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Profire Energy Reports Financial Results for Third Quarter Fiscal 2018

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

LINDON, Utah, Nov. 07, 2018 (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 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 expense

667,085

675,223

Gain on sale of fixed assets

(120,825

)

(62,310

)

Bad debt expense

134,901

147,470

Stock awards issued for services

916,795

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/liability

22,564

(139,298

)

Changes in accounts payable and accrued liabilities

1,506,396

588,868

Net Cash Provided by Operating Activities

3,723,193

4,345,335

INVESTING ACTIVITIES

Proceeds from sale of equipment

219,269

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 options

174,002

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 PERIOD

11,445,799

7,553,088

CASH AT END OF PERIOD

8,637,838

$

8,021,845

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

CASH PAID FOR:

Interest

Income taxes

2,164,149

1,282,157

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