Profire Increased Net Income by 36% Over the Same Quarter in 2017

LINDON, Utah, Nov. 07, 2018 (GLOBE NEWSWIRE) -- Profire Energy, Inc. (NASDAQ: PFIE), a technology company (the “Company”) which creates, installs and services burner and chemical management solutions in the oil and gas industry, today reported financial results for its fiscal quarter ended September 30, 2018. A conference call will be held on Thursday, November 8, 2018 at 1:00 p.m. EST to discuss the results.

Fiscal Q3 2018 Highlights

  • Recognized Revenue of $11.5 million, The Second-Best Quarter in Nearly Four Years
  • Net Income of $1.7 Million or $0.03 Per Share, a 36% Increase From the Same Quarter Last Year
  • Realized Gross Profit of $6.1 Million
  • Cash and Liquid Investments at Period End totaled over $22.2 Million
  • Remained Debt-Free

Fiscal Quarter Financial Results
               
Total revenues for the period equaled $11.5 million or a 14% increase from the same quarter a year ago. This increase is largely attributed to our ability to leverage our expanding customer base with our existing sales force.
               
Total operating expenses were approximately $3.7 million or a 15% increase over the same quarter last year which was mostly attributable to additional employees and increased R&D spend. Compared with the same year ago quarter, operating expenses for general and administrative increased 15%, R&D increased 19%, and depreciation increased 14%.

Gross profit increased to $6.1 million or 53% of total revenues, as compared to $5.1 million or 50% of total revenues in the year-ago quarter. Gross profit margins fluctuate slightly each quarter due to changes in product mix, direct labor costs, and adjustments in our inventory and warranty reserves.

Net income was $1.7 million or $0.03 per share, compared to a net income of $1.2 million or $0.03 per share in the same year-ago quarter.

Cash and liquid investments totaled $22.2 million at the end of the quarter and the Company continues to operate debt-free.

Management Commentary

“Our strategic initiatives over the past few years have positioned us well to achieve future growth,” stated Ryan Oviatt, CFO of Profire. “Profire's ability to respond quickly to customer demands over the years has distinguished Profire from its competition. Our resources allow us to be flexible in responding to customer demand and market opportunities that will be beneficial to Profire.”

“Profire increased revenues in the third quarter despite a sequential slowdown in the industry.” said Brenton Hatch, President and CEO of Profire Energy. “So far, this year is on track to be our most profitable year in Company history and the second-best year in terms of revenue. Our core values and strategies involving cost management, and remaining debt free, have allowed us to see great success throughout the industry recovery. Our anticipated performance in 2018 is providing a solid foundation for additional investments in 2019 and beyond.”

Conference Call

Profire Energy President and CEO Brenton Hatch and CFO Ryan Oviatt will host the presentation, followed by a question and answer period.
Date: Thursday, November 8, 2018
Time: 1:00 p.m. EST (11:00 a.m. MST)
Toll-free dial-in number: 1-877-705-6003
International dial-in number: 1-201-493-6725
The conference call will be webcast live and available for replay via this link:
http://public.viavid.com/index.php?id=132159. The webcast replay will be available for one year.

Please call the conference telephone number five minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting the conference call, please contact Todd Fugal at 1-801-796-5127.

A replay of the call will be available via the dial-in numbers below after 5:00 p.m. EST on the same day through November 15, 2018.

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay Pin Number: 13684861

About Profire Energy, Inc.
Profire Energy assists energy production companies in the safe and efficient production and transportation of oil and natural gas. As energy companies seek greater safety for their employees, compliance with more stringent regulatory standards, and enhanced margins with their energy production processes, Profire Energy's burner management and chemical injection systems are increasingly becoming part of their solution. Profire Energy has offices in Lindon, Utah; Victoria, Texas; Homer, Pennsylvania; Greeley, Colorado; and Spruce Grove, Alberta, Canada. For additional information, visit www.profireenergy.com.

Cautionary Note Regarding Forward-Looking Statements. Statements made in this release that are not historical are forward-looking statements. This release contains forward-looking statements, including, but not limited to statements regarding the Company holding a conference call on November 8, 2018 and the availability of Company resources to make beneficial investments in 2019 and beyond. Forward-looking statements are not guarantees of future results or performance and involve risks, assumptions and uncertainties that could cause actual events or results to differ materially from the events or results described in, or anticipated by, the forward-looking statements. Factors that could materially affect such forward-looking statements include certain economic, business, public market and regulatory risks and factors identified in the company's periodic reports filed with the Securities and Exchange Commission. All forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All forward-looking statements are made only as of the date of this release and the Company assumes no obligation to update forward-looking statements to reflect subsequent events or circumstances, except as required by law. Readers should not place undue reliance on these forward-looking statements.

Contact:
Profire Energy, Inc.
Ryan Oviatt, CFO
(801) 796-5127

Three Part Advisors
Steven Hooser, Partner
214-872-2710

               

PROFIRE ENERGY, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
  As of
  September 30, 2018 December 31, 2017
  (Unaudited)  
CURRENT ASSETS    
Cash and cash equivalents $8,637,838  $11,445,799 
Short-term investments 965,105  300,817 
Short-term investments - other 4,618,379  4,009,810 
Accounts receivable, net 8,094,228  8,069,255 
Inventories, net 10,350,075  6,446,083 
Prepaid expenses & other current assets 636,476  437,304 
Income tax receivable 231,967   
Total Current Assets 33,534,068  30,709,068 
     
LONG-TERM ASSETS    
Net deferred tax asset 50,253  72,817 
Long-term investments 8,023,172  8,517,182 
Property and equipment, net 7,695,650  7,197,499 
Goodwill 997,701  997,701 
Intangible assets, net 460,307  494,792 
Total Long-Term Assets 17,227,083  17,279,991 
     
TOTAL ASSETS $50,761,151  $47,989,059 
     
CURRENT LIABILITIES    
Accounts payable 2,879,156  1,780,977 
Accrued vacation 259,808  196,646 
Accrued liabilities 1,509,881  1,044,284 
Income taxes payable 719,241  919,728 
Total Current Liabilities 5,368,086  3,941,635 
     
TOTAL LIABILITIES 5,368,086  3,941,635 
     
STOCKHOLDERS' EQUITY    
Preferred shares: $0.001 par value, 10,000,000 shares authorized:  no shares issued or outstanding    
Common shares: $0.001 par value, 100,000,000 shares authorized: 54,685,759 issued and 48,083,063 outstanding at September 30, 2018 and 53,931,167 issued and 48,606,425 outstanding at December 31, 2017 54,686  53,931 
Treasury stock, at cost (10,890,349) (6,890,349)
Additional paid-in capital 27,890,171  27,535,469 
Accumulated other comprehensive loss (2,459,865) (2,200,462)
Retained earnings 30,798,422  25,548,835 
TOTAL STOCKHOLDERS' EQUITY 45,393,065  44,047,424 
     
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $50,761,151  $47,989,059 

These financial statements should be read in conjunction with the Form 10-Q and accompanying footnotes.


PROFIRE ENERGY, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations and Other Comprehensive Income
(Unaudited)
  For the Three Months Ended September 30, For the Nine Months Ended September 30,
   2018   2017  2018   2017
REVENUES        
Sales of goods, net $10,830,592  $9,387,232 $33,009,616  $25,514,149
Sales of services, net  669,310   662,960  1,999,764   1,825,528
Total Revenues  11,499,902   10,050,192  35,009,380   27,339,677
         
COST OF SALES        
Cost of goods sold-product  4,917,449   4,509,191  15,434,698   11,600,019
Cost of goods sold-services  484,327   479,206  1,437,749   1,333,819
Total Cost of Goods Sold  5,401,776   4,988,397  16,872,447   12,933,838
         
GROSS PROFIT  6,098,126   5,061,795  18,136,933   14,405,839
         
OPERATING EXPENSES        
General and administrative expenses  3,180,726   2,771,869  9,887,451   8,454,235
Research and development  377,676   318,621  1,097,897   798,142
Depreciation and amortization expense  143,328   125,898  401,114   405,811
Total Operating Expenses  3,701,730   3,216,388  11,386,462   9,658,188
INCOME FROM OPERATIONS  2,396,396   1,845,407  6,750,471   4,747,651
         
OTHER INCOME (EXPENSE)        
Gain on sale of fixed assets  43,904   14,017  129,989   62,492
Other income (expense)  (1,506)  25,991  (7,462)  39,377
Interest income  85,167   41,672  310,646   127,790
Total Other Income  127,565   81,680  433,173   229,659
         
INCOME BEFORE INCOME TAXES  2,523,961   1,927,087  7,183,644   4,977,310
INCOME TAX EXPENSE  864,874   709,169  1,934,057   1,846,634
NET INCOME $1,659,087  $1,217,918 $5,249,587  $3,130,676
         
OTHER COMPREHENSIVE INCOME (LOSS)        
Foreign currency translation gain (loss) $170,641  $327,271 $(223,431) $640,927
Unrealized gains (losses) on investments  (11,963)   10,138  (35,972)  73,085
Total Other Comprehensive Income (Loss)  158,678   337,409  (259,403)  714,012
         
NET COMPREHENSIVE INCOME $1,817,765  $1,555,327 $4,990,184  $3,844,688
         
BASIC EARNINGS PER SHARE $0.03  $0.03 $0.11  $0.06
         
FULLY DILUTED EARNINGS PER SHARE $0.03  $0.02 $0.11  $0.06
         
BASIC WEIGHTED AVG NUMBER OF SHARES OUTSTANDING  48,082,506   48,552,770  48,337,517   49,613,704
         
FULLY DILUTED WEIGHTED AVG NUMBER OF SHARES OUTSTANDING  48,852,167   49,369,835  49,107,178   50,346,333

These financial statements should be read in conjunction with the Form 10-Q and accompanying footnotes. 

PROFIRE ENERGY, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
 For the Nine Months Ended September 30,
 2018 2017
OPERATING ACTIVITIES   
Net income$5,249,587  $3,130,676 
Adjustments to reconcile net income to net cash provided by operating activities:   
    
Depreciation and amortization expense667,085  675,223 
Gain on sale of fixed assets(120,825) (62,310)
Bad debt expense134,901  147,470 
Stock awards issued for services916,795  648,244 
Changes in operating assets and liabilities:    
Changes in accounts receivable(184,951) (2,024,858)
Changes in income taxes receivable/payable(432,575) 840,343 
Changes in inventories(3,863,287) 634,646 
Changes in prepaid expenses(172,497) (93,669)
Changes in deferred tax asset/liability22,564  (139,298)
Changes in accounts payable and accrued liabilities1,506,396  588,868 
    
Net Cash Provided by Operating Activities3,723,193  4,345,335 
    
INVESTING ACTIVITIES   
Proceeds from sale of equipment219,269  140,198 
Purchase of investments(876,463) (869,554)
Purchase of fixed assets(1,271,997) (214,632)
    
    
Net Cash Used in Investing Activities(1,929,191) (943,988)
    
FINANCING ACTIVITIES   
Value of equity awards surrendered by employees for tax liability(737,024) (25,667)
Cash received in exercise of stock options174,002   
Purchase of Treasury stock(4,000,000) (3,120,716)
    
Net Cash Used in Financing Activities(4,563,022) (3,146,383)
    
Effect of exchange rate changes on cash(38,941) 213,793 
    
NET INCREASE (DECREASE) IN CASH(2,807,961) 468,757 
CASH AT BEGINNING OF PERIOD11,445,799  7,553,088 
    
CASH AT END OF PERIOD8,637,838  $8,021,845 
    
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION   
CASH PAID FOR:   
Interest   
Income taxes2,164,149  1,282,157 

These financial statements should be read in conjunction with the Form 10-Q and accompanying footnotes