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Profire Energy Reports Financial Results for Fiscal Year 2018

Company Recognizes Most Profitable Year in Company History with Net Income Up Over 36% to $6 Million or $0.12 Per Diluted Share

Revenues up 19% YOY to $45.6 Million

LINDON, Utah, March 06, 2019 (GLOBE NEWSWIRE) -- Profire Energy, Inc. (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 year ended December 31, 2018. A conference call will be held on Thursday, March 7, 2019 at 1:00 p.m. EST to discuss the results.

Fiscal 2018 Highlights

  • Recognized Revenue of $45.6 million, The Second-Best Year in Company History

  • Net Income of $6 Million or $0.12 Per Diluted Share, a 36% Increase From the Previous Year, The Most Profitable Year in Company History

  • Realized Gross Profit of $22.9 Million

  • Cash and Liquid Investments of $22.6 Million and Remained Debt-Free

  • Received an Effective Internal Control Opinion from External Auditors

  • Received SIL Certification for the PF3100

Fiscal Year Financial Results

Total revenues for the period equaled $45.6 million or a 19% increase from the previous year. This is the second-best revenue year in Company history. This increase is largely attributed to our ability to leverage our expanding customer base.

Net income was $6 million or $0.12 per diluted share, compared to a net income of $4.4 million or $0.09 per share in the previous year making this the Company's most profitable year ever.

Total operating expenses were approximately $14.9 million or an 11% increase over last year. This change is primarily due to increased labor costs, higher sales commissions stemming from the 19% improvement in revenue, and investments in R&D.

Compared with the last fiscal year, operating expenses for general and administrative increased 12%, R&D increased 14% and depreciation decreased roughly 5%.

Gross profit increased to $22.9 million or 50.2% of total revenues, as compared to $20.3 million or 52.9% of total revenues in the previous year. Gross profit margins fluctuated this year largely due to adjustments in inventory reserves as well as changes in product mix, direct labor costs, and warranty reserves.

Cash and liquid investments totaled $22.6 million at the end of the year and the Company continues to operate debt-free. During the year the Company repurchased $4.7 million of Profire stock.

Management Commentary

“2018 was a banner year for Profire as we were able to achieve our most profitable year in Company history,” said Brenton Hatch, President and CEO of Profire Energy. “We believe that in spite of present market volatility, the future of Profire is exciting. Enabling our five-year growth plan requires investing some of our cash reserves in 2019. We made hires throughout 2018 in order to augment our efforts to provide superior products and unparalleled customer experience and plan to continue making strategic hires and investments in 2019."

“Our efforts in this past year paid off and we are now able to conclude that our internal control environment is operating effectively,” stated Ryan Oviatt, CFO of Profire. “Profire's focus on improving controls over financial reporting, cash management and internal investments are helping us to achieve our long-term goals and five-year growth plan. Throughout 2019 we plan to invest in current products, next-gen product development, international expansion, M&A activity, and other areas that we believe will add significant growth potential and opportunity.”

Conference Call

Profire Energy President and CEO Brenton Hatch and CFO Ryan Oviatt will host the call, followed by a question and answer period.

Date: Thursday, March 7, 2019

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=133489. 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 March 14, 2019.

Toll-free replay number: 1-844-512-2921

International replay number: 1-412-317-6671

Replay Pin Number: 13688145

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 March 7, 2019 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

December 31, 2018

December 31, 2017

CURRENT ASSETS

Cash and cash equivalents

$

10,101,932

$

11,445,799

Accounts receivable, net

6,885,296

8,069,255

Inventories, net

9,659,571

6,465,847

Income tax receivable

173,124

Short term investments

961,256

300,817

Investments - other

3,596,484

4,009,810

Prepaid expenses & other current assets

473,726

437,304

Total Current Assets

31,851,389

30,728,832

LONG-TERM ASSETS

Long-term investments

7,978,380

8,517,182

Property and equipment, net

8,020,462

7,197,499

Deferred tax asset, net

85,092

72,817

Goodwill

997,701

997,701

Intangible assets, net

429,956

494,792

Total Long-Term Assets

17,511,591

17,279,991

TOTAL ASSETS

$

49,362,980

$

48,008,823

CURRENT LIABILITIES

Accounts payable

1,177,985

1,780,977

Income taxes payable

1,172,191

919,728

Accrued vacation

311,435

237,949

Accrued liabilities

1,445,510

1,022,745

Total Current Liabilities

4,107,121

3,961,399

TOTAL LIABILITIES

4,107,121

3,961,399

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: 49,707,805 issued and 47,932,305 outstanding at December 31, 2018 and 53,931,167 issued and 48,606,425 outstanding at December 31, 2017

49,708

53,931

Treasury stock, at cost

(2,609,485

)

(6,890,349

)

Additional paid-in capital

28,027,742

27,535,469

Accumulated other comprehensive loss

(2,895,683

)

(2,200,462

)

Retained earnings

22,683,577

25,548,835

Total Stockholders' Equity

45,255,859

44,047,424

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

49,362,980

$

48,008,823

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

PROFIRE ENERGY, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations and Comprehensive Income

For the Year Ended December 31,

2018

2017

REVENUES

Sales of goods, net

$

42,870,050

$

35,502,510

Sales of services, net

2,744,485

2,783,866

Total Revenues

45,614,535

38,286,376

COST OF SALES

Cost of goods sold-product

20,789,229

16,116,161

Cost of goods sold-services

1,924,126

1,906,308

Total Cost of Goods Sold

22,713,355

18,022,469

GROSS PROFIT

22,901,180

20,263,907

OPERATING EXPENSES

General and administrative expenses

13,029,228

11,676,693

Research and development

1,397,440

1,221,211

Depreciation and amortization expense

500,554

526,583

Total Operating Expenses

14,927,222

13,424,487

INCOME FROM OPERATIONS

7,973,958

6,839,420

OTHER INCOME (EXPENSE)

Gain on sale of fixed assets

129,989

62,492

Other income (expense)

(7,414

)

40,992

Interest income

501,429

180,325

Total Other Income

624,004

283,809

INCOME BEFORE INCOME TAXES

8,597,962

7,123,229

INCOME TAX EXPENSE

2,517,200

2,673,694

NET INCOME

$

6,080,762

$

4,449,535

OTHER COMPREHENSIVE INCOME (LOSS)

Foreign currency translation gain (loss)

$

(660,190

)

$

587,951

Unrealized gains (losses) on investments

(35,031

)

22,330

Total Other Comprehensive Income (Loss)

(695,221

)

610,281

COMPREHENSIVE INCOME

$

5,385,541

$

5,059,816

BASIC EARNINGS PER SHARE

$

0.13

$

0.09

FULLY DILUTED EARNINGS PER SHARE

$

0.12

$

0.09

BASIC WEIGHTED AVG NUMBER OF SHARES OUTSTANDING

48,471,011

49,365,592

FULLY DILUTED WEIGHTED AVG NUMBER OF SHARES OUTSTANDING

49,222,353

49,858,435

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

PROFIRE ENERGY, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

For the Year Ended December 31,

2018

2017

OPERATING ACTIVITIES

Net income

$

6,080,762

$

4,449,535

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

Depreciation and amortization expense

896,681

889,724

Gain on sale of fixed assets

(117,693

)

(62,574

)

Bad debt expense

186,882

262,766

Stock awards issued for services

1,059,000

841,166

Changes in operating assets and liabilities:

Changes in accounts receivable

911,981

(2,591,392

)

Changes in income taxes receivable/payable

71,397

1,040,713

Changes in inventories

(3,417,671

)

1,346,919

Changes in prepaid expenses

(14,301

)

(49,923

)

Changes in deferred tax asset/liability

(12,275

)

(11,876

)

Changes in accounts payable and accrued liabilities

(92,207

)

1,597,753

Net Cash Provided by Operating Activities

5,552,556

7,712,811

INVESTING ACTIVITIES

Proceeds from sale of equipment

219,063

140,462

Purchase of investments

140,356

(334,910

)

Purchase of fixed assets

(1,927,906

)

(611,060

)

Net Cash Used in Investing Activities

(1,568,487

)

(805,508

)

FINANCING ACTIVITIES

Value of equity awards surrendered by employees for tax liability

(737,024

)

(43,139

)

Cash received in exercise of stock options

174,002

111,676

Purchase of Treasury stock

(4,670,134

)

(3,307,544

)

Net Cash Used in Financing Activities

(5,233,156

)

(3,239,007

)

Effect of exchange rate changes on cash

(94,780

)

97,882

NET INCREASE (DECREASE) IN CASH

(1,343,867

)

3,766,178

CASH AT BEGINNING OF PERIOD

11,445,799

7,679,621

CASH AT END OF PERIOD

10,101,932

$

11,445,799

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

CASH PAID FOR:

Interest

Income taxes

2,163,826

1,710,135

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