DPW Holdings Inc (NYSEAMERICAN: DPW) is having an incredibly strong start to the trading session this morning, and for good reason. The company reported its financial results for the first quarter, exciting investors and sending the stock running for the top. Today, we’ll talk about:
- The gains in revenue;
- what we’re seeing from DPW stock as a result; and
- what we’ll be watching for ahead.
DPW Reports Financial Results
As mentioned above, DPW Holdings is having a great day in the market today after reporting its first quarter financial results. Of course, the results proved to be overwhelmingly positive. Here’s what we saw from the report:
- Assets – By the end of the first quarter, DPW had assets in the amount of $54.7 million. This figure proved to increase 42.3% on a year over year basis.
- Order Backlog – The company’s order backlog came in at $73.6 million by the end of the first quarter.
- Expenses – Also, expenses reduced by $1.9 million over the first quarter of 2018.
- Revenue – The big story here is revenue. During the first quarter, the company generated revenue in the amount of $6,939,043. That proved to be a $1,743,196 increase, which represents year over year growth of 33.5%. The company said that the growth in revenue was primarily due to acquisition activities in 2018.
In a statement, Milton “Todd” Ault, III, CEO and Chairman at DPW, ahd the following to offer:
We are very pleased that the Company has grown its revenue to over $6.9 million for the first quarter of 2019 and that our assets on the balance sheet have reached approximately $54.7 million. I believe the Company has weathered the last of a downturn that has ended this quarter and look to the second quarter of 2019 to set a baseline going forward. We are very pleased with our progress as we strive to improve our capital structure, our cashflow and our performance.
We have achieved over $10.5 million in debt reduction since the beginning of the year, of which $6 million was executed on April 2, 2019 and thus not reflected in our current results reported yesterday. Stockholders won’t see the benefit of our lowered cost of capital or proportional revenue from MTIX, Ltd. until either late in the second quarter or in the third quarter of 2019.
For the remainder of 2019, we anticipate our investments of over $20 million during 2018 should contribute to our topline with Digital Power Corp’s. renewing the recognition of revenue from the MTIX, Ltd. MLSE contract and from our hospitality segment generating increasing revenues from I.AM due to dryer, warmer weather in the seasons ahead. This past year, 2018, was challenging as we completed two new acquisitions while completing the integration of two acquisitions from 2017.
We anticipate much of the work and investment we have made will bring discernible results starting in the second quarter of 2019 that will continue through this year and well into 2020. With the recent corporate realignment of DPW, which created the new reporting subsidiaries, DPW Technologies led by JR Read and DPW Financial led by Darren Magot, we anticipate both new companies to harness our achievements from 2018 and create new efficiencies that should result positively to our net profitability and continue to increase sales through the year.
We are especially excited to watch JR Read spearhead the reduction in our order backlog and to drive synergies to reduce costs at our commercial and defense businesses that we expect to be realized quarter over quarter into next year. Some of the savings that were projected from our acquisitions were delayed due to lease and other financial commitments or constraints. In summary, there are three important indicators that stockholders and investors should pay attention to; first, the dramatic reduction of outstanding debt; second, the continuing increase in sales and thirdly, moderate growth in our backlog due to new customers and new orders.
The Company plans to support many financings at the subsidiary level. This strategy of raising capital on a closer, more targeted basis should in our view bode well for the commercial/defense business as well as for Digital Farms and Digital Power Lending, LLC, as it builds its client portfolio, as a California licensed finance lender.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that it’s important to follow the news closely. After all, it’s the news that leads to moves in the market. When it comes to DPW Holdings, the news proved to be positive.
After all, as investors, we are looking for growth from the investments that we make. The strong revenue growth shown by the company is exactly what investors wanted to see. So, it’s no surprise that the stock is making a run for the top in the market this morning.
As is just about always the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (8:38), DPW is trading at $0.18 per share after a gain of $0.017 per share or 10.64% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on DPW. In particular, we’re interested in following the story surrounding the company’s continued revenue growth as well as its plans to acquire real estate for the expansion of its cryptocurrency mining business. Nonetheless, we’ll keep a close eye on the story and bring the news to you as it breaks!
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