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Stock impact report

Flux Power: Sell On Dismal Sales Outlook And Impending Debt Covenant Breach [Seeking Alpha]

Flux Power Holdings, Inc. (FLUX) 
NASDAQ:AMEX Investor Relations: fluxpwr.com/investors
Company Research Source: Seeking Alpha
The company's bottom line benefited from recent cost reduction initiatives and a sizeable one-time gain from the reversal of previously accrued bonus awards. On the flip side, unfavorable working capital movements resulted in substantial cash outflows, and the backlog declined to new all-time lows. Even worse, the company's largest customer won't place new orders for the time being due to a "capital freeze". As a result, sales will be impacted materially. Adding insult to injury, FLUX expects to violate debt covenants later this month. The issue has raised substantial doubt about the company's ability to continue as a going concern. Given the company's mounting challenges, I am downgrading Flux Power's common shares from "Buy" to "Sell". Looking for a helping hand in the market? Members of Value Investor's Edge get exclusive ideas and guidance to navigate any climate. Learn More » PhonlamaiPhoto/iStock via Getty Images Note: I have covered Flux Power Holdings Inc. or Show less Read more
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