Profire Energy Reports Financial Results for Fiscal First Quarter 2016

Company Realizes Quarterly Net Increase in Cash of $3.1 Million Amid Difficult Industry Conditions and Reduced Revenues; Fiscal 2016 Guidance Reaffirmed

LINDON, Utah, Aug. 10, 2015 (GLOBE NEWSWIRE) -- Profire Energy, Inc. (NASDAQ:PFIE), a technology company which creates, installs and services burner and chemical management solutions in the oil and gas industry, today reported financial results for its fiscal first quarter of 2016 ended June 30, 2015. A conference call will be held on Monday, August 10, 2015 at 5:00 p.m. EDT to discuss the results.

Fiscal Q1 2016 Highlights

  • Cash at period-end totaled $17.2 million
  • Net cash provided from operating activities during the period totaled $2.9 million
  • Significant cost reductions completed during the period; Operating Expenses reduced to $3.9 million for the quarter, a reduction of over $700,000 from Q4 FY2015
  • Expansive search for new Chief Financial Officer undertaken, nearing completion

Fiscal Q1 2016 Financial Results

Total revenues for the quarter of $6.9 million reflected a decrease of 48%, compared to the comparable period last year. This decrease was principally attributable to the reduced purchasing from companies in the oil and gas industry stemming from budget constraints derived from a drastic decline in the underlying commodity prices year over year. Though the Company expects the difficult industry environment to continue for some time, it is focusing resources in geographic areas that we believe will produce the highest level of total revenues and return on investment, while also focusing on initiatives that might help reduce its long-term exposure to the industry’s volatility.

Gross profit percentage during the three months ended June 30, 2015 decreased from 57% to 48% compared to the comparable period ended June 30, 2014.      

The Company’s total operating expenses during the three months ended June 30, 2015 decreased $217,626, or 5%, compared to the comparable period ended June 30, 2014. As a percentage of total revenues, total operating expenses during the three months ended June 30, 2015 increased from 31% to 56%, compared to the comparable period ended June 30, 2014.

Net loss was $(458,813) or $(0.01) per diluted share, compared to net income of $2.2 million or $0.05 per diluted share in the same prior year period. The quarter represents a rare loss in the Company’s seven-year history as a public entity.

Cash and cash equivalents totaled $17.2 million at June 30, 2015, as compared to $14.1 million at March 31, 2015. The Company continues to operate debt-free.

Management Commentary

“Certainly, the industry is having a tough time right now, and many companies are undergoing difficult transitions,” said Brenton Hatch, President and CEO of Profire Energy. “We anticipate a relatively difficult fiscal year, as we’ve noted previously, but are absolutely confident in our ability to navigate the challenges that lie ahead, and are assured we have the internal talent and resources to do so. We believe we are well-positioned to weather the storm, and are focused on becoming a more robust and efficient organization during this challenging time.”

“We continue to operate without debt, which—coupled with our significant cash reserves of over $17 million—affords us significant staying power amid the current industry turbulence,” said Nathan McBride, VP Finance & Strategy of Profire Energy. “We have acted quickly as a management team to dramatically reduce operating costs, while giving great consideration to our long-term strategic goals, and ensuring we don’t significantly impair our strategic position as a company. We feel that we have done both very effectively.” 

Fiscal 2016 Guidance

The Company reaffirmed its Fiscal 2016 guidance. For fiscal 2016, total revenues are expected between $25.0-30.0 million with net income of $(1.0)-2.0 million. We expect a stronger performance in the second half of Fiscal 2016 resulting from an anticipated improvement in the business outlook and the company’s sales and marketing capability.

Profire management will host a conference call later today to discuss these financial results. Please call the conference telephone number at least five minutes prior to the start time. An operator will register your name and organization.

Date: Monday August 10, 2015
Time: 5:00 p.m. EDT (3:00 p.m. MDT)
Toll-free dial-in number: 1-855-327-6837
International dial-in number: 1-778-327-3988

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 Tanner Lamb at 1-801-796-5127.

A replay of the call will be available after 8:00 p.m. EDT on the same day through August 17, 2015.

Toll-free replay number: 1-877-870-5176
International replay number: 1-858-384-5517
Replay ID: 115550

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 systems are increasingly becoming part of their solution. Profire Energy has offices in Lindon, Utah; Houston, Texas; Victoria, Texas; Oklahoma City, Oklahoma; Tioga, Pennsylvania; Greeley, Colorado; and Edmonton, 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; the Company's long-term outlook and market opportunity of the Company; the Company being well positioned to manage through the industry difficulties; the Company’s intention to hire a new CFO; the Company’s positioning relative to industry peers and the ability to capitalize of opportunities the market present; the Company cost reductions and process improvements creating operational leverage in future periods; the Company’s expectation that it will return to profitability; the Company’s financial expectations, including revenue and net income, for fiscal year 2016; and the company’s sales performance in the upcoming fiscal year. 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.

Item 1 Financial Information
Condensed Consolidated Balance Sheets
   June 30, March 31,
   2015  2015
CURRENT ASSETS            
Cash and cash equivalents  $      17,186,238       $     14,144,796  
Accounts receivable, net       7,003,089             9,462,378  
Inventories       11,071,036             11,766,535  
Income tax receivable       144,402             -  
Prepaid expenses & other current assets       131,503             112,741  
Total Current Assets       35,536,268             35,486,450  
LONG-TERM ASSETS            
Deferred tax asset       535,126             501,921  
PROPERTY AND EQUIPMENT, net       9,092,880             9,275,965  
OTHER ASSETS            
Goodwill       997,701             997,701  
Intangible assets, net       577,866             594,019  
Total Other Assets       1,575,567             1,591,720  
TOTAL ASSETS  $      46,739,841       $     46,856,056  
Accounts payable  $      604,730       $     1,040,530  
Accrued liabilities       594,531             332,229  
Income taxes payable       355,894             347,486  
Total Current Liabilities       1,555,155             1,720,245  
Deferred income tax liability       641,789             631,353  
TOTAL LIABILITIES       2,196,944             2,351,598  
Preferred shares: $0.001 par value,            
  10,000,000 shares authorized: no shares            
  issued and outstanding       -             -  
Common shares: $0.001 par value, 100,000,000 shares authorized:            
53,226,720 and  53,199,136 shares issued and outstanding            
as of June 30, 2015 and March 31, 2015, respectively     53,227           53,199  
Additional paid-in capital     25,688,904             25,525,052  
Accumulated other comprehensive income (loss)     (1,555,609 )           (1,888,981 )
Retained earnings       20,356,375             20,815,188  
Total Stockholders' Equity       44,542,897             44,504,458  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY  $      46,739,841       $     46,856,056  
These financial statements should be read in conjunction with forms 10-Q and 10-K and accompanying footnotes.


Condensed Consolidated Statements of Operations and Other Comprehensive Income
   For the Three Months Ended 
  June 30,
  2015   2014  
Sales of goods, net  $    6,211,970      $    12,316,512  
Sales of services, net     665,273         828,322  
Total Revenues     6,877,243         13,144,834  
COST OF SALES            
Cost of goods sold-product     2,967,918         5,067,627  
Cost of goods sold-services     595,538         640,107  
Total Cost of  Goods Sold     3,563,456         5,707,734  
GROSS PROFIT     3,313,787         7,437,100  
General and administrative expenses     1,978,485         2,409,069  
Research and development     304,489         271,227  
Payroll expenses     1,462,655         1,265,699  
Depreciation and amortization expense     107,455         124,715  
Total Operating Expenses     3,853,084         4,070,710  
INCOME (LOSS) FROM OPERATIONS     (539,297 )       3,366,390  
Interest expense     -          -   
Gain on disposal of fixed assets     18,637         -   
Other (expense) income     (108,990 )       3,121  
Interest income     21,123         237  
Total Other Income (Expense)     (69,230 )       3,358  
NET INCOME (LOSS) BEFORE INCOME TAXES     (608,527 )       3,369,748  
INCOME TAX EXPENSE (BENEFIT)     (149,714 )       1,149,042  
NET INCOME (LOSS) $   (458,813 )   $   2,220,706  
FOREIGN CURRENCY TRANSLATION GAIN (LOSS) $   333,372     $   296,436  
TOTAL COMPREHENSIVE INCOME (LOSS) $   (125,441 )   $   2,517,142  
BASIC EARNINGS (LOSS) PER SHARE $   (0.01 )   $   0.05  
FULLY DILUTED EARNINGS (LOSS) PER SHARE $   (0.01 )   $   0.05  
These financial statements should be read in conjunction with forms 10-Q and 10-K and accompanying footnotes.


Condensed Consolidated Statements of Cash Flows  
      For the Three Months Ended  
      June 30,  
      2015   2014  
  Net Income  $     (458,813 )   $     2,220,706    
  Adjustments to reconcile net income to            
    net cash provided by operating activities:            
    Depreciation and amortization expense       225,945           182,392    
    Gain on disposal of fixed assets       (18,637 )         -    
    Bad debt expense       24,906           -    
    Stock options issued for services       187,406           351,364    
  Changes in operating assets and liabilities:            
    Changes in accounts receivable       2,482,059           (3,071,142 )  
    Changes in income tax receivable       (144,402 )         -    
    Changes in inventories       786,325           (187,668 )  
    Changes in prepaid expenses       (18,728 )         (23,461 )  
    Changes in deferred tax asset       (33,205 )         (79,208 )  
    Changes in accounts payable and accrued liabilities       (181,741 )         428,360    
    Changes in income taxes payable       15,390           1,246,558    
      Net Cash Provided by Operating Activities       2,866,505           1,067,901    
  Proceeds from disposal of equipment       52,500           -    
  Purchase of fixed assets       (12,285 )         (1,147,274 )  
    Net Cash Provided by (Used in) Investing Activities       40,215           (1,147,274 )  
  Value of equity awards surrendered by employees for tax liability       (23,526 )       -    
  Stock issued in exercise of stock options       -           78,870    
      Net Cash Provided by (Used in) Financing Activities       (23,526 )         78,870    
  Effect of exchange rate changes on cash       158,248           113,917    
    NET INCREASE IN CASH       3,041,442           113,414    
    CASH AT BEGINNING OF PERIOD       14,144,796           4,456,674    
    CASH AT END OF PERIOD $     17,186,238     $     4,570,088    
  CASH PAID FOR:            
    Interest  $      -      $      -    
    Income taxes  $      -      $      (138,008 )  
These financial statements should be read in conjunction with forms 10-Q and 10-K and accompanying footnotes.  

Profire Energy, Inc.
Nathan McBride, VP Strategy & Finance
(801) 796-5127

Profire Energy, Inc.
Tanner Lamb, Investor Relations
(801) 796-5127

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Source: Profire Energy