News / Events

Profire Energy Reports Financial Results for Second Quarter Fiscal Year 2022

Company Reports Fifth Consecutive Quarter of Sequential Revenue Growth and Second Consecutive Quarter Net Income and Positive EBITDA

LINDON, Utah, Aug. 04, 2022 (GLOBE NEWSWIRE) -- 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 second quarter ending June 30, 2022. A conference call will be held on Friday, August 5, 2022, at 8:30 a.m. ET to discuss the results.

Second Quarter Summary

  • Revenue of $9.6 million, a 60% increase from prior-year quarter
  • Gross margin improved 170 basis points year-over-year to 45.7%
  • Net income of $284,829 or $0.01 per diluted share
  • Generated EBITDA of $569,4121
  • Repurchased 451,590 shares of stock
  • Non-Oil and Gas revenue is on track to exceed $1 million for the fiscal year, more than tripling our previous year's results

“Our second quarter results reflect continued progress within our historical business segments and into new markets. Revenues increased sequentially for the fifth consecutive quarter, and we reported another quarterly net profit despite product shortages and significant cost pressures across our business,” said Ryan Oviatt, Co-Chief Executive Officer and CFO of Profire Energy. “The initiatives implemented in 2021 and earlier this year made inventory more readily available late in the quarter which allowed us to start to work down sales backorders and to begin replenishing product on the shelf. Our balance sheet remains strong, which affords us the flexibility to respond to additional opportunities within our core business, as well as new markets for our products.”

Second Quarter 2022 Financial Results

Total revenues for the period equaled $9.6 million, compared to $9.5 million in the first quarter and $6.0 million in the second quarter of 2021. The sequential and year-over-year increases were primarily driven by improving demand from the COVID-19 pandemic recovery and higher oil prices.

Gross profit was $4.4 million, compared to $4.6 million in the first quarter of 2022 and $2.7 million in the prior-year quarter. Gross margin was 45.7% of revenues, compared to 47.9% of revenues in the prior quarter and 44.0% of revenues in the second quarter of 2021. The year-over-year increase in gross profit and margin reflect higher revenue, while the sequential decrease in gross profit and margin reflects the inflation impact on direct labor, shipping and freight costs.

Total operating expenses were $4.4 million, compared to $3.9 million in the first quarter and $3.3 million in the year-ago quarter. The increase is related to higher direct labor costs, headcount increases, and increases in travel and automobile expenses.

Compared with the same quarter last year, operating expenses for G&A increased 36% and R&D increased 20%, while depreciation decreased 4% from the second quarter of 2021.

Net income was $284,829 or $0.01 per diluted share, compared to $627,161 or $0.01 per diluted share in the first quarter and a net loss of ($397,166) or ($0.01) per share in the second quarter last year.

“We continue to experience increased levels of interest in our solutions related to new activity, retrofit programs, and other capital projects that were deferred during the pandemic, due primarily to elevated oil prices,” stated Cameron Tidball, Co-CEO of Profire Energy. “Our initiatives outside our traditional oil and gas business continue to gain traction. We received our largest order in this growth area during the quarter and we are on track to exceed our internal revenue target related to this segment. In addition, we are evaluating potential new products, acquisitions and partnership opportunities to further extend Profire’s offerings. We look forward to building on our momentum through the latter half of 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: Friday, August 5, 2022
Time: 8:30 a.m. ET (6:30 a.m. MT)
Toll-free dial-in number: 1-855-327-6837
International 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=1560935&tp_key=08abf64d02
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 12:30 p.m. ET on the same day through August 19, 2022.

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay Pin Number: 10019852

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; 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 recent acquisitions, 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 June 30, 2022  
EBITDA Calculation  
Net Income $ 284,829  
Add back net income tax expense $ 27,177  
Add back net interest expense $ (20,307 )
Add back depreciation and amortization $ 277,713  
EBITDA calculated $ 569,412  


PROFIRE ENERGY, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
    As of
    June 30, 2022   December 31, 2021
ASSETS   (Unaudited)    
CURRENT ASSETS        
Cash and cash equivalents   $ 7,418,827     $ 8,188,270  
Short-term investments     463,027       1,013,683  
Accounts receivable, net     7,311,562       6,262,799  
Inventories, net (note 3)     9,256,684       7,185,248  
Prepaid expenses and other current assets (note 4)     1,156,314       1,025,276  
Income tax receivable     25,994       560,445  
Total Current Assets     25,632,408       24,235,721  
LONG-TERM ASSETS        
Net deferred tax asset     160,877       163,254  
Long-term investments     8,619,410       8,259,809  
Financing right-of-use asset     146,100       65,280  
Property and equipment, net     10,799,084       11,185,539  
Intangible assets, net     1,438,467       1,549,138  
Goodwill     2,579,381       2,579,381  
Total Long-Term Assets     23,743,319       23,802,401  
    TOTAL ASSETS   $ 49,375,727     $ 48,038,122  
         
LIABILITIES AND STOCKHOLDERS' EQUITY        
CURRENT LIABILITIES        
Accounts payable   $ 2,945,957     $ 1,822,559  
Accrued liabilities (note 5)     2,322,683       1,872,348  
Current financing lease liability (note 6)     53,269       30,214  
Total Current Liabilities     5,321,909       3,725,121  
LONG-TERM LIABILITIES        
Net deferred income tax liability     135,698       136,106  
Long-term financing lease liability (note 6)     94,958       35,912  
TOTAL LIABILITIES     5,552,565       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: 52,071,283 issued and 47,033,153 outstanding at June 30, 2022, and 51,720,142 issued and 47,643,233 outstanding at December 31, 2021     52,072       51,720  
Treasury stock, at cost     (7,336,323 )     (6,107,593 )
Additional paid-in capital     31,371,682       30,819,394  
Accumulated other comprehensive loss     (2,654,188 )     (2,100,467 )
Retained earnings     22,389,919       21,477,929  
TOTAL STOCKHOLDERS' EQUITY     43,823,162       44,140,983  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 49,375,727     $ 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 June 30,   For the Six Months Ended June 30,
      2022       2021       2022       2021  
REVENUES (note 8)                
Sales of products, net   $ 8,860,682     $ 5,374,539     $ 17,739,105     $ 10,032,074  
Sales of services, net     772,465       659,744       1,397,182       1,094,558  
Total Revenues     9,633,147       6,034,283       19,136,287       11,126,632  
                 
COST OF SALES                
Cost of sales - product     4,530,065       2,910,879       8,912,764       5,448,513  
Cost of sales - services     699,937       465,672       1,263,674       845,700  
Total Cost of Sales     5,230,002       3,376,551       10,176,438       6,294,213  
                 
GROSS PROFIT     4,403,145       2,657,732       8,959,849       4,832,419  
                 
OPERATING EXPENSES                
General and administrative     3,786,561       2,783,872       7,178,938       5,338,408  
Research and development     362,197       301,445       670,512       558,336  
Depreciation and amortization     159,580       166,852       326,597       334,337  
Total Operating Expenses     4,308,338       3,252,169       8,176,047       6,231,081  
                 
INCOME (LOSS) FROM OPERATIONS     94,807       (594,437 )     783,802       (1,398,662 )
                 
OTHER INCOME (EXPENSE)                
Gain on sale of property and equipment     214,841       38,492       310,683       112,393  
Other income (expense)     (17,949 )     4,836       (36,728 )     4,739  
Interest income     20,307       28,569       41,852       49,631  
Total Other Income     217,199       71,897       315,807       166,763  
                 
INCOME (LOSS) BEFORE INCOME TAXES     312,006       (522,540 )     1,099,609       (1,231,899 )
                 
INCOME TAX BENEFIT (EXPENSE)     (27,177 )     125,374       (187,619 )     233,233  
                 
NET INCOME (LOSS)   $ 284,829     $ (397,166 )   $ 911,990     $ (998,666 )
                 
OTHER COMPREHENSIVE INCOME (LOSS)                
Foreign currency translation gain (loss)   $ (290,291 )   $ 163,485     $ (131,933 )   $ 303,091  
Unrealized gains (losses) on investments     (134,662 )     55,529       (421,788 )     47,555  
Total Other Comprehensive Income (Loss)     (424,953 )     219,014       (553,721 )     350,646  
                 
COMPREHENSIVE INCOME (LOSS)   $ (140,124 )   $ (178,152 )   $ 358,269     $ (648,020 )
                 
BASIC EARNINGS (LOSS) PER SHARE   $ 0.01     $ (0.01 )   $ 0.02     $ (0.02 )
FULLY DILUTED EARNINGS (LOSS) PER SHARE   $ 0.01     $ (0.01 )   $ 0.02     $ (0.02 )
                 
BASIC WEIGHTED AVG NUMBER OF SHARES OUTSTANDING     47,092,275       48,054,136       47,285,782       48,022,295  
FULLY DILUTED WEIGHTED AVG NUMBER OF SHARES OUTSTANDING     48,699,208       48,054,136       48,865,186       48,022,295  

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,
    2022       2021  
OPERATING ACTIVITIES      
Net income (loss) $ 911,990     $ (998,666 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:      
Depreciation and amortization expense   558,832       683,597  
Gain on sale of property and equipment   (310,683 )     (112,393 )
Bad debt expense   28,474       (32,463 )
Stock awards issued for services   412,893       332,127  
Changes in operating assets and liabilities:      
Accounts receivable   (877,417 )     (7,313 )
Income taxes receivable/payable   534,456       (299,436 )
Inventories   (2,097,471 )     577,341  
Prepaid expenses and other current assets   (140,352 )     988,464  
Deferred tax asset/liability   (408 )     78,746  
Accounts payable and accrued liabilities   1,601,376       345,818  
  Net Cash Provided by Operating Activities   621,690       1,555,822  
       
INVESTING ACTIVITIES      
Proceeds from sale of property and equipment   412,339       69,484  
Purchase of investments   (231,032 )     (719,817 )
Purchase of property and equipment   (223,215 )     (93,049 )
  Net Cash Used in Investing Activities   (41,908 )     (743,382 )
       
FINANCING ACTIVITIES      
Value of equity awards surrendered by employees for tax liability   (93,527 )     (42,829 )
Cash received in exercise of stock options   25,106        
Purchase of treasury stock   (1,228,731 )      
Principal paid towards lease liability   (19,787 )     (21,749 )
  Net Cash Used in Financing Activities   (1,316,939 )     (64,578 )
       
Effect of exchange rate changes on cash   (32,286 )     25,201  
       
NET CHANGE IN CASH   (769,443 )     773,063  
CASH AT BEGINNING OF PERIOD   8,188,270       9,148,312  
CASH AT END OF PERIOD $ 7,418,827     $ 9,921,375  
       
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION      
       
CASH PAID FOR:      
Interest $ 1,253     $ 2,353  
Income taxes $ 21,000     $ 17,150  
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

 


Primary Logo

Source: Profire Energy, Inc.