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Data Storage Corporation Provides Business Update and Announces 2018 Financial Results

Achieves revenue growth and positive net income for 2018

MELVILLE, N.Y., April 02, 2019 (GLOBE NEWSWIRE) -- Data Storage Corporation (DTST) (“DSC” and the “Company”), a provider of diverse business continuity, disaster recovery protection, and cloud solutions and services, today provided a business update and announced its 2018 financial results.

Chuck Piluso, CEO of Data Storage Corporation, commented, “2018 was a solid year for the Company, with 8% revenue growth over 2017.  More importantly, we set the stage for accelerated growth in 2019.  We also carefully managed our expenses, which enabled us to achieve both an operating and net profit for the full year.  Overall, we believe we have built a scalable operation and, as we continue to work with the goal of increasing revenue, we believe we are well-positioned to further enhance profitability.  In addition to organic growth, we are also exploring potential opportunities to acquire cash flow positive businesses with complementary products and services.”

“Heading into 2019, we are off to a strong start.  We recently announced a $3.5 million contract with a nationally respected apparel company, to provide state of the art data protection services.  This contract is a further illustration of the traction we are gaining in the market through our ezMirror offering, which helps companies to cost effectively address their demanding data protection requirements for IBM i and AIX applications by replacing legacy tape-based recovery with a more robust solution.  We are also pleased with the successful launch of our new data center located in North Carolina, which will help support the growing demand for our ezSolutions, including ezHost, ezRecovery and ezAvailability.”

Financial Results

Net sales for the year ended December 31, 2018 were $8,887,402, an increase of $630,484 or 7.6%, compared to $8,256,918 for the year ended December 31, 2017. The increase was attributable to the increase in equipment and software sales. Cost of sales for 2018 was $5,427,990, an increase of $517,659 or 10.5%, from $4,910,331 for 2017. The increase in cost of sales was a result of an increase in equipment and software sold. Operating expenses for 2018 were $3,124,052, a decrease of $307,292, as compared to $3,431,344 for 2017. The net decrease was a result of a decrease in staffing salaries, professional fees, travel, commissions, state filing fees and the recovery of bad debt. Net income for 2018 was $236,671 an increase of $425,164, as compared to net loss of $(188,493) for 2017.

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.  All statements other than statements of historical fact contained herein, including, without limitation, statements regarding the Company's future financial position, business strategy, plans and objectives, are forward-looking statements.  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.  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, those factors set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2018 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

   
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DATA STORAGE CORPORATION AND SUBSIDIARY  
CONSOLIDATED BALANCE SHEETS  
   
  December 31,
2018
    December 31,
2017
 
ASSETS          
Current Assets:              
Cash and cash equivalents $ 228,790     $ 105,139  
Accounts receivable (less allowance for doubtful accounts of $30,000 in 2018 and $90,000 in 2017)   531,245       406,393  
Prepaid expenses and other current assets   167,891       120,217  
Total Current Assets   927,926       631,749  
               
Property and Equipment:              
Property and equipment   5,293,711       5,237,965  
Less—Accumulated depreciation   (4,005,338 )     (3,614,177 )
Net Property and Equipment   1,228,373       1,623,788  
               
Other Assets:              
Goodwill   3,015,700       3,015,700  
Employee loans   -       3,000  
Other assets   65,433       75,356  
Intangible assets, net   846,713       1,044,046  
Total Other Assets   3,927,846       4,138,102  
               
Total Assets   6,144,145       6,393,639  
               
LIABILITIES AND STOCKHOLDERS’ EQUITY              
Current Liabilities:              
Accounts payable and accrued expenses   988,579       1,087,351  
Dividend payable   846,685       733,673  
Deferred revenue   435,406       566,731  
Capital leases payable related party   509,487       658,476  
Notes payable related party         186,906  
Note payable   350,000       350,000  
Total Current Liabilities   3,130,157       3,583,137  
               
Deferred rental obligation   18,890       1,061  
Notes payable related party         99,915  
Capital leases payable related party, long-term   1,218,703       1,130,764  
Total Long-Term Liabilities   1,237,593       1,231,740  
               
Total Liabilities   4,367,750       4,814,877  
               
Commitments and contingencies              
               
Stockholders’ Equity              
Preferred stock, Series A par value $.001; 10,000,000 shares authorized; 1,401,786 shares issued and outstanding in each period   1,402       1,402  
Common stock, par value $0.001; 250,000,000 shares authorized; 128,139,418 and 128,039,418 shares issued and outstanding in 2018 and 2017, respectively   128,139       128,139  
Additional paid in capital   17,409,989       17,377,986  
Accumulated deficit   (15,735,624 )     (15,924,376 )
Total Data Storage Corp Stockholders’ Equity   1,803,906       1,583,151  
Non-controlling interest in consolidated subsidiary   (27,511 )     (4,389
Total Stockholder’s Equity   1,776,395       1,578,762  
Total Liabilities and Stockholders’ Equity $ 6,144,145     $ 6,393,639  



   
DATA STORAGE CORPORATION AND SUBSIDIARY  
CONSOLIDATED STATEMENTS OF OPERATIONS  
   
  Years Ended December 31,  
  2018     2017  
Sales $ 8,887,402     $ 8,256,918  
               
Cost of Sales   5,427,990       4,910,331  
               
Gross Profit   3,459,412       3,346,587  
               
Selling, General and Administrative   3,124,052       3,431,344  
               
Income (Loss) from Operations   335,360       (84,757 )
               
Other Income (Expense)              
Other income   99       3,170  
Interest expense   (98,788 )     (106,906 )
Total Other (Expense)   (98,689 )     (103,736 )
               
Income (Loss) Before Provision for Income Taxes   236,671       (188,493 )
               
Provision for Income Taxes          
               
Net Income (Loss)   236,671       (188,493 )
               
Net Loss attributable to non-controlling interest   23,122       4,409  
               
Net Income (Loss) attributable to Data Storage Corp   259,793       (184,084 )
               
Preferred Stock Dividend   (113,012 )     (114,536 )
               
Net Income (Loss) Available to Common Shareholders $ 146,781     $ (298,620 )
               
Earnings (Loss) per Share – Basic $ 0.00     $ 0.00  
               
Earnings (Loss) per Share - Diluted $ 0.00     $ 0.00  
               
Weighted Average Number of Shares - Basic   128,139,418       128,092,569  
               
Weighted Average Number of Shares - Diluted   131,939,979       128,092,569  



 
DATA STORAGE CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
  Years Ended
December 31,
 
  2018       2017  
Net Income (loss) $ 236,671     $ (188,493 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:            
Depreciation and amortization   602,532       614,449  
Stock-based compensation   32,003       183,703  
Changes in Assets and Liabilities:            
Accounts receivable   (124,852 )     401,122  
Other assets   9,923       (20,832 )
Prepaid expenses and other current assets   (47,674 )     111,215  
Employee loan   3,000       (3,000 )
Accounts payable and accrued expenses   (98,774 )     (266,270 )
Deferred revenue   (89,353 )     (352,372 )
Deferred rent   17,829       (843 )
Net Cash Provided by Operating Activities   541,305       478,679  
             
             
Cash Flows from Investing Activities:            
Capital expenditures   (69,783 )      
Net Cash Used in Investing Activities   (69,783 )      
             
             
Cash Flows from Financing Activities:            
Repayments of capital lease obligations   (347,871 )     (428,559 )
Repayments of credit line         (50,412 )
Repayments of related party loans         (150,386
Net Cash Used in Financing Activities   (347,871 )     (629,357 )
             
             
Increase (Decrease) in Cash and Cash Equivalents   123,651       (150,678
             
Cash and Cash Equivalents, Beginning of Year   105,139       255,817  
             
             
Cash and Cash Equivalents, End of Year $ 228,790     $ 105,139  
             
             
Cash paid for interest $ 98,788     $ 106,906  
             
Cash paid for income taxes $ 5,604     $ 1,877  
             
Non-cash investing and financing activities:            
Assets acquired by capital lease $     $ 1,836,714  
Accrual of preferred stock dividend $ 113,012     $ 114,536