Profire Energy Reports Financial Results for Second Quarter 2023

Company Reports Best Six-Month Revenue and Net Income in Company History

LINDON, Utah, Aug. 09, 2023 (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 ending June 30, 2023. A conference call will be held on Thursday, August 10, 2023, at 8:30 a.m. ET to discuss the results.

Second Quarter Summary (comparisons to prior-year quarter)

  • Revenue of $14.4 million, a 50% increase
  • Gross profit of $7.4 million, a 68% increase
  • Gross margin of 51.3%, a 560 basis point increase
  • Net income of $2.9 million, or $0.06 per diluted share, versus $284,829 and $0.01
  • Generated EBITDA of $3.7 million, versus $587,024
  • Cash and investments of $17.4 million with no debt
  • Began repurchasing shares under the previously announced $2 million share repurchase program.

“Our second quarter results reflect the sustained momentum across our business which contributed to a 50 percent increase in revenue over the prior year and the highest quarterly net income and EBITDA in company history,” said Ryan Oviatt, Co-Chief Executive Officer and CFO of Profire Energy. “The last 6-month and 12-month periods represent the best ever consecutive 6 and 12-month periods in company history. We are excited about the path we are on and our ability to continue to operate at these record setting levels. We are a much better and stronger company today than we were when we last achieved this level of quarterly revenues, profits and cashflows.”

Second Quarter 2023 Financial Results

Total revenues for the period equaled $14.4 million, compared to $14.6 million in the first quarter of 2023 and $9.6 million in the prior-year quarter. The sequential performance was basically flat and reflects the strength of our sales backlog and ongoing customer demand for our solutions while the year-over-year increase was primarily driven by ongoing customer demand and continued progress in our diversification efforts.

Gross profit was $7.4 million, compared to $7.8 million in the first quarter and $4.4 million in the second quarter of 2022. Gross margin was 51.3% of revenues, compared to 53.8% of revenues in the prior quarter and 45.7% of revenues in the prior-year quarter. The sequential decrease is related to product mix while the year-over-year increase reflects higher revenues due to pricing initiatives and greater fixed cost coverage.

Total operating expenses were $4.2 million, compared to $4.5 million in the first quarter of 2023 and $4.3 million in the year-ago quarter. The decrease is related to the non-recurring realization of an employee payroll tax credit, which more than offset higher employee-related expenses and cost inflation across the business.

Compared with the same quarter last year, operating expenses for G&A were flat, R&D decreased 29% and depreciation decreased by 12%.

Net income was $2.9 million, or $0.06 per diluted share, compared to net income of $2.6 million or $0.05 per diluted share in the first quarter of 2023 and $284,829 or $0.01 per diluted share in the same quarter last year.

“Our legacy business continues to perform well as E&P’s resume maintenance activity that has been deferred over multiple years as well as new investments being made to increase automation and efficiency and lower emissions,” stated Cameron Tidball, Co-CEO of Profire Energy. “We continue to gain traction across our diversification strategy, particularly within the renewable natural gas sector. During the quarter, we installed projects for food and beverage, industrials and landfill customers and continue to grow across the Critical Energy Infrastructure segment. Overall, we believe the business prospects for Profire remain strong over the near and intermediate term and look forward to delivering long-term value to our shareholders.”

Conference Call

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

Date: Thursday, August 10, 2023
Time: 8:30 a.m. ET (6:30 a.m. MT)
Toll-free dial-in number: 1-855-327-6837
International dial-in number: 1-631-891-4304

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 to 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 1:00 p.m. ET on the same
day through August 24, 2023.

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay Pin Number: 10021753

About Profire Energy, Inc.
Profire Energy is a technology company providing solutions that enhance the efficiency, safety, and reliability of industrial combustion appliances while mitigating potential environmental impacts related to the operation of these devices. It is primarily focused in the upstream, midstream, and downstream transmission segments of the oil and gas industry. However, in recent years, we have completed many installations of our burner-management solutions in other industries that we believe will be applicable as we expand our addressable market over time. Profire specializes in the engineering and design of burner and combustion management systems and solutions used on a variety of natural and forced draft applications. Its products and services are sold primarily throughout North America. It has an experienced team of sales and service professionals that are strategically positioned across the United States and Canada. Profire has offices in Lindon, Utah; Victoria, Texas; Homer, Pennsylvania; Greeley, Colorado; Millersburg, Ohio; and Acheson, 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 expected revenues from recent acquisitions, the Company’s plans to make internal and external investments, and the availability of Company resources to make beneficial investments in 2023 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, Co-CEO & CFO
(801) 796-5127

Three Part Advisors
Steven Hooser, Partner
John Beisler, Managing Director
About Non-GAAP Financial Measures 

To supplement our consolidated financial statements, which statements are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measure of earnings before interest, taxes, depreciation and amortization (“EBITDA”). The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. 

We use this non-GAAP financial measure for financial and operational decision making and as a means to evaluate period-to-period comparisons. Our management believes that this non-GAAP financial measure provides meaningful supplemental information regarding our performance. We believe that both management and investors benefit from referring to this non-GAAP financial measure in assessing our performance and when planning, forecasting, and analyzing future periods. We believe this non-GAAP financial measure is useful to investors both because it allows for greater transparency with respect to key metrics used by management in its financial and operational decision making. 
The Following is a tabular presentation of EBITDA, including a reconciliation to net income which the Company believes to be the most directly comparable US GAAP financial measure. 

Net Income $ 2,857,157  
add back net income tax expense $ 634,028  
add back net interest expense $ (122,800 )
add back depreciation and amortization $ 285,957  
EBITDA Calculated $ 3,654,342  
EBITDA $ 3,654,342  
Divided by total revenue $ 14,443,577  
EBITDA Margin   25.3 %

Item 1 Financial Information

Condensed Consolidated Balance Sheets
    As of
    June 30, 2023   December 31, 2022
ASSETS   (Unaudited)    
Cash and cash equivalents   $ 8,246,092     $ 7,384,578  
Short-term investments     1,896,397       1,154,284  
Accounts receivable, net     13,987,743       10,886,145  
Inventories, net (note 3)     13,016,192       10,293,980  
Prepaid expenses and other current assets (note 4)     2,399,676       2,314,639  
Total Current Assets     39,546,100       32,033,626  
Long-term investments     7,212,652       7,503,419  
Financing lease right-of-use asset     156,943       120,239  
Property and equipment, net     10,627,702       10,423,964  
Intangible assets, net     1,182,859       1,268,907  
Goodwill     2,579,381       2,579,381  
Total Long-Term Assets     21,759,537       21,895,910  
TOTAL ASSETS   $ 61,305,637     $ 53,929,536  
Accounts payable   $ 2,120,546     $ 2,955,506  
Accrued liabilities (note 5)     4,374,628       3,573,994  
Current financing lease liability (note 6)     66,229       53,646  
Income taxes payable     887,647       205,169  
Total Current Liabilities     7,449,050       6,788,315  
Net deferred income tax liability     694,429       488,858  
Long-term financing lease liability (note 6)     92,511       67,883  
TOTAL LIABILITIES     8,235,990       7,345,056  
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: 52,659,763 issued and 47,574,560 outstanding at June 30, 2023, and 52,143,901 issued and 47,105,771 outstanding at December 31, 2022     52,662       52,144  
Treasury stock, at cost     (7,394,281 )     (7,336,323 )
Additional paid-in capital     32,514,997       31,737,843  
Accumulated other comprehensive loss     (2,976,198 )     (3,294,873 )
Retained earnings     30,872,467       25,425,689  
TOTAL STOCKHOLDERS' EQUITY     53,069,647       46,584,480  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 61,305,637     $ 53,929,536  

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

Condensed Consolidated Statements of Income and Comprehensive Income (Loss)
    For the Three Months Ended June 30,   For the Six Months Ended June 30,
      2023       2022       2023       2022  
        (See Note 1)       (See Note 1)
REVENUES (note 8)                
Sales of products, net   $ 13,602,884     $ 8,860,682     $ 27,231,396     $ 17,739,105  
Sales of services, net     840,693       772,465       1,765,643       1,397,182  
Total Revenues     14,443,577       9,633,147       28,997,039       19,136,287  
COST OF SALES                
Cost of sales - product     6,270,174       4,530,065       12,244,513       8,912,764  
Cost of sales - services     758,958       699,937       1,504,972       1,263,674  
Total Cost of Sales     7,029,132       5,230,002       13,749,485       10,176,438  
GROSS PROFIT     7,414,445       4,403,145       15,247,554       8,959,849  
OPERATING EXPENSES                
General and administrative     3,792,127       3,786,561       7,840,093       7,178,938  
Research and development     258,317       362,197       594,769       670,512  
Depreciation and amortization     140,093       159,580       282,981       326,597  
Total Operating Expenses     4,190,537       4,308,338       8,717,843       8,176,047  
INCOME FROM OPERATIONS     3,223,908       94,807       6,529,711       783,802  
OTHER INCOME (EXPENSE)                
Gain on sale of assets     181,343       214,841       234,418       310,683  
Other expense     (36,866 )     (337 )     (46,423 )     (18,420 )
Interest income     123,654       20,307       181,701       41,852  
Interest expense     (854 )     (17,612 )     (1,787 )     (18,308 )
Total Other Income     267,277       217,199       367,909       315,807  
INCOME BEFORE INCOME TAXES     3,491,185       312,006       6,897,620       1,099,609  
INCOME TAX EXPENSE     (634,028 )     (27,177 )     (1,450,842 )     (187,619 )
NET INCOME   $ 2,857,157     $ 284,829     $ 5,446,778     $ 911,990  
Foreign currency translation gain (loss)   $ 278,328     $ (290,291 )   $ 272,804     $ (131,933 )
Unrealized gains (losses) on investments     (30,416 )     (134,662 )     45,871       (421,788 )
Total Other Comprehensive Income (Loss)     247,912       (424,953 )     318,675       (553,721 )
COMPREHENSIVE INCOME   $ 3,105,069     $ (140,124 )   $ 5,765,453     $ 358,269  
BASIC EARNINGS PER SHARE   $ 0.06     $ 0.01     $ 0.12     $ 0.02  
FULLY DILUTED EARNINGS PER SHARE   $ 0.06     $ 0.01     $ 0.11     $ 0.02  
BASIC WEIGHTED AVG NUMBER OF SHARES OUTSTANDING     47,393,768       47,092,275       47,284,749       47,285,782  
FULLY DILUTED WEIGHTED AVG NUMBER OF SHARES OUTSTANDING     49,473,080       48,699,208       49,349,488       48,865,186  

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

Condensed Consolidated Statements of Cash Flows
  For the Six Months Ended June 30,
    2023       2022  
Net income $ 5,446,778     $ 911,990  
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization expense   547,996       558,832  
Gain on sale of property and equipment   (234,418 )     (310,683 )
Bad debt expense   378,753       28,474  
Stock awards issued for services   583,493       412,893  
Changes in operating assets and liabilities:      
Accounts receivable   (3,034,236 )     (877,417 )
Income taxes receivable/payable   682,284       534,456  
Inventories   (2,662,032 )     (2,097,471 )
Prepaid expenses and other current assets   (51,121 )     (140,352 )
Deferred tax asset/liability   205,571       (408 )
Accounts payable and accrued liabilities   (80,409 )     1,601,376  
Net Cash Provided by Operating Activities   1,782,659       621,690  
Proceeds from sale of property and equipment   309,493       412,339  
Purchase of investments   (405,578 )     (231,032 )
Purchase of property and equipment   (607,248 )     (223,215 )
Net Cash Used in Investing Activities   (703,333 )     (41,908 )
Value of equity awards surrendered by employees for tax liability   (248,958 )     (93,527 )
Cash received in exercise of stock options   65,335       25,106  
Purchase of treasury stock   (57,957 )     (1,228,731 )
Principal paid towards lease liability   (13,972 )     (19,787 )
Net Cash Used in Financing Activities   (255,552 )     (1,316,939 )
Effect of exchange rate changes on cash   37,740       (32,286 )
NET CHANGE IN CASH   861,514       (769,443 )
CASH AT BEGINNING OF PERIOD   7,384,578       8,188,270  
CASH AT END OF PERIOD $ 8,246,092     $ 7,418,827  
Interest $ 1,787     $ 1,253  
Income taxes $ 576,750     $ 21,000  
Common stock issued in settlement of accrued bonuses
$ 378,526     $ 212,787  

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


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Source: Profire Energy, Inc.