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Profire Energy Reports Financial Results for Second Quarter Fiscal Year 2022

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Profire Energy, Inc.
Profire Energy, Inc.

Company Reports Fifth Consecutive Quarter of Sequential Revenue Growth and Second Consecutive Quarter Net Income and Positive EBITDA

LINDON, Utah, Aug. 04, 2022 (GLOBE NEWSWIRE) -- Profire Energy, Inc. (NASDAQ: PFIE), a technology company (the "Company") that provides solutions which enhance the efficiency, safety, and reliability of industrial combustion appliances, today reported financial results for its second quarter ending June 30, 2022. A conference call will be held on Friday, August 5, 2022, at 8:30 a.m. ET to discuss the results.

Second Quarter Summary

  • Revenue of $9.6 million, a 60% increase from prior-year quarter

  • Gross margin improved 170 basis points year-over-year to 45.7%

  • Net income of $284,829 or $0.01 per diluted share

  • Generated EBITDA of $569,4121

  • Repurchased 451,590 shares of stock

  • Non-Oil and Gas revenue is on track to exceed $1 million for the fiscal year, more than tripling our previous year's results

“Our second quarter results reflect continued progress within our historical business segments and into new markets. Revenues increased sequentially for the fifth consecutive quarter, and we reported another quarterly net profit despite product shortages and significant cost pressures across our business,” said Ryan Oviatt, Co-Chief Executive Officer and CFO of Profire Energy. “The initiatives implemented in 2021 and earlier this year made inventory more readily available late in the quarter which allowed us to start to work down sales backorders and to begin replenishing product on the shelf. Our balance sheet remains strong, which affords us the flexibility to respond to additional opportunities within our core business, as well as new markets for our products.”

Second Quarter 2022 Financial Results

Total revenues for the period equaled $9.6 million, compared to $9.5 million in the first quarter and $6.0 million in the second quarter of 2021. The sequential and year-over-year increases were primarily driven by improving demand from the COVID-19 pandemic recovery and higher oil prices.

Gross profit was $4.4 million, compared to $4.6 million in the first quarter of 2022 and $2.7 million in the prior-year quarter. Gross margin was 45.7% of revenues, compared to 47.9% of revenues in the prior quarter and 44.0% of revenues in the second quarter of 2021. The year-over-year increase in gross profit and margin reflect higher revenue, while the sequential decrease in gross profit and margin reflects the inflation impact on direct labor, shipping and freight costs.

Total operating expenses were $4.4 million, compared to $3.9 million in the first quarter and $3.3 million in the year-ago quarter. The increase is related to higher direct labor costs, headcount increases, and increases in travel and automobile expenses.

Compared with the same quarter last year, operating expenses for G&A increased 36% and R&D increased 20%, while depreciation decreased 4% from the second quarter of 2021.

Net income was $284,829 or $0.01 per diluted share, compared to $627,161 or $0.01 per diluted share in the first quarter and a net loss of ($397,166) or ($0.01) per share in the second quarter last year.

“We continue to experience increased levels of interest in our solutions related to new activity, retrofit programs, and other capital projects that were deferred during the pandemic, due primarily to elevated oil prices,” stated Cameron Tidball, Co-CEO of Profire Energy. “Our initiatives outside our traditional oil and gas business continue to gain traction. We received our largest order in this growth area during the quarter and we are on track to exceed our internal revenue target related to this segment. In addition, we are evaluating potential new products, acquisitions and partnership opportunities to further extend Profire’s offerings. We look forward to building on our momentum through the latter half of 2022 and delivering long-term value to our shareholders,”

Conference Call

Profire Energy Executives will host the call, followed by a question-and-answer period.
Date: Friday, August 5, 2022
Time: 8:30 a.m. ET (6:30 a.m. MT)
Toll-free dial-in number: 1-855-327-6837
International dial-in number: 1-631-891-4304

The conference call will be webcast live and available for replay via this link: https://viavid.webcasts.com/starthere.jsp?ei=1560935&tp_key=08abf64d02
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 12:30 p.m. ET on the same day through August 19, 2022.

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay Pin Number: 10019852

About Profire Energy, Inc.
Profire Energy is a technology company providing solutions that enhance the efficiency, safety, and reliability of industrial combustion appliances while mitigating potential environmental impacts related to the operation of these devices. It is primarily focused in the upstream, midstream, and downstream transmission segments of the oil and gas industry; however, the Company has commenced identifying applications in other industries where their solutions can likely add value. Profire specializes in the engineering and design of burner and combustion management systems and solutions used on a variety of natural and forced draft applications. Its products and services are sold primarily throughout North America. It has an experienced team of sales and service professionals that are strategically positioned across the United States and Canada. Profire has offices in Lindon, Utah; Victoria, Texas; Homer, Pennsylvania; Millersburg, Ohio; and Acheson, 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’s expected growth, the Company’s expected revenues from recent acquisitions, the Company’s plans to make internal and external investments, and the availability of Company resources to make beneficial investments in 2022 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, Co-CEO & CFO
(801) 796-5127

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

About Non-GAAP Financial Measures

To supplement our consolidated financial statements, which statements are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measure of earnings before interest, taxes, depreciation and amortization (“EBITDA”). The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

We use this non-GAAP financial measure for financial and operational decision making and as a means to evaluate period-to-period comparisons. Our management believes that this non-GAAP financial measure provides meaningful supplemental information regarding our performance. We believe that both management and investors benefit from referring to this non-GAAP financial measure in assessing our performance and when planning, forecasting, and analyzing future periods. We believe this non-GAAP financial measure is useful to investors both because it allows for greater transparency with respect to key metrics used by management in its financial and operational decision making.

The Following is a tabular presentation of EBITDA, including a reconciliation to net income which the Company believes to be the most directly comparable US GAAP financial measure.

For the three Months Ended June 30,

2022

 

EBITDA Calculation

 

Net Income

$

284,829

 

Add back net income tax expense

$

27,177

 

Add back net interest expense

$

(20,307

)

Add back depreciation and amortization

$

277,713

 

EBITDA calculated

$

569,412

 


PROFIRE ENERGY, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

 

 

As of

 

 

June 30, 2022

 

December 31, 2021

ASSETS

 

(Unaudited)

 

 

CURRENT ASSETS

 

 

 

 

Cash and cash equivalents

 

$

7,418,827

 

 

$

8,188,270

 

Short-term investments

 

 

463,027

 

 

 

1,013,683

 

Accounts receivable, net

 

 

7,311,562

 

 

 

6,262,799

 

Inventories, net (note 3)

 

 

9,256,684

 

 

 

7,185,248

 

Prepaid expenses and other current assets (note 4)

 

 

1,156,314

 

 

 

1,025,276

 

Income tax receivable

 

 

25,994

 

 

 

560,445

 

Total Current Assets

 

 

25,632,408

 

 

 

24,235,721

 

LONG-TERM ASSETS

 

 

 

 

Net deferred tax asset

 

 

160,877

 

 

 

163,254

 

Long-term investments

 

 

8,619,410

 

 

 

8,259,809

 

Financing right-of-use asset

 

 

146,100

 

 

 

65,280

 

Property and equipment, net

 

 

10,799,084

 

 

 

11,185,539

 

Intangible assets, net

 

 

1,438,467

 

 

 

1,549,138

 

Goodwill

 

 

2,579,381

 

 

 

2,579,381

 

Total Long-Term Assets

 

 

23,743,319

 

 

 

23,802,401

 

  TOTAL ASSETS

 

$

49,375,727

 

 

$

48,038,122

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

Accounts payable

 

$

2,945,957

 

 

$

1,822,559

 

Accrued liabilities (note 5)

 

 

2,322,683

 

 

 

1,872,348

 

Current financing lease liability (note 6)

 

 

53,269

 

 

 

30,214

 

Total Current Liabilities

 

 

5,321,909

 

 

 

3,725,121

 

LONG-TERM LIABILITIES

 

 

 

 

Net deferred income tax liability

 

 

135,698

 

 

 

136,106

 

Long-term financing lease liability (note 6)

 

 

94,958

 

 

 

35,912

 

TOTAL LIABILITIES

 

 

5,552,565

 

 

 

3,897,139

 

 

 

 

 

 

STOCKHOLDERS' EQUITY (note 7)

 

 

 

 

Preferred stock: $0.001 par value, 10,000,000 shares authorized: no shares issued or outstanding

 

 

 

 

 

 

Common stock: $0.001 par value, 100,000,000 shares authorized: 52,071,283 issued and 47,033,153 outstanding at June 30, 2022, and 51,720,142 issued and 47,643,233 outstanding at December 31, 2021

 

 

52,072

 

 

 

51,720

 

Treasury stock, at cost

 

 

(7,336,323

)

 

 

(6,107,593

)

Additional paid-in capital

 

 

31,371,682

 

 

 

30,819,394

 

Accumulated other comprehensive loss

 

 

(2,654,188

)

 

 

(2,100,467

)

Retained earnings

 

 

22,389,919

 

 

 

21,477,929

 

TOTAL STOCKHOLDERS' EQUITY

 

 

43,823,162

 

 

 

44,140,983

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

49,375,727

 

 

$

48,038,122

 

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 Comprehensive Income (Loss)

(Unaudited)

 

 

For the Three Months Ended June 30,

 

For the Six Months Ended June 30,

 

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

REVENUES (note 8)

 

 

 

 

 

 

 

 

Sales of products, net

 

$

8,860,682

 

 

$

5,374,539

 

 

$

17,739,105

 

 

$

10,032,074

 

Sales of services, net

 

 

772,465

 

 

 

659,744

 

 

 

1,397,182

 

 

 

1,094,558

 

Total Revenues

 

 

9,633,147

 

 

 

6,034,283

 

 

 

19,136,287

 

 

 

11,126,632

 

 

 

 

 

 

 

 

 

 

COST OF SALES

 

 

 

 

 

 

 

 

Cost of sales - product

 

 

4,530,065

 

 

 

2,910,879

 

 

 

8,912,764

 

 

 

5,448,513

 

Cost of sales - services

 

 

699,937

 

 

 

465,672

 

 

 

1,263,674

 

 

 

845,700

 

Total Cost of Sales

 

 

5,230,002

 

 

 

3,376,551

 

 

 

10,176,438

 

 

 

6,294,213

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

 

4,403,145

 

 

 

2,657,732

 

 

 

8,959,849

 

 

 

4,832,419

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

General and administrative

 

 

3,786,561

 

 

 

2,783,872

 

 

 

7,178,938

 

 

 

5,338,408

 

Research and development

 

 

362,197

 

 

 

301,445

 

 

 

670,512

 

 

 

558,336

 

Depreciation and amortization

 

 

159,580

 

 

 

166,852

 

 

 

326,597

 

 

 

334,337

 

Total Operating Expenses

 

 

4,308,338

 

 

 

3,252,169

 

 

 

8,176,047

 

 

 

6,231,081

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) FROM OPERATIONS

 

 

94,807

 

 

 

(594,437

)

 

 

783,802

 

 

 

(1,398,662

)

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

 

Gain on sale of property and equipment

 

 

214,841

 

 

 

38,492

 

 

 

310,683

 

 

 

112,393

 

Other income (expense)

 

 

(17,949

)

 

 

4,836

 

 

 

(36,728

)

 

 

4,739

 

Interest income

 

 

20,307

 

 

 

28,569

 

 

 

41,852

 

 

 

49,631

 

Total Other Income

 

 

217,199

 

 

 

71,897

 

 

 

315,807

 

 

 

166,763

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) BEFORE INCOME TAXES

 

 

312,006

 

 

 

(522,540

)

 

 

1,099,609

 

 

 

(1,231,899

)

 

 

 

 

 

 

 

 

 

INCOME TAX BENEFIT (EXPENSE)

 

 

(27,177

)

 

 

125,374

 

 

 

(187,619

)

 

 

233,233

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS)

 

$

284,829

 

 

$

(397,166

)

 

$

911,990

 

 

$

(998,666

)

 

 

 

 

 

 

 

 

 

OTHER COMPREHENSIVE INCOME (LOSS)

 

 

 

 

 

 

 

 

Foreign currency translation gain (loss)

 

$

(290,291

)

 

$

163,485

 

 

$

(131,933

)

 

$

303,091

 

Unrealized gains (losses) on investments

 

 

(134,662

)

 

 

55,529

 

 

 

(421,788

)

 

 

47,555

 

Total Other Comprehensive Income (Loss)

 

 

(424,953

)

 

 

219,014

 

 

 

(553,721

)

 

 

350,646

 

 

 

 

 

 

 

 

 

 

COMPREHENSIVE INCOME (LOSS)

 

$

(140,124

)

 

$

(178,152

)

 

$

358,269

 

 

$

(648,020

)

 

 

 

 

 

 

 

 

 

BASIC EARNINGS (LOSS) PER SHARE

 

$

0.01

 

 

$

(0.01

)

 

$

0.02

 

 

$

(0.02

)

FULLY DILUTED EARNINGS (LOSS) PER SHARE

 

$

0.01

 

 

$

(0.01

)

 

$

0.02

 

 

$

(0.02

)

 

 

 

 

 

 

 

 

 

BASIC WEIGHTED AVG NUMBER OF SHARES OUTSTANDING

 

 

47,092,275

 

 

 

48,054,136

 

 

 

47,285,782

 

 

 

48,022,295

 

FULLY DILUTED WEIGHTED AVG NUMBER OF SHARES OUTSTANDING

 

 

48,699,208

 

 

 

48,054,136

 

 

 

48,865,186

 

 

 

48,022,295

 

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 Six Months Ended June 30,

 

 

2022

 

 

 

2021

 

OPERATING ACTIVITIES

 

 

 

Net income (loss)

$

911,990

 

 

$

(998,666

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

Depreciation and amortization expense

 

558,832

 

 

 

683,597

 

Gain on sale of property and equipment

 

(310,683

)

 

 

(112,393

)

Bad debt expense

 

28,474

 

 

 

(32,463

)

Stock awards issued for services

 

412,893

 

 

 

332,127

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

(877,417

)

 

 

(7,313

)

Income taxes receivable/payable

 

534,456

 

 

 

(299,436

)

Inventories

 

(2,097,471

)

 

 

577,341

 

Prepaid expenses and other current assets

 

(140,352

)

 

 

988,464

 

Deferred tax asset/liability

 

(408

)

 

 

78,746

 

Accounts payable and accrued liabilities

 

1,601,376

 

 

 

345,818

 

Net Cash Provided by Operating Activities

 

621,690

 

 

 

1,555,822

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

Proceeds from sale of property and equipment

 

412,339

 

 

 

69,484

 

Purchase of investments

 

(231,032

)

 

 

(719,817

)

Purchase of property and equipment

 

(223,215

)

 

 

(93,049

)

Net Cash Used in Investing Activities

 

(41,908

)

 

 

(743,382

)

 

 

 

 

FINANCING ACTIVITIES

 

 

 

Value of equity awards surrendered by employees for tax liability

 

(93,527

)

 

 

(42,829

)

Cash received in exercise of stock options

 

25,106

 

 

 

 

Purchase of treasury stock

 

(1,228,731

)

 

 

 

Principal paid towards lease liability

 

(19,787

)

 

 

(21,749

)

Net Cash Used in Financing Activities

 

(1,316,939

)

 

 

(64,578

)

 

 

 

 

Effect of exchange rate changes on cash

 

(32,286

)

 

 

25,201

 

 

 

 

 

NET CHANGE IN CASH

 

(769,443

)

 

 

773,063

 

CASH AT BEGINNING OF PERIOD

 

8,188,270

 

 

 

9,148,312

 

CASH AT END OF PERIOD

$

7,418,827

 

 

$

9,921,375

 

 

 

 

 

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

 

 

 

 

 

 

 

CASH PAID FOR:

 

 

 

Interest

$

1,253

 

 

$

2,353

 

Income taxes

$

21,000

 

 

$

17,150

 

NON-CASH FINANCING AND INVESTING ACTIVITIES

 

 

 

Common stock issued in settlement of accrued bonuses

$

212,787

 

 

$

 

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

1 See “About Non-GAAP Financial Measures” below