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 fourth quarter and full fiscal
year ending December 31, 2020. A conference call will be held on
Thursday, March 11, 2021 at 1:00 p.m. ET to discuss the results.
Fourth Quarter Summary
- Recognized
revenue of $5.7 million
- Realized gross
profit of $2.8 million or 48.7% of total revenues
- Sequential
gross margin improvement
- Net income of
$55,918 or $0.00 per diluted share
- Generated
$141,723 of cash flow from operations
Full-year Fiscal 2020 Summary
- Recognized
revenue of $21.5 million
- Realized gross
profit of $9.5 million or 44.4% of total revenues
- Reduced
operating expenses by $3.8 million
- Net loss of
$2.2 million or ($0.05) per share
- Cash and
liquid investments of over $17.6 million and remained
debt-free
“The combination of lower demand, as a result of the COVID-19
pandemic, and excess supply, resulting in historically low crude
oil prices in the second quarter, made 2020 the most challenging
year in our Company’s history. We responded swiftly to adjust our
operating cost structure, and reduced SG&A expenses by $3.8
million for the full year. We also generated full-year positive
operating cash flow while remaining debt free,” said Ryan Oviatt,
Co-Chief Executive Officer and CFO of Profire Energy.
Fourth Quarter 2020 Financial Results
Total revenues for the period equaled $5.7 million, compared to
$4.0 million in the third quarter of 2020 and $8.1 million in the
prior-year quarter. The sequential increase was primarily driven by
improving demand caused by higher oil prices in the fourth quarter,
with the year-over-year change attributable to lower demand due to
the COVID-19 pandemic.
Gross profit was $2.8 million, compared to $1.5 million in the
third quarter of 2020 and $3.4 million in the prior-year quarter.
Gross margin was 48.7% of revenues, compared to 38.0% of revenues
in the prior quarter and 42.0% of revenues in the fourth quarter of
2020. The sequential improvement was due to a higher level of
product sales, with the year-over-year differences due to inventory
write-offs in 2019.
Total operating expenses of $2.8 million, was flat quarter over
quarter and down significantly from $4.5 million in the year-ago
quarter. The year-over-year improvement was the result of actions
taken to reduce expenses and adjust the company’s cost structure in
response to COVID-19.
Compared with the same quarter last year, operating expenses for
G&A decreased 32%, R&D decreased 47% and depreciation
decreased by 73%.
Net income was $55,918 or $0.00 per diluted share, compared to a
loss of $1.1 million or ($0.02) per share in the third quarter of
2020 and a net loss of $1.6 million or ($0.03) per share in the
same quarter last year.
Full Year 2020 Financial Results
Total revenues for the year equaled $21.5 million, versus $39.0
million in the prior year. This decrease was primarily driven by
lower demand caused by the COVID-19 pandemic and a 31.4% drop in
the average oil price during the same period.
Gross profit was $9.5 million which was down from $19.5 million
last year. Gross margin was 44.4% of total revenues, compared to
50.1% of revenues in the prior year. The decrease was driven by
product mix changes and by lower fixed cost coverage due to the
decrease in revenues.
Total operating expenses were $12.6 million, a $3.8 million
reduction from the prior year. This decrease is primarily due to
actions taken to reduce expenses and the Company’s cost structure
in response to COVID-19.
Compared with last year, operating expenses for G&A
decreased 21%, R&D decreased 33% and depreciation decreased
32%.
Net loss was $2.2 million or ($0.05) per share, compared to a
net income of $2.0 million or $0.04 per diluted share last
year.
Cash and liquid investments totaled $17.6 million at December
31, 2020 compared to $18.6 million at the end of 2019, and the
Company continues to operate debt-free.
“Though challenging, 2020 represented strong gains for Profire
in terms of customer acquisition within our traditional space, as
well as to new users in agriculture, aviation, infrastructure and
renewable industries,” stated Cameron Tidball, Co-CEO of Profire
Energy. “We plan and expect to continue to prove the validity and
fit for our products both in our expanded traditional markets as
well as in additional industries as we broaden our installation
base and engage with new channel partners.”
Conference Call
Profire Energy Executives will host the call, followed by a
question and answer period.Date: Thursday, March 11, 2021Time:
1:00 p.m. ET (11:00 a.m. MT)Toll-free dial-in number:
1-877-705-6003International dial-in number: 1-201-493-6725The
conference call will be webcast live and available for replay via
this link: http://public.viavid.com/index.php?id=143713. 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 March 25,
2021.
Toll-free replay number: 1-844-512-2921International replay
number: 1-412-317-6671Replay Pin Number: 13716903
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; 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 entry into different industries and hosting a
quarterly earnings call. 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 and CFO(801) 796-5127
Three Part AdvisorsSteven Hooser,
Partner214-872-2710
PROFIRE ENERGY, INC. AND SUBSIDIARIES |
Consolidated Balance Sheets |
|
As of |
ASSETS |
December 31,2020 |
|
December 31,2019 |
CURRENT ASSETS |
|
|
|
Cash and cash equivalents |
$ |
9,148,312 |
|
|
$ |
7,358,856 |
|
Short-term investments (note 2) |
2,388,601 |
|
|
1,222,053 |
|
Short-term investments - other (note 2) |
— |
|
|
2,600,000 |
|
Accounts receivable, net |
3,719,508 |
|
|
5,597,701 |
|
Inventories, net (note 3) |
8,414,772 |
|
|
9,571,807 |
|
Prepaid expenses and other current assets (note 4) |
1,678,428 |
|
|
1,672,422 |
|
Income tax receivable |
486,154 |
|
|
77,385 |
|
Total Current Assets |
25,835,775 |
|
|
28,100,224 |
|
|
|
|
|
LONG-TERM ASSETS |
|
|
|
Long-term investments (note 2) |
6,064,294 |
|
|
7,399,963 |
|
Financing right-of-use asset |
50,094 |
|
|
107,991 |
|
Property and equipment, net (note 5) |
12,021,811 |
|
|
12,071,019 |
|
Intangible assets, net (note 6) |
1,771,870 |
|
|
1,989,782 |
|
Goodwill (note 6) |
2,579,381 |
|
|
2,579,381 |
|
Total Long-Term Assets |
22,487,450 |
|
|
24,148,136 |
|
TOTAL ASSETS |
$ |
48,323,225 |
|
|
$ |
52,248,360 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
Accounts payable |
$ |
1,178,979 |
|
|
$ |
2,633,520 |
|
Accrued liabilities (note 7) |
1,196,870 |
|
|
2,089,391 |
|
Current financing lease liability (note 8) |
39,451 |
|
|
59,376 |
|
Income taxes payable |
— |
|
|
403,092 |
|
Total Current Liabilities |
2,415,300 |
|
|
5,185,379 |
|
LONG-TERM LIABILITIES |
|
|
|
Net deferred income tax liability |
522,870 |
|
|
439,275 |
|
Long-term financing lease liability (note 8) |
12,669 |
|
|
52,120 |
|
TOTAL LIABILITIES |
2,950,839 |
|
|
5,676,774 |
|
|
|
|
|
STOCKHOLDERS' EQUITY (note
9) |
|
|
|
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:
51,384,961 issued and 47,972,583 outstanding at December 31, 2020,
and 50,824,355 issued and 47,411,977 outstanding at December 31,
2019 |
51,385 |
|
|
50,824 |
|
Treasury stock, at cost |
(5,353,019 |
) |
|
(5,353,019 |
) |
Additional paid-in capital |
30,293,472 |
|
|
29,584,172 |
|
Accumulated other comprehensive loss |
(2,148,924 |
) |
|
(2,415,460 |
) |
Retained earnings |
22,529,472 |
|
|
24,705,069 |
|
TOTAL STOCKHOLDERS' EQUITY |
45,372,386 |
|
|
46,571,586 |
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
48,323,225 |
|
|
$ |
52,248,360 |
|
These financial statements should be read in
conjunction with the Form 10-K and accompanying footnotes.
PROFIRE ENERGY, INC. AND SUBSIDIARIES |
Consolidated Statements of Operations and Comprehensive Income |
|
For the Year Ended December 31, 2020 |
|
For the Year EndedDecember 31, 2019 |
REVENUES (note 11) |
|
|
|
Sales of goods, net |
$ |
19,395,639 |
|
|
$ |
36,208,153 |
|
Sales of services, net |
2,062,970 |
|
|
2,773,160 |
|
Total Revenues |
21,458,609 |
|
|
38,981,313 |
|
|
|
|
|
COST OF SALES |
|
|
|
Cost of goods sold-product |
10,378,367 |
|
|
17,587,664 |
|
Cost of goods sold-services |
1,554,041 |
|
|
1,865,290 |
|
Total Cost of Goods Sold |
11,932,408 |
|
|
19,452,954 |
|
|
|
|
|
GROSS PROFIT |
9,526,201 |
|
|
19,528,359 |
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
General and administrative expenses |
10,641,122 |
|
|
13,454,195 |
|
Research and development |
1,299,103 |
|
|
1,933,112 |
|
Depreciation and amortization expense |
666,187 |
|
|
976,652 |
|
Total Operating Expenses |
12,606,412 |
|
|
16,363,959 |
|
|
|
|
|
INCOME (LOSS) FROM
OPERATIONS |
(3,080,211 |
) |
|
3,164,400 |
|
|
|
|
|
OTHER INCOME (EXPENSE) |
|
|
|
Gain on sale of fixed assets |
306,871 |
|
|
114,641 |
|
Other income (expense) |
(67,078 |
) |
|
5,044 |
|
Interest income |
181,254 |
|
|
283,476 |
|
Total Other Income |
421,047 |
|
|
403,161 |
|
|
|
|
|
INCOME (LOSS) BEFORE INCOME
TAXES |
(2,659,164 |
) |
|
3,567,561 |
|
|
|
|
|
INCOME TAX BENEFIT (EXPENSE)
(Note 13) |
483,567 |
|
|
(1,546,069 |
) |
|
|
|
|
NET INCOME (LOSS) |
$ |
(2,175,597 |
) |
|
$ |
2,021,492 |
|
|
|
|
|
OTHER COMPREHENSIVE INCOME
(LOSS) |
|
|
|
Foreign currency translation gain |
$ |
240,013 |
|
|
$ |
335,695 |
|
Unrealized gains on investments |
26,523 |
|
|
144,528 |
|
Total Other Comprehensive Income |
266,536 |
|
|
480,223 |
|
|
|
|
|
COMPREHENSIVE INCOME
(LOSS) |
$ |
(1,909,061 |
) |
|
$ |
2,501,715 |
|
|
|
|
|
BASIC EARNINGS (LOSS) PER
SHARE (note 14) |
$ |
(0.05 |
) |
|
$ |
0.04 |
|
FULLY DILUTED EARNINGS (LOSS)
PER SHARE (note 14) |
$ |
(0.05 |
) |
|
$ |
0.04 |
|
BASIC WEIGHTED AVG NUMBER OF
SHARES OUTSTANDING |
47,778,063 |
|
|
47,490,937 |
|
FULLY DILUTED WEIGHTED AVG
NUMBER OF SHARES OUTSTANDING |
47,778,063 |
|
|
48,133,749 |
|
These financial statements should be read in
conjunction with the Form 10-K and accompanying footnotes.
PROFIRE ENERGY, INC. AND SUBSIDIARIES |
Consolidated Statements of Cash Flows |
|
For the Year Ended December 31, 2020 |
|
For the Year Ended December 31, 2019 |
OPERATING ACTIVITIES |
|
|
|
Net income (loss) |
$ |
(2,175,597 |
) |
|
$ |
2,021,492 |
|
Adjustments to reconcile net
income (loss) to net cash provided by operating activities: |
|
|
|
Depreciation and amortization expense |
1,176,707 |
|
|
1,467,007 |
|
Gain on sale of fixed assets |
(306,871 |
) |
|
(114,641 |
) |
Bad debt expense |
184,293 |
|
|
315,256 |
|
Stock awards issued for services |
443,127 |
|
|
390,826 |
|
Changes in operating assets
and liabilities: |
|
|
|
Accounts receivable |
2,268,435 |
|
|
1,965,207 |
|
Income taxes receivable/payable |
(404,345 |
) |
|
(665,649 |
) |
Inventories |
1,216,200 |
|
|
1,630,632 |
|
Prepaid expenses and other current assets |
157,053 |
|
|
(1,184,385 |
) |
Deferred tax asset/liability |
83,595 |
|
|
524,367 |
|
Accounts payable and accrued liabilities |
(2,378,197 |
) |
|
1,363,090 |
|
Net Cash Provided by Operating Activities |
264,400 |
|
|
7,713,202 |
|
|
|
|
|
INVESTING ACTIVITIES |
|
|
|
Proceeds from sale of fixed assets |
514,448 |
|
|
116,785 |
|
Sale of investments |
2,799,547 |
|
|
1,494,568 |
|
Purchase of fixed assets |
(1,547,331 |
) |
|
(4,664,619 |
) |
Payments for acquisitions, net of cash acquired |
— |
|
|
(4,384,175 |
) |
Net Cash Provided by (Used in) Investing Activities |
1,766,664 |
|
|
(7,437,441 |
) |
|
|
|
|
FINANCING ACTIVITIES |
|
|
|
Value of equity awards surrendered by employees for tax
liability |
(154,659 |
) |
|
(242,497 |
) |
Cash received in exercise of stock options |
2,020 |
|
|
9,356 |
|
Purchase of treasury stock |
— |
|
|
(2,743,534 |
) |
Principal paid towards lease liability |
(57,796 |
) |
|
(73,628 |
) |
Net Cash Used in Financing Activities |
(210,435 |
) |
|
(3,050,303 |
) |
|
|
|
|
Effect of exchange rate
changes on cash |
(31,173 |
) |
|
31,466 |
|
|
|
|
|
NET INCREASE (DECREASE) IN
CASH |
1,789,456 |
|
|
(2,743,076 |
) |
CASH AT BEGINNING OF
PERIOD |
7,358,856 |
|
|
10,101,932 |
|
|
|
|
|
CASH AT END OF PERIOD |
$ |
9,148,312 |
|
|
$ |
7,358,856 |
|
|
|
|
|
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION |
|
|
|
|
|
|
|
CASH PAID FOR: |
|
|
|
Interest |
$ |
6,090 |
|
|
$ |
6,497 |
|
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-K and accompanying footnotes.
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