Data Storage Corporation Reports 42% Increase in Revenue for the Third Quarter of 2021
Management to host conference call today, November 15 at 11:30AM Eastern Time
MELVILLE, N.Y., Nov. 15, 2021 (GLOBE NEWSWIRE) -- Data Storage Corporation (Nasdaq: DTST) (“DSC” and the “Company”), a provider of diverse business continuity, disaster recovery protection, IBM Power infrastructure-as-a-service, cyber-security based and data analytics solutions, today provided a business update and reported its financial results for the third quarter ended September 30, 2021.
Chuck Piluso, CEO of Data Storage Corporation, commented, “I’m pleased to report revenue for the third quarter increased 42% compared to the same period last year, and we continue to generate positive net income, while investing in the future growth of the Company. We saw a meaningful increase in sales across Infrastructure & Disaster Recovery/Cloud Services, which increased 27%; an increase in Managed Services; and Nexxis VoIP services, which increased 17%. This increase was partially offset by a decline in Equipment and Software, reflecting our focus on recurring and high margin cloud-based subscription services. Our solid results for the quarter are a direct reflection of our new sales and marketing strategy, as well as the continued growth and synergies that are being realized from the recent Flagship merger.”
“We continue to expand our offerings, as illustrated by the recent partnership with Precisely, a global leader in data integrity and security software solutions, providing us new and valuable opportunities within the market. As more companies migrate their businesses to the cloud, there is an increasing need for solutions that prioritize privacy and compliance adherence. Precisely has proven to be an ideal partner to enhance our IBM i ezSecurity solution, as evidenced by the increased demand and new sales opportunities.”
“Overall, with our new capital we are investing in our organic growth, including new employees and marketing campaigns. We are establishing special incentives for cross selling our solutions between our three subsidiaries and leveraging our distribution channels. We believe we are positioned for solid organic growth in 2022 creating the baseline of subscription recurring revenue for futures years and continuing our high contract renewal rate of 94%. Our primary objectives going into 2022 are to establish more accretive partnerships and to increase our sales presence across all our product lines. At the same time, we have maintained a strong balance sheet with approximately $12.9 million of cash and cash equivalents as of September 30, 2021. Our cash position enables us to execute on our growth strategy as well as explore opportunistic acquisitions that would enhance our offerings. Looking ahead, we believe we are on track to make considerable progress towards achieving our goals and look forward to providing further updates as developments unfold.”
Financial Results
Revenue for the three months ended September 30, 2021 was $3.86 million, an increase of 42%, compared to $2.72 million for the three months ended September 30, 2020. The increase was primarily attributable to additional sales from the Flagship merger and an increase in monthly subscription revenues.
Selling, general and administrative expenses for the three months ended September 30, 2021 were $2.02 million compared to $1.02 million for the three months ended September 30, 2020. The increase in expenses was primarily attributable to increases in salaries, professional fees, advertising expenses, commission expenses, and interest expenses.
Net income attributable to common shareholders for the three months ended September 30, 2021 was $0.14 million, or $0.02 per share, as compared to $0.01 million, or $0.00 per share, for the three months ended September 30, 2020.
Conference Call
The Company plans to host a conference call at 11:30 am Eastern Time today, November 15, 2021 to discuss the Company’s financial results for the third quarter ended September 30, 2021 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: 737560. A webcast of the call may be accessed at https://www.webcaster4.com/Webcast/Page/2763/43671, 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 November 15, 2022. A telephone replay of the call will be available approximately one hour following the call, through November 29, 2021 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: 43671.
About Data Storage Corporation
The Company delivers and supports a broad range of premium technology solutions focusing on IaaS, data storage protection and IT management. Clients look to Data Storage to ensure disaster recovery, business continuity, enhance security, and to meet increasing industry, state and federal regulations. The Company markets to businesses, government, education and the healthcare industry by leveraging leading technologies. Through its business units, the Company provides IaaS, SaaS, DRaaS, VoIP, cyber security, data analytics, IBM Power systems and storage hardware with managed IT services. For more information, please visit http://www.DataStorageCorp.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, 2020, 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
SOURCE: Data Storage Corporation
***tables follow***
| DATA STORAGE CORPORATION AND SUBSIDIARIES |
| CONSOLIDATED BALANCE SHEETS |
| September 30, 2021 | December 31, 2020 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 12,889,032 | $ | 893,598 | ||||
| Accounts receivable (less allowance for doubtful accounts of $19,896 and $30,000 in 2021 and 2020, respectively) | 1,837,053 | 554,587 | ||||||
| Prepaid expenses and other current assets | 521,958 | 239,472 | ||||||
| Total Current Assets | 15,248,043 | 1,687,657 | ||||||
| Property and Equipment: | ||||||||
| Property and equipment | 6,443,075 | 7,845,423 | ||||||
| Less—Accumulated depreciation | (4,406,987 | ) | (5,543,822 | ) | ||||
| Net Property and Equipment | 2,036,088 | 2,301,601 | ||||||
| Other Assets: | ||||||||
| Goodwill | 6,610,021 | 3,015,700 | ||||||
| Operating lease right-of-use assets | 469,643 | 241,911 | ||||||
| Other assets | 72,153 | 49,310 | ||||||
| Intangible assets, net | 2,355,463 | 455,935 | ||||||
| Total Other Assets | 9,507,280 | 3,762,856 | ||||||
| Total Assets | $ | 26,791,411 | $ | 7,752,114 | ||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | 1,287,525 | $ | 979,552 | ||||
| Dividend payable | — | 1,115,674 | ||||||
| Deferred revenue | 379,526 | 461,893 | ||||||
| Line of credit | 50,000 | 24 | ||||||
| Finance leases payable | 177,175 | 168,139 | ||||||
| Finance leases payable related party | 805,890 | 1,149,403 | ||||||
| Operating lease liabilities short term | 204,598 | 104,549 | ||||||
| Note payable | — | 374,871 | ||||||
| Total Current Liabilities | 2,904,714 | 4,354,105 | ||||||
| Note payable long term | — | 107,106 | ||||||
| Deferred tax liability long term | 429,619 | — | ||||||
| Operating lease liabilities long term | 274,702 | 147,525 | ||||||
| Finance leases payable, long term | 126,645 | 247,677 | ||||||
| Finance leases payable related party, long term | 482,069 | 974,743 | ||||||
| Total Long Term Liabilities | 1,313,035 | 1,477,051 | ||||||
| Total Liabilities | 4,217,749 | 5,831,156 | ||||||
| Stockholders' Equity: | ||||||||
| Preferred stock, Series A par value $.001; 10,000,000 shares authorized; 0 and 1,401,786 shares issued and outstanding in 2021 and 2020, respectively | — | 1,402 | ||||||
| Common stock, par value $.001; 250,000,000 shares authorized; 6,692,742 and 3,213,486 shares issued and outstanding in 2021 and 2020, respectively | 6,693 | 3,213 | ||||||
| Additional paid in capital | 38,189,610 | 17,745,785 | ||||||
| Accumulated deficit | (15,521,578 | ) | (15,734,737 | ) | ||||
| Total Data Storage Corp Stockholders' Equity | 22,674,725 | 2,015,663 | ||||||
| Non-controlling interest in consolidated subsidiary | (101,063 | ) | (94,705 | ) | ||||
| Total Stockholder's Equity | 22,573,662 | 1,920,958 | ||||||
| Total Liabilities and Stockholders' Equity | $ | 26,791,411 | $ | 7,752,114 | ||||
| DATA STORAGE CORPORATION AND SUBSIDIARIES |
| CONSOLIDATED STATEMENTS OF OPERATIONS |
| (Unaudited) |
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2021 | 2020 | 2021 |
2020 |
|||||||||||||
| Sales | $ | 3,860,258 | $ | 2,723,532 | $ | 9,963,198 | $ | 6,827,867 | ||||||||
| Cost of sales | 2,167,622 | 1,621,008 | 5,609,845 | 3,977,546 | ||||||||||||
| Gross Profit | 1,692,636 | 1,102,524 | 4,353,353 | 2,850,321 | ||||||||||||
| Selling, general and administrative | 2,024,304 | 1,017,863 | 4,745,022 | 2,882,755 | ||||||||||||
| Income (loss) from Operations | (331,668 | ) | 84,661 | (391,669 | ) | (32,434 | ) | |||||||||
| Other Income (Expense) | ||||||||||||||||
| Interest income | 1 | 1 | 5 | 21 | ||||||||||||
| Interest expense | (15,727 | ) | (42,727 | ) | (97,397 | ) | (132,866 | ) | ||||||||
| Gain on contingent liability | — | — | — | 350,000 | ||||||||||||
| Loss on sale of equipment | — | — | (29,732 | ) | — | |||||||||||
| Gain on forgiveness of debt | 481,977 | — | 789,277 | — | ||||||||||||
| Total Other Income (Expense) | 466,251 | (42,726 | ) | 662,153 | 217,155 | |||||||||||
| Income before provision for income taxes | 134,583 | 41,935 | 270,484 | 184,721 | ||||||||||||
| Provision for income taxes | — | — | — | — | ||||||||||||
| Net Income | 134,583 | 41,935 | 270,484 | 184,721 | ||||||||||||
| Non-controlling interest in consolidated subsidiary | 1,047 | 4,283 | 6,358 | 17,833 | ||||||||||||
| Net Income attributable to Data Storage Corp | 135,630 | 46,218 | 276,842 | 202,554 | ||||||||||||
| Preferred Stock Dividends | — | (36,650 | ) | (63,683 | ) | (105,877 | ) | |||||||||
| Net Income Attributable to Common Stockholders | $ | 135,630 | $ | 9,568 | $ | 213,159 | $ | 96,677 | ||||||||
| Earning per Share – Basic | $ | 0.02 | $ | 0.00 | $ | 0.05 | $ | 0.03 | ||||||||
| Earning per Share – Diluted | $ | 0.02 | $ | 0.00 | $ | 0.05 | $ | 0.03 | ||||||||
| Weighted Average Number of Shares - Basic | 6,350,826 | 3,213,485 | 4,530,188 | 3,212,821 | ||||||||||||
| Weighted Average Number of Shares - Diluted | 6,482,577 | 3,383,499 | 4,720,546 | 3,365,675 | ||||||||||||
| DATA STORAGE CORPORATION AND SUBSIDIARIES |
| CONSOLIDATED STATEMENTS OF CASH FLOWS |
| Nine Months Ended September 30, | ||||||||
| 2021 | 2020 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net Income | $ | 270,484 | $ | 184,721 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 947,669 | 754,243 | ||||||
| Stock based compensation | 120,251 | 116,557 | ||||||
| Gain on forgiveness of debt | (789,277 | ) | — | |||||
| Gain on contingent liability | — | (350,000 | ) | |||||
| Loss on sale of equipment | 29,732 | — | ||||||
| Changes in Assets and Liabilities: | ||||||||
| Accounts receivable | 106,797 | (241,675 | ) | |||||
| Other assets | (344 | ) | 16,125 | |||||
| Prepaid expenses and other current assets | (154,912 | ) | (98,874 | ) | ||||
| Right of use asset | (227,732 | ) | 61,233 | |||||
| Accounts payable and accrued expenses | (206,384 | ) | 252,717 | |||||
| Deferred revenue | (151,103 | ) | 61,687 | |||||
| Deferred tax liability | (19,362 | ) | — | |||||
| Deferred rent | — | — | ||||||
| Operating lease liability | 227,226 | (60,647 | ) | |||||
| Net Cash Provided by Operating Activities | 153,045 | 696,087 | ||||||
| Cash Flows from Investing Activities: | ||||||||
| Capital expenditures | (418,422 | ) | (164,796 | ) | ||||
| Cash acquired in business acquisition | 212,068 | — | ||||||
| Cash consideration for business acquisition | (6,149,343 | ) | — | |||||
| Net Cash Used in Investing Activities | (6,355,697 | ) | (164,796 | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Proceeds from issuance of note payable | — | 481,977 | ||||||
| Proceeds from line of credit | 50,000 | — | ||||||
| Repayments of finance lease obligations related party | (886,188 | ) | (641,170 | ) | ||||
| Repayments of finance lease obligations | (111,995 | ) | (24,320 | ) | ||||
| Proceeds from issuance of common stock and warrants | 16,944,380 | — | ||||||
| Cash received for the exercise of Warrants | 3,381,270 | — | ||||||
| Cash received for the exercised of options | — | 5,400 | ||||||
| Repayments of Dividend payable | (1,179,357 | ) | — | |||||
| Repayment of line of credit | (24 | ) | (74,976 | ) | ||||
| Net Cash Provided by (Used) in Financing Activities | 18,198,086 | (253,089 | ) | |||||
| Increase in Cash and Cash Equivalents | 11,995,434 | 278,202 | ||||||
| Cash and Cash Equivalents, Beginning of Period | 893,598 | 326,561 | ||||||
| Cash and Cash Equivalents, End of Period | $ | 12,889,032 | $ | 604,763 | ||||
| Supplemental Disclosures: | ||||||||
| Cash paid for interest | $ | 92,779 | $ | 124,297 | ||||
| Cash paid for income taxes | $ | — | $ | — | ||||
| Non-cash investing and financing activities: | ||||||||
| Accrual of preferred stock dividend | $ | 63,683 | $ | 105,877 | ||||
| Assets acquired by finance lease | $ | 50,000 | $ | 808,261 | ||||
Released November 15, 2021