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Profire Energy Reports Financial Results for Third Quarter 2020

Nachrichtenquelle: globenewswire
09.11.2020, 22:15  |  140   |   |   

LINDON, Utah, Nov. 09, 2020 (GLOBE NEWSWIRE) -- Profire Energy, Inc. (NASDAQ: PFIE), a technology company which engineers, install and services burner and combustions management solutions in the oil and gas and other industries, today reported financial results for its third quarter ending September 30, 2020. A conference call will be held on Tuesday, November 10, 2020 at 1:00 p.m. ET to discuss the results.

Third Quarter Summary

  • Recognized revenue of $4.0 million

  • Realized gross profit of $1.5 million or 38.0% of total revenues

  • Net loss of $1.1 million or ($0.02) per share

  • Cash and liquid investments of $17.2 million and remained debt-free

“Our early response to the COVID-19 pandemic has resulted in significant reductions in our operating cost structure and lower G&A expense, all while maintaining our debt-free balance sheet,” said Ryan Oviatt, Co-CEO and CFO of Profire Energy.  “These efforts continue to be outweighed by lower demand and global consumption of oil and gas, combined with lower commodity prices due to a supply imbalance in the markets. However, we remain hopeful in our ability to find new and innovative ways to continue to drive long-term shareholder return.”  

Third Quarter 2020 Financial Results

Total revenues for the period equaled $4.0 million, compared to $4.4 million in the second quarter of 2020, and $9.9 million in the same period a year ago. The third quarter’s results reflect the continued impact of COVID-19 on consumer demand, as well as a 27% drop in the average oil price during the same period, due in part to excess supply in the market from global producers.

Gross profit was $1.5 million, compared to $2.1 million in the second quarter of 2020 and $5.2 million in the year-ago quarter. Gross margin was 38.0% of revenues, compared to 47.9% of revenues in the previous quarter and 52.2% of revenues in the third quarter of 2019. The sequential gross margin decline was primarily related to product mix and related reserves, and the significant decline in revenue pushed the fixed cost impact on costs of goods and services above historical levels.

Total operating expenses were $2.8 million, compared to $3.2 million in prior quarter and $4.0 million in the same period a year ago. The sequential and year-over-year decrease 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 31%, R&D decreased 32% and depreciation increased by 30%.

Net loss was $1.1 million or ($0.02) per share, compared to a net loss of $808,503, or ($0.02) in the second quarter of 2020, and net income of $921,748 or $0.02 per diluted share in the same quarter last year.

Cash and investments totaled $17.2 million at September 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 $152,000.  Working capital as of September 30, 2020 was $22.5 million, compared to $22.9 million at the end of 2019.

“We remain highly focused on building our sales funnel, maintaining and strengthening our customer relationships, and most important, research and development in order to maintain our leading brand awareness and market share,” said Cameron Tidball, Co-CEO of Profire Energy. “We are assessing and analyzing the vast market and opportunity for combustion solutions that reside outside of our traditional market wherein we can leverage our world class burner management systems to serve a more diverse customer base.” 

Conference Call

Profire Energy executives will host the call, followed by a question and answer period.

Date: Tuesday, November 10, 2020
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=142279  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 24, 2020.

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay Pin: 13712689

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 plans to assess opportunities outside of traditional markets. 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, CFO
(801) 796-5127

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

PROFIRE ENERGY, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
    As of
    September 30, 2020   December 31, 2019
ASSETS   (Unaudited)    
CURRENT ASSETS        
Cash and cash equivalents   $ 7,919,545     $ 7,358,856  
Short-term investments   2,239,256     1,222,053  
Short-term investments - other   600,000     2,600,000  
Accounts receivable, net   2,397,985     5,597,701  
Inventories, net (note 3)   8,780,571     9,571,807  
Prepaid expenses and other current assets (note 4)   2,178,682     1,672,422  
Income tax receivable   465,828     77,385  
Total Current Assets   24,581,867     28,100,224  
LONG-TERM ASSETS        
Long-term investments   6,450,891     7,399,963  
Financing right-of-use asset   61,347     107,991  
Property and equipment, net   11,595,366     12,071,019  
Intangible assets, net   1,827,553     1,989,782  
Goodwill   2,579,381     2,579,381  
Total Long-Term Assets   22,514,538     24,148,136  
TOTAL ASSETS   $ 47,096,405     $ 52,248,360  
         
LIABILITIES AND STOCKHOLDERS' EQUITY        
CURRENT LIABILITIES        
Accounts payable   $ 980,601     $ 2,633,520  
Accrued liabilities (note 5)   1,061,515     2,089,391  
Current financing lease liability (note 6)   43,024     59,376  
Income taxes payable       403,092  
Total Current Liabilities   2,085,140     5,185,379  
LONG-TERM LIABILITIES        
Net deferred income tax liability   484,115     439,275  
Long-term financing lease liability (note 6)   20,927     52,120  
TOTAL LIABILITIES   2,590,182     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: 51,371,960 issued and 47,959,582 outstanding at September 30, 2020, and 50,824,355 issued and 47,411,977 outstanding at December 31, 2019   51,371     50,824  
Treasury stock, at cost   (5,353,019 )   (5,353,019 )
Additional paid-in capital   30,208,082     29,584,172  
Accumulated other comprehensive loss   (2,873,765 )   (2,415,460 )
Retained earnings   22,473,554     24,705,069  
TOTAL STOCKHOLDERS' EQUITY   44,506,223     46,571,586  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 47,096,405     $ 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 September 30,   For the Nine Months Ended September 30,
  2020   2019   2020   2019
REVENUES (note 9)              
Sales of goods, net $ 3,517,280     $ 9,251,947     $ 14,377,377     $ 29,009,837  
Sales of services, net 482,826     653,814     1,429,350     1,853,013  
Total Revenues 4,000,106     9,905,761     15,806,727     30,862,850  
               
COST OF SALES              
Cost of goods sold-product 2,141,888     4,326,335     7,919,959     13,465,989  
Cost of goods sold-services 337,795     410,130     1,114,804     1,275,655  
Total Cost of Goods Sold 2,479,683     4,736,465     9,034,763     14,741,644  
               
GROSS PROFIT 1,520,423     5,169,296     6,771,964     16,121,206  
               
OPERATING EXPENSES              
General and administrative expenses 2,247,614     3,256,023     8,273,925     9,984,251  
Research and development 433,800     641,716     1,073,074     1,503,645  
Depreciation and amortization expense 168,507     130,105     496,976     357,238  
Total Operating Expenses 2,849,921     4,027,844     9,843,975     11,845,134  
               
INCOME (LOSS) FROM OPERATIONS (1,329,498 )   1,141,452     (3,072,011 )   4,276,072  
               
OTHER INCOME (EXPENSE)              
Gain on sale of fixed assets 36,483     34,826     193,938     73,166  
Other expense (48,349 )   (2,065 )   (49,667 )   (3,029 )
Interest income 103,364     38,478     255,289     216,068  
Total Other Income 91,498     71,239     399,560     286,205  
               
INCOME (LOSS) BEFORE INCOME TAXES (1,238,000 )   1,212,691     (2,672,451 )   4,562,277  
               
INCOME TAX BENEFIT (EXPENSE) 180,252     (290,943 )   440,936     (986,407 )
               
NET INCOME (LOSS) $ (1,057,748 )   $ 921,748     $ (2,231,515 )   $ 3,575,870  
               
OTHER COMPREHENSIVE INCOME (LOSS)              
Foreign currency translation gain (loss) $ 233,170     $ (91,397 )   $ (336,986 )   $ 160,453  
Unrealized gains (losses) on investments (36,840 )   (12,386 )   (121,319 )   105,861  
Total Other Comprehensive Income (Loss) 196,330     (103,783 )   (458,305 )   266,314  
               
COMPREHENSIVE INCOME (LOSS) $ (861,418 )   $ 817,965     $ (2,689,820 )   $ 3,842,184  
               
BASIC EARNINGS (LOSS) PER SHARE (note 10) $ (0.02 )   $ 0.02     $ (0.05 )   $ 0.08  
FULLY DILUTED EARNINGS (LOSS) PER SHARE (note 10) $ (0.02 )   $ 0.02     $ (0.05 )   $ 0.07  
               
BASIC WEIGHTED AVG NUMBER OF SHARES OUTSTANDING 47,933,318     47,739,192     47,717,114     47,509,357  
FULLY DILUTED WEIGHTED AVG NUMBER OF SHARES OUTSTANDING 47,933,318     48,469,246     47,717,114     48,259,900  

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 Nine Months Ended September 30,
  2020   2019
OPERATING ACTIVITIES      
Net income (loss) $ (2,231,515 )   $ 3,575,870  
Adjustments to reconcile net income (loss) to net cash provided by operating activities:      
Depreciation and amortization expense 860,028     732,396  
Gain on sale of fixed assets (193,938 )   (73,166 )
Bad debt expense 182,179     255,943  
Stock awards issued for services 351,943     358,270  
Changes in operating assets and liabilities:      
Accounts receivable 3,404,439     1,244,104  
Income taxes receivable/payable (404,304 )   (890,523 )
Inventories 714,245     1,711,446  
Prepaid expenses 43,099     (586,576 )
Deferred tax asset/liability 44,840     219,138  
Accounts payable and accrued liabilities (2,648,339 )   855,207  
Net Cash Provided by Operating Activities 122,677     7,402,109  
       
INVESTING ACTIVITIES      
Proceeds from sale of equipment 16,313     75,310  
Sale of investments 1,814,070     2,476,227  
Purchase of fixed assets (1,146,400 )   (3,309,191 )
Payments for acquisitions, net of cash acquired     (4,322,722 )
Net Cash Provided by (Used in) Investing Activities 683,983     (5,080,376 )
       
FINANCING ACTIVITIES      
Value of equity awards surrendered by employees for tax liability (148,879 )   (185,004 )
Cash received in exercise of stock options 2,020     8,870  
Purchase of treasury stock     (2,249,745 )
Principal paid towards lease liability (45,965 )   (53,190 )
Net Cash Used in Financing Activities (192,824 )   (2,479,069 )
       
Effect of exchange rate changes on cash (53,147 )   (468 )
       
NET CHANGE IN CASH 560,689     (157,804 )
CASH AT BEGINNING OF PERIOD 7,358,856     10,101,932  
CASH AT END OF PERIOD $ 7,919,545     $ 9,944,128  
       
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION      
       
CASH PAID FOR:      
Interest $ 4,946     $ 4,469  
Income taxes $ 402,510     $ 1,793,281  
NON-CASH FINANCING AND INVESTING ACTIVITIES      
Common stock issued in settlement of accrued bonuses $ 419,373     $ 379,861  
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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Disclaimer

Profire Energy Reports Financial Results for Third Quarter 2020 LINDON, Utah, Nov. 09, 2020 (GLOBE NEWSWIRE) - Profire Energy, Inc. (NASDAQ: PFIE), a technology company which engineers, install and services burner and combustions management solutions in the oil and gas and other industries, today reported …

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