DPW Holdings (DPW) Stock: Climbing On Purchase Order

DPW Holdings DPW Stock News

DPW Holdings Inc (NYSEAMERICAN: DPW) is making a run for the top in the market this morning, trading on gains of more than 35% in the premarket. The gains come after the company announced that it has been awarded a purchase order worth $1.4 million. Here’s what’s going on:

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DPW Stock Jumps On Purchase Order

In a press release issued early this morning, DPW said that it has received a $1.4 million order. The order came from a leading defense and aerospace customer and was placed with its wholly owned subsidiary, Enertec Systems 2001.

Enertec is based in Israel. The company is a leading defense and aerospace designer and manufacturer. It is known for its advanced multi-purpose electronic systems. These systems include customized computer-based automated test equipment as well as turnkey solutions. All of the company’s products are designed to perform in harsh environments and battlefield conditions.

In the release, DPW said that the $1.4 million order is related to a testing system. It is a follow on of a $2.9 million order in 2019. The original order surrounded the development of a unique and complex testing system.

The company said that it believes that this customer may order over $10 million in Enertec products per year.

Importantly, DPW said that its management believes that its recent restructuring of debt and improvement to its capital structure puts it in a stronger position to execute and expand growth in backlog from this and other customers of the Gresham Worldwide operating units.

In a statement, Zvi Avni, CEO at Enertec, had the following to offer:

The increase in orders from this important customer is the result of a multi-year sales development effort and reinforces Enertec’s strategic focus on delivering complex solutions for the defense and aerospace industry, both at home and abroad.

The above statement was followed up by Milton “Todd” Ault, III, CEO at DPW. Here’s what he had to say:

Our recently announced $7.7 million exchange agreement improved our capital structure and enabled management to focus on the many opportunities we have to grow our business. We are committed to providing additional financial resources to enable Enertec and our other Gresham Worldwide defense subsidiaries to expand.

Why Investors Are So Excited

Let’s face it, DPW is not a massive company. In fact, the company’s market cap is only about $6.6 million. Considering this, $1.4 million is far from chump change.

The new purchase order will generate revenue that adds up to around 20% of the company’s market cap. That, in and of itself, is a very big deal. However, the excitement goes further than that.

DPW mentioned that due to recent restructuring work, it believes that it has the ability to reach a larger scale in terms of backlog and production. Moreover, the company said that this particular customer could be responsible for sales of $10 million annually ahead.

Should the company’s hopes with this customer come to fruition, and other customers start coming through the doors, that $6.6 million market cap isn’t going to stick around for long. So, what this release did was set the stage for hope of strong growth ahead, exciting the masses in the investing world!

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