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Profire Energy Reports Financial Results for Second Quarter Fiscal 2018
Profire Increased Net Income by 31% Over the Same Quarter in 2017

LINDON, Utah August 8, 2018 - 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 fiscal quarter ended June 30, 2018. A conference call will be held on Thursday, August 9, 2018 at 1:00 p.m. EDT to discuss the results.

Fiscal Q2 2018 Highlights

Recognized Revenue of $11.3 million, The Second-Best Quarter in 9 Fiscal Quarters
Net Income of $1.7 Million or $0.04 Per Share, a 31% Increase From the Same Quarter Last Year
Realized Gross Profit of $5.9 Million
Cash and Liquid Investments at Period End totaled over $21 Million
Remained Debt-Free

Fiscal Quarter Financial Results
    
Total revenues for the period equaled $11.3 million or a 20% increase from the same quarter a year ago. This increase is largely attributed to our ability to leverage our expanding customer base.
    
Total operating expenses were approximately $3.8 million or a 21% increase over the same quarter last year which was highly attributable to the growth in staff and additional R&D spend. Compared with the same year ago quarter, operating expenses for general and administrative increased 23%, R&D increased 15%, and depreciation decreased slightly.

Gross profit increased to $5.9 million or 52.1% of total revenues, as compared to $5 million or 52.6% of total revenues in the year-ago quarter. Gross profit margins fluctuate slightly each quarter due to product mix changes, increased direct labor costs, and adjustments in our inventory and warranty reserves.

Net income was $1.7 million or $0.04 per share, compared to a net income of $1.3 million or $0.03 per share in the same year-ago quarter.

Cash and liquid investments totaled over $21 million at the end of the quarter and the Company continues to operate debt-free.

Management Commentary





We continually seek opportunities that can help further our strategic goals and currently have the resources and balance sheet to make investments that we believe will be beneficial to Profire and its shareholders,” stated Ryan Oviatt, CFO of Profire. “Our management team remains focused on allocating spending to meet market demand and to accelerate growth potential. We have focused our investment in R&D over the past year as we believe the new SIL certification, which allows us to enter new markets that we could not previously serve, and product enhancements will be significant drivers for future growth.”

“In addition, we continue to look at merger and acquisition opportunities that will complement our existing product offerings and leverage our sales force and customer base,” said Brenton Hatch, President and CEO of Profire Energy. “We have a renewed focus on automation, including the exploration of the internet-of-things capabilities, and other technologies that could be used within our market. These adjacent technologies could allow Profire to become a leader in not only burner management but in a variety of processes within our industry.”

Conference Call
Profire Energy President and CEO Brenton Hatch and CFO Ryan Oviatt will host the presentation, followed by a question and answer period.

Date: Thursday, August 9, 2018
Time: 1:00 p.m. EDT (11:00 a.m. MDT)
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=130900. 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 5:00 p.m. EDT on the same day through August 16, 2018.

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay Pin Number: 13682308

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; Houston, Texas; Homer, Pennsylvania; Greeley, Colorado; and Spruce Grove, 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 holding a conference call on August 9,2018, regarding the financial quarter results; and the ability of the Company to support growth. 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 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, 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, 2018
 
December 31, 2017
 
 
(Unaudited)
 
 
CURRENT ASSETS
 
 
 
 
Cash and cash equivalents
 

$9,298,677

 

$11,445,799

Short-term investments
 
531,248

 
300,817

Short-term investments - other
 
3,788,507

 
4,009,810

Accounts receivable, net
 
7,311,689

 
8,069,255

Inventories, net
 
8,281,125

 
6,446,083

Prepaid expenses & other current assets
 
350,260

 
437,304

Income tax receivable
 
191,369

 

Total Current Assets
 
29,752,875

 
30,709,068

 
 
 
 
 
LONG-TERM ASSETS
 
 
 
 
Net deferred tax asset
 

 
72,817

Long-term investments
 
8,024,247

 
8,517,182

Long-term investments - other
 

 

Property and equipment, net
 
7,801,954

 
7,197,499

Goodwill
 
997,701

 
997,701

Intangible assets, net
 
459,229

 
494,792

Total Long-Term Assets
 
17,283,131

 
17,279,991

 
 
 
 
 
TOTAL ASSETS
 

$47,036,006

 

$47,989,059

 
 
 
 
 
CURRENT LIABILITIES
 
 
 
 
Accounts payable
 
1,872,095

 
1,780,977

Accrued vacation
 
257,149

 
196,646

Accrued liabilities
 
1,048,487

 
1,044,284

Income taxes payable
 
325,272

 
919,728

Total Current Liabilities
 
3,503,003

 
3,941,635

 
 
 
 
 
LONG-TERM LIABILITIES
 
 
 
 
Net deferred income tax liability
 
19,073

 

 
 
 
 
 
TOTAL LIABILITIES
 
3,522,076

 
3,941,635

 
 
 
 
 
STOCKHOLDERS’ EQUITY
 
 
 
 
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: 54,685,119 issued and 48,082,423 outstanding at June 30, 2018 and 53,931,167 issued and 48,606,425 outstanding at December 31, 2017
 
54,685

 
53,931






Treasury stock, at cost
 
(10,890,349)

 
(6,890,349)

Additional paid-in capital
 
27,828,804

 
27,535,469

Accumulated other comprehensive loss
 
(2,618,543)

 
(2,200,462)

Retained earnings
 
29,139,333

 
25,548,835

TOTAL STOCKHOLDERS’ EQUITY
 
43,513,930

 
44,047,424

 
 
 
 
 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
 

$47,036,006

 

$47,989,059


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 Other Comprehensive Income
(Unaudited)
 
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
 
2018
 
2017
 
2018
 
2017
REVENUES
 
 
 
 
 
 
 
 
Sales of goods, net
 

$10,724,409

 

$8,834,650

 

$22,179,024

 

$16,126,879

Sales of services, net
 
615,352

 
630,301

 
1,330,454

 
1,162,568

Total Revenues
 
11,339,761

 
9,464,951

 
23,509,478

 
17,289,447

 
 
 
 
 
 
 
 
 
COST OF SALES
 
 
 
 
 
 
 
 
Cost of goods sold-product
 
4,959,539

 
4,035,528

 
10,517,249

 
7,090,828

Cost of goods sold-services
 
471,555

 
452,591

 
953,422

 
854,613

Total Cost of Goods Sold
 
5,431,094

 
4,488,119

 
11,470,671

 
7,945,441

 
 
 
 
 
 
 
 
 
GROSS PROFIT
 
5,908,667

 
4,976,832

 
12,038,807

 
9,344,006

 
 
 
 
 
 
 
 
 
OPERATING EXPENSES
 
 
 
 
 
 
 
 
General and administrative expenses
 
3,364,826

 
2,739,055

 
6,706,726

 
5,682,368

Research and development
 
317,002

 
275,776

 
720,221

 
479,520

Depreciation and amortization expense
 
129,070

 
130,838

 
257,787

 
279,913

Total Operating Expenses
 
3,810,898

 
3,145,669

 
7,684,734

 
6,441,801

 
 
 
 
 
 
 
 
 
INCOME FROM OPERATIONS
 
2,097,769

 
1,831,163

 
4,354,073

 
2,902,205

 
 
 
 
 
 
 
 
 
OTHER INCOME (EXPENSE)
 
 
 
 
 
 
 
 
Gain on sale of fixed assets
 
21,254

 
46,374

 
86,085

 
48,476

Other income (expense)
 
(4,164)

 
18,798

 
(5,956)

 
13,385

Interest income
 
174,771

 
54,840

 
225,479

 
86,118

Total Other Income
 
191,861

 
120,012

 
305,608

 
147,979

 
 
 
 
 
 
 
 
 





INCOME BEFORE INCOME TAXES
 
2,289,630

 
1,951,175

 
4,659,681

 
3,050,184

 
 
 
 
 
 
 
 
 
INCOME TAX EXPENSE
 
575,363

 
638,528

 
1,069,183

 
1,137,465

 
 
 
 
 
 
 
 
 
NET INCOME
 

$1,714,267

 

$1,312,647

 

$3,590,498

 

$1,912,719

 
 
 
 
 
 
 
 
 
OTHER COMPREHENSIVE INCOME (LOSS)
 
 
 
 
 
 
 
 
Foreign currency translation gain (loss)
 
$(427,307)
 

$238,543

 
$(394,072)
 

$313,656

Unrealized gains (losses) on investments
 
9,226

 
26,659

 
(24,009)

 
62,947

Total Other Comprehensive Income (Loss)
 
(418,081)

 
265,202

 
(418,081)

 
376,603

 
 
 
 
 
 
 
 
 
NET COMPREHENSIVE INCOME
 

$1,296,186

 

$1,577,849

 

$3,172,417

 

$2,289,322

 
 
 
 
 
 
 
 
 
BASIC EARNINGS PER SHARE
 

$0.04

 

$0.03

 

$0.07

 

$0.04

 
 
 
 
 
 
 
 
 
FULLY DILUTED EARNINGS PER SHARE
 

$0.03

 

$0.03

 

$0.07

 

$0.04

 
 
 
 
 
 
 
 
 
BASIC WEIGHTED AVG NUMBER OF SHARES OUTSTANDING
 
48,266,199

 
49,678,917

 
48,467,136

 
50,152,958

 
 
 
 
 
 
 
 
 
FULLY DILUTED WEIGHTED AVG NUMBER OF SHARES OUTSTANDING
 
49,095,575

 
50,283,144

 
49,237,938

 
50,757,185


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,
 
 
2018
 
2017
OPERATING ACTIVITIES
 
 
 
 
Net income
 

$3,590,498

 

$1,912,719

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization expense
 
442,959

 
458,293

Gain on sale of fixed assets
 
(76,703)

 
(48,255)

Bad debt expense
 
141,348

 
121,015

Stock awards issued for services
 
861,189

 
372,086

Changes in operating assets and liabilities:
 
 
 
 
Changes in accounts receivable
 
548,419

 
(1,107,574)

Changes in income taxes receivable/payable
 
(790,946)

 
1,327,884

Changes in inventories
 
(2,074,974)

 
(646,870)

Changes in prepaid expenses
 
114,907

 
(205,781)

Changes in deferred tax asset/liability
 
91,890

 
(134,427)

Changes in accounts payable and accrued liabilities
 
274,744

 
716,436

Net Cash Provided by Operating Activities
 
3,123,331

 
2,765,526

 
 
 
 
 
INVESTING ACTIVITIES
 
 
 
 
Proceeds from sale of equipment
 
159,449

 
112,183

Sale of investments
 
368,379

 
66,045

Purchase of fixed assets
 
(1,184,126)

 
(181,566)

Net Cash Used in Investing Activities
 
(656,298)

 
(3,338)

 
 
 
 
 
FINANCING ACTIVITIES
 
 
 
 
Value of equity awards surrendered by employees for tax liability
 
(736,160)

 
(20,800)

Cash received in exercise of stock options
 
174,002

 

Purchase of Treasury stock
 
(4,000,000)

 
(2,840,932)

Net Cash Used in Financing Activities
 
(4,562,158)

 
(2,861,732)

 
 
 
 
 
Effect of exchange rate changes on cash
 
(51,997)

 
94,403

 
 
 
 
 
NET DECREASE IN CASH
 
(2,147,122)

 
(5,141)

CASH AT BEGINNING OF PERIOD
 
11,445,799

 
7,621,708

CASH AT END OF PERIOD
 

$9,298,677

 

$7,616,567

 
 
 
 
 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
 
 
 
 
 
 
 
 
 
CASH PAID FOR:
 
 
 
 
Interest
 
$—

 
$—

Income taxes
 

$1,691,397

 

$67,078







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