resource allocation, while capitalizing on extensive cross-selling and upselling opportunities among its customer networks, the two meaningful announced contracts being just the first of many such announcements that will come from the efforts of the combined organizations, having developed a robust business strategy that we will drive growth and secure sustainable profitability while maximizing long term value for shareholders and providing meaningful updates to shareholders as developments unfold. 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 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, LLC
212-671-1020
DTST@crescendo-ir.com

[Tables to Follow]

DATA STORAGE CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

 

 

 

 

March 31,
2024

 

December 31,
2023

ASSETS

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

640,742

 

 

$

1,428,730

 

Accounts receivable (less provision for credit losses of $62,051 and $7,915 in 2024 and 2023, respectively)

 

 

4,437,666

 

 

 

1,259,972

 

Marketable securities

 

 

11,261,565

 

 

 

11,318,196

 

Prepaid expenses and other current assets

 

 

666,957

 

 

 

513,175

 

Total Current Assets

 

 

17,006,930

 

 

 

14,520,073

 

 

 

 

 

 

 

 

 

 

Property and Equipment:

 

 

 

 

 

 

 

 

Property and equipment

 

 

8,196,862

 

 

 

7,838,225

 

Less—Accumulated depreciation

 

 

(5,331,503

)

 

 

(5,105,451

)

Net Property and Equipment

 

 

2,865,359

 

 

 

2,732,774

 

 

 

 

 

 

 

 

 

 

Other Assets:

 

 

 

 

 

 

 

 

Goodwill

 

 

4,238,671

 

 

 

4,238,671

 

Operating lease right-of-use assets

 

 

36,160

 

 

 

62,981

 

Other assets

 

 

48,436

 

 

 

48,436

 

Intangible assets, net

 

 

1,628,937

 

 

 

1,698,084

 

Total Other Assets

 

 

5,952,204

 

 

 

6,048,172

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$

25,824,493

 

 

$

23,301,019

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

4,835,868

 

 

$

2,608,938

 

Deferred revenue

 

 

310,123

 

 

 

336,201

 

Finance leases payable

 

 

214,961

 

 

 

263,600

 

Finance leases payable related party

 

 

155,164

 

 

 

235,944

 

Operating lease liabilities short term

 

 

36,733

 

 

 

63,983

 

Total Current Liabilities

 

 

5,552,849

 

 

 

3,508,666

 

 

 

 

 

 

 

 

 

 

Finance leases payable

 

 

 

 

 

17,641

 

Finance leases payable related party

 

 

 

 

 

20,297

 

Total Long-Term Liabilities

 

 

 

 

 

37,938

 

 

 

 

 

 

 

 

 

 

Total Liabilities

 

 

5,552,849

 

 

 

3,546,604

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 7)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity:

 

 

 

 

 

 

 

 

Preferred stock, Series A par value $.001; 10,000,000 shares authorized; 0 shares issued and outstanding as of March 31, 2024 and December 31, 2023

 

 

 

 

 

 

Common stock, par value $.001; 250,000,000 shares authorized; 6,929,950 and 6,880,460 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

 

 

6,930

 

 

 

6,881

 

Additional paid in capital

 

 

39,661,561

 

 

 

39,490,285

 

Accumulated deficit

 

 

(19,148,701

)

 

 

(19,505,803

)

Total Data Storage Corporation Stockholders’ Equity

 

 

20,519,790

 

 

 

19,991,363

 

Non-controlling interest in consolidated subsidiary

 

 

(248,146

)

 

 

(236,948

)

Total Stockholder’s Equity

 

 

20,271,644

 

 

 

19,754,415

 

Total Liabilities and Stockholders’ Equity

 

$

25,824,493

 

 

$

23,301,019

 


DATA STORAGE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

2024

 

2023

 

 

 

 

 

Sales

 

$

8,235,747

 

 

$

6,879,723

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

 

5,269,275

 

 

 

4,789,978

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

 

2,966,472

 

 

 

2,089,745

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

2,752,677

 

 

 

2,130,759

 

 

 

 

 

 

 

 

 

 

Income (loss) from Operations

 

 

213,795

 

 

 

(41,014

)

 

 

 

 

 

 

 

 

 

Other Income (Expense)

 

 

 

 

 

 

 

 

Interest income

 

 

143,369

 

 

 

103,424

 

Interest expense

 

 

(11,260

)

 

 

(27,347

)

Total Other Income (Expense)

 

 

132,109

 

 

 

76,077

 

 

 

 

 

 

 

 

 

 

Income before provision for income taxes

 

 

345,904

 

 

 

35,063

 

 

 

 

 

 

 

 

 

 

Provision from income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

 

345,904

 

 

 

35,063

 

 

 

 

 

 

 

 

 

 

Loss in Non-controlling interest in consolidated subsidiary

 

 

11,198

 

 

 

15,603

 

 

 

 

 

 

 

 

 

 

Net Income Attributable to Common Stockholders

 

$

357,102

 

 

$

50,666

 

 

 

 

 

 

 

 

 

 

Earnings per Share – Basic

 

$

0.05

 

 

$

0.01

 

Earnings per Share – Diluted

 

$

0.05

 

 

$

0.01

 

Weighted Average Number of Shares – Basic

 

 

7,090,389

 

 

 

6,822,127

 

Weighted Average Number of Shares – Diluted

 

 

7,259,472

 

 

 

6,954,320

 


DATA STORAGE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

2024

 

2023

Cash Flows from Operating Activities:

 

 

 

 

 

 

 

 

Net income

 

$

345,904

 

 

$

35,063

 

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

295,198

 

 

 

288,710

 

Stock based compensation

 

 

171,325

 

 

 

86,469

 

Changes in Assets and Liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(3,177,694

)

 

 

(168,334

)

Other assets

 

 

 

 

 

(17,300

)

Prepaid expenses and other current assets

 

 

(153,782

)

 

 

(293,794

)

Right of use asset

 

 

26,821

 

 

 

50,659

 

Accounts payable and accrued expenses

 

 

2,226,932

 

 

 

491,669

 

Deferred revenue

 

 

(26,078

)

 

 

28,213

 

Operating lease liability

 

 

(27,250

)

 

 

(52,216

)

Net Cash (Used in) Provided by Operating Activities

 

 

(318,624

)

 

 

449,139

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(358,637

)

 

 

(426,671

)

Sale of marketable securities

 

 

200,000

 

 

 

 

Purchase of marketable securities

 

 

(143,369

)

 

 

(103,423

)

Net Cash Used in Investing Activities

 

 

(302,006

)

 

 

(530,094

)

Cash Flows from Financing Activities:

 

 

 

 

 

 

 

 

Repayments of finance lease obligations related party

 

 

(66,280

)

 

 

(183,464

)

Repayments of finance lease obligations

 

 

(101,078

)

 

 

(140,264

)

Net Cash Used in Financing Activities

 

 

(167,358

)

 

 

(323,728

)

 

 

 

 

 

 

 

 

 

Decrease in Cash and Cash Equivalents

 

 

(787,988

)

 

 

(404,683

)

 

 

 

 

 

 

 

 

 

Cash and Cash Equivalents, Beginning of Period

 

 

1,428,730

 

 

 

2,286,722

 

 

 

 

 

 

 

 

 

 

Cash and Cash Equivalents, End of Period

 

$

640,742

 

 

$

1,882,039

 

Supplemental Disclosures:

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

8,855

 

 

$

24,863

 

Cash paid for income taxes

 

$

 

 

$