DPW Holdings, Inc. Reports Preliminary Second Quarter Financial Results
August 15 2018 - 7:00AM
DPW Holdings, Inc. (NYSE American: DPW) (the “Company”) a
diversified holding company, today reported preliminary financial
results for its second quarter ended June 30, 2018.
DPW Holdings’ CEO and Chairman, Milton “Todd” Ault, III said,
“We continue to execute our stated strategic plan to create a
diverse portfolio of assets with global growth potential. Our
successful acquisition of Enertec Systems 2001, Ltd. during the
second quarter added important engineering talent, which expands
the technical design and manufacturing capabilities of each of the
companies within our Coolisys subsidiary. As we move forward, we
intend to continually evaluate our diverse portfolio of assets,
seeking opportunities to capitalize on new market opportunities in
advanced technologies and manufacturing, as well as monetize
existing assets for the benefit of all DPW Holdings’
shareholders.”
Recent Highlights
- DPW Holdings
- Completed acquisition of Enertec Systems 2001, Ltd.
- Completed development of new AntEater ASIC miner.
- Relocated cryptocurrency mining operations for energy
savings.
- Enertec business secured a $4.3 million order for advanced
missile control system.
- Microphase Corporation secured a $4.1 million, multi-year order
for communications filters.
- Super Crypto Mining business mined approximately $719,000 in
cryptocurrencies.
- Coolisys’ order backlog totals over $71.0 million at August 15,
2018.
Preliminary Results of Operations
- Preliminary gross revenue for the second quarter of 2018 is
expected to be between $7.1 million and $7.4 million, increasing
from $1.8 million in the second quarter of 2017 and $5.2 million in
the first quarter 2018.
- Gross margin for the second quarter of 2018 is expected to be
approximately 18.2 percent, compared to 40.1 percent for the second
quarter of 2017. Cryptocurrency mining revenues during the second
quarter were lower than the operating costs of the company’s mining
operation, which primarily consist of colocation costs and
depreciation.
- Preliminary net loss for the second quarter of 2018 is expected
to be between approximately $7.0 million and $7.3 million, compared
to net loss of $1.9 million for the second quarter of 2017.
- The Company’s preliminary second quarter 2018 results include
non-cash charges of between approximately $4.1 million and $4.3
million, compared to non-cash charges of $1.4 million for the
second quarter of 2017.
Preliminary Balance Sheet
- Preliminary total assets at June 30, 2018 increased by $14.9
million, to $53.4 million, compared to total assets of $38.5
million for the quarter ending March 31, 2018.
- The Company’s investment portfolio as of June 30, 2018 included
an investment in convertible promissory notes, warrants and shares
of common stock of $7.7 million in Avalanche International Corp dba
MTIX International, Inc. Under GAAP accounting rules, the value of
the warrants and shares of common stock are marked-to-market on a
quarterly basis, which can result in significant fluctuations
reflecting the volatility of the underlying market.
- During the quarter ended June 30, 2018, the Company generated a
total of $719,000 from its cryptocurrency mining operations and
used $605,000 to pay down its convertible debt and $201,000 to
invest in additional miners. The company is closely monitoring
cryptocurrency market conditions and believes it has the capacity
to have approximately 10,000 miners deployed by December 31, 2018,
subject to available financing and more favorable Bitcoin
pricing.
- Preliminary total stockholders’ equity at June 30, 2018 totaled
approximately $30.8 million, an increase of $9.0 million compared
to total stockholders’ equity of $21.8 million for the quarter
ending March 31, 2018.
Full Year 2018 Gross Revenue Guidance
The Company updated its fiscal year 2018 gross revenue
expectation to between $34.0 million and $39.0 million, compared to
its previous guidance of $44 million to $49 million. The Company’s
updated guidance includes the assumption that its cryptocurrency
mining operations will continue to operate at current levels and
that Bitcoin prices remain depressed at between $6,000 and $6,500
during the second half of 2018. In addition, guidance was reduced
to adjust for the fact that the Company’s acquisitions of Enertec
Systems and I.AM, Inc. closed later in the second quarter than
originally anticipated. The Company estimates that its current
annualized gross revenue run-rate is approximately $40 million.
The Company expects to report final results of its second
quarter through timely submission of its Quarterly Report on Form
10-Q to the SEC on or before August 20, 2018.
The Company will host a conference call at 5:00 p.m. ET on
Wednesday, August 15, 2018 to discuss the preliminary second
quarter results and provide a business update as well as answer
questions. Mr. Ault will be joined by William B. Horne, the
Company’s CFO and a director. Investors and interested parties who
desire to participate in the webcast either online or by calling in
must use this link to register prior to 4:00 P.M. ET on August 15,
2018: https://zoom.us/webinar/register/WN_rityzziCRdaVbijL3q41xw.
In addition, links to the press release, conference presentation
and webcast replay will be available within two business days after
the conference at www.dpwholdings.com under the Investor Relations
section.
About DPW Holdings, Inc.DPW Holdings, Inc. is a
diversified holding company pursuing growth by acquiring
undervalued businesses and disruptive technologies that hold global
potential. Through its wholly owned subsidiaries and strategic
investments, the company provides mission-critical products that
support a diverse range of industries, including defense/aerospace,
industrial, telecommunications, medical, crypto-mining, and
textiles. In addition, the company owns a select portfolio of
commercial hospitality properties and extends credit to select
entrepreneurial businesses through a licensed lending subsidiary.
DPW Holdings, Inc.’s headquarters is located at 201 Shipyard Way,
Suite E, Newport Beach, CA 92663; www.DPWHoldings.com.
Forward-Looking Statements The foregoing
release contains “forward looking statements” within the meaning of
Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as
amended. These forward-looking statements generally include
statements that are predictive in nature and depend upon or refer
to future events or conditions, and include words such as
“believes,” “plans,” “anticipates,” “projects,” “estimates,”
“expects,” “intends,” “strategy,” “future,” “opportunity,” “may,”
“will,” “should,” “could,” “potential,” or similar expressions.
Statements that are not historical facts are forward-looking
statements. Forward-looking statements are based on current beliefs
and assumptions that are subject to risks and uncertainties.
Forward-looking statements speak only as of the date they are made,
and the Company undertakes no obligation to update any of them
publicly in light of new information or future events. Actual
results could differ materially from those contained in any
forward-looking statement as a result of various factors. More
information, including potential risk factors, that could affect
the Company’s business and financial results are included in the
Company’s filings with the U.S. Securities and Exchange Commission,
including, but not limited to, the Company’s Forms 10-K, 10-Q and
8-K. All filings are available at www.sec.gov and on the
Company’s website at www.DPWHoldings.com.
###
Contacts:
Ron Parham or Kirsten Chapman, LHA Investor Relations, 415.433.3777, dpwholdings@lhai.com
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