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Profire Energy Reports Financial Results for Fiscal Second Quarter 2016

LINDON, Utah, Nov. 09, 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 second quarter of 2016 ended September 30, 2015. A conference call will be held on Monday, November 9, 2015 at 5:00 p.m. EST to discuss the results.

Fiscal Q2 2016 Highlights

  • Total revenues up 18% from Q1 FY2016
  • Net income of $778,907, or $0.01 per diluted share
  • Cash at period-end totaled $19.0 million
  • Net cash provided from operating activities during the six-month period totaled $5.1 million
  • Appointed Ryan Oviatt as new CFO
  • Announced next-generation burner management system, the PF3100
  • Completed significant cost reductions during the period; Operating Expenses reduced to $3.4 million for the quarter, a reduction of over $500,000 from Q1 FY2016

Fiscal Q2 2016 Financial Results

Total Revenues for the quarter of $8.1 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. We believe that a continued emphasis on proper resource-allocation and strategic product-development will help yield long-term revenue growth that is increasingly robust and commodity price-impervious. Such will entail investing in geographies and initiatives (e.g. marketing, training, and sales) that we believe will produce the highest level of total revenues and return on investment in the long-run.

Gross Profit percentage during the three months ended September 30, 2015 decreased from 54% to 50% compared to the prior-year’s period ended September 30, 2014.

Total Operating Expenses during the three months ended September 30, 2015 decreased $1.9 million, or 37%, compared to the equivalent period ended September 30, 2014. As a percentage of Total Revenues, Total Operating Expenses during the three months ended September 30, 2015 increased from 34% to 41%, compared to the comparable period ended September 30, 2014. We believe we have made significant improvements to the Company’s cost structure over the last few periods and are well-positioned to weather the current industry challenges.

Net Income for the quarter was $778,907 or $0.01 per diluted share, compared to net income of $2.1 million or $0.04 per diluted share in the same prior-year period.

Cash and Cash Equivalents totaled $19.0 million at September 30, 2015, as compared to $14.1 million at March 31, 2015. The Company continues to operate debt-free.

Fiscal First Half 2015 Financial Results

Total revenues in the fiscal first half of 2016 decreased 48% to $15.0 million, from $28.9 million in the first half of 2015.

Gross Profit decreased to $7.3 million or 49% of Total Revenues, compared to $16.0 million or 55% of total revenues in the first half of 2015.

Total Operating Expenses decreased to $7.2 million or 48% of Total Revenues, from $9.4 million or 32% of Total Revenues in the first half of 2015.

Net Income was a $320,095 or $0.01 per diluted share, from Net Income of $4.3 million or $0.08 per diluted share in the first half of 2015.

Management Commentary

“We are quite pleased with the progress the Company has made in the last quarter, specifically becoming profitable again,” said Brenton Hatch, President and CEO of Profire Energy. “However, as we have stated several times, we still anticipate a relatively difficult year for overall revenues and profitability, but I think this quarter shows that we are on the right track. We are fortunate to have such a strong balance sheet which should allow us to take advantage of opportunities in the market as they arise, while improving upon our strategic positioning in the future.”

“We are in the midst of difficult and challenging times for the oil and gas industry; however Profire has a strong balance sheet, high-quality products and great people which will help us succeed in these circumstances,” said Ryan Oviatt, CFO of Profire Energy. “Not only have we demonstrated a return to profitability this quarter, but we have generated significant operating cash flow despite the current industry environment. It is great to be a part of the Profire team.”

Fiscal 2016 Guidance

The Company maintains 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. Though the Company expects a slightly stronger performance in the second half of Fiscal 2016, volatile oil & gas prices could change this outlook.

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, November 9, 2015
Time: 5:00 p.m. EST (3:00 p.m. MST)
Toll-free dial-in number: 1-855-327-6837
International dial-in number: 1-631-891-4304

The conference call will be webcast live and available for replay via this link: http://public.viavid.com/index.php?id=117080. 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. EST on the same day through November 16, 2015.

Toll-free replay number: 1-877-870-5176
International replay number: 1-858-384-5517
Replay ID: 117080

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 belief that a continued emphasis on proper resource-allocation and strategic product-development will help yield long-term revenue growth that is increasingly robust and commodity price-impervious; the Company’s intention to make investments that will create highest revenue generation and return on investment; and the Company cost reductions and process improvements creating operational leverage in future periods. 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.

PROFIRE ENERGY, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
ASSETS
September 30, March 31,
2015 2015
CURRENT ASSETS
Cash and cash equivalents $ 18,954,290 $ 14,144,796
Accounts receivable, net 6,706,532 9,462,378
Inventories 9,954,358 11,766,535
Income tax receivable 59,886 -
Prepaid expenses & other current assets 395,385 112,741
Total Current Assets 36,070,451 35,486,450
LONG-TERM ASSETS
Deferred tax asset 575,189 501,921
PROPERTY AND EQUIPMENT, net 8,697,175 9,275,965
OTHER ASSETS
Goodwill 997,701 997,701
Intangible assets, net of accumulated amortization 525,527 594,019
Total Other Assets 1,523,228 1,591,720
TOTAL ASSETS $ 46,866,043 $ 46,856,056
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 909,115 $ 1,040,530
Accrued liabilities 819,775 332,229
Income taxes payable 148,426 347,486
Total Current Liabilities 1,877,316 1,720,245
LONG-TERM LIABILITIES
Deferred income tax liability 629,232 631,353
TOTAL LIABILITIES 2,506,548 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: 53,255,275
53,199,136 shares issued and outstanding, respectively 53,255 53,199
Additional paid-in capital 25,811,085 25,525,050
Accumulated other comprehensive income (loss) (2,640,128) (1,888,981)
Retained earnings 21,135,283 20,815,188
Total Stockholders' Equity 44,359,495 44,504,457
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 46,866,043 $ 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
Consolidated Statements of Operations and Other Comprehensive Income (Loss)
For the Three Months EndedFor the Six Months Ended
September 30, September 30,
2015 2014 2015 2014
REVENUES
Sales of goods, net$ 7,291,846 $ 14,628,718 $ 13,503,816 $ 26,945,230
Sales of services, net 805,448 1,092,214 1,470,721 1,920,536
Total Revenues 8,097,294 15,720,932 14,974,537 28,865,766
COST OF SALES
Cost of goods sold-product 3,445,188 6,469,992 6,413,106 11,537,619
Cost of goods sold-services 623,992 701,497 1,219,530 1,341,604
Total Cost of Goods Sold 4,069,180 7,171,489 7,632,636 12,879,223
GROSS PROFIT 4,028,114 8,549,443 7,341,901 15,986,543
OPERATING EXPENSES
General and administrative expenses 1,660,092 2,866,401 3,638,576 5,275,470
Research and development 295,146 538,793 599,635 810,020
Payroll expenses 1,259,770 1,767,730 2,722,425 3,033,429
Depreciation and amortization expense 137,999 122,928 245,454 247,643
Total Operating Expenses 3,353,007 5,295,852 7,206,090 9,366,562
INCOME FROM OPERATIONS 675,107 3,253,591 135,811 6,619,981
OTHER INCOME (EXPENSE)
Gain on disposal of fixed assets 754 - 19,391 -
Other (expense) income 352,310 (257) 243,320 2,864
Interest income 5,517 7,543 26,640 7,780
Total Other Income (Expense) 358,581 7,286 289,351 10,644
NET INCOME BEFORE INCOME TAXES 1,033,688 3,260,877 425,162 6,630,625
INCOME TAX EXPENSE 254,781 1,182,676 105,067 2,331,718
NET INCOME $ 778,907 $ 2,078,201 $ 320,095 $ 4,298,907
FOREIGN CURRENCY TRANSLATION GAIN (LOSS)$ (1,084,519) $ (455,114) $ (751,147) $ (158,678)
TOTAL COMPREHENSIVE INCOME (LOSS)$ (305,612) $ 1,623,087 $ (431,052) $ 4,140,229
BASIC EARNINGS PER SHARE$ 0.01 $ 0.04 $ 0.01 $ 0.09
FULLY DILUTED EARNINGS PER SHARE$ 0.01 $ 0.04 $ 0.01 $ 0.08
BASIC WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 53,236,979 52,482,823 53,230,892 50,222,367
FULLY DILUTED WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 53,344,291 53,126,287 53,338,204 50,865,831
These financial statements should be read in conjunction with forms 10-Q and 10-K and accompanying footnotes.

PROFIRE ENERGY, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the Six Months Ended
September 30,
2015 2014
OPERATING ACTIVITIES
Net Income $ 320,095 $ 4,298,907
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense 476,548 247,643
Gain on disposal of fixed assets (19,391) -
Common stock issued for services - 168,004
Bad debt expense 86,494 -
Stock options issued for services 325,334 712,820
Unrealized foreign exchange gain - (128,429)
Changes in operating assets and liabilities:
Changes in accounts receivable 2,567,419 (5,961,481)
Changes in income tax receivable (59,886) -
Changes in inventories 1,600,797 (1,634,627)
Changes in prepaid expenses (262,547) (200,631)
Changes in deferred tax asset (73,268) 79,208
Changes in accounts payable and accrued liabilities 373,484 2,329,740
Changes in income taxes payable (193,908) 1,448,850
Net Cash Provided by Operating Activities 5,141,171 1,360,004
INVESTING ACTIVITIES
Proceeds from disposal of equipment 119,935 -
Purchase of fixed assets (28,572) (3,720,259)
Net Cash Provided by (Used in) Investing Activities 91,363 (3,720,259)
FINANCING ACTIVITIES
Proceeds from stock issued for cash - 18,000,000
Stock offering costs - (1,529,057)
Value of equity awards surrendered by employees for tax liability (39,243) -
Stock issued in exercise of stock options - 134,711
Net Cash Provided by (Used in) Financing Activities (39,243) 16,605,654
Effect of exchange rate changes on cash (383,797) (30,249)
NET INCREASE IN CASH 4,809,494 14,215,150
CASH AT BEGINNING OF PERIOD 14,144,796 4,456,674
CASH AT END OF PERIOD $ 18,954,290 $ 18,671,824
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION
CASH PAID FOR:
Income taxes $ 292,082 $ -
These financial statements should be read in conjunction with forms 10-Q and 10-K and accompanying footnotes.


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

Source:Profire Energy