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, 2023. A conference call will be held on
Thursday, March 14, 2024, at 8:30 a.m. ET to discuss the results.
Full-year Fiscal 2023 Summary
- Revenue of
$58.2 million, a 27% increase from prior year
- Gross profit
of $30.5 million or 52.5% of total revenues
- Net income of
$10.8 million or $0.22 per diluted share
- Generated
EBITDA of $13.2 million
- Repurchased
1.2 million shares of stock for $2 million
- Cash and
liquid investments of $20 million and remained debt-free
Fourth Quarter Summary
- Revenue of
$14.4 million, compared to $14 million in the prior year
quarter
- Gross profit
of $7.8 million, a 19% increase compared to 4Q22
- Gross margin
of 54.3%, a 730 basis point increase from prior year
- Net income of
$3.3 million, or $0.07 per diluted share
- Generated
EBITDA of $3.1 million
“2023 was a record year for Profire, recording our highest
annual revenue, net income, and EBITDA in company history,” said
Ryan Oviatt, Co-Chief Executive Officer and CFO of Profire Energy.
“We expanded our full-year gross margin and used a portion of our
operating cash flow to repurchase 1.2 million of our outstanding
shares. Our solid balance sheet provides great flexibility for us
to simultaneously invest in our business, repurchase shares when
the market presents the opportunity and pursue other investment
opportunities that will enhance our future, with the ongoing focus
of delivering long-term value for our shareholders.”
Full Year 2023 Financial Results
Total revenues for the year equaled $58.2 million, versus $45.9
million in the prior year. The increase was primarily driven by
improved customer demand and progress in the Company's revenue
diversification efforts.
Gross profit was $30.5 million compared to $21.7 million last
year. Gross margin was 52.5% of total revenues, compared to 47.1%
of revenues in the prior year. The increase was driven by better
fixed cost leverage as a result of the higher revenue base.
Total operating expenses were $18.7 million, or 32% of revenue
versus $16.5 million, or 36% of revenue in the prior year. The
increase is primarily due to inflationary pressures on employee
costs and increased business activity that drives variable costs,
however the decrease as a percent of revenue reflects the Company’s
ability to manage its cost structure while still increasing
business activity.
Compared with last year, operating expenses for G&A
increased 16%, R&D decreased 13% and depreciation decreased
8%.
Net income was $10.8 million or $0.22 per diluted share,
compared to $3.9 million or $0.08 per diluted share last year. This
year’s results include a one-time $828,000, or two cent per diluted
share benefit generated from a reduction adjustment to deferred tax
expense based on a detailed review of our deferred tax
balances.
Over the past two years, Profire implemented several tax
planning strategies that have had a significant benefit on the
Company’ s financial performance and results of operations. These
include filing for and receiving the employee retention credit
through the CARES act, the strategic use of several years of net
operating losses in Profire’s Canadian subsidiary and the deferred
tax true-up noted above. The impact of these tax planning
strategies in 2023 caused operating expenses to be lower by
$760,000, reduced income tax expenses, and an increase to net
income of $1.9 million or four cents per diluted share. However,
even when removing these non-recuring adjustments, 2023 remains the
Company’s best year from an operating income, net income, and
earnings per share perspective.
Cash and liquid investments totaled $20.0 million on December
31, 2023 compared to $16.0 million at the end of 2022, and the
Company continues to operate debt-free.
Fourth Quarter 2023 Financial
Results
Total revenues for
the period equaled $14.4 million, compared to $14.8 million in the
third quarter of 2023 and $14.0 million in the prior-year
quarter.
Gross profit was $7.8 million, compared to $7.5 million in the
third quarter of 2023 and $6.6 million in the prior-year quarter.
Gross margin was 54% of revenues, compared to 50.4% of revenues in
the prior quarter and 47.0% of revenues in the fourth quarter of
2022. The sequential and year-over-year increase in gross profit
and gross margin is due to pricing incentives and better fixed cost
coverage.
Total operating expenses were $5.0 million, compared to $4.9
million in the third quarter of 2023 and $4.3 million in the
year-ago quarter. The year-over-year increase is related to the
inflationary pressures on our business as well as increased
business activity that impacts variable costs.
Compared with the same quarter last year, operating expenses for
G&A increased by 18%, R&D increased 15% and depreciation
decreased by 1%.
Net income was $3.3 million, or $0.07 per diluted share,
compared to net income of $2.0 million or $0.04 per diluted share
in the third quarter of 2023 and $1.8 million or $0.04 per diluted
share in the same quarter last year. This quarter’s results include
the $828,000 or $0.02 per diluted share benefit related to the
deferred tax adjustment noted earlier.
“Our record performance in 2023 was driven through a combination
of continued demand for our legacy products and increased traction
across our diversification strategy, which now represents more than
13% percent of our total revenue, compared to less than one percent
in 2021,” stated Cameron Tidball, Co-CEO of Profire Energy. “Demand
for hydrocarbons remains strong globally and we continue to benefit
from operators playing catch-up on capital expenditures that had
been deferred since the pandemic. We also expect to attract new
users for our applications beyond the oil and gas markets during
the year. Overall, we remain confident about our prospects for 2024
and beyond.”
Conference Call
Profire Energy Executives will host the call, followed by a
question-and-answer period.Date: Thursday, March 14, 2024Time: 8:30
a.m. ET (6:30 a.m. MT)Toll-free dial-in number:
1-855-327-6837International dial-in number: 1-631-891-4304The
conference call will be webcast live and available for replay via
this link:
https://viavid.webcasts.com/starthere.jsp?ei=1653741&tp_key=d0612fee82The
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 1-801-701-8969.
A replay of the call will be available via the dial-in numbers
below after 12:30 p.m. ET on the same day through March 28,
2024.
Toll-free replay number: 1-844-512-2921International replay
number: 1-412-317-6671Replay Pin Number: 10022990
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, attracting new
users beyond the oil and gas market, the Company’s plans to make
internal and external investments, and delivering long-term value
to the Company’s shareholders. 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,
Partner214-872-2710
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.
PROFIRE ENERGY, INC. AND SUBSIDIARIES |
Consolidated Statements of Operations and Comprehensive Income |
|
|
For the Year Ended December 31, 2023 |
|
For the Year Ended December 31, 2022 |
|
|
|
(See note 1) |
REVENUES (note 10) |
|
|
|
Sales of goods, net |
$ |
54,284,295 |
|
|
$ |
42,318,263 |
|
Sales of services, net |
|
3,923,765 |
|
|
|
3,618,380 |
|
Total Revenues |
|
58,208,060 |
|
|
|
45,936,643 |
|
|
|
|
|
COST OF SALES |
|
|
|
Cost of goods sold-product |
|
24,528,345 |
|
|
|
21,425,176 |
|
Cost of goods sold-services |
|
3,147,697 |
|
|
|
2,860,077 |
|
Total Cost of Goods Sold |
|
27,676,042 |
|
|
|
24,285,253 |
|
|
|
|
|
GROSS PROFIT |
|
30,532,018 |
|
|
|
21,651,390 |
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
General and administrative |
|
17,184,917 |
|
|
|
14,776,905 |
|
Research and development |
|
917,123 |
|
|
|
1,051,858 |
|
Depreciation and amortization |
|
575,878 |
|
|
|
628,019 |
|
Total Operating Expenses |
|
18,677,918 |
|
|
|
16,456,782 |
|
|
|
|
|
INCOME FROM OPERATIONS |
|
11,854,100 |
|
|
|
5,194,608 |
|
|
|
|
|
OTHER INCOME (EXPENSE) |
|
|
|
Gain on sale of property and equipment |
|
268,817 |
|
|
|
318,075 |
|
Other income (expense) |
|
(57,088 |
) |
|
|
14,383 |
|
Interest income |
|
390,031 |
|
|
|
177,125 |
|
Interest expense |
|
(9,449 |
) |
|
|
(18,009 |
) |
Total Other Income |
|
592,311 |
|
|
|
491,574 |
|
|
|
|
|
INCOME BEFORE INCOME
TAXES |
|
12,446,411 |
|
|
|
5,686,182 |
|
|
|
|
|
INCOME TAX EXPENSE (note
12) |
|
(1,669,697 |
) |
|
|
(1,738,422 |
) |
|
|
|
|
NET INCOME |
$ |
10,776,714 |
|
|
$ |
3,947,760 |
|
|
|
|
|
OTHER COMPREHENSIVE INCOME
(LOSS) |
|
|
|
Foreign currency translation gain (loss) |
$ |
275,810 |
|
|
$ |
(670,167 |
) |
Unrealized gains (losses) on investments |
|
174,361 |
|
|
|
(524,239 |
) |
Total Other Comprehensive Income (Loss) |
|
450,171 |
|
|
|
(1,194,406 |
) |
|
|
|
|
COMPREHENSIVE INCOME |
$ |
11,226,885 |
|
|
$ |
2,753,354 |
|
|
|
|
|
BASIC EARNINGS PER SHARE (note
13) |
$ |
0.23 |
|
|
$ |
0.08 |
|
FULLY DILUTED EARNINGS PER
SHARE (note 13) |
$ |
0.22 |
|
|
$ |
0.08 |
|
BASIC WEIGHTED AVG NUMBER OF
SHARES OUTSTANDING |
|
47,355,978 |
|
|
|
47,161,101 |
|
FULLY DILUTED WEIGHTED AVG
NUMBER OF SHARES OUTSTANDING |
|
49,127,558 |
|
|
|
48,447,342 |
|
These financial statements should be read in conjunction with the
Form 10-K and accompanying footnotes. |
|
PROFIRE ENERGY, INC. AND SUBSIDIARIES |
Consolidated Balance Sheets |
|
|
As of |
ASSETS |
December 31, 2023 |
|
December 31, 2022 |
CURRENT ASSETS |
|
|
|
Cash and cash equivalents |
$ |
10,767,519 |
|
|
$ |
7,384,578 |
|
Short-term investments (note 2) |
|
2,799,539 |
|
|
|
1,154,284 |
|
Accounts receivable, net |
|
14,013,740 |
|
|
|
10,886,145 |
|
Inventories, net (note 3) |
|
14,059,656 |
|
|
|
10,293,980 |
|
Prepaid expenses and other current assets (note 4) |
|
2,832,262 |
|
|
|
2,314,639 |
|
Total Current Assets |
|
44,472,716 |
|
|
|
32,033,626 |
|
|
|
|
|
LONG-TERM ASSETS |
|
|
|
Net deferred tax asset |
|
496,785 |
|
|
|
— |
|
Long-term investments (note 2) |
|
6,425,582 |
|
|
|
7,503,419 |
|
Lease right-of-use asset (note 8) |
|
432,907 |
|
|
|
120,239 |
|
Property and equipment, net (note 5) |
|
10,782,372 |
|
|
|
10,423,964 |
|
Intangible assets, net (note 6) |
|
1,104,102 |
|
|
|
1,268,907 |
|
Goodwill (note 6) |
|
2,579,381 |
|
|
|
2,579,381 |
|
Total Long-Term Assets |
|
21,821,129 |
|
|
|
21,895,910 |
|
TOTAL ASSETS |
$ |
66,293,845 |
|
|
$ |
53,929,536 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
Accounts payable |
$ |
2,699,556 |
|
|
$ |
2,955,506 |
|
Accrued liabilities (note 7) |
|
4,541,820 |
|
|
|
3,573,994 |
|
Current lease liability (note 8) |
|
130,184 |
|
|
|
53,646 |
|
Income taxes payable |
|
1,723,910 |
|
|
|
205,169 |
|
Total Current Liabilities |
|
9,095,470 |
|
|
|
6,788,315 |
|
LONG-TERM LIABILITIES |
|
|
|
Net deferred income tax liability |
|
52,621 |
|
|
|
488,858 |
|
Long-term lease liability (note 8) |
|
307,528 |
|
|
|
67,883 |
|
TOTAL LIABILITIES |
|
9,455,619 |
|
|
|
7,345,056 |
|
|
|
|
|
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:
53,047,231 issued and 46,803,868 outstanding at December 31, 2023,
and 52,143,901 issued and 47,105,771 outstanding at December 31,
2022 |
|
53,048 |
|
|
|
52,144 |
|
Treasury stock, at cost |
|
(9,324,272 |
) |
|
|
(7,336,323 |
) |
Additional paid-in capital |
|
32,751,749 |
|
|
|
31,737,843 |
|
Accumulated other comprehensive loss |
|
(2,844,702 |
) |
|
|
(3,294,873 |
) |
Retained earnings |
|
36,202,403 |
|
|
|
25,425,689 |
|
TOTAL STOCKHOLDERS' EQUITY |
|
56,838,226 |
|
|
|
46,584,480 |
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY |
$ |
66,293,845 |
|
|
$ |
53,929,536 |
|
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, 2023 |
|
For the Year Ended December 31, 2022 |
OPERATING ACTIVITIES |
|
|
|
Net income |
$ |
10,776,714 |
|
|
$ |
3,947,760 |
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
Depreciation and amortization expense |
|
1,108,962 |
|
|
|
1,101,044 |
|
Gain on sale of property and equipment |
|
(268,817 |
) |
|
|
(318,075 |
) |
Bad debt expense |
|
488,420 |
|
|
|
77,704 |
|
Stock awards issued for services |
|
1,043,740 |
|
|
|
814,769 |
|
Changes in operating assets
and liabilities: |
|
|
|
Accounts receivable |
|
(3,128,051 |
) |
|
|
(4,745,871 |
) |
Income taxes receivable/payable |
|
1,515,843 |
|
|
|
765,650 |
|
Inventories |
|
(3,712,212 |
) |
|
|
(3,240,049 |
) |
Prepaid expenses and other current assets |
|
(480,308 |
) |
|
|
(1,337,076 |
) |
Deferred tax asset/liability |
|
(933,969 |
) |
|
|
512,274 |
|
Accounts payable and accrued liabilities |
|
653,728 |
|
|
|
2,937,947 |
|
Net Cash Provided by Operating Activities |
|
7,064,050 |
|
|
|
516,077 |
|
|
|
|
|
INVESTING ACTIVITIES |
|
|
|
Proceeds from sale of property and equipment |
|
354,840 |
|
|
|
520,068 |
|
Sale (purchase) of investments |
|
(393,057 |
) |
|
|
91,601 |
|
Purchase of property and equipment |
|
(1,228,275 |
) |
|
|
(601,012 |
) |
Net Cash Provided by (Used in) Investing Activities |
|
(1,266,492 |
) |
|
|
10,657 |
|
|
|
|
|
FINANCING ACTIVITIES |
|
|
|
Value of equity awards surrendered by employees for tax
liability |
|
(605,996 |
) |
|
|
(145,930 |
) |
Cash received in exercise of stock options |
|
177,281 |
|
|
|
33,863 |
|
Purchase of treasury stock |
|
(1,987,949 |
) |
|
|
(1,228,730 |
) |
Principal paid towards lease liability |
|
(37,855 |
) |
|
|
(34,214 |
) |
Net Cash Used in Financing Activities |
|
(2,454,519 |
) |
|
|
(1,375,011 |
) |
|
|
|
|
Effect of exchange rate
changes on cash |
|
39,902 |
|
|
|
44,585 |
|
|
|
|
|
NET INCREASE (DECREASE) IN
CASH |
|
3,382,941 |
|
|
|
(803,692 |
) |
CASH AT BEGINNING OF
PERIOD |
|
7,384,578 |
|
|
|
8,188,270 |
|
|
|
|
|
CASH AT END OF PERIOD |
$ |
10,767,519 |
|
|
$ |
7,384,578 |
|
|
|
|
|
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION |
|
|
|
|
|
|
|
CASH PAID FOR: |
|
|
|
Interest |
$ |
9,450 |
|
|
$ |
17,726 |
|
Income taxes |
$ |
1,155,682 |
|
|
$ |
847,712 |
|
NON-CASH FINANCING AND
INVESTING ACTIVITIES: |
|
|
|
Common stock issued in settlement of accrued bonuses |
$ |
378,526 |
|
|
$ |
212,788 |
|
These financial statements should be read in conjunction with the
Form 10-K and accompanying footnotes. |
|
An image accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/ef385693-c44b-4e42-81f6-06f60c4f80d2
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