Global Power Equipment Group Inc (OTCMKTS:GLPW) Is About To Turn Around On Restatement

Global Power Equipment Group Inc (OTCMKTS:GLPW) hit headlines at the beginning of 2015, when the company identified some potential irregularities in its 2014 filing and put together an internal task force to investigate (and eventually restate) its numbers. Since that period, the company has lost more than 75% of its market capitalization, and been delisted from the NYSE. It's also attracted some institutional attention, however, and as announced at the beginning of this month, is about ready to issue the restated numbers.When it does, it can once again apply for a NYSE listing (as its filings will be up to date) and management can start focusing solely on operations. Both of these things have the potential to add value to the company's current market capitalization, making it one to watch as we head into the restatement and beyond.Global Power is an established name in its space, which is designing, manufacturing and servicing equipment for the power infrastructure industry. Its operations are broadly broken in to three distinct sections. The first, Mechanical Solutions, designs and manufactures equipment for utility-scale natural gas turbines. The second makes generator housing and enclosures. The third services the above mentioned, and also third party, equipment.So what happened with the numbers? Well, all we know is that management identified a discrepancy on the FY 2014 figures, and set out to identify the root of the discrepancy. This lead to a delay in filing FY 2015, as well as the first and second quarters of this year. Essentially, we've had no data from the company since end 2014, and this data is under review.As such, it's impossible to really tell how the company has performed over the last twenty-four months (or more). This is why the upcoming release is so important, and why it could have a real impact on Global's market capitalization when it hits press. On July 8, the company reported that it has disbanded the task force that it put together to investigate the situation, and that it expects to report a whole raft of financial data on or around September 30. This data will be the 2015 and 2014 10-Ks, and some restated selected data from 2012/13. Shortly thereafter, we'll get the 10-Qs from the first and second quarter of this year.

We believe that the dissolution of the Special Committee and the announcement of a restatement completion timetable are testaments to the progress we are making. Throughout this comprehensive financial review, we have enhanced our internal controls and procedures and strengthened our financial reporting and accounting functions while continuing our remediation efforts throughout this year.

It's going to come down to this: can the data support the company's at-market valuation? If the numbers stack up, we could see a quick upside revaluation as sentiment shifts in favor of the company's prospects going forward. We know that the restatement is due to certain underestimations in cost of goods sold data, so there's every chance the restatement won't severely impact the company's market cap. If it was revenues misstated, that's more serious. COGS is slightly less so, and the selling pressure has likely come more from risk off sentiment towards a company that is opaque than it has from markets not thinking Global can be a successful business.If the numbers disappoint, there may be some initial downside pressure, but it's difficult to imagine what would have to show up on the reports for markets to deem the company worth less than its current cap. Based on the last three years of reported numbers, it generates around half a billion dollars' revenues annually. Its current market cap is just $58 million. That's a discrepancy.Stick with us for GLPW updates by subscribing to our newsletter using the box below.Disclosure: We have no position in GLPW and have not been compensated for this article.