August 7, 2019 - 4:20 PM EDT
Print Email Article Font Down Font Up Charts

Profire Energy Reports Financial Results for Second Quarter Fiscal 2019

Company recognizes $10.1 million in revenues, 51.2% gross margin,  Acquired Two Additional Companies, and increases Share Repurchase Program

LINDON, Utah, Aug. 07, 2019 (GLOBE NEWSWIRE) -- Profire Energy, Inc. (NASDAQ: PFIE), a technology company (the "Company") which creates, installs and services burner and chemical management solutions in the oil and gas industry, today reported financial results for its quarter ending June 30, 2019. A conference call will be held on Thursday, August 8, 2019 at 1:00 p.m. ET to discuss the results.

Highlights

  • Recognized Revenue of $10.1 million
  • Net Income of $986,000 or $0.02 Per Diluted Share,
  • Realized Gross Profit of $5.2 Million or 51.2% of Total Revenues
  • Cash and Liquid Investments of over $23 Million and Remained Debt-Free
  • Increased Share Repurchase Program by $2 million

Second Quarter 2019 Financial Results
               
Total revenues for the period equaled $10.1 million, an 11% decrease over the same period a year ago. This decrease was primarily driven by negative macro industry trends including a 12% drop in the average oil price during the same period.

Net income was $986,000 or $0.02 per diluted share, compared to a net income of $1.7 million or $0.03 per diluted share in the same quarter last year.

Total operating expenses were approximately $4.1 million, a 10% increase from the same quarter last year. This increase is primarily due to an increase in wages, professional fees related to acquisition activity, and certifications and development of the PF2200 product.

Compared with the same quarter last year, operating expenses for G&A increased  6%, R&D increased 62% and depreciation increased 14%.

Gross profit was $5.2 million or 51.2% of total revenues which was down from 52.1% in the same quarter last year. The fluctuation in gross profit margin was due to product mix changes, direct labor costs, and adjustments in our inventory and warranty reserves.

Cash and liquid investments totaled just over $23 million at June 30, 2019 compared to $22.6 million at the end of 2018, and the Company continues to operate debt-free.

Within the Quarter the Company closed on an agreement to acquire Millstream Energy Products for total compensation of roughly $2.5 million US. Subsequent to the end of the second quarter, the Company closed on a Member Interest Purchase Agreement with Midflow Services, LLC, on August 5, 2019, for total compensation of roughly $2.4 million cash and $1 million worth of the Company’s restricted stock.

The Company announced today that it will continue the stock repurchase program and its Board of  Directors has allocated an additional $2 million towards the existing program, which will remain in effect until October 31, 2019.

Management Commentary

"When analyzing M&A opportunities, we are looking for companies that provide complementary products, improve product development, broaden industry expertise, expand market share, and leverage our strong customer relationships and sales network. We are very excited about both of our recent acquisitions of Millstream and Midflow and believe they fit within our long-term strategy,” said Brenton Hatch, President and CEO of Profire Energy. "We anticipated the current market volatility in 2019 and believe our investment strategies, including acquisitions and product development are crucial to Profire’s growth in the coming years. We will continue to thoughtfully analyze additional strategic opportunities while we focus on the strategic integration of Midflow and Millstream to ensure these acquisitions are value accretive."

"Total cash spend for both the Millstream and Midflow acquisitions was just under $5 million US with expected additional annual revenue of $3.5 to $5.5 million in the coming years. Profire still maintains sufficient cash on hand to continue to react quickly to strategic opportunities,” stated Ryan Oviatt, CFO of Profire. "We are also well-positioned to allocate some of our cash on hand to continue the stock repurchase program. This demonstrates our ongoing commitment to provide value to our shareholders.”

Conference Call

Profire Energy President and CEO Brenton Hatch and CFO Ryan Oviatt will host the call, followed by a question and answer period.
Date: Thursday, August 8, 2019
Time: 1:00 p.m. ET (11:00 a.m. MT)
Toll-free dial-in number: 1-877-705-6003
International dial-in number: 1-201-493-6725
The conference call will be webcast live and available for replay via this link:
http://public.viavid.com/index.php?id=135689. 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 22, 2019.

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay Pin Number: 13693316

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 and chemical injection systems are increasingly becoming part of their solution. Profire Energy has offices in Lindon, Utah; Victoria, Texas; Homer, Pennsylvania; Greeley, Colorado; Millersburg, Ohio; and Spruce Grove, 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 recent acquisitions, the Company’s plans to make internal and external investments, and the availability of Company resources to make beneficial investments in 2019 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, CFO
(801) 796-5127

Three Part Advisors
Steven Hooser, Partner
214-872-2710

               

PROFIRE ENERGY, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
  As of
  June 30, 2019 December 31, 2018
  (Unaudited)  
CURRENT ASSETS    
Cash and cash equivalents $11,487,778  $10,101,932 
Short-term investments 726,782  961,256 
Short-term investments - other 2,400,000  3,596,484 
Accounts receivable, net 6,395,332  6,885,296 
Inventories, net 9,071,479  9,659,571 
Prepaid expenses & other current assets 512,292  473,726 
Income tax receivable 473,093  173,124 
Total Current Assets 31,066,756  31,851,389 
LONG-TERM ASSETS    
Net deferred tax asset   85,092 
Long-term investments 8,433,185  7,978,380 
Financing right-of-use asset 149,484   
Property and equipment, net 9,108,234  8,020,462 
Goodwill 997,701  997,701 
Intangible assets, net 1,699,312  429,956 
Total Long-Term Assets 20,387,916  17,511,591 
TOTAL ASSETS $51,454,672  $49,362,980 
     
CURRENT LIABILITIES    
Accounts payable $1,415,824  $1,177,985 
Accrued vacation 373,995  311,435 
Accrued liabilities 1,679,279  1,445,510 
Current financing lease liability 76,559   
Income taxes payable 199,792  1,172,191 
Total Current Liabilities 3,745,449  4,107,121 
LONG-TERM LIABILITIES    
Net deferred income tax liability 120,222   
Long-term financing lease liability 76,382   
TOTAL LIABILITIES 3,942,053  4,107,121 
     
STOCKHOLDERS' EQUITY    
Preferred shares: $0.001 par value, 10,000,000 shares authorized:  no shares issued or outstanding    
Common shares: $0.001 par value, 100,000,000 shares authorized: 50,016,979 issued and 47,466,192
 outstanding at June 30, 2019, and 49,707,805 issued and 47,932,305 outstanding at December 31, 2018
 50,017  49,708 
Treasury stock, at cost (3,943,063) (2,609,485)
Additional paid-in capital 28,593,552  28,027,742 
Accumulated other comprehensive loss (2,525,586) (2,895,683)
Retained earnings 25,337,699  22,683,577 
TOTAL STOCKHOLDERS' EQUITY 47,512,619  45,255,859 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $51,454,672  $49,362,980 

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 
(Unaudited) 
 For the Three Months Ended June 30, For the Six Months Ended June 30,
 2019  2018  2019  2018 
REVENUES       
Sales of goods, net$9,559,255  $10,724,409  $19,757,890  $22,179,024 
Sales of services, net564,776  615,352  1,199,199  1,330,454 
Total Revenues10,124,031  11,339,761  20,957,089  23,509,478 
        
COST OF SALES       
Cost of goods sold-product4,568,666  4,959,539  9,139,654  10,517,249 
Cost of goods sold-services368,327  471,555  865,525  953,422 
Total Cost of Goods Sold4,936,993  5,431,094  10,005,179  11,470,671 
        
GROSS PROFIT5,187,038  5,908,667  10,951,910  12,038,807 
        
OPERATING EXPENSES       
General and administrative expenses3,566,698  3,364,826  6,728,228  6,706,726 
Research and development512,871  317,002  861,929  720,221 
Depreciation and amortization expense110,910  129,070  227,133  257,787 
Total Operating Expenses4,190,479  3,810,898  7,817,290  7,684,734 
        
INCOME FROM OPERATIONS996,559  2,097,769  3,134,620  4,354,073 
        
OTHER INCOME (EXPENSE)       
Gain on sale of fixed assets21,410  21,254  38,340  86,085 
Other expense(413) (4,164) (964) (5,956)
Interest income85,887  174,771  177,590  225,479 
Total Other Income106,884  191,861  214,966  305,608 
        
INCOME BEFORE INCOME TAXES1,103,443  2,289,630  3,349,586  4,659,681 
        
INCOME TAX EXPENSE117,939  575,363  695,464  1,069,183 
        
NET INCOME$985,504  $1,714,267  $2,654,122  $3,590,498 
        
OTHER COMPREHENSIVE INCOME (LOSS)       
Foreign currency translation gain (loss)$102,435  $(427,307) $251,850  $(394,072)
Unrealized gains (losses) on investments49,495  9,226  118,247  (24,009)
Total Other Comprehensive Income (Loss)151,930  (418,081) 370,097  (418,081)
        
COMPREHENSIVE INCOME$1,137,434  $1,296,186  $3,024,219  $3,172,417 
        
BASIC EARNINGS PER SHARE$0.02  $0.04  $0.06  $0.07 
FULLY DILUTED EARNINGS PER SHARE$0.02  $0.03  $0.06  $0.07 
        
BASIC WEIGHTED AVG NUMBER OF SHARES OUTSTANDING47,348,137  48,266,199  47,392,534  48,467,136 
FULLY DILUTED WEIGHTED AVG NUMBER OF SHARES OUTSTANDING48,124,208  49,095,575  48,192,849  49,237,938 

                                                                                                                          
            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 Ended June 30,
 2019  2018 
OPERATING ACTIVITIES   
Net income$2,654,122  $3,590,498 
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation and amortization expense483,063  442,959 
Gain on sale of fixed assets(38,340) (76,703)
Bad debt expense229,792  141,348 
Stock awards issued for services749,547  861,189 
Changes in operating assets and liabilities:   
Changes in accounts receivable605,009  548,419 
Changes in income taxes receivable/payable(1,261,267) (790,946)
Changes in inventories1,831,865  (2,074,974)
Changes in prepaid expenses(35,637) 114,907 
Changes in deferred tax asset/liability205,314  91,890 
Changes in accounts payable and accrued liabilities(115,813) 274,744 
Net Cash Provided by Operating Activities5,307,655  3,123,331 
    
INVESTING ACTIVITIES   
Proceeds from sale of equipment39,810  159,449 
Sale of investments1,109,297  368,379 
Purchase of fixed assets(1,429,735) (1,184,126)
Payments for asset acquisition(2,088,814)  
Net Cash Used in Investing Activities(2,369,442) (656,298)
    
FINANCING ACTIVITIES   
Value of equity awards surrendered by employees for tax liability(184,433) (736,160)
Cash received in exercise of stock options  174,002 
Purchase of Treasury stock(1,333,578) (4,000,000)
Principal paid towards lease liability(32,185)  
Net Cash Used in Financing Activities(1,550,196) (4,562,158)
    
Effect of exchange rate changes on cash(2,171) (51,997)
    
NET INCREASE (DECREASE) IN CASH1,385,846  (2,147,122)
CASH AT BEGINNING OF PERIOD10,101,932  11,445,799 
CASH AT END OF PERIOD$11,487,778  $9,298,677 
    
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION   
    
CASH PAID FOR:   
Interest$2,832  $ 
Income taxes$1,793,281  $1,691,397 
NON-CASH FINANCING AND INVESTING ACTIVITIES:   
Acquisition of assets (Preliminary estimate)$237,032  $ 

These financial statements should be read in conjunction with the Form 10-Q and accompanying footnotes

Primary Logo


Source: GlobeNewswire (August 7, 2019 - 4:20 PM EDT)

News by QuoteMedia
www.quotemedia.com

Legal Notice