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Profire Energy Reports Financial Results for Fiscal First Quarter 2016

20:00 EDT 9 Aug 2015 | Globe Newswire

LINDON, Utah, Aug. 10, 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 first quarter of 2016 ended June 30, 2015. A conference call will be held on Monday, August 10, 2015 at 5:00 p.m. EDT to discuss the results.

Fiscal Q1 2016 Highlights

  • Cash at period-end totaled $17.2 million
  • Net cash provided from operating activities during the period totaled $2.9 million
  • Significant cost reductions completed during the period; Operating Expenses reduced to $3.9 million for the quarter, a reduction of over $700,000 from Q4 FY2015
  • Expansive search for new Chief Financial Officer undertaken, nearing completion



Fiscal Q1 2016 Financial Results

Total revenues for the quarter of $6.9 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. Though the Company expects the difficult industry environment to continue for some time, it is focusing resources in geographic areas that we believe will produce the highest level of total revenues and return on investment, while also focusing on initiatives that might help reduce its long-term exposure to the industry’s volatility.

Gross profit percentage during the three months ended June 30, 2015 decreased from 57% to 48% compared to the comparable period ended June 30, 2014.      

The Company’s total operating expenses during the three months ended June 30, 2015 decreased $217,626, or 5%, compared to the comparable period ended June 30, 2014. As a percentage of total revenues, total operating expenses during the three months ended June 30, 2015 increased from 31% to 56%, compared to the comparable period ended June 30, 2014.

Net loss was $(458,813) or $(0.01) per diluted share, compared to net income of $2.2 million or $0.05 per diluted share in the same prior year period. The quarter represents a rare loss in the Company’s seven-year history as a public entity.

Cash and cash equivalents totaled $17.2 million at June 30, 2015, as compared to $14.1 million at March 31, 2015. The Company continues to operate debt-free.

Management Commentary

“Certainly, the industry is having a tough time right now, and many companies are undergoing difficult transitions,” said Brenton Hatch, President and CEO of Profire Energy. “We anticipate a relatively difficult fiscal year, as we’ve noted previously, but are absolutely confident in our ability to navigate the challenges that lie ahead, and are assured we have the internal talent and resources to do so. We believe we are well-positioned to weather the storm, and are focused on becoming a more robust and efficient organization during this challenging time.”

“We continue to operate without debt, which—coupled with our significant cash reserves of over $17 million—affords us significant staying power amid the current industry turbulence,” said Nathan McBride, VP Finance & Strategy of Profire Energy. “We have acted quickly as a management team to dramatically reduce operating costs, while giving great consideration to our long-term strategic goals, and ensuring we don’t significantly impair our strategic position as a company. We feel that we have done both very effectively.” 

Fiscal 2016 Guidance

The Company reaffirmed 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. We expect a stronger performance in the second half of Fiscal 2016 resulting from an anticipated improvement in the business outlook and the company’s sales and marketing capability.

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 August 10, 2015
Time: 5:00 p.m. EDT (3:00 p.m. MDT)
Toll-free dial-in number: 1-855-327-6837
International dial-in number: 1-778-327-3988

The conference call will be webcast live and available for replay via this link: http://public.viavid.com/index.php?id=115550. 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 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 August 17, 2015.

Toll-free replay number: 1-877-870-5176
International replay number: 1-858-384-5517
Replay ID: 115550

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 intention to hire a new CFO; the Company’s positioning relative to industry peers and the ability to capitalize of opportunities the market present; the Company cost reductions and process improvements creating operational leverage in future periods; the Company’s expectation that it will return to profitability; the Company’s financial expectations, including revenue and net income, for fiscal year 2016; and the company’s sales performance in the upcoming fiscal year. 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.

PART I. FINANCIAL INFORMATION
Item 1 Financial Information
       
PROFIRE ENERGY, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
       
ASSETS
       
  June 30,March 31,
  2015 2015
  (Unaudited) 
CURRENT ASSETS      
Cash and cash equivalents $    17,186,238   $   14,144,796 
Accounts receivable, net    7,003,089       9,462,378 
Inventories    11,071,036       11,766,535 
Income tax receivable    144,402       - 
Prepaid expenses & other current assets    131,503       112,741 
       
Total Current Assets    35,536,268       35,486,450 
       
LONG-TERM ASSETS      
Deferred tax asset    535,126       501,921 
       
PROPERTY AND EQUIPMENT, net    9,092,880       9,275,965 
       
OTHER ASSETS      
Goodwill    997,701       997,701 
Intangible assets, net    577,866       594,019 
       
Total Other Assets    1,575,567       1,591,720 
       
       
TOTAL ASSETS $    46,739,841   $   46,856,056 
       
LIABILITIES AND STOCKHOLDERS' EQUITY 
       
CURRENT LIABILITIES      
Accounts payable $    604,730   $   1,040,530 
Accrued liabilities    594,531       332,229 
Income taxes payable    355,894       347,486 
       
Total Current Liabilities    1,555,155       1,720,245 
       
LONG-TERM LIABILITIES      
Deferred income tax liability    641,789       631,353 
       
TOTAL LIABILITIES    2,196,944       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:      
53,226,720 and  53,199,136 shares issued and outstanding      
as of June 30, 2015 and March 31, 2015, respectively  53,227     53,199 
Additional paid-in capital  25,688,904       25,525,052 
Accumulated other comprehensive income (loss)  (1,555,609)      (1,888,981)
Retained earnings    20,356,375       20,815,188 
       
Total Stockholders' Equity    44,542,897       44,504,458 
       
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $    46,739,841   $   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
Condensed Consolidated Statements of Operations and Other Comprehensive Income
(Unaudited)
       
  For the Three Months Ended 
 June 30,
 2015 2014 
REVENUES      
Sales of goods, net $   6,211,970   $   12,316,512 
Sales of services, net   665,273     828,322 
Total Revenues   6,877,243     13,144,834 
       
COST OF SALES      
Cost of goods sold-product   2,967,918     5,067,627 
Cost of goods sold-services   595,538     640,107 
Total Cost of  Goods Sold   3,563,456     5,707,734 
       
GROSS PROFIT   3,313,787     7,437,100 
       
OPERATING EXPENSES      
General and administrative expenses   1,978,485     2,409,069 
Research and development   304,489     271,227 
Payroll expenses   1,462,655     1,265,699 
Depreciation and amortization expense   107,455     124,715 
       
Total Operating Expenses   3,853,084     4,070,710 
       
INCOME (LOSS) FROM OPERATIONS   (539,297)    3,366,390 
       
OTHER INCOME (EXPENSE)      
Interest expense   -      -  
Gain on disposal of fixed assets   18,637     -  
Other (expense) income   (108,990)    3,121 
Interest income   21,123     237 
       
Total Other Income (Expense)   (69,230)    3,358 
       
NET INCOME (LOSS) BEFORE INCOME TAXES   (608,527)    3,369,748 
       
INCOME TAX EXPENSE (BENEFIT)   (149,714)    1,149,042 
       
NET INCOME (LOSS)$  (458,813) $  2,220,706 
       
FOREIGN CURRENCY TRANSLATION GAIN (LOSS)$  333,372  $  296,436 
       
TOTAL COMPREHENSIVE INCOME (LOSS)$  (125,441) $  2,517,142 
       
BASIC EARNINGS (LOSS) PER SHARE$  (0.01) $  0.05 
 
FULLY DILUTED EARNINGS (LOSS) PER SHARE$  (0.01) $  0.05 
       
BASIC WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING   53,214,594     47,922,059 
       
FULLY DILUTED WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING   53,214,594     48,579,418 
       
These financial statements should be read in conjunction with forms 10-Q and 10-K and accompanying footnotes.
 

 

PROFIRE ENERGY, INC. AND SUBSIDIARIES 
Condensed Consolidated Statements of Cash Flows 
(Unaudited) 
   For the Three Months Ended 
   June 30, 
   2015 2014 
OPERATING ACTIVITIES      
 Net Income $   (458,813) $   2,220,706  
 Adjustments to reconcile net income to      
   net cash provided by operating activities:      
  Depreciation and amortization expense    225,945      182,392  
  Gain on disposal of fixed assets    (18,637)     -  
  Bad debt expense    24,906      -  
  Stock options issued for services    187,406      351,364  
 Changes in operating assets and liabilities:      
  Changes in accounts receivable    2,482,059      (3,071,142) 
  Changes in income tax receivable    (144,402)     -  
  Changes in inventories    786,325      (187,668) 
  Changes in prepaid expenses    (18,728)     (23,461) 
  Changes in deferred tax asset    (33,205)     (79,208) 
  Changes in accounts payable and accrued liabilities    (181,741)     428,360  
  Changes in income taxes payable    15,390      1,246,558  
         
    Net Cash Provided by Operating Activities    2,866,505      1,067,901  
         
INVESTING ACTIVITIES      
 Proceeds from disposal of equipment    52,500      -  
 Purchase of fixed assets    (12,285)     (1,147,274) 
         
  Net Cash Provided by (Used in) Investing Activities    40,215      (1,147,274) 
         
FINANCING ACTIVITIES      
 Value of equity awards surrendered by employees for tax liability    (23,526)   -  
 Stock issued in exercise of stock options    -      78,870  
         
    Net Cash Provided by (Used in) Financing Activities    (23,526)     78,870  
         
 Effect of exchange rate changes on cash    158,248      113,917  
         
  NET INCREASE IN CASH    3,041,442      113,414  
  CASH AT BEGINNING OF PERIOD    14,144,796      4,456,674  
         
  CASH AT END OF PERIOD$   17,186,238  $   4,570,088  
         
SUPPLEMENTAL DISCLOSURES OF      
 CASH FLOW INFORMATION      
         
 CASH PAID FOR:      
  Interest $    -   $    -  
  Income taxes $    -   $    (138,008) 
         
These financial statements should be read in conjunction with forms 10-Q and 10-K and accompanying footnotes. 


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

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

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