Data Storage Corporation Reports 37% Increase in Revenue for the Second Quarter of 2022
Management to host conference call today, August 11, at 10:00 AM Eastern Time
MELVILLE, N.Y., Aug. 11, 2022 (GLOBE NEWSWIRE) -- Data Storage Corporation (Nasdaq: DTST) (“DSC” and the “Company”), a provider of diverse business continuity solutions for disaster-recovery, cloud infrastructure and cyber-security solutions, today provided a business update and reported financial results for the second quarter ended June 30, 2022.
Chuck Piluso, CEO of Data Storage Corporation, commented, “We continue to generate solid year-over-year growth, with revenue increasing 37% and 121% for the three and six months ended June 30, 2022, respectively. The higher increase in revenue for the six month period relates to the timing of one-time equipment sales, which were front-end loaded in the first quarter. Importantly, we have been increasing our focus on monthly recurring, subscription-based cloud and managed services, which increased 47% in the second quarter of 2022, compared to the same period last year. Given our established leadership position, we believe we are extremely well positioned to capitalize on growing opportunities as more companies seek to migrate their IBM Power infrastructure to the cloud. I’m also pleased to report that despite the lumpiness of equipment sales, we achieved positive EBITDA in the second quarter of 2022, and believe we are well positioned to drive increased profitability going forward given the scalability of our business model. We also ended the quarter with over $11 million of cash and cash equivalents and no long-term debt, which provides us a solid foundation to accelerate our business model.”
Conference Call
The Company plans to host a conference call at 10:00 am Eastern Time today, August 11, 2022, to discuss the company's financial results for the second quarter ended June 30, 2022, as well as corporate progress and other developments.
The conference call will be available via telephone by dialing toll-free 844-369-8770 for U.S. callers or for international callers +1 862-298-0840. A webcast of the call may be accessed at https://www.webcaster4.com/Webcast/Page/2763/46363, or on the Company’s News & Events section of the website, https://www.dtst.com/news-events/ir-calendar.
A webcast replay of the call will be available on the Company’s website (www.DTST.com) through August 11, 2023. A telephone replay of the call will be available approximately one hour following the call, through August 25, 2022, 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: 46363.
About Data Storage Corporation
The Company provides a broad range of premium business continuity solutions from seven data center facilities and two technical labs throughout the USA and Canada. The Company serves its clients with cloud infrastructure, disaster recovery and cyber security solutions. Clients look to Data Storage Corporation to ensure disaster recovery, business continuity, enhance cyber security, and meet increasing industry, state, and federal regulations. The Company markets to businesses, government, education, and the healthcare industry.
For more information, please visit http://www.DTST.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, 2021, 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]
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
|
June 30, 2022 |
December 31, 2021 |
|||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 11,214,436 | $ | 12,135,803 | ||||
| Accounts receivable (less allowance for credit losses of $28,355 and $30,000 in 2022 and 2021, respectively) | 2,484,857 | 2,384,367 | ||||||
| Prepaid expenses and other current assets | 974,845 | 536,401 | ||||||
| Total Current Assets | 14,674,138 | 15,056,571 | ||||||
| Property and Equipment: | ||||||||
| Property and equipment | 7,092,451 | 6,595,236 | ||||||
| Less—Accumulated depreciation | (4,510,837 | ) | (4,657,765 | ) | ||||
| Net Property and Equipment | 2,581,614 | 1,937,471 | ||||||
| Other Assets: | ||||||||
| Goodwill | 6,560,671 | 6,560,671 | ||||||
| Operating lease right-of-use assets | 325,745 | 422,318 | ||||||
| Other assets | 103,436 | 103,226 | ||||||
| Intangible assets, net | 2,115,105 | 2,254,566 | ||||||
| Total Other Assets | 9,104,957 | 9,340,781 | ||||||
| Total Assets | $ | 26,360,709 | $ | 26,334,823 | ||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | 1,312,387 | $ | 1,343,391 | ||||
| Deferred revenue | 249,482 | 366,859 | ||||||
| Finance leases payable | 424,603 | 216,299 | ||||||
| Finance leases payable related party | 706,001 | 839,793 | ||||||
| Operating lease liabilities short term | 207,062 | 205,414 | ||||||
| Total Current Liabilities | 2,899,535 | 2,971,756 | ||||||
| Operating lease liabilities | 128,952 | 226,344 | ||||||
| Finance leases payable | 421,648 | 157,424 | ||||||
| Finance leases payable related party | 450,970 | 364,654 | ||||||
| Total Long Term Liabilities | 1,001,570 | 748,422 | ||||||
| Total Liabilities | 3,901,105 | 3,720,178 | ||||||
| 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 2022 and 2021, respectively | — | — | ||||||
| Common stock, par value $.001; 250,000,000 shares authorized; 6,822,127 and 6,693,793 shares issued and outstanding in 2022 and 2021, respectively | 6,822 | 6,694 | ||||||
| Additional paid in capital | 38,799,853 | 38,241,155 | ||||||
| Accumulated deficit | (16,221,610 | ) | (15,530,576 | ) | ||||
| Total Data Storage Corp Stockholders’ Equity | 22,585,065 | 22,717,273 | ||||||
| Non-controlling interest in consolidated subsidiary | (125,461 | ) | (102,628 | ) | ||||
| Total Stockholder’s Equity | 22,459,604 | 22,614,645 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 26,360,709 | $ | 26,334,823 | ||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Sales | $ | 4,827,749 | $ | 3,528,249 | $ | 13,484,948 | $ | 6,102,940 | ||||||||
| Cost of sales | 2,977,132 | 2,021,324 | 8,988,421 | 3,442,223 | ||||||||||||
| Gross Profit | 1,850,617 | 1,506,925 | 4,496,527 | 2,660,717 | ||||||||||||
| Selling, general and administrative | 2,594,204 | 1,602,311 | 5,054,070 | 2,720,718 | ||||||||||||
| Loss from Operations | (743,587 | ) | (95,386 | ) | (557,543 | ) | (60,001 | ) | ||||||||
| Other Income (Expense) | ||||||||||||||||
| Interest expense, net | (113,664 | ) | (46,621 | ) | (156,324 | ) | (81,666 | ) | ||||||||
| Loss on disposal of equipment | — | (29,732 | ) | — | (29,732 | ) | ||||||||||
| Gain on forgiveness of debt | — | 307,300 | — | 307,300 | ||||||||||||
| Total Other Income (Expense) | (113,664 | ) | 230,947 | (156,324 | ) | 195,902 | ||||||||||
| Income (Loss) before provision for income taxes | (857,251 | ) | 135,561 | (713,867 | ) | 135,901 | ||||||||||
| Provision for income taxes | — | — | — | — | ||||||||||||
| Net Income (Loss) | (857,251 | ) | 135,561 | (713,867 | ) | 135,901 | ||||||||||
| Non-controlling interest in consolidated subsidiary | 10,207 | 3,552 | 22,833 | 5,311 | ||||||||||||
| Net Income (Loss) attributable to Data Storage Corp | (847,044 | ) | 139,113 | (691,034 | ) | 141,212 | ||||||||||
| Preferred Stock Dividends | — | (24,800 | ) | — | (63,683 | ) | ||||||||||
| Net Income (Loss) Attributable to Common Stockholders | $ | (847,044 | ) | $ | 114,313 | $ | (691,034 | ) | $ | 77,529 | ||||||
| Earnings (Loss) per Share – Basic | $ | (0.13 | ) | $ | 0.03 | $ | (0.10 | ) | $ | 0.02 | ||||||
| Earning (Loss) pers Share – Diluted | $ | (0.13 | ) | $ | 0.03 | $ | (0.10 | ) | $ | 0.02 | ||||||
| Weighted Average Number of Shares - Basic | 6,758,238 | 3,981,402 | 6,727,108 | 3,607,909 | ||||||||||||
| Weighted Average Number of Shares - Diluted | 6,758,238 | 4,118,989 | 6,758,238 | 3,611,242 | ||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (Unaudited) | ||||||||
| Six Months Ended June 30, | ||||||||
| 2022 | 2021 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net Income | $ | (713,867 | ) | $ | 135,901 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 640,589 | 577,044 | ||||||
| Stock based compensation | 551,892 | 76,221 | ||||||
| Gain on contingent liability | — | (307,300 | ) | |||||
| Loss on disposal of equipment | — | 29,732 | ||||||
| Changes in Assets and Liabilities: | ||||||||
| Accounts receivable | (100,490 | ) | 385,134 | |||||
| Other assets | (211 | ) | (344 | ) | ||||
| Prepaid expenses and other current assets | (438,444 | ) | (25,443 | ) | ||||
| Right of use asset | 96,573 | 43,362 | ||||||
| Accounts payable and accrued expenses | (31,003 | ) | 53,857 | |||||
| Deferred revenue | (117,377 | ) | (99,582 | ) | ||||
| Operating lease liability | (95,744 | ) | (43,565 | ) | ||||
| Net Cash (Used in) Provided by Operating Activities | (208,082 | ) | 825,017 | |||||
| Cash Flows from Investing Activities: | ||||||||
| Capital expenditures | (51,220 | ) | (303,228 | ) | ||||
| Cash consideration for business acquisition | — | (5,937,275 | ) | |||||
| Net Cash Used in Investing Activities | (51,220 | ) | (6,240,503 | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Repayments of finance lease obligations related party | (487,403 | ) | (603,495 | ) | ||||
| Repayments of finance lease obligations | (181,597 | ) | (74,010 | ) | ||||
| Proceeds from issuance of common stock and warrants | — | 9,454,894 | ||||||
| Cash received for the exercised of options | 6,935 | — | ||||||
| Repayments of Dividend payable | — | (1,179,357 | ) | |||||
| Repayment of line of credit | — | (24 | ) | |||||
| Net Cash (Used in) Provided by Financing Activities | (662,065 | ) | 7,598,008 | |||||
| Increase (decrease) in Cash and Cash Equivalents | (921,367 | ) | 2,182,522 | |||||
| Cash and Cash Equivalents, Beginning of Period | 12,135,803 | 893,598 | ||||||
| Cash and Cash Equivalents, End of Period | $ | 11,214,436 | $ | 3,076,120 | ||||
| Supplemental Disclosures: | ||||||||
| Cash paid for interest | $ | 76,874 | $ | 78,136 | ||||
| Cash paid for income taxes | $ | — | $ | — | ||||
| Non-cash investing and financing activities: | ||||||||
| Accrual of preferred stock dividend | $ | — | $ | 63,683 | ||||
| Assets acquired by finance lease | $ | 1,094,051 | $ | 50,000 | ||||
NON-GAAP FINANCIAL MEASURES
Adjusted EBITDA
To supplement our consolidated financial statements presented in accordance with GAAP and to provide investors with additional information regarding our financial results, we consider and are including herein Adjusted EBITDA, a Non-GAAP financial measure. We view Adjusted EBITDA as an operating performance measure and, as such, we believe that the GAAP financial measure most directly comparable to it is net income (loss). We define Adjusted EBITDA as net income adjusted for interest and financing fees, depreciation, amortization, stock-based compensation, and other non-cash income and expenses. We believe that Adjusted EBITDA provides us an important measure of operating performance because it allows management, investors, debtholders and others to evaluate and compare ongoing operating results from period to period by removing the impact of our asset base, any asset disposals or impairments, stock-based compensation and other non-cash income and expense items associated with our reliance on issuing equity-linked debt securities to fund our working capital.
Our use of Adjusted EBITDA has limitations as an analytical tool, and this measure should not be considered in isolation or as a substitute for an analysis of our results as reported under GAAP, as the excluded items may have significant effects on our operating results and financial condition. Additionally, our measure of Adjusted EBITDA may differ from other companies’ measure of Adjusted EBITDA. When evaluating our performance, Adjusted EBITDA should be considered with other financial performance measures, including various cash flow metrics, net income and other GAAP results. In the future, we may disclose different non-GAAP financial measures in order to help our investors and others more meaningfully evaluate and compare our future results of operations to our previously reported results of operations.
The following table shows our reconciliation of net income (loss) to adjusted EBITDA for the three and six months ended June 30, 2022 and 2021, respectively:
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Net income (loss) | $ | (857,251 | ) | $ | 135,561 | $ | (713,867 | ) | $ | 135,901 | ||||||
| Non-GAAP adjustments: | ||||||||||||||||
| Depreciation and amortization | 289,251 | 309,855 | 640,589 | 577,044 | ||||||||||||
| Interest income and expense | 115,501 | 46,621 | 158,161 | 81,666 | ||||||||||||
| Flagship acquisition costs | — | — | 605 | — | ||||||||||||
| Loss on disposal of equipment | — | 29,732 | — | 29,732 | ||||||||||||
| Gain on forgiveness of debt | — | (307,300 | ) | — | (307,300 | ) | ||||||||||
| Stock based compensation | 485,387 | 34,050 | 551,892 | 76,221 | ||||||||||||
| Adjusted EBITDA | $ | 32,888 | $ | 248,519 | $ | 637,380 | $ | 593,264 | ||||||||
Released August 11, 2022