Profire Energy Reports Financial Results for Fiscal Second Quarter 2016

Company Generates 18% Quarterly Revenue Growth, $0.01 EPS, and $1.8 Million Increase in Cash. Maintains Fiscal 2016 Guidance.

Nov. 9, 2015 4:10 pm |  More About Profire Energy

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: 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

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.

Consolidated Balance Sheets 
     September 30, March 31, 
      2015  2015 
 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  
 Deferred tax asset   575,189    501,921  
PROPERTY AND EQUIPMENT, net   8,697,175    9,275,965  
 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  
 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  
 Deferred income tax liability   629,232    631,353  
TOTAL LIABILITIES   2,506,548    2,351,598  
 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  
These financial statements should be read in conjunction with forms 10-Q and 10-K and accompanying footnotes. 


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
 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 
 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 
 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 
OF SHARES OUTSTANDING  53,236,979     52,482,823    53,230,892    50,222,367 
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.


Consolidated Statements of Cash Flows 
    For the Six Months Ended 
    September 30, 
    2015 2014 
 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  
 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) 
 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  
 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. 


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

Profire Energy, Inc.
Nathan McBride, VP Strategy 
(801) 796-5127

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November 9, 2015 - 4:10 PM EST

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