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 first quarter ending March 31,
2022. A conference call will be held on Wednesday, May 4, 2022, at
8:30 a.m. ET to discuss the results.
First Quarter Summary
- Revenue of
$9.5 million, an 87% increase from prior-year quarter
- Gross margin
improved 630 basis points sequentially to 47.9%
- Net income of
$627,161 or $0.01 per diluted share
- Generated
EBITDA of $1.0 million1
- Repurchased
509,631 shares of stock
“Our first quarter results reflect the continued progress for
the recovery of our end markets and the strategic shift to
diversify our offerings. Revenue increased sequentially for the
fourth consecutive quarter which is significant progress in our
efforts to return to our historical top-line run rate. We also
reported a quarterly net profit for the first time since before the
pandemic began,” said Ryan Oviatt, Co-Chief Executive Officer and
CFO of Profire Energy. “We have successfully managed our inventory
levels to date, however the ongoing labor constraints and broad
supply chain issues combined with another round of stringent COVID
lockdowns in China, could present some challenges in securing
products in the near-term. We remain well-positioned, thanks to our
debt-free balance sheet, to capitalize on opportunities within our
core business, to drive further diversification of our revenue
streams, and to invest in our future.”
First Quarter 2022 Financial
Results
Total revenues for
the period equaled $9.5 million, compared to $8.3 million in the
fourth quarter of 2021 and $5.0 million in the prior-year quarter.
The sequential and year-over-year increase was driven by improving
demand from the COVID-19 pandemic recovery, higher oil prices,
improving rig counts, and consistent execution of our business
strategy.
Gross profit was $4.6 million, compared to $3.4 million in the
fourth quarter of 2021 and $2.2 million in the prior-year quarter.
Gross margin was 47.9% of revenues, compared to 41.6% of revenues
in the prior quarter and 42.7% of revenues in the first quarter of
2021. These increases are primarily due to greater sales activity,
sales price increases implemented at the end of 2021, and customer
and product mix over these periods.
Total operating expenses were $3.9 million, compared to $3.7
million in the fourth quarter of 2021 and $3.0 million in the
year-ago quarter. These increases are being driven by inflation and
the reversal of temporary cost measures implemented in response to
COVID-19.
Compared with the same quarter last year, operating expenses for
G&A increased 33%, R&D increased 20%, and depreciation was
unchanged.
Net income was $627,161 or $0.01 per diluted share, compared to
a net loss of ($145,122) or ($0.00) per share in the fourth quarter
of 2021 and net loss of ($601,500) or ($0.01) per share in the
first quarter last year.
“We are seeing increased levels of interest and drilling
activity from our customers due to oil prices trading at or above
$100 in recent months, including retrofit programs and other
capital projects that were deferred during the previous several
years,” stated Cameron Tidball, Co-CEO of Profire Energy. “We are
adding revenue-generating positions both within and outside the oil
and gas arena, thanks to the continued traction we are seeing for
our products beyond our traditional markets. In addition, we are
investing in R&D, and we continue to review potential joint
ventures and partnerships to further extend Profire’s offering
across North America. We look forward to building on our good start
in 2022 and delivering long-term value to our shareholders.”
Conference Call
Profire Energy Executives will host the call, followed by a
question-and-answer period.Date: Wednesday, May 4, 2022Time: 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://themediaframe.com/mediaframe/webcast.html?webcastid=AC81cFkQThe
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 May 18,
2022.
Toll-free replay number: 1-844-512-2921International replay
number: 1-412-317-6671Replay Pin Number: 10018993
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 and completed several
installations 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; 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, supply chain
constraints, and the Company’s plans to make internal and external
investments. 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, 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 March 31, |
2022 |
|
EBITDA Calculation |
|
Net Income |
$ |
|
627,161 |
|
Add back net income tax expense |
$ |
|
160,442 |
|
Add back net interest expense |
$ |
|
(21,545 |
) |
Add back depreciation and amortization |
$ |
|
281,119 |
|
EBITDA calculated |
$ |
|
1,047,177 |
|
PROFIRE ENERGY, INC. AND SUBSIDIARIES |
Condensed Consolidated Balance Sheets |
|
|
As of |
|
|
March 31, 2022 |
|
December 31, 2021 |
ASSETS |
|
(Unaudited) |
|
|
CURRENT ASSETS |
|
|
|
|
Cash and cash equivalents |
|
$ |
6,879,467 |
|
|
$ |
8,188,270 |
|
Short-term investments |
|
|
454,046 |
|
|
|
1,013,683 |
|
Accounts receivable, net |
|
|
8,137,354 |
|
|
|
6,262,799 |
|
Inventories, net (note 3) |
|
|
7,744,924 |
|
|
|
7,185,248 |
|
Prepaid expenses and other current assets (note 4) |
|
|
1,066,799 |
|
|
|
1,025,276 |
|
Income tax receivable |
|
|
121,407 |
|
|
|
560,445 |
|
Total Current Assets |
|
|
24,403,997 |
|
|
|
24,235,721 |
|
LONG-TERM ASSETS |
|
|
|
|
Net deferred tax asset |
|
|
165,797 |
|
|
|
163,254 |
|
Long-term investments |
|
|
7,852,860 |
|
|
|
8,259,809 |
|
Financing right-of-use asset |
|
|
52,862 |
|
|
|
65,280 |
|
Property and equipment, net |
|
|
11,165,706 |
|
|
|
11,185,539 |
|
Intangible assets, net |
|
|
1,493,455 |
|
|
|
1,549,138 |
|
Goodwill |
|
|
2,579,381 |
|
|
|
2,579,381 |
|
Total Long-Term Assets |
|
|
23,310,061 |
|
|
|
23,802,401 |
|
TOTAL ASSETS |
|
$ |
47,714,058 |
|
|
$ |
48,038,122 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
Accounts payable |
|
$ |
1,505,193 |
|
|
$ |
1,822,559 |
|
Accrued liabilities (note 5) |
|
|
1,694,926 |
|
|
|
1,872,348 |
|
Current financing lease liability (note 6) |
|
|
22,096 |
|
|
|
30,214 |
|
Total Current Liabilities |
|
|
3,222,215 |
|
|
|
3,725,121 |
|
LONG-TERM LIABILITIES |
|
|
|
|
Net deferred income tax liability |
|
|
183,136 |
|
|
|
136,106 |
|
Long-term financing lease liability (note 6) |
|
|
31,401 |
|
|
|
35,912 |
|
TOTAL LIABILITIES |
|
|
3,436,752 |
|
|
|
3,897,139 |
|
|
|
|
|
|
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:
51,860,036 issued and 47,273,496 outstanding at March 31, 2022, and
51,720,142 issued and 47,643,233 outstanding at December 31,
2021 |
|
|
51,860 |
|
|
|
51,720 |
|
Treasury stock, at cost |
|
|
(6,729,856 |
) |
|
|
(6,107,593 |
) |
Additional paid-in capital |
|
|
31,079,446 |
|
|
|
30,819,394 |
|
Accumulated other comprehensive loss |
|
|
(2,229,234 |
) |
|
|
(2,100,467 |
) |
Retained earnings |
|
|
22,105,090 |
|
|
|
21,477,929 |
|
TOTAL STOCKHOLDERS' EQUITY |
|
|
44,277,306 |
|
|
|
44,140,983 |
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
|
$ |
47,714,058 |
|
|
$ |
48,038,122 |
|
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 Ended March 31, |
|
|
|
2022 |
|
|
|
2021 |
|
REVENUES (note 8) |
|
|
|
|
Sales of products, net |
|
$ |
8,878,423 |
|
|
$ |
4,657,535 |
|
Sales of services, net |
|
|
624,717 |
|
|
|
434,814 |
|
Total Revenues |
|
|
9,503,140 |
|
|
|
5,092,349 |
|
|
|
|
|
|
COST OF SALES |
|
|
|
|
Cost of sales - product |
|
|
4,382,700 |
|
|
|
2,537,634 |
|
Cost of sales - services |
|
|
563,736 |
|
|
|
380,028 |
|
Total Cost of Sales |
|
|
4,946,436 |
|
|
|
2,917,662 |
|
|
|
|
|
|
GROSS PROFIT |
|
|
4,556,704 |
|
|
|
2,174,687 |
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
General and administrative |
|
|
3,392,379 |
|
|
|
2,554,536 |
|
Research and development |
|
|
308,316 |
|
|
|
256,891 |
|
Depreciation and amortization |
|
|
167,015 |
|
|
|
167,485 |
|
Total Operating Expenses |
|
|
3,867,710 |
|
|
|
2,978,912 |
|
|
|
|
|
|
INCOME (LOSS) FROM
OPERATIONS |
|
|
688,994 |
|
|
|
(804,225 |
) |
|
|
|
|
|
OTHER INCOME (EXPENSE) |
|
|
|
|
Gain on sale of property and equipment |
|
|
95,842 |
|
|
|
73,901 |
|
Other expense |
|
|
(18,778 |
) |
|
|
(97 |
) |
Interest income |
|
|
21,545 |
|
|
|
21,062 |
|
Total Other Income |
|
|
98,609 |
|
|
|
94,866 |
|
|
|
|
|
|
INCOME (LOSS) BEFORE INCOME
TAXES |
|
|
787,603 |
|
|
|
(709,359 |
) |
|
|
|
|
|
INCOME TAX BENEFIT
(EXPENSE) |
|
|
(160,442 |
) |
|
|
107,859 |
|
|
|
|
|
|
NET INCOME (LOSS) |
|
$ |
627,161 |
|
|
$ |
(601,500 |
) |
|
|
|
|
|
OTHER COMPREHENSIVE INCOME
(LOSS) |
|
|
|
|
Foreign currency translation
gain |
|
$ |
158,359 |
|
|
$ |
139,606 |
|
Unrealized losses on
investments |
|
|
(287,126 |
) |
|
|
(7,974 |
) |
Total Other Comprehensive Income (Loss) |
|
|
(128,767 |
) |
|
|
131,632 |
|
|
|
|
|
|
TOTAL COMPREHENSIVE INCOME
(LOSS) |
|
$ |
498,394 |
|
|
$ |
(469,868 |
) |
|
|
|
|
|
BASIC EARNINGS (LOSS) PER
SHARE |
|
$ |
0.01 |
|
|
$ |
(0.01 |
) |
FULLY DILUTED EARNINGS (LOSS)
PER SHARE |
|
$ |
0.01 |
|
|
$ |
(0.01 |
) |
|
|
|
|
|
BASIC WEIGHTED AVG NUMBER OF
SHARES OUTSTANDING |
|
|
47,481,439 |
|
|
|
47,990,101 |
|
FULLY DILUTED WEIGHTED AVG
NUMBER OF SHARES OUTSTANDING |
|
|
48,536,418 |
|
|
|
47,990,101 |
|
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, |
|
|
2022 |
|
|
|
2021 |
|
OPERATING ACTIVITIES |
|
|
|
Net income (loss) |
$ |
627,161 |
|
|
$ |
(601,500 |
) |
Adjustments to reconcile net
income (loss) to net cash provided by operating activities: |
|
|
|
Depreciation and amortization expense |
|
281,119 |
|
|
|
293,615 |
|
Gain on sale of property and equipment |
|
(95,842 |
) |
|
|
(73,901 |
) |
Bad debt expense |
|
28,453 |
|
|
|
(3,084 |
) |
Stock awards issued for services |
|
138,503 |
|
|
|
125,043 |
|
Changes in operating assets
and liabilities: |
|
|
|
Accounts receivable |
|
(1,663,295 |
) |
|
|
974,602 |
|
Income taxes receivable/payable |
|
439,034 |
|
|
|
(94,597 |
) |
Inventories |
|
(530,568 |
) |
|
|
342,980 |
|
Prepaid expenses and other current assets |
|
49,283 |
|
|
|
906,459 |
|
Deferred tax asset/liability |
|
47,030 |
|
|
|
(707 |
) |
Accounts payable and accrued liabilities |
|
(513,227 |
) |
|
|
(48,245 |
) |
Net Cash Provided by (Used in) Operating Activities |
|
(1,192,349 |
) |
|
|
1,820,665 |
|
|
|
|
|
INVESTING ACTIVITIES |
|
|
|
Proceeds from sale of property and equipment |
|
112,982 |
|
|
|
27,784 |
|
Sale (purchase) of investments |
|
679,636 |
|
|
|
(438,830 |
) |
Purchase of property and equipment |
|
(207,848 |
) |
|
|
(57,825 |
) |
Net Cash Provided by (Used in) Investing Activities |
|
584,770 |
|
|
|
(468,871 |
) |
|
|
|
|
FINANCING ACTIVITIES |
|
|
|
Value of equity awards surrendered by employees for tax
liability |
|
(91,098 |
) |
|
|
(26,629 |
) |
Purchase of treasury stock |
|
(622,263 |
) |
|
|
— |
|
Principal paid towards lease liability |
|
(12,629 |
) |
|
|
(11,227 |
) |
Net Cash Used in Financing Activities |
|
(725,990 |
) |
|
|
(37,856 |
) |
|
|
|
|
Effect of exchange rate
changes on cash |
|
24,766 |
|
|
|
13,179 |
|
|
|
|
|
NET CHANGE IN CASH |
|
(1,308,803 |
) |
|
|
1,327,117 |
|
CASH AT BEGINNING OF
PERIOD |
|
8,188,270 |
|
|
|
9,148,312 |
|
CASH AT END OF PERIOD |
$ |
6,879,467 |
|
|
$ |
10,475,429 |
|
|
|
|
|
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION |
|
|
|
|
|
|
|
CASH PAID FOR: |
|
|
|
Interest |
$ |
697 |
|
|
$ |
1,936 |
|
Income taxes |
$ |
— |
|
|
$ |
— |
|
NON-CASH FINANCING AND
INVESTING ACTIVITIES |
|
|
|
Common stock issued in settlement of accrued bonuses |
$ |
212,787 |
|
|
$ |
— |
|
These financial statements should be read in
conjunction with the Form 10-Q and accompanying footnotes.
1 See “About Non-GAAP Financial Measures” below.
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