Profire Energy Reports Financial Results for First Quarter Fiscal 2019

Company recognizes $10.8 million in revenues, 53.2% gross margin and announces planned launch of next-generation burner management system

LINDON, Utah, May 08, 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 quarter ending March 31, 2019. A conference call will be held on Thursday, May 9, 2019 at 1:00 p.m. ET to discuss the results.


  • Recognized Revenue of $10.8 million
  • Net Income of $1.7 Million or $0.03 Per Diluted Share,
  • Realized Gross Profit of $5.8 Million or 53.2% of Total Revenues
  • Cash and Liquid Investments of $23.4 Million and Remained Debt-Free
  • Announces Planned Launch of PF2200 Burner Management System

Fiscal First Quarter 2019 Financial Results
Total revenues for the period equaled $10.8 million, a 2% sequential increase over the fourth quarter of 2018. Profire's legacy business continues to perform well and the Company achieved higher sales of the PF3100 compared to the previous quarter.

Net income was $1.7 million or $0.03 per diluted share, compared to a net income of $1.9 million or $0.04 per share in the first quarter of 2018.

Total operating expenses were approximately $3.6 million, a 6% decrease from the same quarter last year.
This change was primarily due to lower sales commissions from lower revenues and lower R&D consulting costs as a result of the Company receiving the SIL certification for its PF3100 burner management system in July of last year.

Compared with the same quarter last year, operating expenses for general and administrative decreased 5%, R&D decreased 13% and depreciation decreased 10%.

Gross profit was $5.8 million or 53.2% of total revenues which was up from 50.4% in the same quarter last year. This increase was driven by improvements in inventory reserves, product mix, and warranty reserves.

Cash and liquid investments totaled $23.4 million at March 31, 2019 compared to $22.6 million at the end of 2018, and the Company continues to operate debt-free. During the first quarter of 2019 the Company repurchased $1.3 million of Profire stock pursuant to its previously announced share repurchase program.

PF2200 Burner Management System

Today, the Company is also announcing the planned launch of its next-generation burner management product line, the PF2200. Development of the PF2200 is nearing completion, and the Company expects to begin commercial sales of the PF2200 in the fall of 2019 once field trials have been completed and certifications have been obtained. The PF2200 implements a number of user-friendly upgrades and auxiliary features that are not currently available with the Company’s PF2100 burner management system.

Management Commentary

"We have planned for the market volatility and conditions that we are experiencing to start 2019 as we expect revenues in the first half of 2019 to remain relatively flat with Q4 2018 and pick up as the year moves along,” said Brenton Hatch, President and CEO of Profire Energy. "We believe our growth strategy allows for long-term growth whether or not overall industry conditions improve significantly. We are making strategic investments with the intent of increasing revenues in the coming years. These investments will help Profire remain a technology leader within the industry."

"As we mentioned last quarter, we still expect total operating expenses for the full year of 2019 to increase by roughly 20% when compared to 2018, which may out pace revenue growth in the short term due to the ongoing industry challenges,” stated Ryan Oviatt, CFO of Profire. "We plan to invest both internally and externally in 2019 to take advantages of opportunities that we believe will increase Profire’s market potential. This increased investment does not mean that we plan to move away from core values that have made us successful throughout the previous years."

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, May 9, 2019
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: 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 May 16, 2019.

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay Pin Number: 13690322

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’s expected growth, the Company’s plans to make internal and external investments, the Company’s expected increase in operating expenses, the Company’s planned launch of its PF2200 Burner Management System, 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
  March 31, 2019   December 31, 2018
Cash and cash equivalents $ 11,456,878     $ 10,101,932  
Accounts receivable, net 6,444,792     6,885,296  
Inventories, net 9,062,616     9,659,571  
Income tax receivable 284,805     173,124  
Short-term investments 806,941     961,256  
Short-term investments - other 3,063,843     3,596,484  
Prepaid expenses & other current assets 719,296     473,726  
Total Current Assets 31,839,171     31,851,389  
Long-term investments 8,099,852     7,978,380  
Property and equipment, net 8,276,796     8,020,462  
Net deferred tax asset     85,092  
Financing right-of-use asset 116,128      
Goodwill 997,701     997,701  
Intangible assets, net 430,776     429,956  
Total Long-Term Assets 17,921,253     17,511,591  
TOTAL ASSETS $ 49,760,424     $ 49,362,980  
Accounts payable 1,067,595     1,177,985  
Income taxes payable 1,046,858     1,172,191  
Current financing lease liability 65,098      
Accrued vacation 373,995     311,435  
Accrued liabilities 1,003,913     1,445,510  
Total Current Liabilities 3,557,459     4,107,121  
Net deferred income tax liability 38,672      
Long-term financing lease liability 51,674      
TOTAL LIABILITIES 3,647,805     4,107,121  

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: 49,859,011 issued and 47,308,224 outstanding at March 31, 2019, and 49,707,805 issued and 47,932,305 outstanding at December 31, 2018 49,859     49,708  
Treasury stock, at cost (3,943,063 )   (2,609,485 )
Additional paid-in capital 28,331,144     28,027,742  
Accumulated other comprehensive loss (2,677,516 )   (2,895,683 )
Retained earnings 24,352,195     22,683,577  
TOTAL STOCKHOLDERS' EQUITY 46,112,619     45,255,859  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 49,760,424     $ 49,362,980  

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

Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited)
  For the Three Months Ended March 31,
  2019     2018  
Sales of goods, net $ 10,198,635     $ 11,454,615  
Sales of services, net 634,423     715,103  
Total Revenues 10,833,058     12,169,718  
Cost of goods sold-product 4,570,988     5,557,710  
Cost of goods sold-services 497,198     481,867  
Total Cost of Goods Sold 5,068,186     6,039,577  
GROSS PROFIT 5,764,872     6,130,141  
General and administrative expenses 3,161,530     3,341,903  
Research and development 349,058     403,220  
Depreciation and amortization expense 116,223     128,717  
Total Operating Expenses 3,626,811     3,873,840  
INCOME FROM OPERATIONS 2,138,061     2,256,301  
Gain on sale of fixed assets 16,930     64,831  
Other expense (551 )   -1,792  
Interest income 91,703     50,708  
Total Other Income 108,082     113,747  
INCOME BEFORE INCOME TAXES 2,246,143     2,370,048  
INCOME TAX EXPENSE 577,525     493,820  
NET INCOME $ 1,668,618     $ 1,876,228  
Foreign currency translation gain (loss) 149,415     (239,129 )
Unrealized gains (losses) on investments 68,752     -33,235  
Total Other Comprehensive Income (Loss) 218,167     -272,364  
COMPREHENSIVE INCOME $ 1,886,785     $ 1,603,864  
BASIC EARNINGS PER SHARE $ 0.04     $ 0.04  

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

Condensed Consolidated Statements of Cash Flows (Unaudited)

  For the Three Months Ended March 31,
  2019   2018
Net income $ 1,668,618     $ 1,876,228  
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization expense 249,889     220,245  
Gain on sale of fixed assets (16,930 )   (64,731 )
Bad debt expense 177,906     63,566  
Stock awards issued for services 445,984     581,619  
Changes in operating assets and liabilities:      
Changes in accounts receivable 275,440     (746,179 )
Changes in income taxes receivable/payable (234,042 )   591,277  
Changes in inventories 656,988     (863,148 )
Changes in prepaid expenses (239,395 )   104,008  
Changes in deferred tax asset/liability 123,764     (111,406 )
Changes in accounts payable and accrued liabilities (499,721 )   (198,540 )
Net Cash Provided by Operating Activities 2,608,501     1,452,939  
Proceeds from sale of equipment 18,400     139,763  
Sale (Purchase) of investments 647,739     (484,142 )
Purchase of fixed assets (443,883 )   (234,778 )
Net Cash Provided by (Used in) Investing Activities 222,256     (579,157 )
Value of equity awards surrendered by employees for tax liability (143,022 )   (83,600 )
Cash received in exercise of stock options     74,241  
Purchase of Treasury stock (1,333,579 )    
Principal paid towards lease liability (15,717 )    
Net Cash Used in Financing Activities (1,492,318 )   (9,359 )
Effect of exchange rate changes on cash 16,507     (113,644 )
NET INCREASE IN CASH 1,354,946     750,779  
CASH AT BEGINNING OF PERIOD 10,101,932     11,445,799  
CASH AT END OF PERIOD $ 11,456,878     $ 12,196,578  
Interest 1,411      
Income taxes 711,524      

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

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Source: Profire Energy, Inc.