Profire Energy Reports Financial Results for First Quarter 2024

Published

Company Reports Strong Performance on Revenue Diversification

LINDON, Utah, May 08, 2024 (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, 2024. A conference call will be held on Thursday, May 9, 2024 at 8:30 a.m. ET to discuss the results.

First Quarter Summary (comparisons to prior-year quarter)

  • Revenue of $13.6 million, compared to $14.7 million
  • Gross profit of $6.8 million, compared to $7.8 million
  • Gross margin of 49.5%, compared to 53.3%
  • Net income of $1.4 million, or $0.03 per diluted share, versus $2.6 million and $0.05
  • Generated EBITDA of $2.0 million, versus $3.6 million
  • Cash and investments of $16.2 million with no debt

"Our first quarter results reflect the continued underlying strength of our legacy business and expansion of our diversification efforts, despite lapping the third best quarterly revenue in company history and a significant decline in natural gas prices during the quarter," said Ryan Oviatt, co-CEO and Chief Financial Officer of Profire Energy. "Our overall balance sheet remains strong, with cash in the bank, zero debt, and sufficient inventory to ensure on-time product deliveries to our customers."

First Quarter 2024 Financial Results                       

Total revenues for the period equaled $13.6 million, compared to $14.5 million in the fourth quarter of 2023 and $14.7 million in the prior-year quarter. The sequential and year-over-year increase was partially driven by the timing of certain that orders moved into the second quarter of this year due to changes in customer timing and preparation.

Gross profit was $6.8 million, compared to $7.8 million in both the fourth quarter and same quarter of 2023. Gross margin was 49.5% of revenues, compared to 53.9% of revenues in the prior quarter and 53.3% of revenues in the prior-year quarter. The sequential and year-over-year decrease is related to product mix, the typical fluctuations in inventory and warranty reserves and inflation.

Total operating expenses were $5.0 million, compared to $5.0 million in the final quarter of 2023 and $4.5 million in the year-ago quarter. The increase year-over-year is primarily due to ongoing inflation pressure on our business as well as increased headcount to support strategic growth and increased business activity.

Compared with the same quarter last year, operating expenses for G&A increased 12%, R&D decreased 11% and depreciation increased by 5%.

Net income was $1.4 million, or $0.03 per diluted share, compared to net income of $3.3 million or $0.07 per diluted share in the fourth quarter of 2023 and $2.6 million or $0.05 per diluted share in the same quarter last year.

"The underlying fundamentals of our business remain strong. We recorded our best two sequential quarters in Company history of total value of sales orders received thanks to the strength of our brand and revenue diversification efforts. We have multiple favorable industry tailwinds including forecasts related to LNG and renewable natural gas expansion coupled with the growing demand for global electrification." said Cameron Tidball, co-CEO of Profire Energy. "Our diversification strategy continues to attract interest from existing and new customers. We remain very optimistic about the outlook for Profire and our ability to deliver long-term value to our shareholders."

Conference Call

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

Date: Thursday, May 9, 2024Time: 8:30 a.m. ET (6:30 a.m. MT)Toll-free dial-in number: 1-855-327-6837International 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=1653742&tp_key=c7e5f7d333 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 May 23, 2024.

Toll-free replay number: 1-844-512-2921International replay number: 1-412-317-6671Replay Pin Number: 10022992

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, delivery of Company product, 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 AdvisorsSteven Hooser, PartnerJohn Beisler, Managing Director214-872-2710

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.

 3/31/20243/31/2023
EBITDA Calculation:3 months3 months
Net Income$1,434,375 $2,589,621 
add back net income tax expense$393,148 $816,815 
add back net interest expense$(68,952) $(57,114) 
add back depreciation and amortization$267,654 $262,039 
EBITDA calculated$2,026,225 $3,611,361 

PROFIRE ENERGY, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
  As of
  March 31, 2024 December 31, 2023
ASSETS (Unaudited)  
CURRENT ASSETS    
Cash and cash equivalents $7,196,424  $10,767,519 
Short-term investments  2,750,324   2,799,539 
Accounts receivable, net  14,226,321   14,013,740 
Inventories, net (note 3)  15,747,817   14,059,656 
Prepaid expenses and other current assets (note 4)  3,357,009   2,832,262 
Total Current Assets  43,277,895   44,472,716 
LONG-TERM ASSETS    
Net deferred tax asset  497,263   496,785 
Long-term investments  6,286,599   6,425,582 
Lease right-of-use asset (note 6)  395,267   432,907 
Property and equipment, net  11,233,795   10,782,372 
Intangible assets, net  1,064,724   1,104,102 
Goodwill  2,579,381   2,579,381 
Total Long-Term Assets  22,057,029   21,821,129 
     TOTAL ASSETS $65,334,924  $66,293,845 
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
CURRENT LIABILITIES    
Accounts payable $2,985,177  $2,699,556 
Accrued liabilities (note 5)  2,733,161   4,541,820 
Current lease liability (note 6)  121,386   130,184 
Income taxes payable  916,469   1,723,910 
Total Current Liabilities  6,756,193   9,095,470 
LONG-TERM LIABILITIES    
Net deferred income tax liability  44,876   52,621 
Long-term lease liability (note 6)  280,371   307,528 
TOTAL LIABILITIES  7,081,440   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: 53,337,589 issued and 47,094,226 outstanding at March 31, 2024, and 53,047,231 issued and 46,803,868 outstanding at December 31, 2023  53,340   53,048 
Treasury stock, at cost  (9,324,272)  (9,324,272)
Additional paid-in capital  32,966,075   32,751,749 
Accumulated other comprehensive loss  (3,078,437)  (2,844,702)
Retained earnings  37,636,778   36,202,403 
TOTAL STOCKHOLDERS' EQUITY  58,253,484   56,838,226 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $65,334,924  $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 March 31,
   2024   2023 
    (See Note 1)
REVENUES (note 8)    
Sales of products, net $12,691,804  $13,759,679 
Sales of services, net  949,336   924,949 
Total Revenues  13,641,140   14,684,628 
     
COST OF SALES    
Cost of sales - products  6,095,004   6,105,506 
Cost of sales - services  789,364   746,014 
Total Cost of Sales  6,884,368   6,851,520 
     
GROSS PROFIT  6,756,772   7,833,108 
     
OPERATING EXPENSES    
General and administrative  4,604,766   4,110,032 
Research and development  265,058   274,389 
Depreciation and amortization  149,859   142,887 
Total Operating Expenses  5,019,683   4,527,308 
     
INCOME FROM OPERATIONS  1,737,089   3,305,800 
     
OTHER INCOME (EXPENSE)    
Gain on sale of assets  44,821   53,075 
Other expense  (23,339)  (9,553)
Interest income  71,897   58,047 
Interest expense  (2,945)  (933)
Total Other Income  90,434   100,636 
     
INCOME BEFORE INCOME TAXES  1,827,523   3,406,436 
     
INCOME TAX EXPENSE  (393,148)  (816,815)
     
NET INCOME $1,434,375  $2,589,621 
     
OTHER COMPREHENSIVE INCOME (LOSS)    
Foreign currency translation loss $(244,801) $(5,524)
Unrealized gains on investments  11,066   76,287 
Total Other Comprehensive Income (Loss)  (233,735)  70,763 
     
COMPREHENSIVE INCOME $1,200,640  $2,660,384 
     
BASIC EARNINGS PER SHARE $0.03  $0.05 
FULLY DILUTED EARNINGS PER SHARE $0.03  $0.05 
     
BASIC WEIGHTED AVG NUMBER OF SHARES OUTSTANDING  46,884,875   47,174,518 
FULLY DILUTED WEIGHTED AVG NUMBER OF SHARES OUTSTANDING  48,482,704   48,612,833 
 

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,
  2024   2023 
OPERATING ACTIVITIES   
Net income$1,434,375  $2,589,621 
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation and amortization expense 267,654   262,039 
Gain on sale of property and equipment (44,821)  (53,075)
Bad debt expense 61,684   41,792 
Stock awards issued for services 197,443   223,047 
Changes in operating assets and liabilities:   
Accounts receivable (23,969)  (1,108,889)
Income taxes receivable/payable (804,057)  629,371 
Inventories (1,741,768)  (292,119)
Prepaid expenses and other current assets (564,253)  (335,832)
Deferred tax asset/liability (7,112)  212,548 
Accounts payable and accrued liabilities (1,467,314)  (1,646,723)
     Net Cash Provided by (Used in) Operating Activities (2,692,138)  521,780 
    
INVESTING ACTIVITIES   
Proceeds from sale of property and equipment 46,097   97,886 
Sale (purchase) of investments 199,357   (390,548)
Purchase of property and equipment (776,721)  (153,755)
     Net Cash Used in Investing Activities (531,267)  (446,417)
    
FINANCING ACTIVITIES   
Value of equity awards surrendered by employees for tax liability (307,933)  (242,506)
Principal paid toward lease liability (10,875)  (6,947)
     Net Cash Used in Financing Activities (318,808)  (249,453)
    
Effect of exchange rate changes on cash (28,882)  8,868 
    
NET DECREASE IN CASH (3,571,095)  (165,222)
CASH AT BEGINNING OF PERIOD 10,767,519   7,384,578 
CASH AT END OF PERIOD$7,196,424  $7,219,356 
    
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION   
    
CASH PAID FOR:   
Interest$2,945  $933 
Income taxes$1,056,844  $ 
NON-CASH FINANCING AND INVESTING ACTIVITIES   
Common stock issued in settlement of accrued bonuses$324,415  $378,526 
Common stock issued for stock options$850  $ 
 

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

 

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Source: Profire Energy, Inc.

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