Profire Energy Reports Financial Results for First Quarter Fiscal Year 2021

5/5/2021, 10:15 PM (Source: GlobeNewswire)

LINDON, Utah, May 05, 2021 (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 first quarter fiscal 2021 ending March 31, 2021. A conference call will be held on Thursday, May 6, 2021 at 1:00 p.m. ET to discuss the results.

First Quarter Summary

  • Recognized revenue of $5.1 million
  • Realized gross profit of $2.2 million or 42.7% of total revenues
  • Net loss of $(601,500) or $(0.01) per share
  • Generated $1.8 million of cash flow from operations
  • Cash and liquid investments of $19.4 million while remaining debt-free

“The outlook for consumption of oil and gas continues to improve in the short-term as COVID-19 related restrictions ease and vaccine distribution progresses. Given this trend, we believe the worst of the pandemic is behind us and therefore have started to reinvest in our business to ensure we are well positioned to take advantage of the pending recovery. Although we were able to take deliberate actions to drastically reduce expenses during the heart of the pandemic, this quarter’s increase in SG&A is primarily staff-related to accommodate our current and future customers as demand increases. Additionally, I am pleased that we were able to sequentially increase our cash and liquid investments while remaining debt free,” said Ryan Oviatt, Co-Chief Executive Officer and CFO of Profire Energy.

First Quarter 2021 Financial Results
                        
Total revenues for the period equaled $5.1 million, compared to $5.7 million in the fourth quarter of 2020 and $7.4 million in the prior-year quarter. The sequential and year-over-year decrease was primarily driven by the COVID-19 pandemic’s impact on our industry which drastically decreased drilling and completion activity and wiped out the capital budgets of our customers in 2020.

Gross profit was $2.2 million, compared to $2.8 million in the fourth quarter of 2020 and $3.2 million in the prior-year quarter. Gross margin was 42.7% of revenues, compared to 48.7% of revenues in the prior quarter and 42.5% of revenues in the first quarter of 2020. The sequential decrease was due to product mix and lower coverage of fixed costs associated with the drop in revenue.

Total operating expenses were $3.0 million, compared to $2.8 million in the fourth quarter of 2020 and $3.8 million in the year-ago quarter. The year-over-year improvement reflects the actions taken to reduce expenses and adjust the company’s cost structure in response to the unusual operating environment over the past year.

Compared with the same quarter last year, operating expenses for G&A decreased 22%, R&D decreased 37% and depreciation increased by 14%.

Net loss for the first quarter was ($601,500) or ($0.01) per share, compared to net income of $55,918 or $0.00 per diluted share in the fourth quarter of 2020 and a net loss of ($365,264) or ($0.01) per share in the same quarter last year.

Cash and liquid investments totaled $19.4 million at March 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 overall level of activity we are seeing in our core legacy business as well as some of the traction we are experiencing in our growth segment areas of focus. We expect this trend to continue for our core business and through our recently signed partnerships with Spartan Controls and ECI,” stated Cameron Tidball, Co-CEO of Profire Energy. “We also continue to strategically explore additional industries where our products and solutions expertise can be leveraged, including power and infrastructure and renewable fuels. Through expansion of strategic partnerships and our internal sales and business development initiatives, we expect to continue to gain brand awareness and sales in both our traditional and new markets.”

Conference Call

Profire Energy Executives will host the call, followed by a question and answer period.
Date: Thursday, May 6, 2021
Time: 1:00 p.m. ET (11:00 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:
http://public.viavid.com/index.php?id=144678. 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 May 20, 2021.
 
Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay Pin Number: 10014415

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 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 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 expansion outside of the Company’s traditional market, and holding an earnings call on May 6, 2021. 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, Co-President & CFO
(801) 796-5127

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

PART I. FINANCIAL INFORMATION

Item 1 Financial Information

PROFIRE ENERGY, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
  As of
  March 31, 2021 December 31, 2020
ASSETS (Unaudited)  
CURRENT ASSETS    
Cash and cash equivalents $10,475,429  $9,148,312 
Short-term investments 2,293,992  2,388,601 
Accounts receivable, net 2,772,162  3,719,508 
Inventories, net (note 3) 8,104,532  8,414,772 
Prepaid expenses and other current assets (note 4) 823,901  1,678,428 
Income tax receivable 580,751  486,154 
Total Current Assets 25,050,767  25,835,775 
LONG-TERM ASSETS    
Long-term investments 6,589,247  6,064,294 
Financing right-of-use asset 38,969  50,094 
Property and equipment, net 11,926,464  12,021,811 
Intangible assets, net 1,716,187  1,771,870 
Goodwill 2,579,381  2,579,381 
Total Long-Term Assets 22,850,248  22,487,450 
TOTAL ASSETS $47,901,015  $48,323,225 
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
CURRENT LIABILITIES    
Accounts payable $975,755  $1,178,979 
Accrued liabilities (note 5) 1,361,404  1,196,870 
Current financing lease liability (note 6) 36,408  39,451 
Total Current Liabilities 2,373,567  2,415,300 
LONG-TERM LIABILITIES    
Net deferred income tax liability 522,163  522,870 
Long-term financing lease liability (note 6) 4,353  12,669 
TOTAL LIABILITIES 2,900,083  2,950,839 
     
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: 51,434,074 issued and 48,021,696 outstanding at March 31, 2021, and 51,384,961 issued and 47,972,583 outstanding at December 31, 2020 51,434  51,385 
Treasury stock, at cost (5,353,019) (5,353,019)
Additional paid-in capital 30,391,837  30,293,472 
Accumulated other comprehensive loss (2,017,292) (2,148,924)
Retained earnings 21,927,972  22,529,472 
TOTAL STOCKHOLDERS' EQUITY 45,000,932  45,372,386 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $47,901,015  $48,323,225 
         

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 Loss
(Unaudited)
  For the Three Months Ended March 31,
  2021 2020
REVENUES (note 8)    
Sales of goods, net $4,657,535  $6,860,958 
Sales of services, net 434,814  586,184 
Total Revenues 5,092,349  7,447,142 
     
COST OF SALES    
Cost of goods sold-product 2,537,634  3,833,682 
Cost of goods sold-services 380,028  448,784 
Total Cost of Goods Sold 2,917,662  4,282,466 
     
GROSS PROFIT 2,174,687  3,164,676 
     
OPERATING EXPENSES    
General and administrative expenses 2,554,536  3,272,538 
Research and development 256,891  409,726 
Depreciation and amortization expense 167,485  147,472 
Total Operating Expenses 2,978,912  3,829,736 
     
LOSS FROM OPERATIONS (804,225) (665,060)
     
OTHER INCOME (EXPENSE)    
Gain on sale of fixed assets 73,901   
Other income (expense) (97) 347 
Interest income 21,062  74,393 
Total Other Income 94,866  74,740 
     
LOSS BEFORE INCOME TAXES (709,359) (590,320)
     
INCOME TAX BENEFIT 107,859  225,056 
     
NET LOSS $(601,500) $(365,264)
     
OTHER COMPREHENSIVE INCOME (LOSS)    
Foreign currency translation gain (loss) $139,606  $(945,423)
Unrealized losses on investments (7,974) (157,354)
Total Other Comprehensive Income (Loss) 131,632  (1,102,777)
     
COMPREHENSIVE LOSS $(469,868) $(1,468,041)
     
BASIC LOSS PER SHARE (note 9) $(0.01) $(0.01)
FULLY DILUTED LOSS PER SHARE (note 9) $(0.01) $(0.01)
     
BASIC WEIGHTED AVG NUMBER OF SHARES OUTSTANDING 47,990,101  47,492,441 
FULLY DILUTED WEIGHTED AVG NUMBER OF SHARES OUTSTANDING 47,990,101  47,492,441 
       

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,
 2021 2020
OPERATING ACTIVITIES   
Net loss$(601,500) $(365,264)
Adjustments to reconcile net loss to net cash provided by operating activities:   
Depreciation and amortization expense293,615  259,801 
(Gain) Loss on sale of fixed assets(73,901)  
Bad debt expense(3,084) 133,803 
Stock awards issued for services125,043  66,348 
Changes in operating assets and liabilities:   
Accounts receivable974,602  1,314,939 
Income taxes receivable/payable(94,597) 107,561 
Inventories342,980  537,668 
Prepaid expenses and other current assets906,459  168,546 
Deferred tax asset/liability(707) (114,564)
Accounts payable and accrued liabilities(48,245) (1,837,760)
Net Cash Provided by Operating Activities1,820,665  271,078 
    
INVESTING ACTIVITIES   
Proceeds from sale of property and equipment27,784   
Sale (purchase) of investments(438,830) 387,326 
Purchase of property and equipment(57,825) (525,384)
Net Cash Used in Investing Activities(468,871) (138,058)
    
FINANCING ACTIVITIES   
Value of equity awards surrendered by employees for tax liability(26,629) (148,879)
Cash received in exercise of stock options  2,020 
Principal paid towards lease liability(11,227) (19,089)
Net Cash Used in Financing Activities(37,856) (165,948)
    
Effect of exchange rate changes on cash13,179  (95,598)
    
NET CHANGE IN CASH1,327,117  (128,526)
CASH AT BEGINNING OF PERIOD9,148,312  7,358,856 
CASH AT END OF PERIOD$10,475,429  $7,230,330 
    
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION   
    
CASH PAID FOR:   
Interest$1,936  $872 
Income taxes$  $ 
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-Q and accompanying footnotes.

 


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