Profire Energy Reports Financial Results for Second Quarter 2020
August 05 2020 - 4:15PM
Profire Energy, Inc. (NASDAQ: PFIE), a technology company (the
"Company") which creates, installs and services burner management
solutions in the oil and gas industry, today reported financial
results for its second quarter ending June 30, 2020. A conference
call will be held on Thursday, August 6, 2020 at 1:00 p.m. ET to
discuss the results.
Second Quarter Summary
- Recognized revenue of $4.4 million
- Realized gross profit of $2.1 million or 47.9% of total
revenues
- Net loss of $808,503 or ($0.02) per share
- Cash and liquid investments of $18.1 million and remained
debt-free
“Our second quarter results reflect both a full quarter’s impact
of the COVID-19 global pandemic, which significantly reduced demand
across the oil and gas industry, and the fallout of the price war
between Russia and OPEC, which caused oil futures to turn negative
for the first time in history,” said Ryan Oviatt, Co-CEO and CFO of
Profire Energy. “We responded quickly to these events by reducing
expenses and adjusting the cost structure of our organization
during the quarter. These actions are reflected in our results
through the sequential improvement in gross margin and a nearly
$600,000 reduction in operating expenses from the first quarter,
while maintaining our strong balance sheet.”
Second Quarter 2020 Financial Results
Total revenues for the period equaled $4.4 million, compared to
$7.4 million in the first quarter of 2020, and $10.1 million in the
same period a year ago. The second quarter’s results reflect the
full impact of COVID-19 on consumer demand compared to just a few
weeks in the first quarter, as well as a 53% drop in the average
oil price during the same period, due in part to a significant
price war between Russia and OPEC in the first month of the
quarter.
Gross profit was $2.1 million, compared to $3.2 million in the
first quarter of 2020 and $5.2 million in the year-ago quarter.
Gross margin was 47.9% of revenues, compared to 42.5% of revenues
in previous quarter and 51.2% of revenues in the first quarter of
2019. The sequential gross margin improvement was driven by actions
taken during the quarter to adjust the cost structure of the
company.
Total operating expenses were $3.2 million, compared to $3.8
million in prior quarter and $4.2 million in the same period a year
ago. The sequential and year-over-year decreases 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 23%, R&D decreased 55% and depreciation
increased by 63%.
Net loss was $808,503 or ($0.02) per share, compared to a net
loss of $365,264, or ($0.01) in the first quarter of 2020, and net
income of $1.0 million or $0.02 per diluted share in the same
quarter last year.
Cash and investments totaled $18.1 million at June 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 $469,000. Working capital as of June 30,
2020 was $23.4 million, compared to $22.9 million at the end of
2019.
“Despite turbulent times in our industry, we continue to add
customers who recognize the value our solutions bring in improving
safety and efficiency,” said Cameron Tidball, Co-CEO of Profire
Energy. “We will continue to investigate and analyze opportunities
to diversify our offerings, including the evaluation of select
strategic acquisition targets that provide complementary solutions
or have the potential to expand our customer base, that may arise
through the disruption of the markets.”
Conference Call
Profire Energy Executives will host the call, followed by a
question and answer period. |
Date: Thursday, August 6, 2020 |
Time: 1:00 p.m. ET (11:00 a.m. MT) |
Toll-free dial-in number: 1-855-327-6837 |
International dial-in number: 1-631-891-4304 |
The conference call will be webcast live and available for replay
via this link: http://public.viavid.com/index.php?id=140972. 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 August 20, 2020. |
|
Toll-free replay number: 1-844-512-2921 |
International replay number: 1-412-317-6671 |
Replay Pin Number: 10010507 |
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 possible acquisition opportunities, and the
Company hosting a conference call on August 6, 2020.
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 |
Condensed Consolidated Balance Sheets |
|
|
|
As of |
|
|
June 30,2020 |
|
December 31,2019 |
ASSETS |
|
(Unaudited) |
|
|
CURRENT ASSETS |
|
|
|
|
Cash and cash equivalents |
|
$ |
8,022,237 |
|
|
|
$ |
7,358,856 |
|
|
Short-term investments |
|
2,290,667 |
|
|
|
1,222,053 |
|
|
Short-term investments - other |
|
1,600,000 |
|
|
|
2,600,000 |
|
|
Accounts receivable, net |
|
2,439,296 |
|
|
|
5,597,701 |
|
|
Inventories, net (note 3) |
|
8,996,223 |
|
|
|
9,571,807 |
|
|
Prepaid expenses and other current assets (note 4) |
|
2,144,150 |
|
|
|
1,672,422 |
|
|
Income tax receivable |
|
— |
|
|
|
77,385 |
|
|
Total Current Assets |
|
25,492,573 |
|
|
|
28,100,224 |
|
|
LONG-TERM ASSETS |
|
|
|
|
Long-term investments |
|
6,192,261 |
|
|
|
7,399,963 |
|
|
Financing right-of-use asset |
|
72,914 |
|
|
|
107,991 |
|
|
Property and equipment, net |
|
11,571,961 |
|
|
|
12,071,019 |
|
|
Intangible assets, net |
|
1,883,236 |
|
|
|
1,989,782 |
|
|
Goodwill |
|
2,579,381 |
|
|
|
2,579,381 |
|
|
Total Long-Term Assets |
|
22,299,753 |
|
|
|
24,148,136 |
|
|
TOTAL ASSETS |
|
$ |
47,792,326 |
|
|
|
$ |
52,248,360 |
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
Accounts payable |
|
$ |
685,617 |
|
|
|
$ |
2,633,520 |
|
|
Accrued liabilities (note 5) |
|
1,122,242 |
|
|
|
2,089,391 |
|
|
Current financing lease liability (note 6) |
|
45,411 |
|
|
|
59,376 |
|
|
Income taxes payable |
|
99,481 |
|
|
|
403,092 |
|
|
Total Current Liabilities |
|
1,952,751 |
|
|
|
5,185,379 |
|
|
LONG-TERM LIABILITIES |
|
|
|
|
Net deferred income tax liability |
|
543,441 |
|
|
|
439,275 |
|
|
Long-term financing lease liability (note 6) |
|
30,238 |
|
|
|
52,120 |
|
|
TOTAL LIABILITIES |
|
2,526,430 |
|
|
|
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:
51,325,493 issued and 47,913,115 outstanding at June 30, 2020, and
50,824,355 issued and 47,411,977 outstanding at December 31,
2019 |
|
51,325 |
|
|
|
50,824 |
|
|
Treasury stock, at cost |
|
(5,353,019 |
) |
|
|
(5,353,019 |
) |
|
Additional paid-in capital |
|
30,106,383 |
|
|
|
29,584,172 |
|
|
Accumulated other comprehensive loss |
|
(3,070,095 |
) |
|
|
(2,415,460 |
) |
|
Retained earnings |
|
23,531,302 |
|
|
|
24,705,069 |
|
|
TOTAL STOCKHOLDERS' EQUITY |
|
45,265,896 |
|
|
|
46,571,586 |
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
|
$ |
47,792,326 |
|
|
|
$ |
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 EndedJune 30, |
|
For the Six Months EndedJune 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
REVENUES (note 9) |
|
|
|
|
|
|
|
Sales of goods, net |
$ |
3,999,139 |
|
|
|
$ |
9,559,255 |
|
|
|
$ |
10,860,097 |
|
|
|
$ |
19,757,890 |
|
|
Sales of services, net |
360,340 |
|
|
|
564,776 |
|
|
|
946,524 |
|
|
|
1,199,199 |
|
|
Total Revenues |
4,359,479 |
|
|
|
10,124,031 |
|
|
|
11,806,621 |
|
|
|
20,957,089 |
|
|
|
|
|
|
|
|
|
|
COST OF SALES |
|
|
|
|
|
|
|
Cost of goods sold-product |
1,944,389 |
|
|
|
4,568,666 |
|
|
|
5,778,071 |
|
|
|
9,139,654 |
|
|
Cost of goods sold-services |
328,225 |
|
|
|
368,327 |
|
|
|
777,009 |
|
|
|
865,525 |
|
|
Total Cost of Goods Sold |
2,272,614 |
|
|
|
4,936,993 |
|
|
|
6,555,080 |
|
|
|
10,005,179 |
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT |
2,086,865 |
|
|
|
5,187,038 |
|
|
|
5,251,541 |
|
|
|
10,951,910 |
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
General and administrative expenses |
2,753,773 |
|
|
|
3,566,698 |
|
|
|
6,026,311 |
|
|
|
6,728,228 |
|
|
Research and development |
229,548 |
|
|
|
512,871 |
|
|
|
639,274 |
|
|
|
861,929 |
|
|
Depreciation and amortization expense |
180,997 |
|
|
|
110,910 |
|
|
|
328,469 |
|
|
|
227,133 |
|
|
Total Operating Expenses |
3,164,318 |
|
|
|
4,190,479 |
|
|
|
6,994,054 |
|
|
|
7,817,290 |
|
|
|
|
|
|
|
|
|
|
INCOME (LOSS) FROM
OPERATIONS |
(1,077,453 |
) |
|
|
996,559 |
|
|
|
(1,742,513 |
) |
|
|
3,134,620 |
|
|
|
|
|
|
|
|
|
|
OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
Gain on sale of fixed assets |
157,455 |
|
|
|
21,410 |
|
|
|
157,455 |
|
|
|
38,340 |
|
|
Other expense |
(1,665 |
) |
|
|
(413 |
) |
|
|
(1,318 |
) |
|
|
(964 |
) |
|
Interest income |
77,532 |
|
|
|
85,887 |
|
|
|
151,925 |
|
|
|
177,590 |
|
|
Total Other Income |
233,322 |
|
|
|
106,884 |
|
|
|
308,062 |
|
|
|
214,966 |
|
|
|
|
|
|
|
|
|
|
INCOME (LOSS) BEFORE INCOME
TAXES |
(844,131 |
) |
|
|
1,103,443 |
|
|
|
(1,434,451 |
) |
|
|
3,349,586 |
|
|
|
|
|
|
|
|
|
|
INCOME TAX BENEFIT
(EXPENSE) |
35,628 |
|
|
|
(117,939 |
) |
|
|
260,684 |
|
|
|
(695,464 |
) |
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) |
$ |
(808,503 |
) |
|
|
$ |
985,504 |
|
|
|
$ |
(1,173,767 |
) |
|
|
$ |
2,654,122 |
|
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE INCOME
(LOSS) |
|
|
|
|
|
|
|
Foreign currency translation
gain (loss) |
$ |
375,267 |
|
|
|
$ |
102,435 |
|
|
|
$ |
(570,156 |
) |
|
|
$ |
251,850 |
|
|
Unrealized gains (losses) on
investments |
72,875 |
|
|
|
49,495 |
|
|
|
(84,479 |
) |
|
|
118,247 |
|
|
Total Other Comprehensive Income (Loss) |
448,142 |
|
|
|
151,930 |
|
|
|
(654,635 |
) |
|
|
370,097 |
|
|
|
|
|
|
|
|
|
|
COMPREHENSIVE INCOME
(LOSS) |
$ |
(360,361 |
) |
|
|
$ |
1,137,434 |
|
|
|
$ |
(1,828,402 |
) |
|
|
$ |
3,024,219 |
|
|
|
|
|
|
|
|
|
|
BASIC EARNINGS (LOSS) PER
SHARE (note 10) |
$ |
(0.02 |
) |
|
|
$ |
0.02 |
|
|
|
$ |
(0.02 |
) |
|
|
$ |
0.06 |
|
|
FULLY DILUTED EARNINGS (LOSS)
PER SHARE (note 10) |
$ |
(0.02 |
) |
|
|
$ |
0.02 |
|
|
|
$ |
(0.02 |
) |
|
|
$ |
0.06 |
|
|
|
|
|
|
|
|
|
|
BASIC WEIGHTED AVG NUMBER OF
SHARES OUTSTANDING |
47,723,208 |
|
|
|
47,348,137 |
|
|
|
47,607,825 |
|
|
|
47,392,534 |
|
|
FULLY DILUTED WEIGHTED AVG
NUMBER OF SHARES OUTSTANDING |
47,723,208 |
|
|
|
48,124,208 |
|
|
|
47,607,825 |
|
|
|
48,192,849 |
|
|
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 Six Months EndedJune 30, |
|
2020 |
|
2019 |
OPERATING ACTIVITIES |
|
|
|
Net income (loss) |
$ |
(1,173,767 |
) |
|
|
$ |
2,654,122 |
|
|
Adjustments to reconcile net
income (loss) to net cash provided by operating activities: |
|
|
|
Depreciation and amortization expense |
566,791 |
|
|
|
483,063 |
|
|
Gain on sale of fixed assets |
(153,973 |
) |
|
|
(38,340 |
) |
|
Bad debt expense |
236,005 |
|
|
|
229,792 |
|
|
Stock awards issued for services |
250,198 |
|
|
|
363,841 |
|
|
Changes in operating assets
and liabilities: |
|
|
|
Accounts receivable |
3,248,693 |
|
|
|
983,865 |
|
|
Income taxes receivable/payable |
(1,761 |
) |
|
|
(1,261,267 |
) |
|
Inventories |
445,634 |
|
|
|
1,831,865 |
|
|
Prepaid expenses |
168,718 |
|
|
|
(35,637 |
) |
|
Deferred tax asset/liability |
104,166 |
|
|
|
205,314 |
|
|
Accounts payable and accrued liabilities |
(2,843,685 |
) |
|
|
(115,813 |
) |
|
Net Cash Provided by Operating Activities |
847,019 |
|
|
|
5,300,805 |
|
|
|
|
|
|
INVESTING ACTIVITIES |
|
|
|
Proceeds from sale of equipment |
— |
|
|
|
39,810 |
|
|
Sale of investments |
1,057,404 |
|
|
|
1,109,297 |
|
|
Purchase of fixed assets |
(994,410 |
) |
|
|
(1,429,735 |
) |
|
Payments for acquisitions, net of cash acquired |
— |
|
|
|
(2,088,814 |
) |
|
Net Cash Provided by (Used in) Investing Activities |
62,994 |
|
|
|
(2,369,442 |
) |
|
|
|
|
|
FINANCING ACTIVITIES |
|
|
|
Value of equity awards surrendered by employees for tax
liability |
(148,879 |
) |
|
|
(184,433 |
) |
|
Cash received in exercise of stock options |
2,020 |
|
|
|
6,850 |
|
|
Purchase of treasury stock |
— |
|
|
|
(1,333,578 |
) |
|
Principal paid towards lease liability |
(34,267 |
) |
|
|
(32,185 |
) |
|
Net Cash Used in Financing Activities |
(181,126 |
) |
|
|
(1,543,346 |
) |
|
|
|
|
|
Effect of exchange rate
changes on cash |
(65,506 |
) |
|
|
(2,171 |
) |
|
|
|
|
|
NET INCREASE IN CASH |
663,381 |
|
|
|
1,385,846 |
|
|
CASH AT BEGINNING OF
PERIOD |
7,358,856 |
|
|
|
10,101,932 |
|
|
CASH AT END OF PERIOD |
$ |
8,022,237 |
|
|
|
$ |
11,487,778 |
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION |
|
|
|
|
|
|
|
CASH PAID FOR: |
|
|
|
Interest |
$ |
4,247 |
|
|
|
$ |
2,832 |
|
|
Income taxes |
$ |
— |
|
|
|
$ |
1,793,281 |
|
|
NON-CASH FINANCING AND
INVESTING ACTIVITIES |
|
|
|
Common stock issued in settlement of accrued bonuses |
$ |
419,373 |
|
|
|
$ |
379,861 |
|
|
These financial statements should be read in
conjunction with the Form 10-Q and accompanying footnotes.
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