DPW Holdings, Inc. Reports Second Quarter Financial Results
August 21 2018 - 5:55AM
DPW Holdings, Inc. (NYSE American: DPW) (the “Company”) a
diversified holding company, today submitted its Quarterly Report
on Form 10-Q reporting financial results for its second quarter
ended June 30, 2018.
DPW Holdings’ CEO and Chairman, Milton “Todd” Ault, III said,
“Our actual second quarter results, which are consistent with the
preliminary results we announced on August 15, demonstrate that we
continue to execute our stated strategic plan to create a diverse
portfolio of assets with global growth potential. Coolisys’ order
book continues to improve, giving us additional confidence in the
growth potential of its advanced engineering, design and
manufacturing businesses. As we position the company for continued
expansion in 2019, 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.”
Second Quarter and First Half 2018 Results of
Operations
- Second quarter gross revenue was $7.4 million, a 309 percent
increase from $1.8 million in the second quarter of 2017 and 43
percent increase from $5.2 million in the first quarter 2018. First
half gross revenue was $12.6 million, a 266 percent increase from
$3.5 million in the first half of 2017.
- Second quarter gross margin was 18.3 percent, compared to 40.1
percent for the second quarter of 2017. First half gross margin was
21.8 percent, compared to 41.7 percent in the first half 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.
- Second quarter net loss was $7.0 million, including non-cash
charges of $4.3 million, compared to net loss of $1.9 million for
the second quarter of 2017, which included non-cash charges of $1.0
million. First half net loss was $13.1 million, including non-cash
charges of $8.5 million, compared to net loss of $2.8 million in
the first half of 2017, which included non-cash charges of $1.4
million.
- Order backlog at the Company’s Coolisys subsidiary totaled
$74.4 million at August 20, 2018.
June 30, 2018 Balance Sheet
- Total assets 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.
- Total stockholders’ equity at June 30, 2018 totaled $31.5
million, an increase of $9.7 million compared to total
stockholders’ equity of $21.8 million for the quarter ending March
31, 2018.
Full Year 2018 Gross Revenue Guidance
On August 15, 2018, 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 hosted a conference call at 5:00 p.m. ET on
Wednesday, August 15, 2018 to discuss its preliminary second
quarter results, provide a business update and answer questions. A
replay of the webcast is available 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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