Profire Energy Reports Financial Results for First Quarter Fiscal 2019
May 08 2019 - 4:15PM
Profire Energy, Inc. (NASDAQ: 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 quarter ending March 31, 2019. A
conference call will be held on Thursday, May 9, 2019 at 1:00 p.m.
ET to discuss the results.
Highlights
- Recognized Revenue of $10.8 million
- Net Income of $1.7 Million or $0.03 Per Diluted Share,
- Realized Gross Profit of $5.8 Million or 53.2% of Total
Revenues
- Cash and Liquid Investments of $23.4 Million and Remained
Debt-Free
- Announces Planned Launch of PF2200 Burner Management
System
Fiscal First Quarter 2019 Financial
Results
Total revenues for the period equaled $10.8 million, a 2%
sequential increase over the fourth quarter of 2018. Profire's
legacy business continues to perform well and the Company achieved
higher sales of the PF3100 compared to the previous quarter.
Net income was $1.7 million or $0.03 per diluted
share, compared to a net income of $1.9 million or $0.04 per share
in the first quarter of 2018.
Total operating expenses were approximately $3.6
million, a 6% decrease from the same quarter last year.This change
was primarily due to lower sales commissions from lower revenues
and lower R&D consulting costs as a result of the Company
receiving the SIL certification for its PF3100 burner management
system in July of last year.
Compared with the same quarter last year,
operating expenses for general and administrative decreased 5%,
R&D decreased 13% and depreciation decreased 10%.
Gross profit was $5.8 million or 53.2% of total revenues which
was up from 50.4% in the same quarter last year. This increase was
driven by improvements in inventory reserves, product mix, and
warranty reserves.
Cash and liquid investments totaled $23.4
million at March 31, 2019 compared to $22.6 million at the end of
2018, and the Company continues to operate debt-free. During the
first quarter of 2019 the Company repurchased $1.3 million of
Profire stock pursuant to its previously announced share repurchase
program.
PF2200 Burner Management
System
Today, the Company is also announcing the
planned launch of its next-generation burner management product
line, the PF2200. Development of the PF2200 is nearing completion,
and the Company expects to begin commercial sales of the PF2200 in
the fall of 2019 once field trials have been completed and
certifications have been obtained. The PF2200 implements a number
of user-friendly upgrades and auxiliary features that are not
currently available with the Company’s PF2100 burner management
system.
Management Commentary
"We have planned for the market volatility and
conditions that we are experiencing to start 2019 as we expect
revenues in the first half of 2019 to remain relatively flat with
Q4 2018 and pick up as the year moves along,” said Brenton Hatch,
President and CEO of Profire Energy. "We believe our growth
strategy allows for long-term growth whether or not overall
industry conditions improve significantly. We are making strategic
investments with the intent of increasing revenues in the coming
years. These investments will help Profire remain a technology
leader within the industry."
"As we mentioned last quarter, we still expect
total operating expenses for the full year of 2019 to increase by
roughly 20% when compared to 2018, which may out
pace revenue growth in the short term due to the ongoing industry
challenges,” stated Ryan Oviatt, CFO of Profire. "We plan to invest
both internally and externally in 2019 to take advantages of
opportunities that we believe will increase Profire’s market
potential. This increased investment does not mean that we plan to
move away from core values that have made us successful throughout
the previous years."
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,
May 9, 2019 |
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=134353. 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 May 16, 2019. Toll-free replay number: 1-844-512-2921 |
International replay number: 1-412-317-6671 |
Replay Pin Number: 13690322 |
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’s expected growth, the Company’s
plans to make internal and external investments, the Company’s
expected increase in operating expenses, the Company’s planned
launch of its PF2200 Burner Management System, 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 AdvisorsSteven Hooser,
Partner214-872-2710
PROFIRE ENERGY, INC. AND SUBSIDIARIES |
Condensed Consolidated Balance Sheets |
|
As of |
|
March 31, 2019 |
|
December 31, 2018 |
|
(Unaudited) |
|
|
CURRENT ASSETS |
|
|
|
Cash and cash equivalents |
$ |
11,456,878 |
|
|
$ |
10,101,932 |
|
Accounts receivable, net |
6,444,792 |
|
|
6,885,296 |
|
Inventories, net |
9,062,616 |
|
|
9,659,571 |
|
Income tax receivable |
284,805 |
|
|
173,124 |
|
Short-term investments |
806,941 |
|
|
961,256 |
|
Short-term investments -
other |
3,063,843 |
|
|
3,596,484 |
|
Prepaid expenses & other
current assets |
719,296 |
|
|
473,726 |
|
Total Current Assets |
31,839,171 |
|
|
31,851,389 |
|
|
|
|
|
LONG-TERM ASSETS |
|
|
|
Long-term investments |
8,099,852 |
|
|
7,978,380 |
|
Property and equipment,
net |
8,276,796 |
|
|
8,020,462 |
|
Net deferred tax asset |
— |
|
|
85,092 |
|
Financing right-of-use
asset |
116,128 |
|
|
— |
|
Goodwill |
997,701 |
|
|
997,701 |
|
Intangible assets, net |
430,776 |
|
|
429,956 |
|
Total Long-Term Assets |
17,921,253 |
|
|
17,511,591 |
|
|
|
|
|
TOTAL ASSETS |
$ |
49,760,424 |
|
|
$ |
49,362,980 |
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
Accounts payable |
1,067,595 |
|
|
1,177,985 |
|
Income taxes payable |
1,046,858 |
|
|
1,172,191 |
|
Current financing lease
liability |
65,098 |
|
|
— |
|
Accrued vacation |
373,995 |
|
|
311,435 |
|
Accrued liabilities |
1,003,913 |
|
|
1,445,510 |
|
Total Current Liabilities |
3,557,459 |
|
|
4,107,121 |
|
|
|
|
|
LONG-TERM LIABILITIES |
|
|
|
Net deferred income tax
liability |
38,672 |
|
|
— |
|
Long-term financing lease
liability |
51,674 |
|
|
— |
|
TOTAL LIABILITIES |
3,647,805 |
|
|
4,107,121 |
|
|
|
|
|
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: 49,859,011 issued and
47,308,224 outstanding at March 31, 2019, and 49,707,805 issued and
47,932,305 outstanding at December 31, 2018 |
49,859 |
|
|
49,708 |
|
Treasury stock, at cost |
(3,943,063 |
) |
|
(2,609,485 |
) |
Additional paid-in
capital |
28,331,144 |
|
|
28,027,742 |
|
Accumulated other
comprehensive loss |
(2,677,516 |
) |
|
(2,895,683 |
) |
Retained earnings |
24,352,195 |
|
|
22,683,577 |
|
TOTAL STOCKHOLDERS'
EQUITY |
46,112,619 |
|
|
45,255,859 |
|
|
|
|
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY |
$ |
49,760,424 |
|
|
$ |
49,362,980 |
|
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 (Unaudited) |
|
For the Three Months Ended March 31, |
|
2019 |
|
|
2018 |
|
REVENUES |
|
|
|
Sales of goods, net |
$ |
10,198,635 |
|
|
$ |
11,454,615 |
|
Sales of services, net |
634,423 |
|
|
715,103 |
|
Total Revenues |
10,833,058 |
|
|
12,169,718 |
|
|
|
|
|
COST OF SALES |
|
|
|
Cost of goods sold-product |
4,570,988 |
|
|
5,557,710 |
|
Cost of goods sold-services |
497,198 |
|
|
481,867 |
|
Total Cost of Goods Sold |
5,068,186 |
|
|
6,039,577 |
|
|
|
|
|
GROSS PROFIT |
5,764,872 |
|
|
6,130,141 |
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
General and administrative
expenses |
3,161,530 |
|
|
3,341,903 |
|
Research and development |
349,058 |
|
|
403,220 |
|
Depreciation and amortization
expense |
116,223 |
|
|
128,717 |
|
Total Operating Expenses |
3,626,811 |
|
|
3,873,840 |
|
|
|
|
|
INCOME FROM OPERATIONS |
2,138,061 |
|
|
2,256,301 |
|
|
|
|
|
OTHER INCOME (EXPENSE) |
|
|
|
Gain on sale of fixed assets |
16,930 |
|
|
64,831 |
|
Other expense |
(551 |
) |
|
-1,792 |
|
Interest income |
91,703 |
|
|
50,708 |
|
Total Other Income |
108,082 |
|
|
113,747 |
|
|
|
|
|
INCOME BEFORE INCOME TAXES |
2,246,143 |
|
|
2,370,048 |
|
INCOME TAX EXPENSE |
577,525 |
|
|
493,820 |
|
NET INCOME |
$ |
1,668,618 |
|
|
$ |
1,876,228 |
|
|
|
|
|
OTHER COMPREHENSIVE INCOME
(LOSS) |
|
|
|
Foreign currency translation gain
(loss) |
149,415 |
|
|
(239,129 |
) |
Unrealized gains (losses) on
investments |
68,752 |
|
|
-33,235 |
|
Total Other Comprehensive Income
(Loss) |
218,167 |
|
|
-272,364 |
|
|
|
|
|
COMPREHENSIVE INCOME |
$ |
1,886,785 |
|
|
$ |
1,603,864 |
|
|
|
|
|
BASIC EARNINGS PER SHARE |
$ |
0.04 |
|
|
$ |
0.04 |
|
|
|
|
|
FULLY DILUTED EARNINGS PER
SHARE |
$ |
0.03 |
|
|
$ |
0.04 |
|
|
|
|
|
BASIC WEIGHTED AVG NUMBER OF
SHARES OUTSTANDING |
47,437,424 |
|
|
48,670,305 |
|
|
|
|
|
FULLY DILUTED WEIGHTED AVG NUMBER
OF SHARES OUTSTANDING |
48,084,390 |
|
|
49,744,101 |
|
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 Three Months Ended March 31, |
|
2019 |
|
2018 |
OPERATING ACTIVITIES |
|
|
|
Net income |
$ |
1,668,618 |
|
|
$ |
1,876,228 |
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
Depreciation and amortization expense |
249,889 |
|
|
220,245 |
|
Gain on sale of fixed assets |
(16,930 |
) |
|
(64,731 |
) |
Bad debt expense |
177,906 |
|
|
63,566 |
|
Stock awards issued for services |
445,984 |
|
|
581,619 |
|
Changes in operating assets
and liabilities: |
|
|
|
Changes in accounts receivable |
275,440 |
|
|
(746,179 |
) |
Changes in income taxes receivable/payable |
(234,042 |
) |
|
591,277 |
|
Changes in inventories |
656,988 |
|
|
(863,148 |
) |
Changes in prepaid expenses |
(239,395 |
) |
|
104,008 |
|
Changes in deferred tax asset/liability |
123,764 |
|
|
(111,406 |
) |
Changes in accounts payable and accrued liabilities |
(499,721 |
) |
|
(198,540 |
) |
Net Cash Provided by Operating Activities |
2,608,501 |
|
|
1,452,939 |
|
|
|
|
|
INVESTING ACTIVITIES |
|
|
|
Proceeds from sale of equipment |
18,400 |
|
|
139,763 |
|
Sale (Purchase) of investments |
647,739 |
|
|
(484,142 |
) |
Purchase of fixed assets |
(443,883 |
) |
|
(234,778 |
) |
Net Cash Provided by (Used in) Investing Activities |
222,256 |
|
|
(579,157 |
) |
|
|
|
|
FINANCING ACTIVITIES |
|
|
|
Value of equity awards surrendered by employees for tax
liability |
(143,022 |
) |
|
(83,600 |
) |
Cash received in exercise of stock options |
— |
|
|
74,241 |
|
Purchase of Treasury stock |
(1,333,579 |
) |
|
— |
|
Principal paid towards lease liability |
(15,717 |
) |
|
— |
|
Net Cash Used in Financing
Activities |
(1,492,318 |
) |
|
(9,359 |
) |
|
|
|
|
Effect of exchange rate
changes on cash |
16,507 |
|
|
(113,644 |
) |
|
|
|
|
NET INCREASE IN CASH |
1,354,946 |
|
|
750,779 |
|
CASH AT BEGINNING OF
PERIOD |
10,101,932 |
|
|
11,445,799 |
|
CASH AT END OF PERIOD |
$ |
11,456,878 |
|
|
$ |
12,196,578 |
|
|
|
|
|
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION |
|
|
|
CASH PAID FOR: |
|
|
|
Interest |
1,411 |
|
|
— |
|
Income taxes |
711,524 |
|
|
— |
|
These financial statements should be read in
conjunction with the Form 10-Q and accompanying footnotes
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