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Data Storage Corporation Announces Year End Results 2020; Annual Revenue of $9.3 Million Represents Ten Percent Year over Year Increase
[April 01, 2021]

Data Storage Corporation Announces Year End Results 2020; Annual Revenue of $9.3 Million Represents Ten Percent Year over Year Increase


MELVILLE, N.Y., April 01, 2021 (GLOBE NEWSWIRE) -- Data Storage Corporation (OTC: DTST) (“DSC” and the “Company”), a provider of diverse business continuity, disaster recovery protection, and cloud infrastructure solutions and services, today provided a business update and announced its 2020 financial results.

Chuck Piluso, CEO of Data Storage Corporation, commented, “We continue to achieve meaningful financial performance and profitability despite the impact of COVID-19 on the global markets, as evidenced by a 10% increase in revenue to $9.3 million for the year ending December 31, 2020 as compared to the year ended December 31, 2019. Importantly, we had strong revenue growth in each of our key products: Nexxis VoIP Services increased by 44%; Infrastructure & Disaster Recovery/Cloud Services increased by 6.8%; Equipment and Software increased by 16%; and Managed Services increased by 4%. We achieved profitability while investing resources and capital in Nexxis, adding leadership for channel management, rounding out our product suite, as well as investing our income into further advancements in our infrastructure and operations to support our long-term growth initiatives. At the same time, we continue to carefully manage our expenses. Overall, we have built a scalable business model focused on high-margin recurring revenues.

“Heading into 2021, we believe we have set the stage for continued growth. Due to the COVID-19 outbreak and the critical need for safe remote collaboration, we expanded our offering of cybersecurity solutions for remote tele-computing with our new product, ezSecurity™. We also launched a new remote collaboration program for small and medium-sized businesses. As part of this new program, we are offering free migration services from Microsoft Exchange to Microsoft 365, along with support for comprehensive voice communications (Hosted VoIP, IP Phones, Cloud PBX) and video conferencing. In addition, we expanded capacity through our new Dallas data center location to accommodate increased demand for our portfolio of ezServices, including ezBackup, ezRecovery and ezAvailability, adding to our existing network of data centers and fiber backbone.

“At the same time, we expanded our North American footprint, including new markets in Canada, where we added two new Tier 3 enterprise-level data centers. We also recently announced a joint venture with Able-One Systems Inc, an IBM market leader, to provide our portfolio of enterprise-level IBM cloud infrastructure services to customers in Canada. We look forward to working closely with Able-One to develop new opportunities in Canada and solve technology issues for businesses seeking superior IBM infrastructure and Disaster Recovery services.

“In addition to our organic growth, we are also exploring potential opportunities to acquire cash flow positive businesses with complementary products and services. Most recently, we entered into a definitive Agreement with Flagship Solutions, LLC to merge into our wholly owned subsidiary, Data Storage FL, LLC, at which time Flagship will become a wholly owned subsidiary of our Company. Flagship is a provider of IBM Software, Services, Equipment and cutting edge intelligent analytical and decision-making solutions, providing managed services and cloud solutions worldwide that include cloud-based server monitoring and management, 24×7 help desk support, and data center infrastructure management. We believe this transaction will be highly synergistic with our existing IBM business. This merger provides a comprehensive one-stop provider approach to cross-sell solutions across our respective enterprises and middle-market customers. Overall, we remain extremely encouraged by the outlook for the business and believe 2021 will be a transformative year for the Company.”  

Financial Results

Net sales for the year ended December 31, 2020 were $9,320,933, an increase of $837,325 or 10%, compared to $8,483,608 for the year ended December 31, 2019. The increase was primarily attributable to an increase in our infrastructure & disaster recover / cloud subscription services due to a higher demand for IBM Power Systems cloud hosting, increased equipment sales, as well as an increase in demand for our VoIP services related to the Nexxis division in which we have invested $488,438 which impacted our core profitability by $(133,282).

Cost of Sales for the year ended December 31, 2020 was $5,425,205, an increase of $678,904 or 14%, from $4,746,031 for the year ended December 31, 2019. The increase in cost of sales was primarily attributable to improvements and expenses associated with the data centers for infrastructure and disaster recovery cloud services, including new IBM systems, storage and network equipment for the Raleigh, NC expansion and new Dallas data center location. There were also additional costs related to the Nexxis division, and equipment purchases for sale.

Operating expenses for the year ended December 31, 2020 were $3,896,791, an increase of $365,738, or 13%, as compared to $3,531,053 for the year ended December 31, 2019. The net increase was a result of an increase in salaries, stock option compensation, software as a service, advertising and Nexxis.

Net income for the year ended December 31, 2020 was $173,359, as compared to a net income of $29,323 for the year ended December 31, 2019.

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 DSC 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, 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 generally can be identified by the use of forward-looking terminology such as "may," "will," "expects," "intends," "plans," "projects," "estimates," "anticipates," or "believes" or the negative thereof or any variation thereon or similar terminology or expressions. These forward-looking statements are based upon current estimates and assumptions and include statements regarding the Company’s future revenue, setting the stage for the Company’s accelerated growth, working with Able-One to develop new opportunities in Canada and solve technology issues for businesses seeking superior IBM infrastructure and disaster Recovery services, exploring potential opportunities to acquire cash flow positive businesses with complementary products and services, completion of the pending acquisition of Flagship Solutions, LLC, the Flagship acquisition being highly synergistic with the Company’s existing IBM business, and 2021 being a transformative year for the Company. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from results proposed in such statements. 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. Important factors that could cause actual results to differ materially from the Company's expectations include, but are not limited to, the Company’s ability to continue to generate revenue at current levels, the Company’s ability to achieve accelerated growth, the Company’s ability to work with Able-One to develop new opportunities in Canada and solve technology issues for businesses seeking superior IBM infrastructure and disaster Recovery services, the Company’s ability to acquire cash flow positive businesses with complementary products and services, the Company’s ability to complete the acquisition of Flagship Solutions, LLC, the Company’s ability to integrate Flagship’s business with the Company’s existing IBM business, the Company’s ability to make 2021 a transformative year for the Company and those risk factors set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2020 and its other filings and submissions with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made. Except as required by law, the Company assumes no obligation to update or revise any forward-looking statements.

Contact:
Crescendo Communications, LLC
212-671-1020
DTST@crescendo-ir.com

DATA STORAGE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31,

  2020  2019 
ASSETS        
Current Assets:        
Cash and cash equivalents $893,598  $326,561 
Accounts receivable (less allowance for doubtful accounts of $30,000 in 2020 and 2019)  554,587   691,436 
Prepaid expenses and other current assets  239,472   80,728 
Total Current Assets  1,687,657   1,098,725 
         
Property and Equipment:        
Property and equipment  7,845,423   6,894,087 
Less—Accumulated depreciation  (5,543,822)  (4,705,256)
Net Property and Equipment  2,301,601   2,188,831 
         
Other Assets:        
Goodwill  3,015,700   3,015,700 
Operating lease right-of-use assets  241,911   324,267 
Other assets  49,310   65,433 
Intangible assets, net  455,935   649,934 
Total Other Assets  3,762,856   4,055,334 
         
Total Assets $7,752,114  $7,342,890 
         
LIABILITIES AND STOCKHOLDERS’ DEFICIT        
Current Liabilities:        
Accounts payable and accrued expenses $979,552  $906,716 
Dividend payable  1,115,674   970,997 
Deferred revenue  461,893   432,942 
Line of credit  24   75,000 
Finance leases payable  168,139   - 
Finance leases payable related party  1,149,403   833,148 
Operating lease liabilities short term  104,549   101,505 
Note payable  374,871   350,000 
Total Current Liabilities  4,354,105   3,670,308 
         
Note payable long term  107,106   -- 
Operating lease liabilities long term  147,525   231,312 
Finance leases payable, long term  247,677   -- 
Finance leases payable related party, long term  974,743   1,713,122 
Total Long Term Liabilities  1,477,051   1,944,434 
         
Total Liabilities  5,831,156   5,614,742 
         
Stockholders’ Equity:        
Preferred stock, Series A par value $.001; 10,000,000 shares authorized; 1,401,786 shares


issued and outstanding in each year
  1,402   1,402 
Common stock, par value $.001; 250,000,000 shares authorized; 128,539,418 and 128,439,418
shares issued and outstanding in 2020 and 2019, respectively
  128,539   128,439 
Additional paid in capital  17,620,459   17,456,431 
Accumulated deficit  (15,734,737)  (15,790,076)
Total Data Storage Corp Stockholders’ Equity  2,015,663   1,796,196 
Non-controlling interest in consolidated subsidiary  (94,705)  (68,048)
Total Stockholders’ Equity  1,920,958   1,728,148 
Total Liabilities and Stockholders’ Equity $7,752,114  $7,342,890 
         


DATA STORAGE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31,

  2020  2019 
       
Sales $9,320,933  $8,483,608 
         
Cost of sales  5,425,205   4,746,031 
         
Gross Profit  3,895,728   3,737,577 
         
Selling, general and administrative  3,896,791   3,531,053 
         
(Loss) Income from Operations  (1,063)  206,524 
         
Other Income (Expense)        
Interest income  24   250 
Interest expense  (175,602)  (177,451)
Gain on extinguishment of contingent liability  350,000   - 
Total Other Income (Expense)  174,422   (177,201)
         
Income before provision for income taxes  173,359   29,323 
         
Provision for income taxes  --    
         
Net Income  173,359   29,323 
         
Non-controlling interest in consolidated subsidiary  26,657   40,537 
         
Net Income attributable to Data Storage Corporation  200,016   69,860 
         
Preferred Stock Dividends  (144,677)  (124,312)
         
Net Income (Loss) Attributable to Common Stockholders $55,339  $(54,452)
         
Earnings (Loss) per Share – Basic $0.00  $0.00 
Earnings (Loss) per Share – Diluted $0.00  $0.00 
Weighted Average Number of Shares - Basic  128,526,267   128,156,678 
Weighted Average Number of Shares - Diluted  134,640,419   128,156,678 
         


DATA STORAGE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS


Cash Flows from Operating Activities:        
Net Income $173,359  $29,323 
Adjustments to reconcile net income to net cash provided by operating activities:        
Depreciation and amortization  1,032,566   896,697 
Stock based compensation  158,728   41,340 
Gain on extinguishment of contingent liability  (350,000)  -- 
Changes in Assets and Liabilities:        
Accounts receivable  136,849   (160,191)
Other assets  16,126   -- 
Prepaid expenses and other current assets  (132,132)  87,163 
Right of use asset  82,356   (324,267)
Accounts payable and accrued expenses  44,620   (81,862)
Deferred revenue  28,951   (2,464)
Deferred rent  --   (18,890)
Operating lease liability  (80,743)  332,817 
Net Cash Provided by Operating Activities  1,110,679   799,666 
Cash Flows from Investing Activities:        
               Capital expenditures  (181,072)  (40,355)
Net Cash Used in Investing Activities  (181,072)  (40,355)
Cash Flows from Financing Activities:        
Repayments of capital lease obligations  --   -- 
Proceeds from issuance of note payable  481,977   - 
Repayments of finance lease obligations related party  (718,690)  (741,940)
Repayments of finance lease obligations  (56,281)  -- 
Cash received for the exercised of options  5,400   5,400? 
Advance from Credit Line  --   75,000? 
Repayment of Credit Line  (74,976)  -- 
Net Cash Used in Financing Activities  (362,570)  (661,540)
Increase in Cash and Cash Equivalents  567,037   97,771 
Cash and Cash Equivalents, Beginning of Year  326,561   228,790 
Cash and Cash Equivalents, End of Year $893,598  $326,561 
Supplemental Disclosures:        
Cash paid for interest $168,837  $177,451 
Cash paid for income taxes $--  $-- 
Non-cash investing and financing activities:        
Accrual of preferred stock dividend $144,677  $124,312 
Assets acquired by finance lease $808,261  $1,560,021 

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