Profire Energy Reports Financial Results for Fiscal Third Quarter of 2016
Company Recognizes Quarterly Profit and Positive Cash Flow Amid Difficult Industry Conditions; Fiscal 2016 Guidance Reiterated
LINDON, Utah, Feb. 08, 2016 (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 third quarter ended December 31, 2015. A conference call will be held on Tuesday, February 9, 2016 at 1:00 p.m. EST to discuss the results.
Fiscal Q3 2016 Highlights
- Total revenues of $7.6 million
- Net income of $478,799 or $0.01 per diluted share
- Cash at period-end totaled $19.3 million
- Generated positive cash flow
- Remained debt-free
Fiscal Q3 2016 Financial Results
Total revenues in the third fiscal quarter of 2016 decreased 40%, compared to the same quarter last year. The decline was a result of decreased oilfield purchasing which could persist for some time. Based on the current industry environment, and near-term commodity price expectations, the Company does not anticipate improvement in customer purchasing in the short-term. Although facing a difficult market, the Company is determined to position itself to capture the greatest amount of revenue in both the short- and long-terms.
Gross profit decreased during the quarter to $4.0 million or 53% of total revenues, compared to $6.5 million or 52% of total revenues in the same year-ago quarter.
Total operating expenses decreased to $3.5 million or 46% of total revenues from $4.7 million or 38% of total revenues in the same year-ago quarter. Cost management has been a significant Company focus over the last few periods and will continue to be an emphasis for the foreseeable future. The Company has been successful in its expense-reduction measures and will continue to work toward maximizing efficiency.
Net income was $478,799 or $0.01 per diluted share, compared to net income of $1.9 million or $0.04 per diluted share in the same year-ago quarter.
Cash and cash equivalents totaled $19.3 million, an increase of more than $5.1 million compared to prior year-end. The Company continues to generate cash flow from operating activities, which will remain a focus in future periods.
First Nine-Months of Fiscal 2016 Financial Results
Total revenues in the first nine-months of fiscal 2016 decreased 46% to $22.5 million from $41.4 million in the same year-ago period.
Gross profit decreased to $11.3 million or 50% of total revenues, compared to $22.5 million or 55% of total revenues in the same period last year.
Total operating expenses decreased to $10.7 million or 48% of total revenues from $14.1 million or 34% of total revenues in the first nine-months of fiscal 2016.
Net income was $0.8 million or $0.01 per diluted share, compared to a net income of $6.2 million or $0.12 per diluted share in the same year-ago period.
Management Commentary
“Unquestionably the industry is enduring a period of significant volatility,” said Brenton Hatch, President and CEO of Profire Energy. “We continue to anticipate a challenging calendar year. However, I’m pleased with our ability to remain profitable amid the difficult market headwinds. Our focus continues to be on improving cost management. We have made momentous changes to our cost structure over the last several periods and will continue to look for opportunities to reduce expenses without damaging the long-term strategy of the Company. We believe this strategic approach, coupled with the internal talent and resources we have, will position us to weather the storm and become a flexible, more efficient Company.”
“In addition to our strong balance sheet, we continue to operate debt-free,” said Ryan Oviatt, CFO of Profire Energy. “Our team is resilient and has refocused their energies on cost management and cash flow generation. Despite industry trends, we believe we have demonstrated that even in volatile times, the Company has the potential to remain profitable and generate positive cash flow.”
Fiscal 2016 Outlook
The Company maintains 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.
Conference Call
Profire management will host a conference Tuesday, February 9, 2016 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: Tuesday, February 9, 2016
Time: 1:00 p.m. EST (11:00 a.m. MST)
Toll-free dial-in number: 1-855-327-6837
International dial-in number: 1-631-891-4304
The conference call will also be webcast live and available for replay via this link: http://public.viavid.com/index.php?id=118100.
If you have any difficulty connecting with the call, please contact Tanner Lamb at 1-801-796-5127.
A telephone replay of the call will be available after 8:00 p.m. EST on the same day through February 16, 2016
Toll-free replay number: 1-877-870-5176
International replay number: 1-858-384-5517
Replay ID: 10000631
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 and chemical management systems are 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 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 Fiscal 2016 Guidance being reiterated; or, the Company holding a conference call on February 9, 2016 regarding Q3 fiscal results; or, the Company’s ability to remain profitable; or, the Company finding ways to reduce expenses without damaging the long-term strategy of the Company; or, the Company being able to weather the industry’s current volatility and become a flexible, more efficient Company; or, the Company being able to continue operating debt-free; or, the Company being able to generate positive cash flow; or, the conference call being available for replay until February 16, 2016. 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.
| PART I. FINANCIAL INFORMATION | |||||||||||||
| Item 1 Financial Information | |||||||||||||
| PROFIRE ENERGY, INC. AND SUBSIDIARIES | |||||||||||||
| Consolidated Balance Sheets | |||||||||||||
| ASSETS | |||||||||||||
| December 31, | March 31, | ||||||||||||
| 2015 | 2015 | ||||||||||||
| (unaudited) | |||||||||||||
| CURRENT ASSETS | |||||||||||||
| Cash and cash equivalents | $ | 19,281,501 | $ | 14,144,796 | |||||||||
| Accounts receivable, net | 6,515,543 | 9,462,378 | |||||||||||
| Inventories | 10,840,598 | 11,766,535 | |||||||||||
| Income tax receivable | 113,978 | - | |||||||||||
| Prepaid expenses & other current assets | 312,547 | 112,741 | |||||||||||
| Total Current Assets | 37,064,167 | 35,486,450 | |||||||||||
| LONG-TERM ASSETS | |||||||||||||
| Deferred tax asset | 669,895 | 501,921 | |||||||||||
| PROPERTY AND EQUIPMENT, net | 8,449,492 | 9,275,965 | |||||||||||
| OTHER ASSETS | |||||||||||||
| Goodwill | 997,701 | 997,701 | |||||||||||
| Intangible assets, net of accumulated amortization | 501,490 | 594,019 | |||||||||||
| Total Other Assets | 1,499,191 | 1,591,720 | |||||||||||
| TOTAL ASSETS | $ | 47,682,745 | $ | 46,856,056 | |||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||
| CURRENT LIABILITIES | |||||||||||||
| Accounts payable | $ | 1,379,019 | $ | 1,040,530 | |||||||||
| Accrued liabilities | 594,236 | 332,229 | |||||||||||
| Income taxes payable | 396,089 | 347,486 | |||||||||||
| Total Current Liabilities | 2,369,344 | 1,720,245 | |||||||||||
| LONG-TERM LIABILITIES | |||||||||||||
| Deferred income tax liability | 616,735 | 631,353 | |||||||||||
| TOTAL LIABILITIES | 2,986,079 | 2,351,598 | |||||||||||
| STOCKHOLDERS' EQUITY | |||||||||||||
| 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: 53,255,275 and | |||||||||||||
| 53,199,136 shares issued and outstanding, respectively | 53,255 | 53,199 | |||||||||||
| Additional paid-in capital | 26,152,201 | 25,525,052 | |||||||||||
| Accumulated other comprehensive income (loss) | (3,122,872 | ) | (1,888,981 | ) | |||||||||
| Retained earnings | 21,614,082 | 20,815,188 | |||||||||||
| Total Stockholders' Equity | 44,696,666 | 44,504,458 | |||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 47,682,745 | $ | 46,856,056 | |||||||||
| These financial statements should be read in conjunction with forms 10-Q and 10-K and accompanying footnotes. | |||||||||||||
| PROFIRE ENERGY, INC. AND SUBSIDIARIES | |||||||||||||||||||||||
| Consolidated Statements of Operations and Other Comprehensive Income (Loss) | |||||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||||
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
| December 31, | December 31, | ||||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||
| REVENUES | |||||||||||||||||||||||
| Sales of goods, net | $ | 6,515,584 | $ | 11,695,016 | $ | 20,019,400 | $ | 38,640,246 | |||||||||||||||
| Sales of services, net | 1,038,671 | 821,683 | 2,509,392 | 2,742,219 | |||||||||||||||||||
| Total Revenues | 7,554,255 | 12,516,699 | 22,528,792 | 41,382,465 | |||||||||||||||||||
| COST OF SALES | |||||||||||||||||||||||
| Cost of goods sold-product | 2,833,909 | 5,299,912 | 9,247,014 | 16,837,531 | |||||||||||||||||||
| Cost of goods sold-services | 722,288 | 674,192 | 1,941,819 | 2,015,796 | |||||||||||||||||||
| Total Cost of Goods Sold | 3,556,197 | 5,974,104 | 11,188,833 | 18,853,327 | |||||||||||||||||||
| GROSS PROFIT | 3,998,058 | 6,542,595 | 11,339,959 | 22,529,138 | |||||||||||||||||||
| OPERATING EXPENSES | |||||||||||||||||||||||
| General and administrative expenses | 1,800,491 | 2,446,896 | 5,439,067 | 7,722,366 | |||||||||||||||||||
| Research and development | 348,874 | 521,814 | 948,508 | 1,331,834 | |||||||||||||||||||
| Payroll expenses | 1,230,022 | 1,591,397 | 3,952,447 | 4,624,826 | |||||||||||||||||||
| Depreciation and amortization expense | 128,793 | 176,371 | 374,247 | 424,014 | |||||||||||||||||||
| Total Operating Expenses | 3,508,180 | 4,736,478 | 10,714,269 | 14,103,040 | |||||||||||||||||||
| INCOME FROM OPERATIONS | 489,878 | 1,806,117 | 625,690 | 8,426,098 | |||||||||||||||||||
| OTHER INCOME (EXPENSE) | |||||||||||||||||||||||
| Interest expense | - | (14,222 | ) | - | (14,222 | ) | |||||||||||||||||
| Gain on disposal of fixed assets | - | 9,052 | 19,391 | 9,052 | |||||||||||||||||||
| Other (expense) income | 177,931 | (910 | ) | 421,251 | 1,954 | ||||||||||||||||||
| Interest income | 5,217 | 6,687 | 31,857 | 14,467 | |||||||||||||||||||
| Total Other Income (Expense) | 183,148 | 607 | 472,499 | 11,251 | |||||||||||||||||||
| NET INCOME BEFORE INCOME TAXES | 673,026 | 1,806,724 | 1,098,189 | 8,437,349 | |||||||||||||||||||
| INCOME TAX EXPENSE (BENEFIT) | 194,227 | (110,426 | ) | 299,295 | 2,221,292 | ||||||||||||||||||
| NET INCOME | $ | 478,799 | $ | 1,917,150 | $ | 798,895 | $ | 6,216,057 | |||||||||||||||
| FOREIGN CURRENCY TRANSLATION GAIN (LOSS) | $ | (482,744 | ) | $ | (381,099 | ) | $ | (1,233,891 | ) | $ | (539,777 | ) | |||||||||||
| TOTAL COMPREHENSIVE INCOME (LOSS) | $ | (3,945 | ) | $ | 1,536,051 | $ | (434,997 | ) | $ | 5,676,280 | |||||||||||||
| BASIC EARNINGS PER SHARE | $ | 0.01 | $ | 0.04 | $ | 0.02 | $ | 0.12 | |||||||||||||||
| FULLY DILUTED EARNINGS PER SHARE | $ | 0.01 | $ | 0.04 | $ | 0.01 | $ | 0.12 | |||||||||||||||
| BASIC WEIGHTED AVERAGE NUMBER | |||||||||||||||||||||||
| OF SHARES OUTSTANDING | 53,255,275 | 52,884,358 | 53,239,087 | 51,112,924 | |||||||||||||||||||
| FULLY DILUTED WEIGHTED AVERAGE NUMBER | |||||||||||||||||||||||
| OF SHARES OUTSTANDING | 53,523,081 | 53,161,058 | 53,506,778 | 51,389,624 | |||||||||||||||||||
| These financial statements should be read in conjunction with forms 10-Q and 10-K and accompanying footnotes. | |||||||||||||||||||||||
| PROFIRE ENERGY, INC. AND SUBSIDIARIES | |||||||||||||
| Consolidated Statements of Cash Flows | |||||||||||||
| (unaudited) | |||||||||||||
| For the Nine Months Ended | |||||||||||||
| December 31, | |||||||||||||
| 2015 | 2014 | ||||||||||||
| OPERATING ACTIVITIES | |||||||||||||
| Net Income | $ | 798,895 | $ | 6,216,057 | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||
| Depreciation and amortization expense | 729,695 | 784,193 | |||||||||||
| Gain on disposal of fixed assets | (19,391 | ) | (9,052 | ) | |||||||||
| Bad debt expense | 104,252 | (14,832 | ) | ||||||||||
| Stock options issued for services | 666,450 | 1,031,301 | |||||||||||
| Changes in operating assets and liabilities: | |||||||||||||
| Changes in accounts receivable | 2,683,035 | (3,035,929 | ) | ||||||||||
| Changes in income tax receivable | (113,978 | ) | - | ||||||||||
| Changes in inventories | 625,368 | (4,533,903 | ) | ||||||||||
| Changes in prepaid expenses | (199,923 | ) | (345,977 | ) | |||||||||
| Changes in deferred tax asset | (167,974 | ) | (246,016 | ) | |||||||||
| Changes in accounts payable and accrued liabilities | 627,765 | 1,831,277 | |||||||||||
| Changes in income taxes payable | 45,417 | (478,480 | ) | ||||||||||
| Net Cash Provided by Operating Activities | 5,779,611 | 1,198,639 | |||||||||||
| INVESTING ACTIVITIES | |||||||||||||
| Proceeds from disposal of equipment | 116,524 | 9,052 | |||||||||||
| Cash paid for asset acquisition | - | (750,000 | ) | ||||||||||
| Purchase of fixed assets | (62,465 | ) | (5,941,953 | ) | |||||||||
| Net Cash Provided by (Used in) Investing Activities | 54,059 | (6,682,901 | ) | ||||||||||
| FINANCING ACTIVITIES | |||||||||||||
| Proceeds from stock issued for cash, net of stock offering costs | - | 16,424,688 | |||||||||||
| Value of equity awards surrendered by employees for tax liability | (39,243 | ) | - | ||||||||||
| Stock issued in exercise of stock options | - | 197,961 | |||||||||||
| Net Cash Provided by (Used in) Financing Activities | (39,243 | ) | 16,622,649 | ||||||||||
| Effect of exchange rate changes on cash | (657,722 | ) | (209,454 | ) | |||||||||
| NET INCREASE IN CASH | 5,136,705 | 10,928,933 | |||||||||||
| CASH AT BEGINNING OF PERIOD | 14,144,796 | 4,456,674 | |||||||||||
| CASH AT END OF PERIOD | $ | 19,281,501 | $ | 15,385,607 | |||||||||
| SUPPLEMENTAL DISCLOSURES OF | |||||||||||||
| CASH FLOW INFORMATION | |||||||||||||
| CASH PAID FOR: | |||||||||||||
| Interest | $ | - | $ | 14,222 | |||||||||
| Income taxes | $ | 402,417 | $ | 2,890,769 | |||||||||
| NON CASH INVESTING AND FINANCING ACTIVITIES: | |||||||||||||
| Stock issued for acquisition | $ | - | $ | 1,000,000 | |||||||||
| These financial statements should be read in conjunction with forms 10-Q and 10-K and accompanying footnotes. | |||||||||||||
Contact: Profire Energy, Inc. Tanner Lamb, Finance and Investor Relations (801) 796-5127
Released February 8, 2016