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 third quarter ending September
30, 2023. A conference call will be held on Thursday, November 9,
2023 at 8:30 a.m. ET to discuss the results.
Third Quarter Summary (comparisons to prior-year
quarter)
- Revenue of
$14.8 million, a 16% increase
- Gross profit
of $7.5 million, a 22% increase
- Gross margin
of 50.4%, a 270-basis point increase
- Net income of
$2.0 million, or $0.04 per diluted share, versus $1.2 million and
$0.02
- Generated
EBITDA of $2.9 million, versus $2.4 million
- Cash and
investments of $17.4 million with no debt
- Repurchased
192,643 shares of stock
Nine-Month Summary (comparisons to prior-year
period)
- Revenue of
$43.8 million, a 37% increase
- Gross margin
of 51.9%, a 470-basis point increase
- Net income of
$7.5 million, or $0.15 per diluted share, versus $2.1 million and
$0.04
- Generated
EBITDA of $10.1 million, versus $4.0 million
“Our third quarter represents the fifth consecutive quarter of
at least $12 million in revenue, and our 2nd highest quarterly
revenue in company history,” said Ryan Oviatt, Co-Chief Executive
Officer and CFO of Profire Energy. “We are on track to report the
best annual revenue in our 21-year history and are optimistic about
long-term prospects for our business. Hydrocarbon demand is
expected to continue to grow in the coming years, which combined
with the strength of oil and gas prices, will likely mean continued
strong performance for Profire over this same period.”
Third Quarter 2023 Financial Results
Total revenues for the period equaled $14.8 million, compared to
$14.4 million in the second quarter of 2023 and $12.8 million in
the prior-year quarter. The sequential and year-over-year increase
was primarily driven by ongoing customer demand and continued
progress in our diversification efforts.
Gross profit was $7.5 million, compared to $7.4 million in the
second quarter and $6.1 million in the third quarter of 2022. Gross
margin was 50.4% of revenues, compared to 51.3% of revenues in the
prior quarter and 47.7% of revenues in the prior-year quarter. The
sequential decrease is related to product mix while the
year-over-year increase reflects the increased fixed cost coverage
from higher revenues and the typical fluctuations in product mix
and inventory and warranty reserves.
Total operating expenses were $4.9 million, compared to $4.2
million in the second quarter of 2023 and $4.0 million in the
year-ago quarter. The sequential and year-over-year increase is
related to a tax credit that benefited both the second quarter of
2023 and third quarter of 2022 in the amount of $760,000. Excluding
the impact of this employee retention tax credit, operating
expenses were roughly flat sequentially and up 13% on a
year-over-year basis. The increase year-over-year is primarily due
to ongoing inflation pressure on our business and headcount growth
to support increased business activity.
Compared with the same quarter last year, operating expenses for
G&A increased 29%, R&D decreased 30% and depreciation
decreased by 5%. The increase in G&A is also a result of the
timing of the tax credit mentioned above.
Net income was $2.0 million, or $0.04 per diluted share,
compared to net income of $2.9 million or $0.06 per diluted share
in the second quarter of 2023 and $1.2 million or $0.02 per diluted
share in the same quarter last year.
“Our strong performance over the past 12 months reflects the
underlying strength of our legacy business and continued traction
across the breadth of our diversification strategy,” stated Cameron
Tidball, Co-CEO of Profire Energy. “Our pipeline of diversification
opportunities for 2024 is stronger than it was at this point for
2023 and expect to gain more acceptance for our offerings as
companies place additional emphasis on emissions reduction and more
efficient operations. We continue to believe the business prospects
for Profire remain strong and we look forward to delivering
long-term value to our shareholders.”
Conference Call
Profire Energy Executives will host the call, followed by a
question-and-answer period.
Date: Thursday, November 9, 2023Time: 8:30 a.m. ET (6:30 a.m.
MT)Toll-free dial-in number: 1-855-327-6837International dial-in
number: 1-631-891-4304
The conference call will be webcast live and available for
replay via this link:
https://viavid.webcasts.com/starthere.jsp?ei=1611697&tp_key=59eedbc77eThe
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 Athena Kefalas at 1-801-796-8969.
A replay of the call will be available via the dial-in numbers
below after 1:00 p.m. ET on the sameday through November 23,
2023.
Toll-free replay number: 1-844-512-2921International replay
number: 1-412-317-6671Replay Pin Number: 10021755
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, in recent years, we have completed many
installations of our burner-management solutions in other
industries that we believe will be applicable as we expand our
addressable market over time. 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 the Company’s expected growth, the Company’s
expected revenues from diversification opportunities, the Company’s
results based on additional emphasis on emissions reduction and
more efficient operations, and achieving the Company’s best annual
revenue in our 21-year history. 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 & CFO(801) 796-5127
Three Part AdvisorsSteven Hooser, PartnerJohn
Beisler, Managing Director214-872-2710
About Non-GAAP Financial Measures
To supplement our consolidated financial statements, which
statements are prepared and presented in accordance with GAAP, we
use the following non-GAAP financial measure of earnings before
interest, taxes, depreciation and amortization (“EBITDA”). The
presentation of this financial information is not intended to be
considered in isolation or as a substitute for, or superior to, the
financial information prepared and presented in accordance with
GAAP.
We use this non-GAAP financial measure for financial and
operational decision making and as a means to evaluate
period-to-period comparisons. Our management believes that this
non-GAAP financial measure provides meaningful supplemental
information regarding our performance. We believe that both
management and investors benefit from referring to this non-GAAP
financial measure in assessing our performance and when planning,
forecasting, and analyzing future periods. We believe this non-GAAP
financial measure is useful to investors both because it allows for
greater transparency with respect to key metrics used by management
in its financial and operational decision making. The
Following is a tabular presentation of EBITDA, including a
reconciliation to net income which the Company believes to be the
most directly comparable US GAAP financial measure.
|
9/30/2023 |
9/30/2022 |
9/30/2023 |
9/30/2022 |
EBITDA
Calculation: |
3 months |
3 months |
9 Months |
9 Months |
Net Income |
$ |
2,039,390 |
|
|
$ |
1,210,748 |
|
|
$ |
7,486,168 |
|
|
$ |
2,122,738 |
|
add back net income tax expense |
$ |
611,008 |
|
|
$ |
958,300 |
|
|
$ |
2,061,851 |
|
|
$ |
1,145,919 |
|
add back net interest expense |
$ |
(69,727 |
) |
|
$ |
(44,029 |
) |
|
$ |
(249,641 |
) |
|
$ |
(67,572 |
) |
add back depreciation and amortization |
$ |
274,208 |
|
|
$ |
272,204 |
|
|
$ |
822,204 |
|
|
$ |
831,036 |
|
EBITDA calculated |
$ |
2,854,879 |
|
|
$ |
2,397,223 |
|
|
$ |
10,120,582 |
|
|
$ |
4,032,121 |
|
PROFIRE ENERGY, INC. AND SUBSIDIARIES |
Condensed Consolidated Balance Sheets |
|
|
As of |
|
|
September 30, 2023 |
|
December 31, 2022 |
ASSETS |
|
(Unaudited) |
|
|
CURRENT ASSETS |
|
|
|
|
Cash and cash equivalents |
|
$ |
8,338,863 |
|
|
$ |
7,384,578 |
|
Short-term investments |
|
|
2,795,040 |
|
|
|
1,154,284 |
|
Accounts receivable, net |
|
|
13,253,470 |
|
|
|
10,886,145 |
|
Inventories, net (note 3) |
|
|
13,531,652 |
|
|
|
10,293,980 |
|
Prepaid expenses and other current assets (note 4) |
|
|
2,744,172 |
|
|
|
2,314,639 |
|
Total Current Assets |
|
|
40,663,197 |
|
|
|
32,033,626 |
|
LONG-TERM ASSETS |
|
|
|
|
Long-term investments |
|
|
6,220,703 |
|
|
|
7,503,419 |
|
Financing lease right-of-use asset |
|
|
136,332 |
|
|
|
120,239 |
|
Property and equipment, net |
|
|
10,650,384 |
|
|
|
10,423,964 |
|
Intangible assets, net |
|
|
1,143,480 |
|
|
|
1,268,907 |
|
Goodwill |
|
|
2,579,381 |
|
|
|
2,579,381 |
|
Total Long-Term Assets |
|
|
20,730,280 |
|
|
|
21,895,910 |
|
TOTAL ASSETS |
|
$ |
61,393,477 |
|
|
$ |
53,929,536 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
Accounts payable |
|
$ |
1,193,876 |
|
|
$ |
2,955,506 |
|
Accrued liabilities (note 5) |
|
|
3,760,890 |
|
|
|
3,573,994 |
|
Current financing lease liability (note 6) |
|
|
65,321 |
|
|
|
53,646 |
|
Income taxes payable |
|
|
669,431 |
|
|
|
205,169 |
|
Total Current Liabilities |
|
|
5,689,518 |
|
|
|
6,788,315 |
|
LONG-TERM LIABILITIES |
|
|
|
|
Net deferred income tax liability |
|
|
955,256 |
|
|
|
488,858 |
|
Long-term financing lease liability (note 6) |
|
|
74,495 |
|
|
|
67,883 |
|
TOTAL LIABILITIES |
|
|
6,719,269 |
|
|
|
7,345,056 |
|
|
|
|
|
|
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:
52,949,566 issued and 47,671,720 outstanding at September 30, 2023,
and 52,143,901 issued and 47,105,771 outstanding at December 31,
2022 |
|
|
52,952 |
|
|
|
52,144 |
|
Treasury stock, at cost |
|
|
(7,675,637 |
) |
|
|
(7,336,323 |
) |
Additional paid-in capital |
|
|
32,734,069 |
|
|
|
31,737,843 |
|
Accumulated other comprehensive loss |
|
|
(3,349,033 |
) |
|
|
(3,294,873 |
) |
Retained earnings |
|
|
32,911,857 |
|
|
|
25,425,689 |
|
TOTAL STOCKHOLDERS' EQUITY |
|
|
54,674,208 |
|
|
|
46,584,480 |
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
|
$ |
61,393,477 |
|
|
$ |
53,929,536 |
|
|
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 Income and Comprehensive
Income (Loss) |
(Unaudited) |
|
|
For the Three Months Ended September 30, |
|
For the Nine Months Ended September 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
(See Note 1) |
|
|
|
(See Note 1) |
REVENUES (note 8) |
|
|
|
|
|
|
|
|
Sales of products, net |
|
$ |
13,970,065 |
|
|
$ |
11,895,881 |
|
|
$ |
41,201,461 |
|
|
$ |
29,634,986 |
|
Sales of services, net |
|
|
858,871 |
|
|
|
933,457 |
|
|
|
2,624,514 |
|
|
|
2,330,639 |
|
Total Revenues |
|
|
14,828,936 |
|
|
|
12,829,338 |
|
|
|
43,825,975 |
|
|
|
31,965,625 |
|
|
|
|
|
|
|
|
|
|
COST OF SALES |
|
|
|
|
|
|
|
|
Cost of sales - products |
|
|
6,551,986 |
|
|
|
5,960,311 |
|
|
|
18,796,499 |
|
|
|
14,873,075 |
|
Cost of sales - services |
|
|
799,866 |
|
|
|
750,151 |
|
|
|
2,304,838 |
|
|
|
2,013,825 |
|
Total Cost of Sales |
|
|
7,351,852 |
|
|
|
6,710,462 |
|
|
|
21,101,337 |
|
|
|
16,886,900 |
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT |
|
|
7,477,084 |
|
|
|
6,118,876 |
|
|
|
22,724,638 |
|
|
|
15,078,725 |
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
General and administrative |
|
|
4,572,460 |
|
|
|
3,538,541 |
|
|
|
12,487,783 |
|
|
|
10,878,734 |
|
Research and development |
|
|
215,359 |
|
|
|
309,566 |
|
|
|
734,894 |
|
|
|
818,823 |
|
Depreciation and amortization |
|
|
145,662 |
|
|
|
152,876 |
|
|
|
428,644 |
|
|
|
479,473 |
|
Total Operating Expenses |
|
|
4,933,481 |
|
|
|
4,000,983 |
|
|
|
13,651,321 |
|
|
|
12,177,030 |
|
|
|
|
|
|
|
|
|
|
INCOME FROM OPERATIONS |
|
|
2,543,603 |
|
|
|
2,117,893 |
|
|
|
9,073,317 |
|
|
|
2,901,695 |
|
|
|
|
|
|
|
|
|
|
OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
|
Gain on sale of assets |
|
|
17,350 |
|
|
|
12,887 |
|
|
|
251,768 |
|
|
|
323,570 |
|
Other expense |
|
|
19,718 |
|
|
|
(5,761 |
) |
|
|
(26,704 |
) |
|
|
(24,180 |
) |
Interest income |
|
|
74,165 |
|
|
|
45,107 |
|
|
|
255,865 |
|
|
|
86,959 |
|
Interest expense |
|
|
(4,438 |
) |
|
|
(1,078 |
) |
|
|
(6,226 |
) |
|
|
(19,387 |
) |
Total Other Income |
|
|
106,795 |
|
|
|
51,155 |
|
|
|
474,703 |
|
|
|
366,962 |
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME
TAXES |
|
|
2,650,398 |
|
|
|
2,169,048 |
|
|
|
9,548,020 |
|
|
|
3,268,657 |
|
|
|
|
|
|
|
|
|
|
INCOME TAX EXPENSE |
|
|
(611,008 |
) |
|
|
(958,300 |
) |
|
|
(2,061,851 |
) |
|
|
(1,145,919 |
) |
|
|
|
|
|
|
|
|
|
NET INCOME |
|
$ |
2,039,390 |
|
|
$ |
1,210,748 |
|
|
$ |
7,486,169 |
|
|
$ |
2,122,738 |
|
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE LOSS |
|
|
|
|
|
|
|
|
Foreign currency translation
loss |
|
$ |
(301,642 |
) |
|
$ |
(591,282 |
) |
|
$ |
(28,838 |
) |
|
$ |
(723,209 |
) |
Unrealized losses on
investments |
|
|
(71,193 |
) |
|
|
(172,802 |
) |
|
|
(25,322 |
) |
|
|
(594,596 |
) |
Total Other Comprehensive Loss |
|
|
(372,835 |
) |
|
|
(764,084 |
) |
|
|
(54,160 |
) |
|
|
(1,317,805 |
) |
|
|
|
|
|
|
|
|
|
COMPREHENSIVE INCOME |
|
$ |
1,666,555 |
|
|
$ |
446,664 |
|
|
$ |
7,432,009 |
|
|
$ |
804,933 |
|
|
|
|
|
|
|
|
|
|
BASIC EARNINGS PER SHARE |
|
$ |
0.04 |
|
|
$ |
0.03 |
|
|
$ |
0.16 |
|
|
$ |
0.04 |
|
FULLY DILUTED EARNINGS PER
SHARE |
|
$ |
0.04 |
|
|
$ |
0.02 |
|
|
$ |
0.15 |
|
|
$ |
0.04 |
|
|
|
|
|
|
|
|
|
|
BASIC WEIGHTED AVG NUMBER OF
SHARES OUTSTANDING |
|
|
47,521,238 |
|
|
|
47,036,012 |
|
|
|
47,364,445 |
|
|
|
47,201,611 |
|
FULLY DILUTED WEIGHTED AVG
NUMBER OF SHARES OUTSTANDING |
|
|
49,504,024 |
|
|
|
48,558,207 |
|
|
|
49,314,304 |
|
|
|
48,761,346 |
|
|
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, |
|
|
2023 |
|
|
|
2022 |
|
OPERATING ACTIVITIES |
|
|
|
Net income |
$ |
7,486,169 |
|
|
$ |
2,122,738 |
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
Depreciation and amortization expense |
|
822,204 |
|
|
|
831,036 |
|
Gain on sale of property and equipment |
|
(251,768 |
) |
|
|
(323,570 |
) |
Bad debt expense |
|
420,883 |
|
|
|
40,948 |
|
Stock awards issued for services |
|
878,392 |
|
|
|
605,955 |
|
Changes in operating assets
and liabilities: |
|
|
|
Accounts receivable |
|
(2,360,696 |
) |
|
|
(2,620,155 |
) |
Income taxes receivable/payable |
|
464,256 |
|
|
|
1,130,931 |
|
Inventories |
|
(3,245,588 |
) |
|
|
(3,190,546 |
) |
Prepaid expenses and other current assets |
|
(437,023 |
) |
|
|
(1,668,442 |
) |
Deferred tax asset/liability |
|
466,398 |
|
|
|
307,663 |
|
Accounts payable and accrued liabilities |
|
(1,574,995 |
) |
|
|
1,566,810 |
|
Net Cash Provided by (Used in) Operating Activities |
|
2,668,232 |
|
|
|
(1,196,632 |
) |
|
|
|
|
INVESTING ACTIVITIES |
|
|
|
Proceeds from sale of property and equipment |
|
328,350 |
|
|
|
549,574 |
|
Purchase of investments |
|
(383,520 |
) |
|
|
(133,371 |
) |
Purchase of property and equipment |
|
(974,070 |
) |
|
|
(370,791 |
) |
Net Cash Provided by (Used in) Investing Activities |
|
(1,029,240 |
) |
|
|
45,412 |
|
|
|
|
|
FINANCING ACTIVITIES |
|
|
|
Value of equity awards surrendered by employees for tax
liability |
|
(502,307 |
) |
|
|
(94,802 |
) |
Cash received in exercise of stock options |
|
178,195 |
|
|
|
31,084 |
|
Purchase of treasury stock |
|
(339,313 |
) |
|
|
(1,228,731 |
) |
Principal paid toward lease liability |
|
(26,617 |
) |
|
|
(28,145 |
) |
Net Cash Used in Financing Activities |
|
(690,042 |
) |
|
|
(1,320,594 |
) |
|
|
|
|
Effect of exchange rate
changes on cash |
|
5,335 |
|
|
|
(76,591 |
) |
|
|
|
|
NET CHANGE IN CASH |
|
954,285 |
|
|
|
(2,548,405 |
) |
CASH AT BEGINNING OF
PERIOD |
|
7,384,578 |
|
|
|
8,188,270 |
|
CASH AT END OF PERIOD |
$ |
8,338,863 |
|
|
$ |
5,639,865 |
|
|
|
|
|
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION |
|
|
|
|
|
|
|
CASH PAID FOR: |
|
|
|
Interest |
$ |
6,227 |
|
|
$ |
2,331 |
|
Income taxes |
$ |
1,126,750 |
|
|
$ |
21,000 |
|
NON-CASH FINANCING AND
INVESTING ACTIVITIES |
|
|
|
Common stock issued in settlement of accrued bonuses |
$ |
378,526 |
|
|
$ |
212,787 |
|
|
|
|
|
|
|
|
|
These financial statements should be read in
conjunction with the Form 10-Q and accompanying footnotes.
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