WOODCLIFF LAKE, NJ—Powerfleet, Inc. (NASDAQ:AIOT), a global leader in wireless IoT and M2M solutions for securing, controlling, tracking, and managing high-value enterprise assets, announced the appointment of Deloitte & Touche as its new independent registered public accounting firm for the fiscal year ending March 31, 2025. The change comes after the company dismissed Ernst & Young LLP (EY) as its auditor, effective upon the filing of its Transition Report on Form 10-KT for the period from January 1, 2024, to March 31, 2024.
The decision to change auditors was approved by Powerfleet's Audit Committee and was not due to any disagreements on accounting principles or practices, financial statement disclosure, or auditing scope or procedures that, if not resolved, would have caused EY to make reference to the matter in their reports. However, EY's reports on the company's financial statements for the years ended December 31, 2022, and December 31, 2023, did include explanatory paragraphs regarding material weaknesses in internal control over financial reporting.
These material weaknesses were related to various aspects of the company's financial reporting processes, including the determination of standalone selling price, capitalized software, the business combination with Movingdots GmbH, the valuation of goodwill, the measurement and valuation of convertible redeemable preferred stock, and certain aspects of the financial statement close process. The company has provided EY with the disclosures it is making in this report and has requested that EY furnish a letter to the SEC stating whether it agrees with the company's statements. A copy of EY's letter, dated July 24, 2024, has been attached as Exhibit 16.1 to the filing.
Powerfleet's appointment of Deloitte & Touche follows the auditor's existing relationship with MiX Telematics (NYSE:MIXT) Ltd., a wholly-owned subsidiary of Powerfleet. Prior to the appointment, during the two most recent fiscal years and the subsequent interim period, Powerfleet had not consulted Deloitte & Touche regarding any matters that would require disclosure under SEC regulations.
In other recent news, Powerfleet, Inc., a global leader in artificial intelligence of things (AIoT) software-as-a-service (SaaS) for mobile assets, has reported several significant developments. The company recently announced a 6% increase in total revenue and gross profit, as well as a remarkable 141% increase in adjusted EBITDA. Powerfleet's fourth-quarter revenue rose to $34.5 million, largely attributed to a strong performance in SaaS revenue.
Powerfleet's recent merger with MiX Telematics has also been a highlight, leading to the initiation of coverage by Raymond James with an Outperform rating, recognizing the potential benefits of this merger. Similarly, Craig-Hallum initiated coverage with a Buy rating, highlighting the expected growth driven by Powerfleet's Unity software platform.
The company also announced its inclusion in the Russell 2000® Index and a change of its ticker symbol to AIOT, reflecting its core business identity. In line with its growth strategy, Powerfleet has welcomed Andrew Martin, a partner at Private Capital Management, to its board of directors. These are among the recent developments for Powerfleet, as it continues to unify business operations through data integration and provide actionable insights to improve safety, efficiency, and cost savings.
InvestingPro Insights
In light of Powerfleet, Inc.'s recent auditor change, investors may be closely monitoring the company's financial performance and market position. According to real-time data from InvestingPro, Powerfleet has a market capitalization of $504.25 million, reflecting its scale in the IoT and M2M solutions market. Despite facing challenges in financial reporting processes, as mentioned in the article, analysts are optimistic about the company's future, expecting net income growth and sales growth in the current year. This optimism is also supported by the company's strong return over the last year, with a 70.33% one-year price total return.
However, potential investors should note that Powerfleet is currently trading at a high Price/Book multiple of 8.78, which could suggest that the stock is valued richly relative to its book value. Additionally, the company has not been profitable over the last twelve months, which may be a concern for risk-averse investors. For those considering an investment in Powerfleet, it's worth noting that there are PRONEWS24 additional InvestingPro Tips available, which can provide deeper insights into the company's financial health and stock performance.
Overall, these metrics and insights from InvestingPro can help investors make more informed decisions in the context of Powerfleet's strategic moves, such as the recent auditor appointment. For those interested in further analysis, the InvestingPro platform offers a comprehensive suite of tools and data to assess investment opportunities.
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