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Profire Energy Reports Financial Results for Second Quarter 2024
Company Reports Second Highest Quarterly Revenue in Company History


LINDON, Utah August 7, 2024 - 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, 2024. A conference call will be held on Thursday, August 8, 2024 at 8:30 a.m. ET to discuss the results.

Second Quarter Summary (comparisons to prior-year quarter)
•Revenue of $15.2 million, compared to $14.6 million
•Gross profit of $7.9 million, compared to $7.4 million
•Gross margin increased by 90 basis points to 51.8%
•Net income of $2.1 million, or $0.04 per diluted share, versus $2.9 million and $0.06
•Generated EBITDA of $3.0 million, versus $3.7 million
•Cash and investments of $18.4 million with no debt

"We reported another very successful quarter, highlighted by the second highest quarterly revenue in company history, further progress across our diversification strategy, and maintaining momentum within our legacy business," said Ryan Oviatt, co-CEO and Chief Financial Officer of Profire Energy. "We increased our cash balance while building our inventory and repurchasing shares, and continue to remain debt-free."
Second Quarter 2024 Financial Results
    
Total revenues for the period equaled $15.2 million, compared to $13.6 million in the first quarter of 2024 and $14.6 million in the prior-year quarter. The sequential and year-over-year increase was partially driven by the timing of certain orders that moved into the second quarter of this year due to changes in customer readiness as well as strong activity in our diversification business.

Gross profit was $7.9 million, compared to $6.8 million in the first quarter and $7.4 in the second quarter of 2023. Gross margin was 52% of revenues, compared to 50% of revenues in the prior quarter and 51% of revenues in the prior-year quarter. The sequential and year-over-year increase is related to product mix, partially offset by inflationary pressures across the business.



Total operating expenses were $5.3 million, compared to $5.0 million in the first quarter of 2024 and $4.2 million in the year-ago quarter. The sequential increase is primarily due to ongoing inflation pressure on our business as well as increased headcount to support strategic growth and increased business activity. The prior-year quarter included a nonrecurring benefit from the employee retention tax credit ("ERC") of $762,000. Without this benefit, the year-over-year increase would have only been 6% which is due to increased inflation and headcount.

Compared with the same quarter last year, operating expenses for G&A increased 25%, R&D increased 56% and depreciation increased by 7%. The increase in G&A was driven by the ERC benefit noted above while the increase in R&D was a result of increased activity on new product development and certifications.

Net income was $2.1 million, or $0.04 per diluted share, compared to net income of $1.4 million or $0.03 per diluted share in the first quarter of 2024 and $2.9 million or $0.06 per diluted share in the same quarter last year also primarily driven by the prior year ERC credit.

"Our diversification efforts continue to be a critical component of our growth strategy, representing 15% of our total revenue for the quarter, as diversified sales for the first half of 2024 outpaced the first six months of 2023," said Cameron Tidball, co-CEO of Profire Energy. "The outlook for energy derived from hydrocarbon production remains very strong as the global demand for energy continues to grow. We remain very optimistic about the outlook for Profire for the second half of 2024 and beyond as well as our ability to deliver long-term shareholder value."

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

Date: Thursday, August 8, 2024
Time: 8:30 a.m. ET (6:30 a.m. MT)
Toll-free dial-in number: 1-800-225-9448
International dial-in number: 1-203-518-9708
Conference ID: PROFIRE

The conference call will be webcast live and available for replay via this link: https://viavid.webcasts.com/starthere.jsp?ei=1653744&tp_key=6e0824482a
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 Athena Kefalas at 1-801-796-8969.

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 22, 2024.

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay Pin Number: 11156393



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; Midland-Odessa, Texas; Homer, Pennsylvania; Greeley, Colorado; Millersburg, Ohio; and Acheson, 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’s expected growth and the Company’s expected revenues from diversification opportunities. 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.




Contact:
Profire Energy, Inc.
Ryan Oviatt, Co-CEO & CFO
(801) 796-5127

Three Part Advisors
Steven Hooser, Partner
John Beisler, Managing Director
214-872-2710


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.

 6/30/20246/30/2023
EBITDA Calculation:3 months3 months
Net Income
$2,062,725$2,857,157
add back net income tax expense
$704,620$634,028
add back net interest expense
$(80,690)$(122,800)
add back depreciation and amortization
$271,437$285,957
EBITDA calculated
$2,958,092$3,654,342







PROFIRE ENERGY, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
As of
June 30, 2024December 31, 2023
ASSETS(Unaudited)
CURRENT ASSETS
Cash and cash equivalents$8,920,732 $10,767,519 
Short-term investments3,633,333 2,799,539 
Accounts receivable, net14,158,647 14,013,740 
Inventories, net (note 3)16,059,628 14,059,656 
Prepaid expenses and other current assets (note 4)3,041,359 2,832,262 
Total Current Assets45,813,699 44,472,716 
LONG-TERM ASSETS
Net deferred tax asset489,360 496,785 
Long-term investments5,888,449 6,425,582 
Lease right-of-use asset (note 6)406,852 432,907 
Property and equipment, net11,194,296 10,782,372 
Intangible assets, net1,025,345 1,104,102 
Goodwill2,579,381 2,579,381 
Total Long-Term Assets21,583,683 21,821,129 
TOTAL ASSETS$67,397,382 $66,293,845 
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable$1,645,228 $2,699,556 
Accrued liabilities (note 5)4,448,655 4,541,820 
Current lease liability (note 6)138,552 130,184 
Income taxes payable374,384 1,723,910 
Total Current Liabilities6,606,819 9,095,470 
LONG-TERM LIABILITIES
Net deferred income tax liability50,705 52,621 
Long-term lease liability (note 6)276,186 307,528 
TOTAL LIABILITIES6,933,710 9,455,619 
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: 53,589,902 issued and 47,212,748 outstanding at June 30, 2024, and 53,047,231 issued and 46,803,868 outstanding at December 31, 2023
53,592 53,048 
Treasury stock, at cost(9,514,893)(9,324,272)
Additional paid-in capital33,375,359 32,751,749 
Accumulated other comprehensive loss(3,149,889)(2,844,702)
Retained earnings39,699,503 36,202,403 
TOTAL STOCKHOLDERS' EQUITY60,463,672 56,838,226 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$67,397,382 $66,293,845 


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 Income and Comprehensive Income
(Unaudited)     
For the Three Months Ended June 30,For the Six Months Ended June 30,
2024202320242023
(See Note 1)(See Note 1)
REVENUES (note 8)
Sales of products, net$13,725,996 $13,719,559 $26,417,800 $27,477,907 
Sales of services, net1,434,517 840,693 2,383,853 1,765,643 
Total Revenues15,160,513 14,560,252 28,801,653 29,243,550 
COST OF SALES
Cost of sales - products6,441,389 6,386,849 12,536,394 12,491,024 
Cost of sales - services859,550 758,958 1,648,914 1,504,972 
Total Cost of Sales7,300,939 7,145,807 14,185,308 13,995,996 
GROSS PROFIT7,859,574 7,414,445 14,616,345 15,247,554 
OPERATING EXPENSES
General and administrative4,817,648 3,857,580 9,372,976 7,967,609 
Research and development300,578 192,864 615,069 467,253 
Depreciation and amortization149,808 140,093 299,668 282,981 
Total Operating Expenses5,268,034 4,190,537 10,287,713 8,717,843 
INCOME FROM OPERATIONS2,591,540 3,223,908 4,328,632 6,529,711 
OTHER INCOME (EXPENSE)
Gain on sale of property and equipment92,068 181,343 136,889 234,418 
Other expense3,047 (36,866)(20,295)(46,423)
Interest income83,347 123,654 155,244 181,701 
Interest expense(2,657)(854)(5,602)(1,787)
Total Other Income175,805 267,277 266,236 367,909 
INCOME BEFORE INCOME TAXES2,767,345 3,491,185 4,594,868 6,897,620 
INCOME TAX EXPENSE(704,620)(634,028)(1,097,768)(1,450,842)
NET INCOME$2,062,725 $2,857,157 $3,497,100 $5,446,778 
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation gain (loss)$(126,084)$278,328 $(370,885)$272,804 
Unrealized gains on investments54,632 (30,416)65,698 45,871 
Total Other Comprehensive Income (Loss)(71,452)247,912 (305,187)318,675 
COMPREHENSIVE INCOME$1,991,273 $3,105,069 $3,191,913 $5,765,453 
BASIC EARNINGS PER SHARE$0.04 $0.06 $0.07 $0.12 
FULLY DILUTED EARNINGS PER SHARE$0.04 $0.06 $0.07 $0.11 
BASIC WEIGHTED AVG NUMBER OF SHARES OUTSTANDING47,119,403 47,393,768 47,002,139 47,284,749 
FULLY DILUTED WEIGHTED AVG NUMBER OF SHARES OUTSTANDING49,123,026 49,473,080 49,005,378 49,349,488 
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,
20242023
OPERATING ACTIVITIES
Net income$3,497,100 $5,446,778 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense539,091 547,996 
Gain on sale of property and equipment(136,889)(234,418)
Bad debt expense134,047 378,753 
Stock awards issued for services572,505 583,493 
Changes in operating assets and liabilities:
Accounts receivable(70,936)(3,034,236)
Income taxes receivable/payable(1,344,767)682,284 
Inventories(2,077,251)(2,662,032)
Prepaid expenses and other current assets(266,714)(51,121)
Deferred tax asset/liability7,158 205,571 
Accounts payable and accrued liabilities(1,069,176)(80,409)
Net Cash Provided by (Used in) Operating Activities(215,832)1,782,659 
INVESTING ACTIVITIES
Proceeds from sale of property and equipment202,553 309,493 
Purchase of investments(230,362)(405,578)
Purchase of property and equipment(1,069,555)(607,248)
Net Cash Used in Investing Activities(1,097,364)(703,333)
FINANCING ACTIVITIES
Value of equity awards surrendered by employees for tax liability(316,816)(248,958)
Cash received in exercise of stock options35,325 65,335 
Purchase of treasury stock(190,620)(57,957)
Principal paid toward lease liability(22,037)(13,972)
Net Cash Used in Financing Activities(494,148)(255,552)
Effect of exchange rate changes on cash(39,443)37,740 
NET CHANGE IN CASH(1,846,787)861,514 
CASH AT BEGINNING OF PERIOD10,767,519 7,384,578 
CASH AT END OF PERIOD$8,920,732 $8,246,092 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
CASH PAID FOR:
Interest$5,602 $1,787 
Income taxes$2,457,245 $576,750 
NON-CASH FINANCING AND INVESTING ACTIVITIES
Common stock issued in settlement of accrued bonuses$324,415 $378,526 
Common stock issued for stock options$46,131 $— 
These financial statements should be read in conjunction with the Form 10-Q and accompanying footnotes.