Profire Energy Reports Financial Results for Second Quarter Fiscal Year 2021
Company Reports Sequential Improvement in Revenue and Gross Margin
LINDON, Utah, Aug. 04, 2021 (GLOBE NEWSWIRE) -- Profire Energy, Inc. (NASDAQ: PFIE), a technology company (the "Company") that provides solutions which enhance the efficiency, safety, and reliability of industrial combustion appliances, today reported financial results for its second quarter fiscal 2021 ending June 30, 2021. A conference call will be held on Thursday, August 5, 2021 at 1:00 p.m. ET to discuss the results.
Second Quarter Summary
- Revenue increased 18.5% sequentially to $6.0 million
- Realized gross profit of $2.7 million
- Gross margin increased 130 basis points sequentially to 44.0% of total revenues
- Net loss of ($397,166) or ($0.01) per share
- EBITDA improvement of $453,546 year-over-year to ($161,127)
- Cash and liquid investments of $19.1 million while remaining debt-free
“The continued reopening of most global economies during the second quarter resulted in increased demand and higher commodity prices across the oil and gas markets. Our sequential and year-over-year revenue growth reflects increased product sales and resumption of equipment maintenance that was largely deferred during the pandemic. We continued to reinvest in our company in response to the increased demand and improved industry outlook. Additionally, I am pleased that we were able to generate operating cash flow and increase our cash and liquid investments in the first six months of this year while remaining debt free,” said Ryan Oviatt, Co-Chief Executive Officer and CFO of Profire Energy.
Second Quarter 2021 Financial Results
Total revenues for the period equaled $6.0 million, compared to $5.1 million in the first quarter of 2021 and $4.4 million in the prior-year quarter. The sequential and year-over-year increases reflect improved customer demand for product sales and services.
Gross profit was $2.7 million, compared to $2.2 million in the first quarter of 2021 and $2.1 million in the prior-year quarter. Gross margin was 44.0% of revenues, compared to 42.7% of revenues in the prior quarter and 47.9% of revenues in the second quarter of 2020. The year-over-year decrease was due to revenue mix and the ongoing impact of COVID-19.
Total operating expenses were $3.3 million, compared to $3.0 million in the first quarter of 2021 and $3.2 million in the year-ago quarter. The sequential increase reflects the reinvestment within sales and product development in response to the increased demand as well as cost pressure in the labor market.
Compared with the same quarter last year, operating expenses for G&A increased 1%, R&D increased 31% and depreciation decreased by 8%.
Net loss for the first quarter was ($397,000) or ($0.01) per share, compared to a net loss of ($602,000) or ($0.01) per share in the first quarter of 2021 and a net loss of ($809,000) or ($0.02) per share in the same quarter last year.
Cash and liquid investments totaled $19.1 million at June 30, 2021 compared to $17.6 million at the end of 2020, and the Company continues to operate debt-free.
“We are encouraged by our Q2 results, despite the challenges that remain in the petroleum industry. Our team has performed well on our strategy to further our excellent brand reputation and product performance in the upstream, midstream and downstream utility space,” stated Cameron Tidball, Co-CEO of Profire Energy. “We continue to demonstrate suitability in a wide variety of burner and combustion management applications across North America. We remain focused on supporting our channel partners, driving organic growth, and continued product development and enhancement.”
Conference Call
| Profire Energy Executives will host the call, followed by a question and answer period. |
| Date: Thursday, August 5, 2021 |
| 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=145937. 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 19, 2021. Toll-free replay number: 1-844-512-2921 |
| International replay number: 1-412-317-6671 |
| Replay Pin Number: 13721878 |
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 expected growth, product development, and the Company’s plans to make internal and external investments. 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, Co-President 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, 2021 | December 31, 2020 | |||||||
| ASSETS | (Unaudited) | |||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | 9,921,375 | $ | 9,148,312 | ||||
| Short-term investments | 2,087,332 | 2,388,601 | ||||||
| Accounts receivable, net | 3,787,084 | 3,719,508 | ||||||
| Inventories, net (note 3) | 7,911,996 | 8,414,772 | ||||||
| Prepaid expenses and other current assets (note 4) | 773,146 | 1,678,428 | ||||||
| Income tax receivable | 785,590 | 486,154 | ||||||
| Total Current Assets | 25,266,523 | 25,835,775 | ||||||
| LONG-TERM ASSETS | ||||||||
| Long-term investments | 7,132,675 | 6,064,294 | ||||||
| Financing right-of-use asset | 28,758 | 50,094 | ||||||
| Property and equipment, net | 11,721,692 | 12,021,811 | ||||||
| Intangible assets, net | 1,660,504 | 1,771,870 | ||||||
| Goodwill | 2,579,381 | 2,579,381 | ||||||
| Total Long-Term Assets | 23,123,010 | 22,487,450 | ||||||
| TOTAL ASSETS | $ | 48,389,533 | $ | 48,323,225 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | 1,257,437 | $ | 1,178,979 | ||||
| Accrued liabilities (note 5) | 1,486,578 | 1,196,870 | ||||||
| Current financing lease liability (note 6) | 30,238 | 39,451 | ||||||
| Total Current Liabilities | 2,774,253 | 2,415,300 | ||||||
| LONG-TERM LIABILITIES | ||||||||
| Net deferred income tax liability | 601,616 | 522,870 | ||||||
| Long-term financing lease liability (note 6) | — | 12,669 | ||||||
| TOTAL LIABILITIES | 3,375,869 | 2,950,839 | ||||||
| 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: 51,651,386 issued and 48,239,008 outstanding at June 30, 2021, and 51,384,961 issued and 47,972,583 outstanding at December 31, 2020 | 51,651 | 51,385 | ||||||
| Treasury stock, at cost | (5,353,019 | ) | (5,353,019 | ) | ||||
| Additional paid-in capital | 30,582,504 | 30,293,472 | ||||||
| Accumulated other comprehensive loss | (1,798,278 | ) | (2,148,924 | ) | ||||
| Retained earnings | 21,530,806 | 22,529,472 | ||||||
| TOTAL STOCKHOLDERS' EQUITY | 45,013,664 | 45,372,386 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 48,389,533 | $ | 48,323,225 | ||||
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 Loss | |||||||||||||||
| (Unaudited) | |||||||||||||||
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||
| REVENUES (note 8) | |||||||||||||||
| Sales of goods, net | $ | 5,374,539 | $ | 3,999,139 | $ | 10,032,074 | $ | 10,860,097 | |||||||
| Sales of services, net | 659,744 | 360,340 | 1,094,558 | 946,524 | |||||||||||
| Total Revenues | 6,034,283 | 4,359,479 | 11,126,632 | 11,806,621 | |||||||||||
| COST OF SALES | |||||||||||||||
| Cost of goods sold-product | 2,910,879 | 1,944,389 | 5,448,513 | 5,778,071 | |||||||||||
| Cost of goods sold-services | 465,672 | 328,225 | 845,700 | 777,009 | |||||||||||
| Total Cost of Goods Sold | 3,376,551 | 2,272,614 | 6,294,213 | 6,555,080 | |||||||||||
| GROSS PROFIT | 2,657,732 | 2,086,865 | 4,832,419 | 5,251,541 | |||||||||||
| OPERATING EXPENSES | |||||||||||||||
| General and administrative expenses | 2,783,872 | 2,753,773 | 5,338,408 | 6,026,311 | |||||||||||
| Research and development | 301,445 | 229,548 | 558,336 | 639,274 | |||||||||||
| Depreciation and amortization expense | 166,852 | 180,997 | 334,337 | 328,469 | |||||||||||
| Total Operating Expenses | 3,252,169 | 3,164,318 | 6,231,081 | 6,994,054 | |||||||||||
| LOSS FROM OPERATIONS | (594,437 | ) | (1,077,453 | ) | (1,398,662 | ) | (1,742,513 | ) | |||||||
| OTHER INCOME (EXPENSE) | |||||||||||||||
| Gain on sale of fixed assets | 38,492 | 157,455 | 112,393 | 157,455 | |||||||||||
| Other income (expense) | 4,836 | (1,665 | ) | 4,739 | (1,318 | ) | |||||||||
| Interest income | 28,569 | 77,532 | 49,631 | 151,925 | |||||||||||
| Total Other Income | 71,897 | 233,322 | 166,763 | 308,062 | |||||||||||
| LOSS BEFORE INCOME TAXES | (522,540 | ) | (844,131 | ) | (1,231,899 | ) | (1,434,451 | ) | |||||||
| INCOME TAX BENEFIT | 125,374 | 35,628 | 233,233 | 260,684 | |||||||||||
| NET LOSS | $ | (397,166 | ) | $ | (808,503 | ) | $ | (998,666 | ) | $ | (1,173,767 | ) | |||
| OTHER COMPREHENSIVE INCOME (LOSS) | |||||||||||||||
| Foreign currency translation gain (loss) | $ | 163,485 | $ | 375,267 | $ | 303,091 | $ | (570,156 | ) | ||||||
| Unrealized gains (losses) on investments | 55,529 | 72,875 | 47,555 | (84,479 | ) | ||||||||||
| Total Other Comprehensive Income (Loss) | 219,014 | 448,142 | 350,646 | (654,635 | ) | ||||||||||
| COMPREHENSIVE LOSS | $ | (178,152 | ) | $ | (360,361 | ) | $ | (648,020 | ) | $ | (1,828,402 | ) | |||
| BASIC LOSS PER SHARE (note 9) | $ | (0.01 | ) | $ | (0.02 | ) | $ | (0.02 | ) | $ | (0.02 | ) | |||
| FULLY DILUTED LOSS PER SHARE (note 9) | $ | (0.01 | ) | $ | (0.02 | ) | $ | (0.02 | ) | $ | (0.02 | ) | |||
| BASIC WEIGHTED AVG NUMBER OF SHARES OUTSTANDING | 48,054,136 | 47,723,208 | 48,022,295 | 47,607,825 | |||||||||||
| FULLY DILUTED WEIGHTED AVG NUMBER OF SHARES OUTSTANDING | 48,054,136 | 47,723,208 | 48,022,295 | 47,607,825 | |||||||||||
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, | |||||||
| 2021 | 2020 | ||||||
| OPERATING ACTIVITIES | |||||||
| Net loss | $ | (998,666 | ) | $ | (1,173,767 | ) | |
| Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
| Depreciation and amortization expense | 683,597 | 566,791 | |||||
| Gain on sale of fixed assets | (112,393 | ) | (153,973 | ) | |||
| Bad debt expense | (32,463 | ) | 236,005 | ||||
| Stock awards issued for services | 332,127 | 250,198 | |||||
| Changes in operating assets and liabilities: | |||||||
| Accounts receivable | (7,313 | ) | 3,248,693 | ||||
| Income taxes receivable/payable | (299,436 | ) | (1,761 | ) | |||
| Inventories | 577,341 | 445,634 | |||||
| Prepaid expenses and other current assets | 988,464 | 168,718 | |||||
| Deferred tax asset/liability | 78,746 | 104,166 | |||||
| Accounts payable and accrued liabilities | 345,818 | (2,843,685 | ) | ||||
| Net Cash Provided by Operating Activities | 1,555,822 | 847,019 | |||||
| INVESTING ACTIVITIES | |||||||
| Proceeds from sale of property and equipment | 69,484 | — | |||||
| Sale (purchase) of investments | (719,817 | ) | 1,057,404 | ||||
| Purchase of property and equipment | (93,049 | ) | (994,410 | ) | |||
| Net Cash Provided by (Used in) Investing Activities | (743,382 | ) | 62,994 | ||||
| FINANCING ACTIVITIES | |||||||
| Value of equity awards surrendered by employees for tax liability | (42,829 | ) | (148,879 | ) | |||
| Cash received in exercise of stock options | — | 2,020 | |||||
| Principal paid towards lease liability | (21,749 | ) | (34,267 | ) | |||
| Net Cash Used in Financing Activities | (64,578 | ) | (181,126 | ) | |||
| Effect of exchange rate changes on cash | 25,201 | (65,506 | ) | ||||
| NET INCREASE IN CASH | 773,063 | 663,381 | |||||
| CASH AT BEGINNING OF PERIOD | 9,148,312 | 7,358,856 | |||||
| CASH AT END OF PERIOD | $ | 9,921,375 | $ | 8,022,237 | |||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | |||||||
| CASH PAID FOR: | |||||||
| Interest | $ | 2,353 | $ | 4,247 | |||
| Income taxes | $ | 17,150 | $ | — | |||
| NON-CASH FINANCING AND INVESTING ACTIVITIES | |||||||
| Common stock issued in settlement of accrued bonuses | $ | — | $ | 419,373 | |||
These financial statements should be read in conjunction with the Form 10-Q and accompanying footnotes.
Released August 4, 2021