Data Storage (US:DTST)2025-11-19 16:02Financial Data and Key Metrics Changes - The sale of the CloudFirst subsidiary was completed for $40 million, which was projected to generate approximately $25 million in annual revenue and $5.5 million in EBITDA with no debt [6][10] - Sales from continuing operations (Nexus subsidiary) were $417,000 for Q3 2025, an increase of $92,000 or 28.2% from $325,000 in Q3 2024 [7] - Net income attributable to common shareholders for Q3 2025 was $16.8 million compared to $122,000 for Q3 2024, driven by the gain recognized on discontinued operations [10] Business Line Data and Key Metrics Changes - Sales from continuing operations for the nine months ended September 30, 2025, were $1.1 million, an increase of approximately $159,000 or 17.6% from $900,000 in the same period last year [8] - Selling, general, and administrative expenses for Q3 2025 increased by $313,000 or 31.8% to $1.3 million from $984,000 in Q3 2024, primarily due to non-cash stock-based compensation and salary adjustments [8][9] Market Data and Key Metrics Changes - The company ended Q3 2025 with cash, cash equivalents, and marketable securities of approximately $45.8 million, up from $12.3 million at the end of 2024 [10] Company Strategy and Development Direction - The company is focusing on building DSC 2.0, a streamlined operation pursuing selective opportunities in high-value markets, following the sale of CloudFirst [4][11] - The company is exploring strategic acquisitions in areas such as GPU-based computing, AI-enabled infrastructure, and cybersecurity, while emphasizing disciplined execution and prudent capital allocation [11][12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the transformative impact of the CloudFirst sale, which strengthened the financial position and clarified strategic direction [11] - The company plans to complete the tender offer and share buyback process, finalize cash position, and pursue acquisitions that provide recurring revenue [12] Other Important Information - A special committee has been established to oversee the tender offer and buyback process, ensuring transparency and alignment with shareholder interests [5] - The company is launching a new corporate website to reflect its streamlined profile and future direction [5] Q&A Session Summary Question: Possible outcomes of the tender offer for cash position - Management estimated that if everything is tendered, the cash position could range from approximately $5 million to $15 million, but this is difficult to forecast accurately [16][18] Question: Non-recurring charges in SG&A for Q3 2025 - Management confirmed that there were no non-recurring charges in Q3 2025, and the SG&A number is a good run rate going forward [20] Question: Direction for acquisitions and focus on Nexus - Management indicated that there is potential for acquisitions to bolster Nexus, particularly in VoIP and data access companies, which could enhance revenue streams [22][24]