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Data Storage Corporation Reports Record Revenue of $25 Million and Achieves Profitability for the 2023 Fiscal Year

Data Storage Corp.
Data Storage Corp.

MELVILLE, N.Y., March 28, 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 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.”

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“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 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 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, LLC
212-671-1020
DTST@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