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Profire Energy Reports Financial Results for Second Quarter 2020

Nachrichtenquelle: globenewswire
05.08.2020, 22:15  |  119   |   |   

LINDON, Utah, Aug. 05, 2020 (GLOBE NEWSWIRE) -- Profire Energy, Inc. (NASDAQ: PFIE), a technology company (the "Company") which creates, installs and services burner management solutions in the oil and gas industry, today reported financial results for its second quarter ending June 30, 2020. A conference call will be held on Thursday, August 6, 2020 at 1:00 p.m. ET to discuss the results.

Second Quarter Summary

  • Recognized revenue of $4.4 million

  • Realized gross profit of $2.1 million or 47.9% of total revenues

  • Net loss of $808,503 or ($0.02) per share

  • Cash and liquid investments of $18.1 million and remained debt-free

“Our second quarter results reflect both a full quarter’s impact of the COVID-19 global pandemic, which significantly reduced demand across the oil and gas industry, and the fallout of the price war between Russia and OPEC, which caused oil futures to turn negative for the first time in history,” said Ryan Oviatt, Co-CEO and CFO of Profire Energy. “We responded quickly to these events by reducing expenses and adjusting the cost structure of our organization during the quarter. These actions are reflected in our results through the sequential improvement in gross margin and a nearly $600,000 reduction in operating expenses from the first quarter, while maintaining our strong balance sheet.”

Second Quarter 2020 Financial Results

Total revenues for the period equaled $4.4 million, compared to $7.4 million in the first quarter of 2020, and $10.1 million in the same period a year ago. The second quarter’s results reflect the full impact of COVID-19 on consumer demand compared to just a few weeks in the first quarter, as well as a 53% drop in the average oil price during the same period, due in part to a significant price war between Russia and OPEC in the first month of the quarter.

Gross profit was $2.1 million, compared to $3.2 million in the first quarter of 2020 and $5.2 million in the year-ago quarter. Gross margin was 47.9% of revenues, compared to 42.5% of revenues in previous quarter and 51.2% of revenues in the first quarter of 2019. The sequential gross margin improvement was driven by actions taken during the quarter to adjust the cost structure of the company.

Total operating expenses were $3.2 million, compared to $3.8 million in prior quarter and $4.2 million in the same period a year ago. The sequential and year-over-year decreases reflect ongoing cost control measures in response to COVID-19 and the ongoing supply and demand imbalance within the oil markets.

Compared with the same quarter last year, operating expenses for G&A decreased 23%, R&D decreased 55% and depreciation increased by 63%.

Net loss was $808,503 or ($0.02) per share, compared to a net loss of $365,264, or ($0.01) in the first quarter of 2020, and net income of $1.0 million or $0.02 per diluted share in the same quarter last year.

Cash and investments totaled $18.1 million at June 30, 2020 compared to $18.6 million at the end of 2019, and the Company continues to operate debt-free.  Capital expenditures for the quarter were $469,000.   Working capital as of June 30, 2020 was $23.4 million, compared to $22.9 million at the end of 2019.

“Despite turbulent times in our industry, we continue to add customers who recognize the value our solutions bring in improving safety and efficiency,” said Cameron Tidball, Co-CEO of Profire Energy. “We will continue to investigate and analyze opportunities to diversify our offerings, including the evaluation of select strategic acquisition targets that provide complementary solutions or have the potential to expand our customer base, that may arise through the disruption of the markets.”

Conference Call

Profire Energy Executives will host the call, followed by a question and answer period.
Date: Thursday, August 6, 2020
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=140972. 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 20, 2020.
 
Toll-free replay number: 1-844-512-2921 
International replay number: 1-412-317-6671
Replay Pin Number: 10010507

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 possible acquisition opportunities, and the Company hosting a conference call on August 6, 2020. 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 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,
2020
  December 31,
2019
ASSETS   (Unaudited)    
CURRENT ASSETS        
Cash and cash equivalents   $ 8,022,237       $ 7,358,856    
Short-term investments   2,290,667       1,222,053    
Short-term investments - other   1,600,000       2,600,000    
Accounts receivable, net   2,439,296       5,597,701    
Inventories, net (note 3)   8,996,223       9,571,807    
Prepaid expenses and other current assets (note 4)   2,144,150       1,672,422    
Income tax receivable         77,385    
Total Current Assets   25,492,573       28,100,224    
LONG-TERM ASSETS        
Long-term investments   6,192,261       7,399,963    
Financing right-of-use asset   72,914       107,991    
Property and equipment, net   11,571,961       12,071,019    
Intangible assets, net   1,883,236       1,989,782    
Goodwill   2,579,381       2,579,381    
Total Long-Term Assets   22,299,753       24,148,136    
TOTAL ASSETS   $ 47,792,326       $ 52,248,360    
         
LIABILITIES AND STOCKHOLDERS' EQUITY        
CURRENT LIABILITIES        
Accounts payable   $ 685,617       $ 2,633,520    
Accrued liabilities (note 5)   1,122,242       2,089,391    
Current financing lease liability (note 6)   45,411       59,376    
Income taxes payable   99,481       403,092    
Total Current Liabilities   1,952,751       5,185,379    
LONG-TERM LIABILITIES        
Net deferred income tax liability   543,441       439,275    
Long-term financing lease liability (note 6)   30,238       52,120    
TOTAL LIABILITIES   2,526,430       5,676,774    
         
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: 51,325,493 issued and 47,913,115 outstanding at June 30, 2020, and 50,824,355 issued and 47,411,977 outstanding at December 31, 2019   51,325       50,824    
Treasury stock, at cost   (5,353,019 )     (5,353,019 )  
Additional paid-in capital   30,106,383       29,584,172    
Accumulated other comprehensive loss   (3,070,095 )     (2,415,460 )  
Retained earnings   23,531,302       24,705,069    
TOTAL STOCKHOLDERS' EQUITY   45,265,896       46,571,586    
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 47,792,326       $ 52,248,360    

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,
  2020   2019   2020   2019
REVENUES (note 9)              
Sales of goods, net $ 3,999,139       $ 9,559,255       $ 10,860,097       $ 19,757,890    
Sales of services, net 360,340       564,776       946,524       1,199,199    
Total Revenues 4,359,479       10,124,031       11,806,621       20,957,089    
               
COST OF SALES              
Cost of goods sold-product 1,944,389       4,568,666       5,778,071       9,139,654    
Cost of goods sold-services 328,225       368,327       777,009       865,525    
Total Cost of Goods Sold 2,272,614       4,936,993       6,555,080       10,005,179    
               
GROSS PROFIT 2,086,865       5,187,038       5,251,541       10,951,910    
               
OPERATING EXPENSES              
General and administrative expenses 2,753,773       3,566,698       6,026,311       6,728,228    
Research and development 229,548       512,871       639,274       861,929    
Depreciation and amortization expense 180,997       110,910       328,469       227,133    
Total Operating Expenses 3,164,318       4,190,479       6,994,054       7,817,290    
               
INCOME (LOSS) FROM OPERATIONS (1,077,453 )     996,559       (1,742,513 )     3,134,620    
               
OTHER INCOME (EXPENSE)              
Gain on sale of fixed assets 157,455       21,410       157,455       38,340    
Other expense (1,665 )     (413 )     (1,318 )     (964 )  
Interest income 77,532       85,887       151,925       177,590    
Total Other Income 233,322       106,884       308,062       214,966    
               
INCOME (LOSS) BEFORE INCOME TAXES (844,131 )     1,103,443       (1,434,451 )     3,349,586    
               
INCOME TAX BENEFIT (EXPENSE) 35,628       (117,939 )     260,684       (695,464 )  
               
NET INCOME (LOSS) $ (808,503 )     $ 985,504       $ (1,173,767 )     $ 2,654,122    
               
OTHER COMPREHENSIVE INCOME (LOSS)              
Foreign currency translation gain (loss) $ 375,267       $ 102,435       $ (570,156 )     $ 251,850    
Unrealized gains (losses) on investments 72,875       49,495       (84,479 )     118,247    
Total Other Comprehensive Income (Loss) 448,142       151,930       (654,635 )     370,097    
               
COMPREHENSIVE INCOME (LOSS) $ (360,361 )     $ 1,137,434       $ (1,828,402 )     $ 3,024,219    
               
BASIC EARNINGS (LOSS) PER SHARE (note 10) $ (0.02 )     $ 0.02       $ (0.02 )     $ 0.06    
FULLY DILUTED EARNINGS (LOSS) PER SHARE (note 10) $ (0.02 )     $ 0.02       $ (0.02 )     $ 0.06    
               
BASIC WEIGHTED AVG NUMBER OF SHARES OUTSTANDING 47,723,208       47,348,137       47,607,825       47,392,534    
FULLY DILUTED WEIGHTED AVG NUMBER OF SHARES OUTSTANDING 47,723,208       48,124,208       47,607,825       48,192,849    

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,
  2020   2019
OPERATING ACTIVITIES      
Net income (loss) $ (1,173,767 )     $ 2,654,122    
Adjustments to reconcile net income (loss) to net cash provided by operating activities:      
Depreciation and amortization expense 566,791       483,063    
Gain on sale of fixed assets (153,973 )     (38,340 )  
Bad debt expense 236,005       229,792    
Stock awards issued for services 250,198       363,841    
Changes in operating assets and liabilities:      
Accounts receivable 3,248,693       983,865    
Income taxes receivable/payable (1,761 )     (1,261,267 )  
Inventories 445,634       1,831,865    
Prepaid expenses 168,718       (35,637 )  
Deferred tax asset/liability 104,166       205,314    
Accounts payable and accrued liabilities (2,843,685 )     (115,813 )  
Net Cash Provided by Operating Activities 847,019       5,300,805    
       
INVESTING ACTIVITIES      
Proceeds from sale of equipment       39,810    
Sale of investments 1,057,404       1,109,297    
Purchase of fixed assets (994,410 )     (1,429,735 )  
Payments for acquisitions, net of cash acquired       (2,088,814 )  
Net Cash Provided by (Used in) Investing Activities 62,994       (2,369,442 )  
       
FINANCING ACTIVITIES      
Value of equity awards surrendered by employees for tax liability (148,879 )     (184,433 )  
Cash received in exercise of stock options 2,020       6,850    
Purchase of treasury stock       (1,333,578 )  
Principal paid towards lease liability (34,267 )     (32,185 )  
Net Cash Used in Financing Activities (181,126 )     (1,543,346 )  
       
Effect of exchange rate changes on cash (65,506 )     (2,171 )  
       
NET INCREASE IN CASH 663,381       1,385,846    
CASH AT BEGINNING OF PERIOD 7,358,856       10,101,932    
CASH AT END OF PERIOD $ 8,022,237       $ 11,487,778    
       
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION      
       
CASH PAID FOR:      
Interest $ 4,247       $ 2,832    
Income taxes $       $ 1,793,281    
NON-CASH FINANCING AND INVESTING ACTIVITIES      
Common stock issued in settlement of accrued bonuses $ 419,373       $ 379,861    

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


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Disclaimer

Profire Energy Reports Financial Results for Second Quarter 2020 LINDON, Utah, Aug. 05, 2020 (GLOBE NEWSWIRE) - Profire Energy, Inc. (NASDAQ: PFIE), a technology company (the "Company") which creates, installs and services burner management solutions in the oil and gas industry, today reported financial results …

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