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: http://public.viavid.com/index.php?id=133489. 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 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 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.
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 | |||||||
| December 31, 2018 | December 31, 2017 | ||||||
| CURRENT ASSETS | |||||||
| 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 ASSETS | |||||||
| 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 | |||
| CURRENT LIABILITIES | |||||||
| 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 | |||||
| STOCKHOLDERS' EQUITY | |||||||
| 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.
| PROFIRE ENERGY, INC. AND SUBSIDIARIES | ||||||||
| Condensed Consolidated Statements of Operations and Comprehensive Income | ||||||||
| For the Year Ended December 31, | ||||||||
| 2018 | 2017 | |||||||
| REVENUES | ||||||||
| 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 SALES | ||||||||
| 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 | ||||||
| OPERATING EXPENSES | ||||||||
| 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 | ||||||
| OTHER INCOME (EXPENSE) | ||||||||
| 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 | ||||
| OTHER COMPREHENSIVE INCOME (LOSS) | ||||||||
| 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 | ||||
| FULLY DILUTED EARNINGS PER SHARE | $ | 0.12 | $ | 0.09 | ||||
| BASIC WEIGHTED AVG NUMBER OF SHARES OUTSTANDING | 48,471,011 | 49,365,592 | ||||||
| FULLY DILUTED WEIGHTED AVG NUMBER OF SHARES OUTSTANDING | 49,222,353 | 49,858,435 | ||||||
These financial statements should be read in conjunction with the Form 10-K and accompanying footnotes.
| PROFIRE ENERGY, INC. AND SUBSIDIARIES | |||||||
| Condensed Consolidated Statements of Cash Flows | |||||||
| For the Year Ended December 31, | |||||||
| 2018 | 2017 | ||||||
| OPERATING ACTIVITIES | |||||||
| 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 | |||||
| INVESTING ACTIVITIES | |||||||
| 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 | ) | |||
| FINANCING ACTIVITIES | |||||||
| 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 | ||||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | |||||||
| CASH PAID FOR: | |||||||
| Interest | — | — | |||||
| Income taxes | 2,163,826 | 1,710,135 | |||||
These financial statements should be read in conjunction with the Form 10-K and accompanying footnotes
Released March 6, 2019