VISTA, Calif. - Flux Power Holdings, Inc. (NASDAQ: FLUX), a provider of lithium-ion energy storage solutions, announced it will restate its financial statements for fiscal year 2023 and certain interim periods of fiscal year 2024 due to $1.7 million in excess and obsolete inventory. The adjustment was attributed to product design changes during a period of rapid growth. This non-cash charge will not affect the company's cash flow, but further adjustments may arise as the review continues.
CEO Ron Dutt, alongside new CFO Kevin Royal, stated that measures are being implemented to prevent recurrence of such inventory issues. These include enhanced procedures and quality checks as the company transitions to more advanced energy cells. Dutt expressed confidence that the restatement will not affect the company's business strength, access to capital, or positive future outlook.
Flux Power's $16 million revolving credit facility with Gibraltar Business Capital is expected to remain accessible, contingent on compliance with the loan agreement's criteria.
The company plans to file the restated financial statements promptly, with further details disclosed in their Form 8-K submitted to the Securities and Exchange Commission.
Flux Power specializes in advanced lithium-ion batteries for commercial and industrial equipment electrification, offering a more sustainable alternative to traditional lead acid and propane-based solutions. These products aim to reduce CO2 emissions and enhance sustainability for fleet operators.
This news article is based on a press release statement from Flux Power Holdings, Inc.
In other recent news, Flux Power Holdings has made notable changes to its loan and security agreement with Gibraltar Business Capital. The amendment, which modifies the financial covenants related to the company's EBITDA, resulted in a non-refundable payment of $50,000 to Gibraltar Business Capital. This adjustment reflects Flux Power's ongoing financial management efforts.
In financial updates, Flux Power reported a decrease in revenues to $14.5 million in the third quarter of fiscal year 2024, down from $15.1 million in the previous year. The company's net loss also broadened to $2.6 million, a significant increase from a loss of $1.4 million year-over-year.
In product development, Flux Power has launched the L36 battery pack for Class 1 3-Wheel Counterbalance forklifts, a move endorsed by a major Original Equipment Manufacturer in the material handling industry. The company also hinted at an upcoming private label program with another top Forklift OEM. In line with these recent developments, Flux Power is actively developing higher-voltage lithium batteries and exploring expansion into adjacent markets, including military and medical batteries.
InvestingPro Insights
Recent market dynamics have presented challenges for Flux Power Holdings, Inc. (NASDAQ: FLUX), as reflected in the InvestingPro data and tips. With a market capitalization of $52.88 million, Flux Power's financial performance over the last twelve months has been under scrutiny. The company's Price / Book ratio stands at a high 9.8, indicating that the stock is trading at a premium compared to the company's book value. This is particularly notable given that the company has not been profitable during this period, with an adjusted P/E ratio of -7.53.
InvestingPro Tips suggest a cautious outlook from analysts, who have revised their earnings expectations downwards for the upcoming period and do not anticipate the company to be profitable this year. Additionally, the stock has experienced significant volatility, with a 6-month price total return of -26.65% and a 1-week price total return of -9.06%. These metrics may be important for investors considering the company's future performance, especially in light of the recent financial restatements.
While the company does not pay a dividend, which may be a consideration for income-focused investors, it is also worth noting that the InvestingPro Fair Value estimate stands at $3.29, slightly above the previous close price of $3.11. For those looking for more comprehensive analysis, there are additional InvestingPro Tips available that could provide deeper insights into Flux Power's valuation and prospects.
As Flux Power continues to navigate its inventory adjustments and market position, these InvestingPro metrics and tips offer valuable context for investors assessing the company's current status and future potential.
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