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, 2021. A conference call will be held on
Wednesday, March 9, 2022 at 8:30 a.m. ET to discuss the results.
Fourth Quarter Summary
- Revenue of $8.3 million, a 47% increase from prior-year
quarter
- Gross profit of $3.4 million or 41.6% of total revenues
- Net loss of $145,123 or ($0.00) per share
- Generated EBITDA1 of $40,951
- Repurchased 664,531 shares of stock
Full-year Fiscal 2021 Summary
- Revenue of $26.4 million, a 23% increase from the
prior-year
- Gross profit of $11.4 million or 43.3% of total revenues
- Net loss of $1.1 million or ($0.02) per share
- Cash flow from operations of $648,927
- Cash and liquid investments of $17.5 million and remained
debt-free
“The fourth quarter represents our third
consecutive quarter of revenue growth coming out of the pandemic.
In fact, revenue in the fourth quarter exceeded our pre-pandemic
top-line results from the fourth quarter of 2019,” said Ryan
Oviatt, Co-Chief Executive Officer and CFO of Profire Energy. “I am
pleased that we have been able to generate operating cash flow
while maintaining our strong balance sheet, which remains debt
free. We believe we are well positioned to capitalize on our
significant customer base of our core business as we continue to
find new markets which we can serve to provide long-term value for
our shareholders.”
_______________1 See “About Non-GAAP Financial
Measures” below.
Fourth Quarter 2021 Financial
Results
Total revenues for the period equaled $8.3
million, compared to $6.9 million in the third quarter of 2021 and
$5.7 million in the prior-year quarter. The sequential and
year-over-year increase was primarily driven by improving demand
from the COVID-19 pandemic recovery, higher oil prices, and the
success and progress in the strategic growth segments of our
business.
Gross profit was $3.4 million, compared to $3.1
million in the third quarter of 2021 and $2.8 million in the
prior-year quarter. Gross margin was 41.6% of revenues, compared to
44.9% of revenues in the prior quarter and 48.8% of revenues in the
fourth quarter of 2020. The increased in gross profit is due to
higher revenue, while the sequential and year-over-year gross
margin decrease reflects product mix fluctuations and inflationary
pressures.
Total operating expenses were $3.7 million,
compared to $3.4 million in the third quarter of 2021 and $2.8
million in the year-ago quarter. The increase is related to the
reversal of temporary cost measures implemented in response to
COVID-19 in the prior year and continuing cost inflation in
2021.
Operating expense for G&A increased 8%,
R&D decreased 7%, and depreciation and amortization increased
58% as compared to the previous quarter. When compared to the same
quarter last year, operating expenses for G&A increased 36%,
R&D increased 20% and depreciation and amortization increased
by 55%.
Net loss was $145,123 or ($0.00) per share,
compared to net income of $92,246 or $0.00 per diluted share in the
third quarter of 2021 and net income of $55,918 or $0.00 per
diluted share in the same quarter last year.
Full Year 2021 Financial
Results
Total revenues for the year equaled $26.4 million,
versus $21.5 million in the prior year. The increase was primarily
driven by greater demand related to the recovery from the COVID-19
pandemic and a 74% increase in the average oil price during the
year.
Gross profit was $11.4 million compared to $9.5
million last year. Gross margin was 43.3% of total revenues,
compared to 44.4% of revenues in the prior year. The decrease in
gross margin was driven by changes in product and service sales
mix.
Total operating expenses were $13.4 million versus
$12.6 million in the prior year. The increase is primarily due to
an increase in employee costs due to the reversal of actions taken
to reduce the company’s cost structure in response to the economic
impacts of COVID-19 in addition to the inflationary pressures of
2021.
Compared with last year, operating expenses for
G&A increased 8%, R&D decreased 14% and depreciation
increased 14%.
Net loss was $1.1 million or ($0.02) per share,
compared to a net loss of $2.2 million or ($0.05) per share last
year.
Cash and liquid investments totaled $17.5 million
on December 31, 2021, compared to $17.6 million at the end of 2020,
and the Company continues to operate debt-free.
“We are encouraged by the continued recovery of
our business, including our first $8 million revenue quarter since
the COVID-19 pandemic,” stated Cameron Tidball, Co-CEO of Profire
Energy. “While oil prices continue to be favorable our customers
have remained patient on capital deployments creating pent-up
demand for our products. We are starting to see positive signs
including drilling, plans for upgrades as well as industry
consolidation activity which has new buyers looking to modernize
the assets they have acquired. While our core business is steadily
returning, we have remained on the offense by diversifying our
customer base both inside and outside of oil and gas. We have
expanded our burner management product offerings, fostered new
sales partnerships, and added salespeople for both our core and new
business opportunities. We look forward to 2022 and our ability to
capitalize on the strategic moves that we made during the pandemic
to grow our business.”
Conference Call
Profire Energy Executives will host the call,
followed by a question-and-answer period.
Date: Wednesday, March 9, 2022Time: 8:30 a.m.
ET (6:30 a.m. MT)Toll-free dial-in number:
1-877-705-6003International dial-in number: 1-201-493-6725
The conference call will be webcast live and
available for replay via this link:
https://viavid.webcasts.com/starthere.jsp?ei=1531897&tp_key=34f13256e7
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 11:30 a.m. ET on the same day
through March 23, 2022.
Toll-free replay number:
1-844-512-2921International replay number: 1-412-317-6671Replay Pin
Number: 13727420
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 the Company’s expected growth and demand for
products, the Company’s plans to make internal and external
investments, and the availability of Company resources to make
beneficial investments in 2022 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, Co-CEO CFO (801) 796-5127
Three Part Advisors Steven
Hooser, Partner 214-872-2710
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.
For the three Months Ended December 31, |
|
2021 |
|
|
|
2020 |
|
EBITDA Calculation |
|
|
|
Net Income |
$ |
(145,123 |
) |
|
$ |
55,918 |
|
Add back net income tax expense |
$ |
(47,358 |
) |
|
$ |
(42,631 |
) |
Add back net interest expense |
$ |
(50,503 |
) |
|
$ |
74,035 |
|
Add back depreciation and amortization |
$ |
283,935 |
|
|
$ |
316,679 |
|
EBITDA calculated |
$ |
40,951 |
|
|
$ |
404,001 |
|
|
|
|
|
|
|
|
|
PROFIRE ENERGY, INC. AND SUBSIDIARIES |
Consolidated Balance Sheets |
|
|
As of |
ASSETS |
|
December 31, 2021 |
|
December 31, 2020 |
CURRENT ASSETS |
|
|
|
|
Cash and cash equivalents |
|
$ |
8,188,270 |
|
|
$ |
9,148,312 |
|
Short-term investments (note 2) |
|
|
1,013,683 |
|
|
|
2,388,601 |
|
Accounts receivable, net |
|
|
6,262,799 |
|
|
|
3,719,508 |
|
Inventories, net (note 3) |
|
|
7,185,248 |
|
|
|
8,414,772 |
|
Prepaid expenses and other current assets (note 4) |
|
|
1,025,276 |
|
|
|
1,678,428 |
|
Income tax receivable |
|
|
560,445 |
|
|
|
486,154 |
|
Total Current Assets |
|
|
24,235,721 |
|
|
|
25,835,775 |
|
|
|
|
|
|
LONG-TERM ASSETS |
|
|
|
|
Net deferred tax asset |
|
|
163,254 |
|
|
|
— |
|
Long-term investments (note 2) |
|
|
8,259,809 |
|
|
|
6,064,294 |
|
Financing right-of-use asset |
|
|
65,280 |
|
|
|
50,094 |
|
Property and equipment, net (note 5) |
|
|
11,185,539 |
|
|
|
12,021,811 |
|
Intangible assets, net (note 6) |
|
|
1,549,138 |
|
|
|
1,771,870 |
|
Goodwill (note 6) |
|
|
2,579,381 |
|
|
|
2,579,381 |
|
Total Long-Term Assets |
|
|
23,802,401 |
|
|
|
22,487,450 |
|
TOTAL ASSETS |
|
$ |
48,038,122 |
|
|
$ |
48,323,225 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
Accounts payable |
|
$ |
1,822,559 |
|
|
$ |
1,178,979 |
|
Accrued liabilities (note 7) |
|
|
1,872,348 |
|
|
|
1,196,870 |
|
Current financing lease liability (note 8) |
|
|
30,214 |
|
|
|
39,451 |
|
Total Current Liabilities |
|
|
3,725,121 |
|
|
|
2,415,300 |
|
LONG-TERM LIABILITIES |
|
|
|
|
Net deferred income tax liability |
|
|
136,106 |
|
|
|
522,870 |
|
Long-term financing lease liability (note 8) |
|
|
35,912 |
|
|
|
12,669 |
|
TOTAL LIABILITIES |
|
|
3,897,139 |
|
|
|
2,950,839 |
|
|
|
|
|
|
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:
51,720,142 issued and 47,643,233 outstanding at December 31, 2021,
and 51,384,961 issued and 47,972,583 outstanding at December 31,
2020 |
|
|
51,720 |
|
|
|
51,385 |
|
Treasury stock, at cost |
|
|
(6,107,593 |
) |
|
|
(5,353,019 |
) |
Additional paid-in capital |
|
|
30,819,394 |
|
|
|
30,293,472 |
|
Accumulated other comprehensive loss |
|
|
(2,100,467 |
) |
|
|
(2,148,924 |
) |
Retained earnings |
|
|
21,477,929 |
|
|
|
22,529,472 |
|
TOTAL STOCKHOLDERS' EQUITY |
|
|
44,140,983 |
|
|
|
45,372,386 |
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
|
$ |
48,038,122 |
|
|
$ |
48,323,225 |
|
|
|
|
|
|
|
|
|
|
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, 2021 |
|
For the Year Ended December 31, 2020 |
REVENUES (note 11) |
|
|
|
|
Sales of goods, net |
|
$ |
23,690,994 |
|
|
$ |
19,395,639 |
|
Sales of services, net |
|
|
2,665,182 |
|
|
|
2,062,970 |
|
Total Revenues |
|
|
26,356,176 |
|
|
|
21,458,609 |
|
|
|
|
|
|
COST OF SALES |
|
|
|
|
Cost of goods sold-product |
|
|
12,825,906 |
|
|
|
10,378,367 |
|
Cost of goods sold-services |
|
|
2,129,255 |
|
|
|
1,554,041 |
|
Total Cost of Goods Sold |
|
|
14,955,161 |
|
|
|
11,932,408 |
|
|
|
|
|
|
GROSS PROFIT |
|
|
11,401,015 |
|
|
|
9,526,201 |
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
General and administrative |
|
|
11,533,496 |
|
|
|
10,641,122 |
|
Research and development |
|
|
1,120,080 |
|
|
|
1,299,103 |
|
Depreciation and amortization |
|
|
762,439 |
|
|
|
666,187 |
|
Total Operating Expenses |
|
|
13,416,015 |
|
|
|
12,606,412 |
|
|
|
|
|
|
LOSS FROM OPERATIONS |
|
|
(2,015,000 |
) |
|
|
(3,080,211 |
) |
|
|
|
|
|
OTHER INCOME (EXPENSE) |
|
|
|
|
Gain on sale of fixed assets |
|
|
192,183 |
|
|
|
306,871 |
|
Other income (expense) |
|
|
8,715 |
|
|
|
(67,078 |
) |
Interest income |
|
|
133,201 |
|
|
|
181,254 |
|
Total Other Income |
|
|
334,099 |
|
|
|
421,047 |
|
|
|
|
|
|
LOSS BEFORE INCOME TAXES |
|
|
(1,680,901 |
) |
|
|
(2,659,164 |
) |
|
|
|
|
|
INCOME TAX BENEFIT (note 12) |
|
|
629,358 |
|
|
|
483,567 |
|
|
|
|
|
|
NET LOSS |
|
$ |
(1,051,543 |
) |
|
$ |
(2,175,597 |
) |
|
|
|
|
|
OTHER COMPREHENSIVE INCOME (LOSS) |
|
|
|
|
Foreign currency translation gain |
|
$ |
54,006 |
|
|
$ |
240,013 |
|
Unrealized gains (losses) on investments |
|
|
(5,549 |
) |
|
|
26,523 |
|
Total Other Comprehensive Income |
|
|
48,457 |
|
|
|
266,536 |
|
|
|
|
|
|
COMPREHENSIVE LOSS |
|
$ |
(1,003,086 |
) |
|
$ |
(1,909,061 |
) |
|
|
|
|
|
BASIC LOSS PER SHARE (note 13) |
|
$ |
(0.02 |
) |
|
$ |
(0.05 |
) |
FULLY DILUTED LOSS PER SHARE (note 13) |
|
$ |
(0.02 |
) |
|
$ |
(0.05 |
) |
BASIC WEIGHTED AVG NUMBER OF SHARES OUTSTANDING |
|
|
48,070,581 |
|
|
|
47,778,063 |
|
FULLY DILUTED WEIGHTED AVG NUMBER OF SHARES OUTSTANDING |
|
|
48,070,581 |
|
|
|
47,778,063 |
|
|
|
|
|
|
|
|
|
|
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, 2021 |
|
For the Year Ended December 31, 2020 |
OPERATING ACTIVITIES |
|
|
|
|
Net loss |
|
$ |
(1,051,543 |
) |
|
$ |
(2,175,597 |
) |
Adjustments to reconcile net loss to net cash provided by operating
activities: |
|
|
|
|
Depreciation and amortization expense |
|
|
1,255,647 |
|
|
|
1,176,707 |
|
Gain on sale of fixed assets |
|
|
(192,183 |
) |
|
|
(306,871 |
) |
Bad debt expense |
|
|
15,979 |
|
|
|
184,293 |
|
Stock awards issued for services |
|
|
567,077 |
|
|
|
443,127 |
|
Changes in operating assets and liabilities: |
|
|
|
|
Accounts receivable |
|
|
(2,595,483 |
) |
|
|
2,268,435 |
|
Income taxes receivable/payable |
|
|
(101,990 |
) |
|
|
(404,345 |
) |
Inventories |
|
|
1,247,004 |
|
|
|
1,216,200 |
|
Prepaid expenses and other current assets |
|
|
705,575 |
|
|
|
157,053 |
|
Deferred tax asset/liability |
|
|
(524,791 |
) |
|
|
83,595 |
|
Accounts payable and accrued liabilities |
|
|
1,323,635 |
|
|
|
(2,378,197 |
) |
Net Cash Provided by Operating Activities |
|
|
648,927 |
|
|
|
264,400 |
|
|
|
|
|
|
INVESTING ACTIVITIES |
|
|
|
|
Proceeds from sale of property and equipment |
|
|
177,851 |
|
|
|
514,448 |
|
Sale (purchase) of investments |
|
|
(826,827 |
) |
|
|
2,799,547 |
|
Purchase of property and equipment |
|
|
(168,527 |
) |
|
|
(1,547,331 |
) |
Net Cash Provided by (Used in) Investing Activities |
|
|
(817,503 |
) |
|
|
1,766,664 |
|
|
|
|
|
|
FINANCING ACTIVITIES |
|
|
|
|
Value of equity awards surrendered by employees for tax
liability |
|
|
(46,873 |
) |
|
|
(154,659 |
) |
Cash received in exercise of stock options |
|
|
6,053 |
|
|
|
2,020 |
|
Purchase of treasury stock |
|
|
(754,574 |
) |
|
|
— |
|
Principal paid towards lease liability |
|
|
(40,745 |
) |
|
|
(57,796 |
) |
Net Cash Used in Financing Activities |
|
|
(836,139 |
) |
|
|
(210,435 |
) |
|
|
|
|
|
Effect of exchange rate changes on cash |
|
|
44,673 |
|
|
|
(31,173 |
) |
|
|
|
|
|
NET INCREASE (DECREASE) IN CASH |
|
|
(960,042 |
) |
|
|
1,789,456 |
|
CASH AT BEGINNING OF PERIOD |
|
|
9,148,312 |
|
|
|
7,358,856 |
|
|
|
|
|
|
CASH AT END OF PERIOD |
|
$ |
8,188,270 |
|
|
$ |
9,148,312 |
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION |
|
|
|
|
|
|
|
|
|
CASH PAID FOR: |
|
|
|
|
Interest |
|
$ |
3,205 |
|
|
$ |
6,090 |
|
Income taxes |
|
$ |
17,150 |
|
|
$ |
402,510 |
|
NON-CASH FINANCING AND INVESTING ACTIVITIES: |
|
|
|
|
Common stock issued in settlement of accrued bonuses |
|
$ |
— |
|
|
$ |
419,373 |
|
|
|
|
|
|
|
|
|
|
These financial statements should be read in
conjunction with the Form 10-K and accompanying footnotes.
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