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Profire Energy Reports Financial Results for Third Quarter Fiscal 2018
Profire Increased Net Income by 36% Over the Same Quarter in 2017

LINDON, Utah November 7, 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 September 30, 2018. A conference call will be held on Thursday, November 8, 2018 at 1:00 p.m. EST to discuss the results.

Fiscal Q3 2018 Highlights

•
Recognized Revenue of $11.5 million, The Second-Best Quarter in Nearly Four Years
•
Net Income of $1.7 Million or $0.03 Per Share, a 36% Increase From the Same Quarter Last Year
•
Realized Gross Profit of $6.1 Million
•
Cash and Liquid Investments at Period End totaled over $22.2 Million
•
Remained Debt-Free

Fiscal Quarter Financial Results
    
Total revenues for the period equaled $11.5 million or a 14% increase from the same quarter a year ago. This increase is largely attributed to our ability to leverage our expanding customer base with our existing sales force.
    
Total operating expenses were approximately $3.7 million or a 15% increase over the same quarter last year which was mostly attributable to additional employees and increased R&D spend. Compared with the same year ago quarter, operating expenses for general and administrative increased 15%, R&D increased 19%, and depreciation increased 14%.

Gross profit increased to $6.1 million or 53% of total revenues, as compared to $5.1 million or 50% of total revenues in the year-ago quarter. Gross profit margins fluctuate slightly each quarter due to changes in product mix, direct labor costs, and adjustments in our inventory and warranty reserves.

Net income was $1.7 million or $0.03 per share, compared to a net income of $1.2 million or $0.03 per share in the same year-ago quarter.

Cash and liquid investments totaled $22.2 million at the end of the quarter and the Company continues to operate debt-free.





Management Commentary
“Our strategic initiatives over the past few years have positioned us well to achieve future growth ,” stated Ryan Oviatt, CFO of Profire. “Profire's ability to respond quickly to customer demands over the years has distinguished Profire from its competition. Our resources allow us to be flexible in responding to customer demand and market opportunities that will be beneficial to Profire.”

“Profire increased revenues in the third quarter despite a sequential slowdown in the industry.” said Brenton Hatch, President and CEO of Profire Energy. “So far, this year is on track to be our most profitable year in Company history and the second-best year in terms of revenue. Our core values and strategies involving cost management, and remaining debt free, have allowed us to see great success throughout the industry recovery. Our anticipated performance in 2018 is providing a sold foundation for additional investments in 2019 and beyond. .”

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, November 8, 2018
Time: 1:00 p.m. EST (11:00 a.m. MST)
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=132159. 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. EST on the same day through November 15, 2018.

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay Pin Number: 13684861

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; Victoria, 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 November 8, 2018 and the




availability of Company resources to make beneficial investments in 2019 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 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
 
 
September 30, 2018
 
December 31, 2017
 
 
(Unaudited)

 
 
CURRENT ASSETS
 
 
 
 
Cash and cash equivalents
 
$
8,637,838

 
$
11,445,799

Short-term investments
 
965,105

 
300,817

Short-term investments - other
 
4,618,379

 
4,009,810

Accounts receivable, net
 
8,094,228

 
8,069,255

Inventories, net
 
10,350,075

 
6,446,083

Prepaid expenses & other current assets
 
636,476

 
437,304

Income tax receivable
 
231,967

 
—

Total Current Assets
 
33,534,068

 
30,709,068

 
 
 
 
 
LONG-TERM ASSETS
 
 
 
 
Net deferred tax asset
 
50,253

 
72,817

Long-term investments
 
8,023,172

 
8,517,182

Property and equipment, net
 
7,695,650

 
7,197,499

Goodwill
 
997,701

 
997,701

Intangible assets, net
 
460,307

 
494,792

Total Long-Term Assets
 
17,227,083

 
17,279,991

 
 
 
 
 
TOTAL ASSETS
 
$
50,761,151

 
$
47,989,059

 
 
 
 
 
CURRENT LIABILITIES
 
 
 
 
Accounts payable
 
2,879,156

 
1,780,977

Accrued vacation
 
259,808

 
196,646

Accrued liabilities
 
1,509,881

 
1,044,284

Income taxes payable
 
719,241

 
919,728

Total Current Liabilities
 
5,368,086

 
3,941,635

 
 
 
 
 
TOTAL LIABILITIES
 
5,368,086

 
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: 54,685,759 issued and 48,083,063 outstanding at September 30, 2018 and 53,931,167 issued and 48,606,425 outstanding at December 31, 2017
 
54,686

 
53,931

Treasury stock, at cost
 
(10,890,349
)
 
(6,890,349
)
Additional paid-in capital
 
27,890,171

 
27,535,469

Accumulated other comprehensive loss
 
(2,459,865
)
 
(2,200,462
)
Retained earnings
 
30,798,422

 
25,548,835

TOTAL STOCKHOLDERS' EQUITY
 
45,393,065

 
44,047,424

 
 
 
 
 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
 
$
50,761,151

 
$
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 September 30,
 
For the Nine Months Ended September 30,
 
 
2018
 
2017
 
2018
 
2017
REVENUES
 
 
 
 
 
 
 
 
Sales of goods, net
 

$10,830,592

 

$9,387,232

 

$33,009,616

 

$25,514,149

Sales of services, net
 
669,310

 
662,960

 
1,999,764

 
1,825,528

Total Revenues
 
11,499,902

 
10,050,192

 
35,009,380

 
27,339,677

 
 
 
 
 
 
 
 
 
COST OF SALES
 
 
 
 
 
 
 
 
Cost of goods sold-product
 
4,917,449

 
4,509,191

 
15,434,698

 
11,600,019

Cost of goods sold-services
 
484,327

 
479,206

 
1,437,749

 
1,333,819

Total Cost of Goods Sold
 
5,401,776

 
4,988,397

 
16,872,447

 
12,933,838

 
 
 
 
 
 
 
 
 
GROSS PROFIT
 
6,098,126

 
5,061,795

 
18,136,933

 
14,405,839

 
 
 
 
 
 
 
 
 
OPERATING EXPENSES
 
 
 
 
 
 
 
 
General and administrative expenses
 
3,180,726

 
2,771,869

 
9,887,451

 
8,454,235

Research and development
 
377,676

 
318,621

 
1,097,897

 
798,142

Depreciation and amortization expense
 
143,328

 
125,898

 
401,114

 
405,811

Total Operating Expenses
 
3,701,730

 
3,216,388

 
11,386,462

 
9,658,188

 
 
 
 
 
 
 
 
 
INCOME FROM OPERATIONS
 
2,396,396

 
1,845,407

 
6,750,471

 
4,747,651

 
 
 
 
 
 
 
 
 
OTHER INCOME (EXPENSE)
 
 
 
 
 
 
 
 
Gain on sale of fixed assets
 
43,904

 
14,017

 
129,989

 
62,492

Other income (expense)
 
(1,506)

 
25,991

 
(7,462)

 
39,377

Interest income
 
85,167

 
41,672

 
310,646

 
127,790

Total Other Income
 
127,565

 
81,680

 
433,173

 
229,659

 
 
 
 
 
 
 
 
 
INCOME BEFORE INCOME TAXES
 
2,523,961

 
1,927,087

 
7,183,644

 
4,977,310

INCOME TAX EXPENSE
 
864,874

 
709,169

 
1,934,057

 
1,846,634

NET INCOME
 

$1,659,087

 

$1,217,918

 

$5,249,587

 

$3,130,676

 
 
 
 
 
 
 
 
 
OTHER COMPREHENSIVE INCOME (LOSS)
 
 
 
 
 
 
 
 
Foreign currency translation gain (loss)
 
$170,641
 

$327,271

 
$(223,431)
 

$640,927

Unrealized gains (losses) on investments
 
-11,963

 
10,138

 
(35,972)

 
73,085

Total Other Comprehensive Income (Loss)
 
158,678

 
337,409

 
(259,403)

 
714,012

 
 
 
 
 
 
 
 
 
NET COMPREHENSIVE INCOME
 

$1,817,765

 

$1,555,327

 

$4,990,184

 

$3,844,688

 
 
 
 
 
 
 
 
 
BASIC EARNINGS PER SHARE
 

$0.03

 

$0.03

 

$0.11

 

$0.06

 
 
 
 
 
 
 
 
 
FULLY DILUTED EARNINGS PER SHARE
 

$0.03

 

$0.02

 

$0.11

 

$0.06

 
 
 
 
 
 
 
 
 
BASIC WEIGHTED AVG NUMBER OF SHARES OUTSTANDING
 
48,082,506

 
48,552,770

 
48,337,517

 
49,613,704

 
 
 
 
 
 
 
 
 
FULLY DILUTED WEIGHTED AVG NUMBER OF SHARES OUTSTANDING
 
48,852,167

 
49,369,835

 
49,107,178

 
50,346,333

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 Nine Months Ended September 30,
 
2018
 
2017
OPERATING ACTIVITIES
 
 
 
Net income
$
5,249,587

 
$
3,130,676

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization expense
667,085

 
675,223

Gain on sale of fixed assets
(120,825
)
 
(62,310
)
Bad debt expense
134,901

 
147,470

Stock awards issued for services
916,795

 
648,244

Changes in operating assets and liabilities:
—

 
 
Changes in accounts receivable
(184,951
)
 
(2,024,858
)
Changes in income taxes receivable/payable
(432,575
)
 
840,343

Changes in inventories
(3,863,287
)
 
634,646

Changes in prepaid expenses
(172,497
)
 
(93,669
)
Changes in deferred tax asset/liability
22,564

 
(139,298
)
Changes in accounts payable and accrued liabilities
1,506,396

 
588,868

Net Cash Provided by Operating Activities
3,723,193

 
4,345,335

 
 
 
 
INVESTING ACTIVITIES
 
 
 
Proceeds from sale of equipment
219,269

 
140,198

Purchase of investments
(876,463
)
 
(869,554
)
Purchase of fixed assets
(1,271,997
)
 
(214,632
)
Net Cash Used in Investing Activities
(1,929,191
)
 
(943,988
)
 
 
 
 
FINANCING ACTIVITIES
 
 
 
Value of equity awards surrendered by employees for tax liability
(737,024
)
 
(25,667
)
Cash received in exercise of stock options
174,002

 
—

Purchase of Treasury stock
(4,000,000
)
 
(3,120,716
)
Net Cash Used in Financing Activities
(4,563,022
)
 
(3,146,383
)
 
 
 
 
Effect of exchange rate changes on cash
(38,941
)
 
213,793

 
 
 
 
NET INCREASE (DECREASE) IN CASH
(2,807,961
)
 
468,757

CASH AT BEGINNING OF PERIOD
11,445,799

 
7,553,088

CASH AT END OF PERIOD
8,637,838

 
$
8,021,845

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

 
—

Income taxes
2,164,149

 
1,282,157

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