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Profire Energy Reports Financial Results for Fiscal First Quarter 2016

LINDON, Utah, Aug. 10, 2015 (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 first quarter of 2016 ended June 30, 2015. A conference call will be held on Monday, August 10, 2015 at 5:00 p.m. EDT to discuss the results.

Fiscal Q1 2016 Highlights

  • Cash at period-end totaled $17.2 million
  • Net cash provided from operating activities during the period totaled $2.9 million
  • Significant cost reductions completed during the period; Operating Expenses reduced to $3.9 million for the quarter, a reduction of over $700,000 from Q4 FY2015
  • Expansive search for new Chief Financial Officer undertaken, nearing completion



Fiscal Q1 2016 Financial Results

Total revenues for the quarter of $6.9 million reflected a decrease of 48%, compared to the comparable period last year. This decrease was principally attributable to the reduced purchasing from companies in the oil and gas industry stemming from budget constraints derived from a drastic decline in the underlying commodity prices year over year. Though the Company expects the difficult industry environment to continue for some time, it is focusing resources in geographic areas that we believe will produce the highest level of total revenues and return on investment, while also focusing on initiatives that might help reduce its long-term exposure to the industry’s volatility.

Gross profit percentage during the three months ended June 30, 2015 decreased from 57% to 48% compared to the comparable period ended June 30, 2014.

The Company’s total operating expenses during the three months ended June 30, 2015 decreased $217,626, or 5%, compared to the comparable period ended June 30, 2014. As a percentage of total revenues, total operating expenses during the three months ended June 30, 2015 increased from 31% to 56%, compared to the comparable period ended June 30, 2014.

Net loss was $(458,813) or $(0.01) per diluted share, compared to net income of $2.2 million or $0.05 per diluted share in the same prior year period. The quarter represents a rare loss in the Company’s seven-year history as a public entity.

Cash and cash equivalents totaled $17.2 million at June 30, 2015, as compared to $14.1 million at March 31, 2015. The Company continues to operate debt-free.

Management Commentary

“Certainly, the industry is having a tough time right now, and many companies are undergoing difficult transitions,” said Brenton Hatch, President and CEO of Profire Energy. “We anticipate a relatively difficult fiscal year, as we’ve noted previously, but are absolutely confident in our ability to navigate the challenges that lie ahead, and are assured we have the internal talent and resources to do so. We believe we are well-positioned to weather the storm, and are focused on becoming a more robust and efficient organization during this challenging time.”

“We continue to operate without debt, which—coupled with our significant cash reserves of over $17 million—affords us significant staying power amid the current industry turbulence,” said Nathan McBride, VP Finance & Strategy of Profire Energy. “We have acted quickly as a management team to dramatically reduce operating costs, while giving great consideration to our long-term strategic goals, and ensuring we don’t significantly impair our strategic position as a company. We feel that we have done both very effectively.”

Fiscal 2016 Guidance

The Company reaffirmed 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. We expect a stronger performance in the second half of Fiscal 2016 resulting from an anticipated improvement in the business outlook and the company’s sales and marketing capability.

Profire management will host a conference call later today 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: Monday August 10, 2015
Time: 5:00 p.m. EDT (3:00 p.m. MDT)
Toll-free dial-in number: 1-855-327-6837
International dial-in number: 1-778-327-3988

The conference call will be webcast live and available for replay via this link: http://public.viavid.com/index.php?id=115550. 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 to the conference call, please contact Tanner Lamb at 1-801-796-5127.

A replay of the call will be available after 8:00 p.m. EDT on the same day through August 17, 2015.

Toll-free replay number: 1-877-870-5176
International replay number: 1-858-384-5517
Replay ID: 115550

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 systems are increasingly 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; the Company's long-term outlook and market opportunity of the Company; the Company being well positioned to manage through the industry difficulties; the Company’s intention to hire a new CFO; the Company’s positioning relative to industry peers and the ability to capitalize of opportunities the market present; the Company cost reductions and process improvements creating operational leverage in future periods; the Company’s expectation that it will return to profitability; the Company’s financial expectations, including revenue and net income, for fiscal year 2016; and the company’s sales performance in the upcoming fiscal year. 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
Condensed Consolidated Balance Sheets
ASSETS
June 30,March 31,
2015 2015
(Unaudited)
CURRENT ASSETS
Cash and cash equivalents $ 17,186,238 $ 14,144,796
Accounts receivable, net 7,003,089 9,462,378
Inventories 11,071,036 11,766,535
Income tax receivable 144,402 -
Prepaid expenses & other current assets 131,503 112,741
Total Current Assets 35,536,268 35,486,450
LONG-TERM ASSETS
Deferred tax asset 535,126 501,921
PROPERTY AND EQUIPMENT, net 9,092,880 9,275,965
OTHER ASSETS
Goodwill 997,701 997,701
Intangible assets, net 577,866 594,019
Total Other Assets 1,575,567 1,591,720
TOTAL ASSETS $ 46,739,841 $ 46,856,056
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 604,730 $ 1,040,530
Accrued liabilities 594,531 332,229
Income taxes payable 355,894 347,486
Total Current Liabilities 1,555,155 1,720,245
LONG-TERM LIABILITIES
Deferred income tax liability 641,789 631,353
TOTAL LIABILITIES 2,196,944 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:
53,226,720 and 53,199,136 shares issued and outstanding
as of June 30, 2015 and March 31, 2015, respectively 53,227 53,199
Additional paid-in capital 25,688,904 25,525,052
Accumulated other comprehensive income (loss) (1,555,609) (1,888,981)
Retained earnings 20,356,375 20,815,188
Total Stockholders' Equity 44,542,897 44,504,458
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 46,739,841 $ 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
Condensed Consolidated Statements of Operations and Other Comprehensive Income
(Unaudited)
For the Three Months Ended
June 30,
2015 2014
REVENUES
Sales of goods, net $ 6,211,970 $ 12,316,512
Sales of services, net 665,273 828,322
Total Revenues 6,877,243 13,144,834
COST OF SALES
Cost of goods sold-product 2,967,918 5,067,627
Cost of goods sold-services 595,538 640,107
Total Cost of Goods Sold 3,563,456 5,707,734
GROSS PROFIT 3,313,787 7,437,100
OPERATING EXPENSES
General and administrative expenses 1,978,485 2,409,069
Research and development 304,489 271,227
Payroll expenses 1,462,655 1,265,699
Depreciation and amortization expense 107,455 124,715
Total Operating Expenses 3,853,084 4,070,710
INCOME (LOSS) FROM OPERATIONS (539,297) 3,366,390
OTHER INCOME (EXPENSE)
Interest expense - -
Gain on disposal of fixed assets 18,637 -
Other (expense) income (108,990) 3,121
Interest income 21,123 237
Total Other Income (Expense) (69,230) 3,358
NET INCOME (LOSS) BEFORE INCOME TAXES (608,527) 3,369,748
INCOME TAX EXPENSE (BENEFIT) (149,714) 1,149,042
NET INCOME (LOSS)$ (458,813) $ 2,220,706
FOREIGN CURRENCY TRANSLATION GAIN (LOSS)$ 333,372 $ 296,436
TOTAL COMPREHENSIVE INCOME (LOSS)$ (125,441) $ 2,517,142
BASIC EARNINGS (LOSS) PER SHARE$ (0.01) $ 0.05
FULLY DILUTED EARNINGS (LOSS) PER SHARE$ (0.01) $ 0.05
BASIC WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 53,214,594 47,922,059
FULLY DILUTED WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 53,214,594 48,579,418
These financial statements should be read in conjunction with forms 10-Q and 10-K and accompanying footnotes.

PROFIRE ENERGY, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
For the Three Months Ended
June 30,
2015 2014
OPERATING ACTIVITIES
Net Income $ (458,813) $ 2,220,706
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization expense 225,945 182,392
Gain on disposal of fixed assets (18,637) -
Bad debt expense 24,906 -
Stock options issued for services 187,406 351,364
Changes in operating assets and liabilities:
Changes in accounts receivable 2,482,059 (3,071,142)
Changes in income tax receivable (144,402) -
Changes in inventories 786,325 (187,668)
Changes in prepaid expenses (18,728) (23,461)
Changes in deferred tax asset (33,205) (79,208)
Changes in accounts payable and accrued liabilities (181,741) 428,360
Changes in income taxes payable 15,390 1,246,558
Net Cash Provided by Operating Activities 2,866,505 1,067,901
INVESTING ACTIVITIES
Proceeds from disposal of equipment 52,500 -
Purchase of fixed assets (12,285) (1,147,274)
Net Cash Provided by (Used in) Investing Activities 40,215 (1,147,274)
FINANCING ACTIVITIES
Value of equity awards surrendered by employees for tax liability (23,526) -
Stock issued in exercise of stock options - 78,870
Net Cash Provided by (Used in) Financing Activities (23,526) 78,870
Effect of exchange rate changes on cash 158,248 113,917
NET INCREASE IN CASH 3,041,442 113,414
CASH AT BEGINNING OF PERIOD 14,144,796 4,456,674
CASH AT END OF PERIOD$ 17,186,238 $ 4,570,088
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION
CASH PAID FOR:
Interest $ - $ -
Income taxes $ - $ (138,008)
These financial statements should be read in conjunction with forms 10-Q and 10-K and accompanying footnotes.


Profire Energy, Inc. Nathan McBride, VP Strategy & Finance (801) 796-5127 Profire Energy, Inc. Tanner Lamb, Investor Relations (801) 796-5127

Source:Profire Energy