Profire Energy Reports Financial Results for Fiscal Year 2018

Company Recognizes Most Profitable Year in Company History with Net Income Up Over 36% to $6 Million or $0.12 Per Diluted Share

Revenues up 19% YOY to $45.6 Million

LINDON, Utah, March 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 fiscal year ended December 31, 2018. A conference call will be held on Thursday, March 7, 2019 at 1:00 p.m. EST to discuss the results.

Fiscal 2018 Highlights

  • Recognized Revenue of $45.6 million, The Second-Best Year in Company History
  • Net Income of $6 Million or $0.12 Per Diluted Share, a 36% Increase From the Previous Year, The Most Profitable Year in Company History
  • Realized Gross Profit of $22.9 Million
  • Cash and Liquid Investments of $22.6 Million and Remained Debt-Free
  • Received an Effective Internal Control Opinion from External Auditors
  • Received SIL Certification for the PF3100

Fiscal Year Financial Results
Total revenues for the period equaled $45.6 million or a 19% increase from the previous year. This is the second-best revenue year in Company history. This increase is largely attributed to our ability to leverage our expanding customer base.

Net income was $6 million or $0.12 per diluted share, compared to a net income of $4.4 million or $0.09 per share in the previous year making this the Company's most profitable year ever.

Total operating expenses were approximately $14.9 million or an 11% increase over last year. This change is primarily due to increased labor costs, higher sales commissions stemming from the 19% improvement in revenue, and investments in R&D.

Compared with the last fiscal year, operating expenses for general and administrative increased 12%, R&D increased 14% and depreciation decreased roughly 5%.

Gross profit increased to $22.9 million or 50.2% of total revenues, as compared to $20.3 million or 52.9% of total revenues in the previous year. Gross profit margins fluctuated this year largely due to adjustments in inventory reserves as well as changes in product mix, direct labor costs, and warranty reserves.

Cash and liquid investments totaled $22.6 million at the end of the year and the Company continues to operate debt-free. During the year the Company repurchased $4.7 million of Profire stock.

Management Commentary

“2018 was a banner year for Profire as we were able to achieve our most profitable year in Company history,” said Brenton Hatch, President and CEO of Profire Energy. “We believe that in spite of present market volatility, the future of Profire is exciting. Enabling our five-year growth plan requires investing some of our cash reserves in 2019. We made hires throughout 2018 in order to augment our efforts to provide superior products and unparalleled customer experience and plan to continue making strategic hires and investments in 2019."

“Our efforts in this past year paid off and we are now able to conclude that our internal control environment is operating effectively,” stated Ryan Oviatt, CFO of Profire. “Profire's focus on improving controls over financial reporting, cash management and internal investments are helping us to achieve our long-term goals and five-year growth plan. Throughout 2019 we plan to invest in current products, next-gen product development, international expansion, M&A activity, and other areas that we believe will add significant growth potential and opportunity.”

Conference Call

Profire Energy President and CEO Brenton Hatch and CFO Ryan Oviatt will host the call, followed by a question and answer period.
Date: Thursday, March 7, 2019
Time: 1:00 p.m. EST (11:00 a.m. MST)
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 5:00 p.m. EST on the same day through March 14, 2019.

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay Pin Number: 13688145

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 systems are increasingly becoming part of their solution. Profire Energy has offices in Lindon, Utah; Victoria, Texas; Homer, Pennsylvania; Greeley, Colorado; 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 holding a conference call on March 7, 2019 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
  December 31, 2018   December 31, 2017
Cash and cash equivalents $ 10,101,932     $ 11,445,799  
Accounts receivable, net 6,885,296     8,069,255  
Inventories, net 9,659,571     6,465,847  
Income tax receivable 173,124      
Short term investments 961,256     300,817  
Investments - other 3,596,484     4,009,810  
Prepaid expenses & other current assets 473,726     437,304  
Total Current Assets 31,851,389     30,728,832  
Long-term investments 7,978,380     8,517,182  
Property and equipment, net 8,020,462     7,197,499  
Deferred tax asset, net 85,092     72,817  
Goodwill 997,701     997,701  
Intangible assets, net 429,956     494,792  
Total Long-Term Assets 17,511,591     17,279,991  
TOTAL ASSETS $ 49,362,980     $ 48,008,823  
Accounts payable 1,177,985     1,780,977  
Income taxes payable 1,172,191     919,728  
Accrued vacation 311,435     237,949  
Accrued liabilities 1,445,510     1,022,745  
Total Current Liabilities 4,107,121     3,961,399  
TOTAL LIABILITIES 4,107,121     3,961,399  
Preferred shares: $0.001 par value, 10,000,000 shares authorized:  no shares issued or outstanding      
Common shares: $0.001 par value, 100,000,000 shares authorized: 49,707,805 issued and 47,932,305 outstanding at December 31, 2018 and 53,931,167 issued and 48,606,425 outstanding at December 31, 2017 49,708     53,931  
Treasury stock, at cost (2,609,485 )   (6,890,349 )
Additional paid-in capital 28,027,742     27,535,469  
Accumulated other comprehensive loss (2,895,683 )   (2,200,462 )
Retained earnings 22,683,577     25,548,835  
Total Stockholders' Equity 45,255,859     44,047,424  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 49,362,980     $ 48,008,823  

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

Condensed Consolidated Statements of Operations and Comprehensive Income
  For the Year Ended December 31,
    2018       2017
Sales of goods, net $ 42,870,050     $ 35,502,510  
Sales of services, net   2,744,485       2,783,866
Total Revenues   45,614,535       38,286,376
Cost of goods sold-product   20,789,229       16,116,161
Cost of goods sold-services   1,924,126       1,906,308
Total Cost of Goods Sold   22,713,355       18,022,469
GROSS PROFIT   22,901,180       20,263,907
General and administrative expenses   13,029,228       11,676,693
Research and development   1,397,440       1,221,211
Depreciation and amortization expense   500,554       526,583
Total Operating Expenses   14,927,222       13,424,487
INCOME FROM OPERATIONS   7,973,958       6,839,420
Gain on sale of fixed assets   129,989       62,492
Other income (expense)   (7,414 )     40,992
Interest income   501,429       180,325
Total Other Income   624,004       283,809
INCOME BEFORE INCOME TAXES   8,597,962       7,123,229
INCOME TAX EXPENSE   2,517,200       2,673,694
NET INCOME $ 6,080,762     $ 4,449,535  
Foreign currency translation gain (loss) $ (660,190 )   $ 587,951  
Unrealized gains (losses) on investments   (35,031 )     22,330
Total Other Comprehensive Income (Loss)   (695,221 )     610,281
COMPREHENSIVE INCOME $ 5,385,541     $ 5,059,816  
BASIC EARNINGS PER SHARE $ 0.13     $ 0.09  

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

Condensed Consolidated Statements of Cash Flows
  For the Year Ended December 31,
  2018   2017
Net income $ 6,080,762     $ 4,449,535  
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization expense 896,681     889,724  
Gain on sale of fixed assets (117,693 )   (62,574 )
Bad debt expense 186,882     262,766  
Stock awards issued for services 1,059,000     841,166  
Changes in operating assets and liabilities:      
Changes in accounts receivable 911,981     (2,591,392 )
Changes in income taxes receivable/payable 71,397     1,040,713  
Changes in inventories (3,417,671 )   1,346,919  
Changes in prepaid expenses (14,301 )   (49,923 )
Changes in deferred tax asset/liability (12,275 )   (11,876 )
Changes in accounts payable and accrued liabilities (92,207 )   1,597,753  
Net Cash Provided by Operating Activities 5,552,556     7,712,811  
Proceeds from sale of equipment 219,063     140,462  
Purchase of investments 140,356     (334,910 )
Purchase of fixed assets (1,927,906 )   (611,060 )
Net Cash Used in Investing Activities (1,568,487 )   (805,508 )
Value of equity awards surrendered by employees for tax liability (737,024 )   (43,139 )
Cash received in exercise of stock options 174,002     111,676  
Purchase of Treasury stock (4,670,134 )   (3,307,544 )
Net Cash Used in Financing Activities (5,233,156 )   (3,239,007 )
Effect of exchange rate changes on cash (94,780 )   97,882  
NET INCREASE (DECREASE) IN CASH (1,343,867 )   3,766,178  
CASH AT BEGINNING OF PERIOD 11,445,799     7,679,621  
CASH AT END OF PERIOD 10,101,932     $ 11,445,799  
Income taxes 2,163,826     1,710,135  

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

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Source: Profire Energy, Inc.