Profire Energy Reports Financial Results for Second Quarter Fiscal Year 2021

8/4/2021, 10:15 PM (Source: GlobeNewswire)

LINDON, Utah, Aug. 04, 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 second quarter fiscal 2021 ending June 30, 2021. A conference call will be held on Thursday, August 5, 2021 at 1:00 p.m. ET to discuss the results.

Second Quarter Summary

  • Revenue increased 18.5% sequentially to $6.0 million
  • Realized gross profit of $2.7 million
  • Gross margin increased 130 basis points sequentially to 44.0% of total revenues
  • Net loss of ($397,166) or ($0.01) per share
  • EBITDA improvement of $453,546 year-over-year to ($161,127)
  • Cash and liquid investments of $19.1 million while remaining debt-free

“The continued reopening of most global economies during the second quarter resulted in increased demand and higher commodity prices across the oil and gas markets. Our sequential and year-over-year revenue growth reflects increased product sales and resumption of equipment maintenance that was largely deferred during the pandemic. We continued to reinvest in our company in response to the increased demand and improved industry outlook. Additionally, I am pleased that we were able to generate operating cash flow and increase our cash and liquid investments in the first six months of this year while remaining debt free,” said Ryan Oviatt, Co-Chief Executive Officer and CFO of Profire Energy.

Second Quarter 2021 Financial Results
                        
Total revenues for the period equaled $6.0 million, compared to $5.1 million in the first quarter of 2021 and $4.4 million in the prior-year quarter. The sequential and year-over-year increases reflect improved customer demand for product sales and services.

Gross profit was $2.7 million, compared to $2.2 million in the first quarter of 2021 and $2.1 million in the prior-year quarter. Gross margin was 44.0% of revenues, compared to 42.7% of revenues in the prior quarter and 47.9% of revenues in the second quarter of 2020. The year-over-year decrease was due to revenue mix and the ongoing impact of COVID-19.

Total operating expenses were $3.3 million, compared to $3.0 million in the first quarter of 2021 and $3.2 million in the year-ago quarter. The sequential increase reflects the reinvestment within sales and product development in response to the increased demand as well as cost pressure in the labor market.

Compared with the same quarter last year, operating expenses for G&A increased 1%, R&D increased 31% and depreciation decreased by 8%.

Net loss for the first quarter was ($397,000) or ($0.01) per share, compared to a net loss of ($602,000) or ($0.01) per share in the first quarter of 2021 and a net loss of ($809,000) or ($0.02) per share in the same quarter last year.

Cash and liquid investments totaled $19.1 million at June 30, 2021 compared to $17.6 million at the end of 2020, and the Company continues to operate debt-free.

“We are encouraged by our Q2 results, despite the challenges that remain in the petroleum industry. Our team has performed well on our strategy to further our excellent brand reputation and product performance in the upstream, midstream and downstream utility space,” stated Cameron Tidball, Co-CEO of Profire Energy. “We continue to demonstrate suitability in a wide variety of burner and combustion management applications across North America. We remain focused on supporting our channel partners, driving organic growth, and continued product development and enhancement.”

Conference Call

Profire Energy Executives will host the call, followed by a question and answer period.
Date: Thursday, August 5, 2021
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=145937. 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 19, 2021.

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay Pin Number: 13721878
 

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 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, product development, 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, Co-President and 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, 2021 December 31, 2020
ASSETS (Unaudited)  
CURRENT ASSETS    
Cash and cash equivalents $9,921,375  $9,148,312 
Short-term investments 2,087,332  2,388,601 
Accounts receivable, net 3,787,084  3,719,508 
Inventories, net (note 3) 7,911,996  8,414,772 
Prepaid expenses and other current assets (note 4) 773,146  1,678,428 
Income tax receivable 785,590  486,154 
Total Current Assets 25,266,523  25,835,775 
LONG-TERM ASSETS    
Long-term investments 7,132,675  6,064,294 
Financing right-of-use asset 28,758  50,094 
Property and equipment, net 11,721,692  12,021,811 
Intangible assets, net 1,660,504  1,771,870 
Goodwill 2,579,381  2,579,381 
Total Long-Term Assets 23,123,010  22,487,450 
TOTAL ASSETS $48,389,533  $48,323,225 
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
CURRENT LIABILITIES    
Accounts payable $1,257,437  $1,178,979 
Accrued liabilities (note 5) 1,486,578  1,196,870 
Current financing lease liability (note 6) 30,238  39,451 
Total Current Liabilities 2,774,253  2,415,300 
LONG-TERM LIABILITIES    
Net deferred income tax liability 601,616  522,870 
Long-term financing lease liability (note 6)   12,669 
TOTAL LIABILITIES 3,375,869  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: 51,651,386 issued and 48,239,008 outstanding at June 30, 2021, and 51,384,961 issued and 47,972,583 outstanding at December 31, 2020 51,651  51,385 
Treasury stock, at cost (5,353,019) (5,353,019)
Additional paid-in capital 30,582,504  30,293,472 
Accumulated other comprehensive loss (1,798,278) (2,148,924)
Retained earnings 21,530,806  22,529,472 
TOTAL STOCKHOLDERS' EQUITY 45,013,664  45,372,386 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $48,389,533  $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 June 30, For the Six Months Ended June 30,
 2021 2020 2021 2020
REVENUES (note 8)       
Sales of goods, net$5,374,539  $3,999,139  $10,032,074  $10,860,097 
Sales of services, net659,744  360,340  1,094,558  946,524 
Total Revenues6,034,283  4,359,479  11,126,632  11,806,621 
        
COST OF SALES       
Cost of goods sold-product2,910,879  1,944,389  5,448,513  5,778,071 
Cost of goods sold-services465,672  328,225  845,700  777,009 
Total Cost of Goods Sold3,376,551  2,272,614  6,294,213  6,555,080 
        
GROSS PROFIT2,657,732  2,086,865  4,832,419  5,251,541 
        
OPERATING EXPENSES       
General and administrative expenses2,783,872  2,753,773  5,338,408  6,026,311 
Research and development301,445  229,548  558,336  639,274 
Depreciation and amortization expense166,852  180,997  334,337  328,469 
Total Operating Expenses3,252,169  3,164,318  6,231,081  6,994,054 
        
LOSS FROM OPERATIONS(594,437) (1,077,453) (1,398,662) (1,742,513)
        
OTHER INCOME (EXPENSE)       
Gain on sale of fixed assets38,492  157,455  112,393  157,455 
Other income (expense)4,836  (1,665) 4,739  (1,318)
Interest income28,569  77,532  49,631  151,925 
Total Other Income71,897  233,322  166,763  308,062 
        
LOSS BEFORE INCOME TAXES(522,540) (844,131) (1,231,899) (1,434,451)
        
INCOME TAX BENEFIT125,374  35,628  233,233  260,684 
        
NET LOSS$(397,166) $(808,503) $(998,666) $(1,173,767)
        
OTHER COMPREHENSIVE INCOME (LOSS)       
Foreign currency translation gain (loss)$163,485  $375,267  $303,091  $(570,156)
Unrealized gains (losses) on investments55,529  72,875  47,555  (84,479)
Total Other Comprehensive Income (Loss)219,014  448,142  350,646  (654,635)
        
COMPREHENSIVE LOSS$(178,152) $(360,361) $(648,020) $(1,828,402)
        
BASIC LOSS PER SHARE (note 9)$(0.01) $(0.02) $(0.02) $(0.02)
FULLY DILUTED LOSS PER SHARE (note 9)$(0.01) $(0.02) $(0.02) $(0.02)
        
BASIC WEIGHTED AVG NUMBER OF SHARES OUTSTANDING48,054,136  47,723,208  48,022,295  47,607,825 
FULLY DILUTED WEIGHTED AVG NUMBER OF SHARES OUTSTANDING48,054,136  47,723,208  48,022,295  47,607,825 

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,
 2021 2020
OPERATING ACTIVITIES   
Net loss$(998,666) $(1,173,767)
Adjustments to reconcile net loss to net cash provided by operating activities:   
Depreciation and amortization expense683,597  566,791 
Gain on sale of fixed assets(112,393) (153,973)
Bad debt expense(32,463) 236,005 
Stock awards issued for services332,127  250,198 
Changes in operating assets and liabilities:   
Accounts receivable(7,313) 3,248,693 
Income taxes receivable/payable(299,436) (1,761)
Inventories577,341  445,634 
Prepaid expenses and other current assets988,464  168,718 
Deferred tax asset/liability78,746  104,166 
Accounts payable and accrued liabilities345,818  (2,843,685)
Net Cash Provided by Operating Activities1,555,822  847,019 
    
INVESTING ACTIVITIES   
Proceeds from sale of property and equipment69,484   
Sale (purchase) of investments(719,817) 1,057,404 
Purchase of property and equipment(93,049) (994,410)
Net Cash Provided by (Used in) Investing Activities(743,382) 62,994 
    
FINANCING ACTIVITIES   
Value of equity awards surrendered by employees for tax liability(42,829) (148,879)
Cash received in exercise of stock options  2,020 
Principal paid towards lease liability(21,749) (34,267)
Net Cash Used in Financing Activities(64,578) (181,126)
    
Effect of exchange rate changes on cash25,201  (65,506)
    
NET INCREASE IN CASH773,063  663,381 
CASH AT BEGINNING OF PERIOD9,148,312  7,358,856 
CASH AT END OF PERIOD$9,921,375  $8,022,237 
    
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION   
    
CASH PAID FOR:   
Interest$2,353  $4,247 
Income taxes$17,150  $ 
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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