U.S. markets open in 3 hours 1 minute
  • S&P Futures

    4,289.75
    -8.50 (-0.20%)
     
  • Dow Futures

    33,826.00
    -47.00 (-0.14%)
     
  • Nasdaq Futures

    13,651.00
    -30.25 (-0.22%)
     
  • Russell 2000 Futures

    2,020.30
    -3.50 (-0.17%)
     
  • Crude Oil

    88.86
    -0.55 (-0.62%)
     
  • Gold

    1,790.30
    -7.80 (-0.43%)
     
  • Silver

    20.01
    -0.26 (-1.27%)
     
  • EUR/USD

    1.0136
    -0.0029 (-0.28%)
     
  • 10-Yr Bond

    2.7910
    0.0000 (0.00%)
     
  • Vix

    20.09
    +0.56 (+2.87%)
     
  • GBP/USD

    1.2023
    -0.0035 (-0.29%)
     
  • USD/JPY

    134.1710
    +0.8990 (+0.67%)
     
  • BTC-USD

    24,083.82
    -101.50 (-0.42%)
     
  • CMC Crypto 200

    572.82
    -17.94 (-3.04%)
     
  • FTSE 100

    7,550.76
    +41.61 (+0.55%)
     
  • Nikkei 225

    28,868.91
    -2.87 (-0.01%)
     

Profire Energy Reports Financial Results for Third Quarter Fiscal Year 2021

  • Oops!
    Something went wrong.
    Please try again later.
·12 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

Company Reports Sequential Improvement in Revenue and Gross Margin

LINDON, Utah, Nov. 03, 2021 (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 third quarter fiscal 2021 ending September 30, 2021. A conference call will be held on Thursday, November 4, 2021 at 1:00 p.m. ET to discuss the results.

Third Quarter Summary

  • Revenue increased 15% sequentially and 74% year-over-year to $6.9 million

  • Realized gross profit of $3.1 million

  • Gross margin increased 90 basis points sequentially to 44.9% of total revenues

  • Net income improvement of approximately $1 million year-over-year to $92,000 or nil per diluted share

  • EBITDA1 improvement of approximately $1 million year-over-year to ($1,473)

  • Cash and liquid investments of $18.5 million while remaining debt-free

1 See “About Non-GAAP Financial Measures” below.

“Our third quarter results reflect the continued return of economic activity across global markets, resulting in higher oil and gas prices compared to the prior year quarter. Our sequential and year-over-year revenue growth reflects increased product sales and resumption of service orders from customers that have been largely deferring capital during the pandemic. As previously suggested SG&A spending increased on a year-over-year basis, reflecting the rehiring of staff and continued investment in the company, but remains significantly below pre-pandemic levels. Additionally, I am pleased that we have been able to generate operating cash flow in the first nine months of this year while maintaining our pristine balance sheet, which remains debt free with $18.5 million in cash and liquid investments,” said Ryan Oviatt, Co-CEO and CFO of Profire Energy.

Third Quarter 2021 Financial Results

Total revenues for the period of $6.9 million, compared to $6.0 million in the second quarter of 2021 and $4.0 million in the prior-year quarter. The sequential and year-over-year increase reflects increased customer demand for product sales and services due to an increase in oil and gas prices.

Gross profit was $3.1 million, compared to $2.7 million in the prior quarter and $1.5 million in the prior-year quarter. Gross margin was 44.9% of revenues, compared to 44.0% of revenues in the prior quarter and 38.0% of revenues in the third quarter of 2020. The sequential and year-over-year increases were driven by higher revenues which provided greater coverage of fixed costs.

Total operating expenses were $3.4 million, compared to $3.3 million in the second quarter of 2021 and $2.8 million in the year-ago quarter. The sequential increase reflects the unwinding of COVID related cost reductions implemented in 2020 and operating cost inflation seen throughout 2021.

Compared with the same quarter last year, operating expenses for G&A increased 33%, R&D decreased 33% and depreciation decreased by 1%.

Net income for the third quarter was $92,246 or nil per diluted share, compared to a net loss of ($397,166) or ($0.01) per share in the second quarter of 2021 and a net loss of ($1,057,748) or ($0.02) per share in the same quarter last year.

Cash and liquid investments totaled $18.5 million at September 30, 2021, compared to $17.6 million at the end of 2020, and the Company continues to operate debt-free.

“We are encouraged by the results of the third quarter. We continue to believe that demand for our products in both our core business and new industries and markets will continue to trend positively. Additionally, the traditional inventory levels that we strategically hold will enable us to continue our first in class reputation of delivering for our customers as industry continues to navigate global supply chain challenges,” stated Cameron Tidball, Co-CEO of Profire Energy. “We remain highly focused on the recovery of our core business as well as other opportunities and ongoing expansion in midstream, downstream, and outside of oil and gas to create long-term value for our shareholders.”

Conference Call

Profire Energy Executives will host the call, followed by a question-and-answer period.

Date: Thursday, November 4, 2021
Time: 1:00 p.m. ET (11:00 a.m. MT)
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:
https://78449.themediaframe.com/dataconf/productusers/vvdb/mediaframe/47150/indexl.html.
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 4:00 p.m. ET on the same
day through November 18, 2021.

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay Pin Number: 13724425

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 products are continuing to be a key part of their solutions. Profire Energy has offices in Lindon, Utah; Victoria, Texas; Homer, Pennsylvania; Greeley, Colorado; Millersburg, Ohio; 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’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. 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 the ongoing effects of the COVID 19 pandemic and certain other 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


PROFIRE ENERGY, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

As of

September 30, 2021

December 31, 2020

ASSETS

(Unaudited)

CURRENT ASSETS

Cash and cash equivalents

$

9,129,416

$

9,148,312

Short-term investments

1,420,884

2,388,601

Accounts receivable, net

4,632,245

3,719,508

Inventories, net (note 3)

7,472,750

8,414,772

Prepaid expenses and other current assets (note 4)

1,184,717

1,678,428

Income tax receivable

1,092,282

486,154

Total Current Assets

24,932,294

25,835,775

LONG-TERM ASSETS

Net deferred tax asset

Long-term investments

7,939,582

6,064,294

Financing right-of-use asset

19,798

50,094

Property and equipment, net

11,401,978

12,021,811

Intangible assets, net

1,604,821

1,771,870

Goodwill

2,579,381

2,579,381

Total Long-Term Assets

23,545,560

22,487,450

TOTAL ASSETS

$

48,477,854

$

48,323,225

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

Accounts payable

$

1,495,216

$

1,178,979

Accrued liabilities (note 5)

1,422,372

1,196,870

Current financing lease liability (note 6)

20,927

39,451

Total Current Liabilities

2,938,515

2,415,300

LONG-TERM LIABILITIES

Net deferred income tax liability

572,721

522,870

Long-term financing lease liability (note 6)

12,669

TOTAL LIABILITIES

3,511,236

2,950,839

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: 51,654,386 issued and 48,242,008 outstanding at September 30, 2021, and 51,384,961 issued and 47,972,583 outstanding at December 31, 2020

51,654

51,385

Treasury stock, at cost

(5,353,019

)

(5,353,019

)

Additional paid-in capital

30,727,928

30,293,472

Accumulated other comprehensive loss

(2,082,997

)

(2,148,924

)

Retained earnings

21,623,052

22,529,472

TOTAL STOCKHOLDERS' EQUITY

44,966,618

45,372,386

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

48,477,854

$

48,323,225

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 September 30,

For the Nine Months Ended September 30,

2021

2020

2021

2020

REVENUES (note 8)

Sales of goods, net

$

6,296,736

$

3,517,280

$

16,328,810

$

14,377,377

Sales of services, net

646,462

482,826

1,741,020

1,429,350

Total Revenues

6,943,198

4,000,106

18,069,830

15,806,727

COST OF SALES

Cost of goods sold-product

3,217,655

2,141,888

8,666,168

7,919,959

Cost of goods sold-services

606,075

337,795

1,451,775

1,114,804

Total Cost of Goods Sold

3,823,730

2,479,683

10,117,943

9,034,763

GROSS PROFIT

3,119,468

1,520,423

7,951,887

6,771,964

OPERATING EXPENSES

General and administrative

2,980,945

2,247,614

8,319,353

8,273,925

Research and development

290,657

433,800

848,993

1,073,074

Depreciation and amortization

166,155

168,507

500,492

496,976

Total Operating Expenses

3,437,757

2,849,921

9,668,838

9,843,975

LOSS FROM OPERATIONS

(318,289

)

(1,329,498

)

(1,716,951

)

(3,072,011

)

OTHER INCOME (EXPENSE)

Gain on sale of property and equipment

31,685

36,483

144,078

193,938

Other income (expense)

(2,984

)

(48,349

)

1,755

(49,667

)

Interest income

33,067

103,364

82,698

255,289

Total Other Income

61,768

91,498

228,531

399,560

LOSS BEFORE INCOME TAXES

(256,521

)

(1,238,000

)

(1,488,420

)

(2,672,451

)

INCOME TAX BENEFIT

348,767

180,252

582,000

440,936

NET INCOME (LOSS)

$

92,246

$

(1,057,748

)

$

(906,420

)

$

(2,231,515

)

OTHER COMPREHENSIVE INCOME (LOSS)

Foreign currency translation gain (loss)

$

(263,908

)

$

233,170

$

39,183

$

(336,986

)

Unrealized gains (losses) on investments

(20,811

)

(36,840

)

26,744

(121,319

)

Total Other Comprehensive Income (Loss)

(284,719

)

196,330

65,927

(458,305

)

TOTAL COMPREHENSIVE LOSS

$

(192,473

)

$

(861,418

)

$

(840,493

)

$

(2,689,820

)

BASIC EARNINGS (LOSS) PER SHARE

$

$

(0.02

)

$

(0.02

)

$

(0.05

)

FULLY DILUTED EARNINGS (LOSS) PER SHARE

$

$

(0.02

)

$

(0.02

)

$

(0.05

)

BASIC WEIGHTED AVG NUMBER OF SHARES OUTSTANDING

48,239,236

47,933,318

48,095,404

47,717,114

FULLY DILUTED WEIGHTED AVG NUMBER OF SHARES OUTSTANDING

49,328,808

47,933,318

48,095,404

47,717,114

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,

2021

2020

OPERATING ACTIVITIES

Net loss

$

(906,420

)

$

(2,231,515

)

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization expense

971,712

860,028

Gain on sale of fixed assets

(144,078

)

(193,938

)

Bad debt expense

2,622

182,179

Stock awards issued for services

474,881

351,943

Changes in operating assets and liabilities:

Accounts receivable

(904,325

)

3,404,439

Income taxes receivable/payable

(606,128

)

(404,304

)

Inventories

946,865

714,245

Prepaid expenses and other current assets

532,519

43,099

Deferred tax asset/liability

49,851

44,840

Accounts payable and accrued liabilities

540,322

(2,648,339

)

Net Cash Provided by Operating Activities

957,821

122,677

INVESTING ACTIVITIES

Proceeds from sale of property and equipment

101,169

16,313

Sale (purchase) of investments

(881,588

)

1,814,070

Purchase of property and equipment

(138,562

)

(1,146,400

)

Net Cash Provided by (Used in) Investing Activities

(918,981

)

683,983

FINANCING ACTIVITIES

Value of equity awards surrendered by employees for tax liability

(42,829

)

(148,879

)

Cash received in exercise of stock options

2,673

2,020

Principal paid towards lease liability

(31,911

)

(45,965

)

Net Cash Used in Financing Activities

(72,067

)

(192,824

)

Effect of exchange rate changes on cash

14,331

(53,147

)

NET CHANGE IN CASH

(18,896

)

560,689

CASH AT BEGINNING OF PERIOD

9,148,312

7,358,856

CASH AT END OF PERIOD

$

9,129,416

$

7,919,545

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

CASH PAID FOR:

Interest

$

2,689

$

4,946

Income taxes

$

17,150

$

402,510

NON-CASH FINANCING AND INVESTING ACTIVITIES

Common stock issued in settlement of accrued bonuses

$

$

419,373

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



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. We also use this measure as a metric in our incentive compensation plans. 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 September 30,

2021

2020

EBITDA Calculation

Net Income

$

92,246

$

(1,057,748

)

Add back net income tax expense

$

(348,767

)

$

(180,252

)

Add back net interest expense

$

(33,067

)

$

(103,364

)

Add back depreciation and amortization

$

288,115

$

293,237

EBITDA calculated

$

(1,473

)

$

(1,048,127

)


1 See “About Non-GAAP Financial Measures” below.