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| 8-K - 8-K - PROFIRE ENERGY INC | a2018q38-kfinancialresults.htm |
Profire Energy Reports Financial Results for Third Quarter Fiscal 2018
Profire Increased Net Income by 36% Over the Same Quarter in 2017
LINDON, Utah November 7, 2018 - Profire Energy, Inc. (NASDAQ: PFIE), a technology company (the “Company”) which creates, installs and services burner and chemical management solutions in the oil and gas industry, today reported financial results for its fiscal quarter ended September 30, 2018. A conference call will be held on Thursday, November 8, 2018 at 1:00 p.m. EST to discuss the results.
Fiscal Q3 2018 Highlights
• | Recognized Revenue of $11.5 million, The Second-Best Quarter in Nearly Four Years |
• | Net Income of $1.7 Million or $0.03 Per Share, a 36% Increase From the Same Quarter Last Year |
• | Realized Gross Profit of $6.1 Million |
• | Cash and Liquid Investments at Period End totaled over $22.2 Million |
• | Remained Debt-Free |
Fiscal Quarter Financial Results
Total revenues for the period equaled $11.5 million or a 14% increase from the same quarter a year ago. This increase is largely attributed to our ability to leverage our expanding customer base with our existing sales force.
Total operating expenses were approximately $3.7 million or a 15% increase over the same quarter last year which was mostly attributable to additional employees and increased R&D spend. Compared with the same year ago quarter, operating expenses for general and administrative increased 15%, R&D increased 19%, and depreciation increased 14%.
Gross profit increased to $6.1 million or 53% of total revenues, as compared to $5.1 million or 50% of total revenues in the year-ago quarter. Gross profit margins fluctuate slightly each quarter due to changes in product mix, direct labor costs, and adjustments in our inventory and warranty reserves.
Net income was $1.7 million or $0.03 per share, compared to a net income of $1.2 million or $0.03 per share in the same year-ago quarter.
Cash and liquid investments totaled $22.2 million at the end of the quarter and the Company continues to operate debt-free.
Management Commentary
“Our strategic initiatives over the past few years have positioned us well to achieve future growth ,” stated Ryan Oviatt, CFO of Profire. “Profire's ability to respond quickly to customer demands over the years has distinguished Profire from its competition. Our resources allow us to be flexible in responding to customer demand and market opportunities that will be beneficial to Profire.”
“Profire increased revenues in the third quarter despite a sequential slowdown in the industry.” said Brenton Hatch, President and CEO of Profire Energy. “So far, this year is on track to be our most profitable year in Company history and the second-best year in terms of revenue. Our core values and strategies involving cost management, and remaining debt free, have allowed us to see great success throughout the industry recovery. Our anticipated performance in 2018 is providing a sold foundation for additional investments in 2019 and beyond. .”
Conference Call
Profire Energy President and CEO Brenton Hatch and CFO Ryan Oviatt will host the presentation, followed by a question and answer period. | |
Date: | Thursday, November 8, 2018 |
Time: 1:00 p.m. EST (11:00 a.m. MST) | |
Toll-free dial-in number: 1-877-705-6003 | |
International dial-in number: 1-201-493-6725 | |
The conference call will be webcast live and available for replay via this link: http://public.viavid.com/index.php?id=132159. 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 Todd Fugal at 1-801-796-5127. A replay of the call will be available via the dial-in numbers below after 5:00 p.m. EST on the same day through November 15, 2018. Toll-free replay number: 1-844-512-2921 | |
International replay number: 1-412-317-6671 | |
Replay Pin Number: 13684861 | |
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 and chemical injection systems are increasingly becoming part of their solution. Profire Energy has offices in Lindon, Utah; Victoria, Texas; Homer, Pennsylvania; Greeley, Colorado; and Spruce Grove, 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 holding a conference call on November 8, 2018 and the
availability of Company resources to make beneficial investments in 2019 and beyond. 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.
Ryan Oviatt, CFO
(801) 796-5127
Three Part Advisors
Steven Hooser, Partner
214-872-2710
PROFIRE ENERGY, INC. AND SUBSIDIARIES | ||||||||
Condensed Consolidated Balance Sheets | ||||||||
As of | ||||||||
September 30, 2018 | December 31, 2017 | |||||||
(Unaudited) | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 8,637,838 | $ | 11,445,799 | ||||
Short-term investments | 965,105 | 300,817 | ||||||
Short-term investments - other | 4,618,379 | 4,009,810 | ||||||
Accounts receivable, net | 8,094,228 | 8,069,255 | ||||||
Inventories, net | 10,350,075 | 6,446,083 | ||||||
Prepaid expenses & other current assets | 636,476 | 437,304 | ||||||
Income tax receivable | 231,967 | — | ||||||
Total Current Assets | 33,534,068 | 30,709,068 | ||||||
LONG-TERM ASSETS | ||||||||
Net deferred tax asset | 50,253 | 72,817 | ||||||
Long-term investments | 8,023,172 | 8,517,182 | ||||||
Property and equipment, net | 7,695,650 | 7,197,499 | ||||||
Goodwill | 997,701 | 997,701 | ||||||
Intangible assets, net | 460,307 | 494,792 | ||||||
Total Long-Term Assets | 17,227,083 | 17,279,991 | ||||||
TOTAL ASSETS | $ | 50,761,151 | $ | 47,989,059 | ||||
CURRENT LIABILITIES | ||||||||
Accounts payable | 2,879,156 | 1,780,977 | ||||||
Accrued vacation | 259,808 | 196,646 | ||||||
Accrued liabilities | 1,509,881 | 1,044,284 | ||||||
Income taxes payable | 719,241 | 919,728 | ||||||
Total Current Liabilities | 5,368,086 | 3,941,635 | ||||||
TOTAL LIABILITIES | 5,368,086 | 3,941,635 | ||||||
STOCKHOLDERS' EQUITY | ||||||||
Preferred shares: $0.001 par value, 10,000,000 shares authorized: no shares issued or outstanding | — | — | ||||||
Common shares: $0.001 par value, 100,000,000 shares authorized: 54,685,759 issued and 48,083,063 outstanding at September 30, 2018 and 53,931,167 issued and 48,606,425 outstanding at December 31, 2017 | 54,686 | 53,931 | ||||||
Treasury stock, at cost | (10,890,349 | ) | (6,890,349 | ) | ||||
Additional paid-in capital | 27,890,171 | 27,535,469 | ||||||
Accumulated other comprehensive loss | (2,459,865 | ) | (2,200,462 | ) | ||||
Retained earnings | 30,798,422 | 25,548,835 | ||||||
TOTAL STOCKHOLDERS' EQUITY | 45,393,065 | 44,047,424 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 50,761,151 | $ | 47,989,059 | ||||
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 Operations and Other Comprehensive Income | ||||||||||||||||
(Unaudited) | ||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
REVENUES | ||||||||||||||||
Sales of goods, net | $10,830,592 | $9,387,232 | $33,009,616 | $25,514,149 | ||||||||||||
Sales of services, net | 669,310 | 662,960 | 1,999,764 | 1,825,528 | ||||||||||||
Total Revenues | 11,499,902 | 10,050,192 | 35,009,380 | 27,339,677 | ||||||||||||
COST OF SALES | ||||||||||||||||
Cost of goods sold-product | 4,917,449 | 4,509,191 | 15,434,698 | 11,600,019 | ||||||||||||
Cost of goods sold-services | 484,327 | 479,206 | 1,437,749 | 1,333,819 | ||||||||||||
Total Cost of Goods Sold | 5,401,776 | 4,988,397 | 16,872,447 | 12,933,838 | ||||||||||||
GROSS PROFIT | 6,098,126 | 5,061,795 | 18,136,933 | 14,405,839 | ||||||||||||
OPERATING EXPENSES | ||||||||||||||||
General and administrative expenses | 3,180,726 | 2,771,869 | 9,887,451 | 8,454,235 | ||||||||||||
Research and development | 377,676 | 318,621 | 1,097,897 | 798,142 | ||||||||||||
Depreciation and amortization expense | 143,328 | 125,898 | 401,114 | 405,811 | ||||||||||||
Total Operating Expenses | 3,701,730 | 3,216,388 | 11,386,462 | 9,658,188 | ||||||||||||
INCOME FROM OPERATIONS | 2,396,396 | 1,845,407 | 6,750,471 | 4,747,651 | ||||||||||||
OTHER INCOME (EXPENSE) | ||||||||||||||||
Gain on sale of fixed assets | 43,904 | 14,017 | 129,989 | 62,492 | ||||||||||||
Other income (expense) | (1,506) | 25,991 | (7,462) | 39,377 | ||||||||||||
Interest income | 85,167 | 41,672 | 310,646 | 127,790 | ||||||||||||
Total Other Income | 127,565 | 81,680 | 433,173 | 229,659 | ||||||||||||
INCOME BEFORE INCOME TAXES | 2,523,961 | 1,927,087 | 7,183,644 | 4,977,310 | ||||||||||||
INCOME TAX EXPENSE | 864,874 | 709,169 | 1,934,057 | 1,846,634 | ||||||||||||
NET INCOME | $1,659,087 | $1,217,918 | $5,249,587 | $3,130,676 | ||||||||||||
OTHER COMPREHENSIVE INCOME (LOSS) | ||||||||||||||||
Foreign currency translation gain (loss) | $170,641 | $327,271 | $(223,431) | $640,927 | ||||||||||||
Unrealized gains (losses) on investments | -11,963 | 10,138 | (35,972) | 73,085 | ||||||||||||
Total Other Comprehensive Income (Loss) | 158,678 | 337,409 | (259,403) | 714,012 | ||||||||||||
NET COMPREHENSIVE INCOME | $1,817,765 | $1,555,327 | $4,990,184 | $3,844,688 | ||||||||||||
BASIC EARNINGS PER SHARE | $0.03 | $0.03 | $0.11 | $0.06 | ||||||||||||
FULLY DILUTED EARNINGS PER SHARE | $0.03 | $0.02 | $0.11 | $0.06 | ||||||||||||
BASIC WEIGHTED AVG NUMBER OF SHARES OUTSTANDING | 48,082,506 | 48,552,770 | 48,337,517 | 49,613,704 | ||||||||||||
FULLY DILUTED WEIGHTED AVG NUMBER OF SHARES OUTSTANDING | 48,852,167 | 49,369,835 | 49,107,178 | 50,346,333 | ||||||||||||
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 Nine Months Ended September 30, | |||||||
2018 | 2017 | ||||||
OPERATING ACTIVITIES | |||||||
Net income | $ | 5,249,587 | $ | 3,130,676 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization expense | 667,085 | 675,223 | |||||
Gain on sale of fixed assets | (120,825 | ) | (62,310 | ) | |||
Bad debt expense | 134,901 | 147,470 | |||||
Stock awards issued for services | 916,795 | 648,244 | |||||
Changes in operating assets and liabilities: | — | ||||||
Changes in accounts receivable | (184,951 | ) | (2,024,858 | ) | |||
Changes in income taxes receivable/payable | (432,575 | ) | 840,343 | ||||
Changes in inventories | (3,863,287 | ) | 634,646 | ||||
Changes in prepaid expenses | (172,497 | ) | (93,669 | ) | |||
Changes in deferred tax asset/liability | 22,564 | (139,298 | ) | ||||
Changes in accounts payable and accrued liabilities | 1,506,396 | 588,868 | |||||
Net Cash Provided by Operating Activities | 3,723,193 | 4,345,335 | |||||
INVESTING ACTIVITIES | |||||||
Proceeds from sale of equipment | 219,269 | 140,198 | |||||
Purchase of investments | (876,463 | ) | (869,554 | ) | |||
Purchase of fixed assets | (1,271,997 | ) | (214,632 | ) | |||
Net Cash Used in Investing Activities | (1,929,191 | ) | (943,988 | ) | |||
FINANCING ACTIVITIES | |||||||
Value of equity awards surrendered by employees for tax liability | (737,024 | ) | (25,667 | ) | |||
Cash received in exercise of stock options | 174,002 | — | |||||
Purchase of Treasury stock | (4,000,000 | ) | (3,120,716 | ) | |||
Net Cash Used in Financing Activities | (4,563,022 | ) | (3,146,383 | ) | |||
Effect of exchange rate changes on cash | (38,941 | ) | 213,793 | ||||
NET INCREASE (DECREASE) IN CASH | (2,807,961 | ) | 468,757 | ||||
CASH AT BEGINNING OF PERIOD | 11,445,799 | 7,553,088 | |||||
CASH AT END OF PERIOD | 8,637,838 | $ | 8,021,845 | ||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | |||||||
CASH PAID FOR: | |||||||
Interest | — | — | |||||
Income taxes | 2,164,149 | 1,282,157 | |||||
These financial statements should be read in conjunction with the Form 10-Q and accompanying footnotes