Profire Energy Reports Financial Results for Third Quarter Fiscal 2019

11/6/2019, 10:15 PM (Source: GlobeNewswire)

Company recognizes $9.9 million in revenue and 52.2% gross margin  
Recent acquisitions contribute more than $1 million to Q3 revenues

LINDON, Utah, Nov. 06, 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 September 30, 2019. A conference call will be held on Thursday, November 7, 2019 at 1:00 p.m. ET to discuss the results.


  • Recognized revenue of $9.9 million
  • Net income of $922,000 or $0.02 per diluted share,
  • Realized gross profit of $5.2 million or 52.2% of total revenues
  • Cash and liquid investments of over $20 million and remained debt-free
  • Repurchased 592,100 shares of Profire stock for  $916,000

“During the third quarter we were able to generate positive net income and operating cash flows, successfully integrate two acquisitions, and repurchase $916,000 of our stock, all while remaining debt free,” said Brenton Hatch, Chairman and CEO of Profire Energy.

Third Quarter 2019 Financial Results
Total revenues for the period equaled $9.9 million, a 14% decrease over the same period a year ago. This decrease was primarily driven by negative macro industry trends including a 15% drop in the average oil price during the same period.

Gross profit was $5.2 million or 52.2% of total revenues which was down from 53% in the same quarter last year. The fluctuation of gross profit margin was within an expected range and was driven by changes in product mix, direct labor costs, and inventory and warranty reserves.

Total operating expenses were approximately $4 million, a 9% 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 2.4%, R&D increased 70% and depreciation decreased 9.2%.

Net income was $922,000 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.

Cash and liquid investments totaled just over $20 million at September 30, 2019 compared to $22.6 million at the end of 2018, and the Company continues to operate debt-free. The decrease is primarily related to the two acquisitions this year, totaling almost $5 million.  

The Company continued the stock repurchase program with a repurchase of 592,100 shares, or $916,000 of Profire stock during the third quarter.

Management Commentary

“In the third quarter we sold just over $300,000 worth of Millstream products and Midflow generated just over $400,000 in revenue. Additionally, through these acquisitions, we have been able to add new customers, build new direct relationships with end users and OEM re-sellers, enabling us to capture revenue not previously available to us. In the quarter we realized $400,000 worth of revenues on Profire products from these new relationships,” stated Cameron Tidball, Chief Business Development Officer of Profire. “We are encouraged to achieve these operational results and revenue performance even in a down market. We believe these acquisitions will continue to provide greater value as the market improves. We expect annual revenue related to both of these acquisitions to greater than $3.5 million in the coming years.”

“With the launch of these product advancements we are increasing our capabilities and opportunities to eventually provide detailed data analytics and further use cloud technologies to improve the customer experience,” said Ryan Oviatt, CFO of Profire. “We plan to continue to invest in additional sales and operational resources to further our entrance into the downstream market, and to support new product development and enhancements to our existing product lines.”

Conference Call

Profire Energy Executives will host the call, followed by a question and answer period.
Date: Thursday, November 7, 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: 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 November 21, 2019.

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay Pin Number: 13695761

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 products are continuing to be a key part of their solutions. Profire Energy has offices in Lindon, Utah; Victoria, Texas; Homer, Pennsylvania; Greeley, Colorado; Millersburg, Ohio; and Spruce Grove, Alberta, Canada. For additional information, visit

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.

Profire Energy, Inc.
Ryan Oviatt, CFO
(801) 796-5127

Three Part Advisors
Steven Hooser, Partner

Condensed Consolidated Balance Sheets
  As of
  September 30, 2019 December 31, 2018
Cash and cash equivalents $9,944,128  $10,101,932 
Short-term investments 864,629  961,256 
Short-term investments - other 2,000,000  3,596,484 
Accounts receivable, net 6,568,599  6,885,296 
Inventories, net (note 3) 9,782,643  9,659,571 
Prepaid expenses & other current assets 1,076,138  473,726 
Income tax receivable 524,695  173,124 
Total Current Assets 30,760,832  31,851,389 
Net deferred tax asset   85,092 
Long-term investments 7,319,099  7,978,380 
Financing right-of-use asset 128,738   
Property and equipment, net 10,896,855  8,020,462 
Intangible assets, net 3,934,727  429,956 
Goodwill 1,120,381  997,701 
Total Long-Term Assets 23,399,800  17,511,591 
TOTAL ASSETS $54,160,632  $49,362,980 
Accounts payable $2,181,592  $1,177,985 
Accrued vacation 446,451  311,435 
Accrued liabilities 2,209,303  1,445,510 
Current financing lease liability (note 8) 67,984   
Income taxes payable 627,010  1,172,191 
Total Current Liabilities 5,532,340  4,107,121 
Net deferred income tax liability 134,046   
Long-term financing lease liability 63,951   
TOTAL LIABILITIES 5,730,337  4,107,121 
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: 50,761,491 issued and 47,618,604 outstanding at September 30, 2019, and 49,707,805 issued and 47,932,305 outstanding at December 31, 2018 50,762  49,708 
Treasury stock, at cost (4,859,230) (2,609,485)
Additional paid-in capital 29,608,685  28,027,742 
Accumulated other comprehensive loss (2,629,369) (2,895,683)
Retained earnings 26,259,447  22,683,577 
TOTAL STOCKHOLDERS' EQUITY 48,430,295  45,255,859 

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

Condensed Consolidated Statements of Operations and Comprehensive Income
 For the Three Months Ended September 30, For the Nine Months Ended September 30,
 2019  2018  2019  2018 
REVENUES (note 6)       
Sales of goods, net$9,251,947  $10,830,592  $29,009,837  $33,009,616 
Sales of services, net653,814  669,310  1,853,013  1,999,764 
Total Revenues9,905,761  11,499,902  30,862,850  35,009,380 
Cost of goods sold-product4,326,335  4,917,449  13,465,989  15,434,698 
Cost of goods sold-services410,130  484,327  1,275,655  1,437,749 
Total Cost of Goods Sold4,736,465  5,401,776  14,741,644  16,872,447 
GROSS PROFIT5,169,296  6,098,126  16,121,206  18,136,933 
General and administrative expenses3,256,023  3,180,725  9,984,251  9,887,451 
Research and development641,716  377,676  1,503,645  1,097,897 
Depreciation and amortization expense130,105  143,327  357,238  401,114 
Total Operating Expenses4,027,844  3,701,728  11,845,134  11,386,462 
INCOME FROM OPERATIONS1,141,452  2,396,398  4,276,072  6,750,471 
Gain on sale of fixed assets34,826  43,904  73,166  129,989 
Other expense(2,065) (1,506) (3,029) (7,462)
Interest income38,478  85,167  216,068  310,646 
Total Other Income71,239  127,565  286,205  433,173 
INCOME BEFORE INCOME TAXES1,212,691  2,523,963  4,562,277  7,183,644 
INCOME TAX EXPENSE290,943  864,874  986,407  1,934,057 
NET INCOME$921,748  $1,659,089  $3,575,870  $5,249,587 
Foreign currency translation gain (loss)$(91,397) $170,641  $160,453  $(223,431)
Unrealized gains (losses) on investments(12,386) (11,963) 105,861  (35,972)
Total Other Comprehensive Income (Loss)(103,783) 158,678  266,314  (259,403)
COMPREHENSIVE INCOME$817,965  $1,817,767  $3,842,184  $4,990,184 
BASIC EARNINGS PER SHARE (note 7)$0.02  $0.03  $0.08  $0.11 
FULLY DILUTED EARNINGS PER SHARE$0.02  $0.03  $0.07  $0.11 
BASIC WEIGHTED AVG NUMBER OF SHARES OUTSTANDING47,739,192  48,082,506  47,509,357  48,337,517 
FULLY DILUTED WEIGHTED AVG NUMBER OF SHARES OUTSTANDING48,469,246  48,852,167  48,259,900  49,107,178 

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

Condensed Consolidated Statements of Cash Flows
 For the Nine Months Ended September 30,
 2019  2018 
Net income$3,575,870  $5,249,587 
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation and amortization expense732,396  667,085 
Gain on sale of fixed assets(73,166) (120,825)
Bad debt expense255,943  134,901 
Stock awards issued for services358,270  916,795 
Changes in operating assets and liabilities:   
Changes in accounts receivable1,244,104  (184,951)
Changes in income taxes receivable/payable(890,523) (432,575)
Changes in inventories1,711,446  (3,863,287)
Changes in prepaid expenses(586,576) (172,497)
Changes in deferred tax asset/liability219,138  22,564 
Changes in accounts payable and accrued liabilities855,207  1,506,396 
Net Cash Provided by Operating Activities7,402,109  3,723,193 
Proceeds from sale of equipment75,310  219,269 
Sale (purchase) of investments2,476,227  (876,463)
Purchase of fixed assets(3,309,191) (1,271,997)
Payments for acquisitions(4,322,722)  
Net Cash Used in Investing Activities(5,080,376) (1,929,191)
Value of equity awards surrendered by employees for tax liability(185,004) (737,024)
Cash received in exercise of stock options8,870  174,002 
Purchase of treasury stock(2,249,745) (4,000,000)
Principal paid towards lease liability(53,190)  
Net Cash Used in Financing Activities(2,479,069) (4,563,022)
Effect of exchange rate changes on cash(468) (38,941)
NET DECREASE IN CASH(157,804) (2,807,961)
CASH AT BEGINNING OF PERIOD10,101,932  11,445,799 
CASH AT END OF PERIOD$9,944,128  $8,637,838 
Interest$4,469  $ 
Income taxes$1,793,281  $2,164,149 
Issuance of common stock - Midflow acquisition$1,020,000  $ 

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

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