• Profire Energy Reports Financial Results for First Quarter 2023

    Source: Nasdaq GlobeNewswire / 09 May 2023 15:10:00   America/Chicago

    Company Reports Second-Highest Quarterly Revenue and Best Ever Net Income in Company History
    Announces $2M Share Repurchase Program

    LINDON, Utah, May 09, 2023 (GLOBE NEWSWIRE) -- 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 first quarter ending March 31, 2023. A conference call will be held on Wednesday, May 10, 2023 at 8:30 a.m. ET to discuss the results.

    First Quarter Summary

    • Revenue of $14.6 million, a 53% increase from prior year quarter
    • Gross profit of $7.8 million, a 72% increase compared to 1Q22
    • Gross margin of 53.8%, a 590 basis point increase from the same quarter of last year
    • Net income of $2.6 million, or $0.05 per diluted share
    • Generated EBITDA of $3.6 million
    • Cash and investments of $16.3 million with no debt

    “We have achieved eight quarters of sequential revenue growth as we continue to improve and deliver consistent operational and financial results across our business,” said Ryan Oviatt, Co-Chief Executive Officer and CFO of Profire Energy. “We also recorded a meaningful improvement in gross margin despite continued supply chain challenges and inflationary pressures. We will continue to make additional investments in our diversification efforts and other strategic opportunities with the objective of delivering long-term shareholder value.”

    First Quarter 2023 Financial Results

    Total revenues for the period equaled $14.6 million, compared to $14.0 million in the fourth quarter of 2022 and $9.5 million in the prior-year quarter. The sequential and year-over-year increases were primarily driven by ongoing customer demand, price increases on the products we sell, ongoing historical strength in oil and natural gas prices, and continued progress in our strategic diversification efforts.

    Gross profit was $7.8 million, compared to $6.6 million in the fourth quarter of 2022 and $4.6 million in the prior-year quarter. Gross margin was 53.8% of revenues, compared to 47.0% of revenues in the prior quarter and 47.9% of revenues in the first quarter of 2022. The sequential increase is due to pricing initiatives and more favorable product, service and customer mix while the year-over-year increase reflects higher revenues and greater fixed cost coverage.

    Total operating expenses were $4.5 million, compared to $4.3 million in the fourth quarter of 2022 and $3.9 million in the year-ago quarter. The increase is related to inflation in employee-related costs and other costs across the business.

    Compared with the same quarter last year, operating expenses for G&A increased 19%, R&D increased 9% and depreciation decreased by 14%.

    Net income was $2.6 million, or $0.05 per diluted share, compared to net income of $1.8 million or $0.04 per diluted share in the fourth quarter of 2022 and $627,161 or $0.01 per diluted share in the same quarter last year.

    “Our first quarter 2023 results built upon the momentum we generated in the second half of 2022, recording our second-highest quarterly revenue in company history once again,” stated Cameron Tidball, Co-CEO of Profire Energy. “The combination of the industry’s multi-year deferred capital expenditures and ongoing strong demand for oil and gas are increasing the necessity of our legacy products, and we continue to gain traction with our diversification strategy across industrial markets. We remain focused on growth through both our core legacy business and diversified revenue streams within the petroleum industry as well as new market segments. Overall, we are pleased with our start to 2023 and are confident in our ability to capitalize on the opportunities ahead.”

    Share Repurchase Program

    On May 3, 2023, the Company’s board of directors authorized a repurchase program as a means of opportunistically returning capital to shareholders. The program authorizes the repurchase of up to $2,000,000 of the Company’s common stock through April 30, 2024.

    Repurchases will be made at management’s discretion as part of the Company’s capital allocation strategy based on the best interests of both the Company and its shareholders, subject to the availability of stock, general market conditions, the trading price of the stock, alternative uses for capital, and the Company’s financial performance. The actual amount of common stock to be repurchased, the timing of repurchases and the price at which the shares are repurchased will depend on future market conditions and on potential alternative uses for the Company’s cash resources. Additionally, the repurchases may also be made under a Rule 10b5-1 plan, which would permit shares to be repurchased when the Company might otherwise be precluded from doing so under insider trading laws. Open market repurchases will be conducted in accordance with applicable legal requirements.

    The repurchase program may be suspended, terminated, or modified at any time for any reason, including market conditions, the cost of repurchasing shares, the availability of alternative investment opportunities, liquidity, and other factors deemed appropriate. The repurchase program does not obligate the Company to repurchase any particular number of shares.

    Conference Call

    Profire Energy Executives will host the call, followed by a question and answer period.
    Date: Wednesday, May 10, 2023
    Time: 8:30 a.m. ET (6:30 a.m. MT)
    Toll-free dial-in number: 1-855-327-6937
    International dial-in number: 1-631-891-4304
    The conference call will be webcast live and available for replay via this link: https://viavid.webcasts.com/starthere.jsp?ei=1610085&tp_key=d7950f6a2f

    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 1:00 p.m. ET on the same day through May 24, 2023.

    Toll-free replay number: 1-844-512-2921
    International replay number: 1-412-317-6671
    Replay Pin Number: 10021694

    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; 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, the Company’s plans to make investments to support revenue diversification, and the Company’s plans regarding a share repurchase program. 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
    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.

     3/31/2023
    EBITDA Calculation:3 months
    Net Income$2,589,621 
    add back net income tax expense$816,815 
    add back net interest expense$(58,980)
    add back depreciation and amortization$262,039 
    EBITDA calculated$3,609,495 



    PROFIRE ENERGY, INC. AND SUBSIDIARIES
    Condensed Consolidated Balance Sheets
     As of
     March 31, 2023 December 31, 2022
    ASSETS(Unaudited)  
    CURRENT ASSETS   
    Cash and cash equivalents$7,219,356  $7,384,578 
    Short-term investments 2,071,834   1,154,284 
    Accounts receivable, net 12,308,290   10,886,145 
    Inventories, net (note 3) 10,589,023   10,293,980 
    Prepaid expenses and other current assets (note 4) 2,650,823   2,314,639 
    Total Current Assets 34,839,326   32,033,626 
    LONG-TERM ASSETS   
    Long-term investments 7,052,725   7,503,419 
    Financing right-of-use asset 106,760   120,239 
    Property and equipment, net 10,330,685   10,423,964 
    Intangible assets, net 1,225,154   1,268,907 
    Goodwill 2,579,381   2,579,381 
    Total Long-Term Assets 21,294,705   21,895,910 
    TOTAL ASSETS$56,134,031  $53,929,536 
        
    LIABILITIES AND STOCKHOLDERS' EQUITY   
    CURRENT LIABILITIES   
    Accounts payable$1,962,882  $2,955,506 
    Accrued liabilities (note 5) 2,922,928   3,573,994 
    Current financing lease liability (note 6) 51,821   53,646 
    Income taxes payable 834,542   205,169 
    Total Current Liabilities 5,772,173   6,788,315 
    LONG-TERM LIABILITIES   
    Net deferred income tax liability 701,406   488,858 
    Long-term financing lease liability (note 6) 56,522   67,883 
    TOTAL LIABILITIES 6,530,101   7,345,056 
        
    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: 52,390,017 issued and 47,351,887 outstanding at March 31, 2023, and 52,143,901 issued and 47,105,771 outstanding at December 31, 2022 52,391   52,144 
    Treasury stock, at cost (7,336,323)  (7,336,323)
    Additional paid-in capital 32,096,662   31,737,843 
    Accumulated other comprehensive loss (3,224,110)  (3,294,873)
    Retained earnings 28,015,310   25,425,689 
    TOTAL STOCKHOLDERS' EQUITY 49,603,930   46,584,480 
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$56,134,031  $53,929,536 

    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 (Loss)
    (Unaudited)
     For the Three Months Ended March 31,
      2023   2022 
       (See Note 1)
    REVENUES (note 8)   
    Sales of products, net$13,628,512  $8,878,423 
    Sales of services, net 924,949   624,717 
    Total Revenues 14,553,461   9,503,140 
        
    COST OF SALES   
    Cost of sales - product 5,974,339   4,382,700 
    Cost of sales - services 746,014   563,736 
    Total Cost of Sales 6,720,353   4,946,436 
        
    GROSS PROFIT 7,833,108   4,556,704 
        
    OPERATING EXPENSES   
    General and administrative 4,047,969   3,392,379 
    Research and development 336,452   308,316 
    Depreciation and amortization 142,887   167,015 
    Total Operating Expenses 4,527,308   3,867,710 
        
    INCOME FROM OPERATIONS 3,305,800   688,994 
        
    OTHER INCOME (EXPENSE)   
    Gain on sale of assets 53,075   95,842 
    Other expense (9,553)  (18,081)
    Interest income 58,047   21,545 
    Interest expense (933)  (697)
    Total Other Income 100,636   98,609 
        
    INCOME BEFORE INCOME TAXES 3,406,436   787,603 
        
    INCOME TAX EXPENSE (816,815)  (160,442)
        
    NET INCOME$2,589,621  $627,161 
        
    OTHER COMPREHENSIVE INCOME (LOSS)   
    Foreign currency translation gain (loss)$(5,524) $158,359 
    Unrealized gains (losses) on investments 76,287   (287,126)
    Total Other Comprehensive Income (Loss) 70,763   (128,767)
        
    COMPREHENSIVE INCOME$2,660,384  $498,394 
        
    BASIC EARNINGS PER SHARE$0.05  $0.01 
    FULLY DILUTED EARNINGS PER SHARE$0.05  $0.01 
        
    BASIC WEIGHTED AVG NUMBER OF SHARES OUTSTANDING 47,174,518   47,481,439 
    FULLY DILUTED WEIGHTED AVG NUMBER OF SHARES OUTSTANDING 48,612,833   48,536,418 

    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 Three Months Ended March 31,
      2023   2022 
    OPERATING ACTIVITIES   
    Net income$2,589,621  $627,161 
    Adjustments to reconcile net income (loss) to net cash provided by operating activities:   
    Depreciation and amortization expense 262,039   281,119 
    Gain on sale of property and equipment (53,075)  (95,842)
    Bad debt expense 41,792   28,453 
    Stock awards issued for services 223,047   138,503 
    Changes in operating assets and liabilities:   
    Accounts receivable (1,108,889)  (1,663,295)
    Income taxes receivable/payable 629,371   439,034 
    Inventories (292,119)  (530,568)
    Prepaid expenses and other current assets (335,832)  49,283 
    Deferred tax asset/liability 212,548   47,030 
    Accounts payable and accrued liabilities (1,646,723)  (513,227)
    Net Cash Provided by (Used in) Operating Activities 521,780   (1,192,349)
        
    INVESTING ACTIVITIES   
    Proceeds from sale of property and equipment 97,886   112,982 
    Sale (purchase) of investments (390,548)  679,636 
    Purchase of property and equipment (153,755)  (207,848)
    Net Cash Provided by (Used in) Investing Activities (446,417)  584,770 
        
    FINANCING ACTIVITIES   
    Value of equity awards surrendered by employees for tax liability (242,506)  (91,098)
    Cash received in exercise of stock options     
    Purchase of treasury stock    (622,263)
    Principal paid towards lease liability (6,947)  (12,629)
    Net Cash Used in Financing Activities (249,453)  (725,990)
        
    Effect of exchange rate changes on cash 8,868   24,766 
        
    NET DECREASE IN CASH (165,222)  (1,308,803)
    CASH AT BEGINNING OF PERIOD 7,384,578   8,188,270 
    CASH AT END OF PERIOD$7,219,356  $6,879,467 
        
    SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION   
        
    CASH PAID FOR:   
    Interest$933  $697 
    Income taxes$  $ 
    NON-CASH FINANCING AND INVESTING ACTIVITIES   
    Common stock issued in settlement of accrued bonuses$378,526  $212,787 

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

     


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