Attached files
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| 8-K - PROFIRE ENERGY, INC. 8K 2015-11-09 - PROFIRE ENERGY INC | profire.htm |
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.
LINDON, Utah, November 9, 2015 - 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
|
·
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Total revenues up 18% from Q1 FY2016
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|
·
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Net income of $778,907, or $0.01 per diluted share
|
|
·
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Cash at period-end totaled $19.0 million
|
|
·
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Net cash provided from operating activities during the six-month period totaled $5.1 million
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·
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Appointed Ryan Oviatt as new CFO
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·
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Announced next-generation burner management system, the PF3100
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|
·
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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
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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 thisoutlook.
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
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. EDT 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
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 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.
Tanner Lamb, Finance & Investor Relations
(801)796-5127
Profire Energy, Inc.
Nathan McBride, VP Strategy
(801) 796-5127
(801) 796-5127
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PART I. FINANCIAL INFORMATION
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||||||||
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Item 1 Financial Information
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||||||||
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PROFIRE ENERGY, INC. AND SUBSIDIARIES
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||||||||
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Consolidated Balance Sheets
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||||||||
| ASSETS | ||||||||
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September 30,
2015 |
March 31,
2015 |
|||||||
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CURRENT ASSETS
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||||||||
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Cash and cash equivalents
|
$
|
18,954,290
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$
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14,144,796
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||||
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Accounts receivable, net
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6,706,532
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9,462,378
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||||||
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Inventories
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9,954,358
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11,766,535
|
||||||
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Income tax receivable
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59,886
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-
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||||||
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Prepaid expenses & other current assets
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395,385
|
112,741
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||||||
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Total Current Assets
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36,070,451
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35,486,450
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||||||
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LONG-TERM ASSETS
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||||||||
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Deferred tax asset
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575,189
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501,921
|
||||||
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PROPERTY AND EQUIPMENT, net
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8,697,175
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9,275,965
|
||||||
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OTHER ASSETS
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||||||||
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Goodwill
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997,701
|
997,701
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||||||
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Intangible assets, net of accumulated amortization
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525,527
|
594,019
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||||||
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Total Other Assets
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1,523,228
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1,591,720
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||||||
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TOTAL ASSETS
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$
|
46,866,043
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$
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46,856,056
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||||
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LIABILITIES AND STOCKHOLDERS' EQUITY
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||||||||
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CURRENT LIABILITIES
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||||||||
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Accounts payable
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$
|
909,115
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$
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1,040,530
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||||
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Accrued liabilities
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819,775
|
332,229
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||||||
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Income taxes payable
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148,426
|
347,486
|
||||||
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Total Current Liabilities
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1,877,316
|
1,720,245
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||||||
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LONG-TERM LIABILITIES
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||||||||
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Deferred income tax liability
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629,232
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631,353
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||||||
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TOTAL LIABILITIES
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2,506,548
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2,351,598
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||||||
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STOCKHOLDERS' EQUITY
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||||||||
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Preferred shares: $0.001 par value, 10,000,000 shares authorized: no shares issued and outstanding
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-
|
-
|
||||||
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Common shares: $0.001 par value, 100,000,000 shares authorized: 53,255,275 53,199,136 shares issued and outstanding, respectively
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53,255
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53,199
|
||||||
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Additional paid-in capital
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25,811,085
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25,525,050
|
||||||
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Accumulated other comprehensive income (loss)
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(2,640,128
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)
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(1,888,981
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)
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||||
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Retained earnings
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21,135,283
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20,815,188
|
||||||
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Total Stockholders' Equity
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44,359,495
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44,504,457
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||||||
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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.
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PROFIRE ENERGY, INC. AND SUBSIDIARIES
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||||||||||||||||
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Consolidated Statements of Operations and Other Comprehensive Income (Loss)
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||||||||||||||||
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For the Three Months Ended
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For the Six Months Ended
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|||||||||||||||
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September 30,
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September 30,
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|||||||||||||||
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|
2015 | 2014 | 2015 | 2014 | ||||||||||||
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REVENUES
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||||||||||||||||
|
Sales of goods, net
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$
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7,291,846
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$
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14,628,718
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$
|
13,503,816
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$
|
26,945,230
|
||||||||
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Sales of services, net
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805,448
|
1,092,214
|
1,470,721
|
1,920,536
|
||||||||||||
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Total Revenues
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8,097,294
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15,720,932
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14,974,537
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28,865,766
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||||||||||||
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COST OF SALES
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||||||||||||||||
|
Cost of goods sold-product
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3,445,188
|
6,469,992
|
6,413,106
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11,537,619
|
||||||||||||
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Cost of goods sold-services
|
623,992
|
701,497
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1,219,530
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1,341,604
|
||||||||||||
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Total Cost of Goods Sold
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4,069,180
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7,171,489
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7,632,636
|
12,879,223
|
||||||||||||
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GROSS PROFIT
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4,028,114
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8,549,443
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7,341,901
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15,986,543
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||||||||||||
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OPERATING EXPENSES
|
||||||||||||||||
|
General and administrative expenses
|
1,660,092
|
2,866,401
|
3,638,576
|
5,275,470
|
||||||||||||
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Research and development
|
295,146
|
538,793
|
599,635
|
810,020
|
||||||||||||
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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.