U.S. Markets open in 7 hrs 55 mins
  • S&P Futures

    3,653.75
    +30.50 (+0.84%)
     
  • Dow Futures

    29,865.00
    +236.00 (+0.80%)
     
  • Nasdaq Futures

    12,376.00
    +99.00 (+0.81%)
     
  • Russell 2000 Futures

    1,840.70
    +20.60 (+1.13%)
     
  • Crude Oil

    44.93
    -0.41 (-0.90%)
     
  • Gold

    1,787.90
    +7.00 (+0.39%)
     
  • Silver

    22.94
    +0.35 (+1.56%)
     
  • EUR/USD

    1.1962
    +0.0027 (+0.2273%)
     
  • 10-Yr Bond

    0.8440
    0.0000 (0.00%)
     
  • Vix

    20.57
    -0.27 (-1.30%)
     
  • GBP/USD

    1.3365
    +0.0033 (+0.2499%)
     
  • USD/JPY

    104.3600
    +0.0360 (+0.0345%)
     
  • BTC-USD

    19,439.28
    -125.27 (-0.64%)
     
  • CMC Crypto 200

    382.37
    +17.77 (+4.87%)
     
  • FTSE 100

    6,266.19
    -101.39 (-1.59%)
     
  • Nikkei 225

    26,787.54
    +353.92 (+1.34%)
     

Profire Energy Reports Financial Results for Third Quarter 2020

Profire Energy, Inc.
·11 min read

LINDON, Utah, Nov. 09, 2020 (GLOBE NEWSWIRE) -- Profire Energy, Inc. (NASDAQ: PFIE), a technology company which engineers, install and services burner and combustions management solutions in the oil and gas and other industries, today reported financial results for its third quarter ending September 30, 2020. A conference call will be held on Tuesday, November 10, 2020 at 1:00 p.m. ET to discuss the results.

Third Quarter Summary

  • Recognized revenue of $4.0 million

  • Realized gross profit of $1.5 million or 38.0% of total revenues

  • Net loss of $1.1 million or ($0.02) per share

  • Cash and liquid investments of $17.2 million and remained debt-free

“Our early response to the COVID-19 pandemic has resulted in significant reductions in our operating cost structure and lower G&A expense, all while maintaining our debt-free balance sheet,” said Ryan Oviatt, Co-CEO and CFO of Profire Energy. “These efforts continue to be outweighed by lower demand and global consumption of oil and gas, combined with lower commodity prices due to a supply imbalance in the markets. However, we remain hopeful in our ability to find new and innovative ways to continue to drive long-term shareholder return.”

Third Quarter 2020 Financial Results

Total revenues for the period equaled $4.0 million, compared to $4.4 million in the second quarter of 2020, and $9.9 million in the same period a year ago. The third quarter’s results reflect the continued impact of COVID-19 on consumer demand, as well as a 27% drop in the average oil price during the same period, due in part to excess supply in the market from global producers.

Gross profit was $1.5 million, compared to $2.1 million in the second quarter of 2020 and $5.2 million in the year-ago quarter. Gross margin was 38.0% of revenues, compared to 47.9% of revenues in the previous quarter and 52.2% of revenues in the third quarter of 2019. The sequential gross margin decline was primarily related to product mix and related reserves, and the significant decline in revenue pushed the fixed cost impact on costs of goods and services above historical levels.

Total operating expenses were $2.8 million, compared to $3.2 million in prior quarter and $4.0 million in the same period a year ago. The sequential and year-over-year decrease reflect ongoing cost control measures in response to COVID-19 and the ongoing supply and demand imbalance within the oil markets.

Compared with the same quarter last year, operating expenses for G&A decreased 31%, R&D decreased 32% and depreciation increased by 30%.

Net loss was $1.1 million or ($0.02) per share, compared to a net loss of $808,503, or ($0.02) in the second quarter of 2020, and net income of $921,748 or $0.02 per diluted share in the same quarter last year.

Cash and investments totaled $17.2 million at September 30, 2020 compared to $18.6 million at the end of 2019, and the Company continues to operate debt-free. Capital expenditures for the quarter were $152,000. Working capital as of September 30, 2020 was $22.5 million, compared to $22.9 million at the end of 2019.

“We remain highly focused on building our sales funnel, maintaining and strengthening our customer relationships, and most important, research and development in order to maintain our leading brand awareness and market share,” said Cameron Tidball, Co-CEO of Profire Energy. “We are assessing and analyzing the vast market and opportunity for combustion solutions that reside outside of our traditional market wherein we can leverage our world class burner management systems to serve a more diverse customer base.”

Conference Call

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

Date: Tuesday, November 10, 2020
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: http://public.viavid.com/index.php?id=142279 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 24, 2020.

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay Pin: 13712689

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 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 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 plans to assess opportunities outside of traditional markets. 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, 2020

December 31, 2019

ASSETS

(Unaudited)

CURRENT ASSETS

Cash and cash equivalents

$

7,919,545

$

7,358,856

Short-term investments

2,239,256

1,222,053

Short-term investments - other

600,000

2,600,000

Accounts receivable, net

2,397,985

5,597,701

Inventories, net (note 3)

8,780,571

9,571,807

Prepaid expenses and other current assets (note 4)

2,178,682

1,672,422

Income tax receivable

465,828

77,385

Total Current Assets

24,581,867

28,100,224

LONG-TERM ASSETS

Long-term investments

6,450,891

7,399,963

Financing right-of-use asset

61,347

107,991

Property and equipment, net

11,595,366

12,071,019

Intangible assets, net

1,827,553

1,989,782

Goodwill

2,579,381

2,579,381

Total Long-Term Assets

22,514,538

24,148,136

TOTAL ASSETS

$

47,096,405

$

52,248,360

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

Accounts payable

$

980,601

$

2,633,520

Accrued liabilities (note 5)

1,061,515

2,089,391

Current financing lease liability (note 6)

43,024

59,376

Income taxes payable

403,092

Total Current Liabilities

2,085,140

5,185,379

LONG-TERM LIABILITIES

Net deferred income tax liability

484,115

439,275

Long-term financing lease liability (note 6)

20,927

52,120

TOTAL LIABILITIES

2,590,182

5,676,774

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: 51,371,960 issued and 47,959,582 outstanding at September 30, 2020, and 50,824,355 issued and 47,411,977 outstanding at December 31, 2019

51,371

50,824

Treasury stock, at cost

(5,353,019

)

(5,353,019

)

Additional paid-in capital

30,208,082

29,584,172

Accumulated other comprehensive loss

(2,873,765

)

(2,415,460

)

Retained earnings

22,473,554

24,705,069

TOTAL STOCKHOLDERS' EQUITY

44,506,223

46,571,586

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

47,096,405

$

52,248,360

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,

2020

2019

2020

2019

REVENUES (note 9)

Sales of goods, net

$

3,517,280

$

9,251,947

$

14,377,377

$

29,009,837

Sales of services, net

482,826

653,814

1,429,350

1,853,013

Total Revenues

4,000,106

9,905,761

15,806,727

30,862,850

COST OF SALES

Cost of goods sold-product

2,141,888

4,326,335

7,919,959

13,465,989

Cost of goods sold-services

337,795

410,130

1,114,804

1,275,655

Total Cost of Goods Sold

2,479,683

4,736,465

9,034,763

14,741,644

GROSS PROFIT

1,520,423

5,169,296

6,771,964

16,121,206

OPERATING EXPENSES

General and administrative expenses

2,247,614

3,256,023

8,273,925

9,984,251

Research and development

433,800

641,716

1,073,074

1,503,645

Depreciation and amortization expense

168,507

130,105

496,976

357,238

Total Operating Expenses

2,849,921

4,027,844

9,843,975

11,845,134

INCOME (LOSS) FROM OPERATIONS

(1,329,498

)

1,141,452

(3,072,011

)

4,276,072

OTHER INCOME (EXPENSE)

Gain on sale of fixed assets

36,483

34,826

193,938

73,166

Other expense

(48,349

)

(2,065

)

(49,667

)

(3,029

)

Interest income

103,364

38,478

255,289

216,068

Total Other Income

91,498

71,239

399,560

286,205

INCOME (LOSS) BEFORE INCOME TAXES

(1,238,000

)

1,212,691

(2,672,451

)

4,562,277

INCOME TAX BENEFIT (EXPENSE)

180,252

(290,943

)

440,936

(986,407

)

NET INCOME (LOSS)

$

(1,057,748

)

$

921,748

$

(2,231,515

)

$

3,575,870

OTHER COMPREHENSIVE INCOME (LOSS)

Foreign currency translation gain (loss)

$

233,170

$

(91,397

)

$

(336,986

)

$

160,453

Unrealized gains (losses) on investments

(36,840

)

(12,386

)

(121,319

)

105,861

Total Other Comprehensive Income (Loss)

196,330

(103,783

)

(458,305

)

266,314

COMPREHENSIVE INCOME (LOSS)

$

(861,418

)

$

817,965

$

(2,689,820

)

$

3,842,184

BASIC EARNINGS (LOSS) PER SHARE (note 10)

$

(0.02

)

$

0.02

$

(0.05

)

$

0.08

FULLY DILUTED EARNINGS (LOSS) PER SHARE (note 10)

$

(0.02

)

$

0.02

$

(0.05

)

$

0.07

BASIC WEIGHTED AVG NUMBER OF SHARES OUTSTANDING

47,933,318

47,739,192

47,717,114

47,509,357

FULLY DILUTED WEIGHTED AVG NUMBER OF SHARES OUTSTANDING

47,933,318

48,469,246

47,717,114

48,259,900

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,

2020

2019

OPERATING ACTIVITIES

Net income (loss)

$

(2,231,515

)

$

3,575,870

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

Depreciation and amortization expense

860,028

732,396

Gain on sale of fixed assets

(193,938

)

(73,166

)

Bad debt expense

182,179

255,943

Stock awards issued for services

351,943

358,270

Changes in operating assets and liabilities:

Accounts receivable

3,404,439

1,244,104

Income taxes receivable/payable

(404,304

)

(890,523

)

Inventories

714,245

1,711,446

Prepaid expenses

43,099

(586,576

)

Deferred tax asset/liability

44,840

219,138

Accounts payable and accrued liabilities

(2,648,339

)

855,207

Net Cash Provided by Operating Activities

122,677

7,402,109

INVESTING ACTIVITIES

Proceeds from sale of equipment

16,313

75,310

Sale of investments

1,814,070

2,476,227

Purchase of fixed assets

(1,146,400

)

(3,309,191

)

Payments for acquisitions, net of cash acquired

(4,322,722

)

Net Cash Provided by (Used in) Investing Activities

683,983

(5,080,376

)

FINANCING ACTIVITIES

Value of equity awards surrendered by employees for tax liability

(148,879

)

(185,004

)

Cash received in exercise of stock options

2,020

8,870

Purchase of treasury stock

(2,249,745

)

Principal paid towards lease liability

(45,965

)

(53,190

)

Net Cash Used in Financing Activities

(192,824

)

(2,479,069

)

Effect of exchange rate changes on cash

(53,147

)

(468

)

NET CHANGE IN CASH

560,689

(157,804

)

CASH AT BEGINNING OF PERIOD

7,358,856

10,101,932

CASH AT END OF PERIOD

$

7,919,545

$

9,944,128

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

CASH PAID FOR:

Interest

$

4,946

$

4,469

Income taxes

$

402,510

$

1,793,281

NON-CASH FINANCING AND INVESTING ACTIVITIES

Common stock issued in settlement of accrued bonuses

$

419,373

$

379,861

Issuance of common stock - Midflow acquisition

$

$

1,020,000

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