Profire Energy Reports Financial Results For Fiscal Second Quarter Of 2017

LINDON, Utah, Nov. 09, 2016 (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 ended September 30, 2016. A conference call will be held on Thursday, November 10, 2016 at 1:30 p.m. EST to discuss the results.

Fiscal Q2 2017 Highlights
  • Total revenues of $4,990,813
  • Net income of $74,452 or $0.00 per diluted share
  • Cash and liquid investments at period-end totaled $22.7 million
  • Generated positive cash flow from operations of $1,845,355
  • Remained debt-free

Fiscal Second Quarter Financial Results

The second quarter resulted in positive cash flows from operating activities. $11.1m in cash used to invest in low risk, CD's, bonds and mutual funds. This investment strategy was done to allow liquidity while earning an improved rate of return. Cash and these liquid investments, total $22.7m, which is an increase from $22m in the first quarter. The positive cash flows and substantial cash position have allowed Profire to remain debt free.

Total revenues were just under $5m, representing an increase of 26% from the previous quarter. Net income was $74,452 or $0.00 per diluted share, compared to a net loss of $605,295 or loss of $0.01 per diluted share in the first quarter of this fiscal year.

Gross profit increased to 53% compared to 48% in the previous quarter while total operating expenses decreased slightly. Compared with the same year ago quarter, operating expenses for general and administrative decreased 20%, R&D decreased 11%, and depreciation increased 16%.

Management Commentary

"We remain optimistic for our Company and believe we've positioned ourselves well." Said Brenton Hatch, President and CEO of Profire Energy. "We have invested in R&D, implemented effective cost cutting strategies, taken advantage of the slowdown to more extensively train our personnel, focused on generating positive cash flow, and been able to grow our customer base. We believe these actions will enable us to emerge stronger than before the industry downturn began."

"In looking at the industry as a whole, we believe there are several positive indicators that oil prices are on the rebound.  The Baker Hughes North American rig count has increased 41% from the historical low point in May 2016 and the significant build up in the number of drilled but uncompleted wells, since 2014, has begun decreasing over the last few months," stated Ryan Oviatt, CFO of Profire.  "We believe these industry trends will have a positive impact for Profire and our customers in the coming quarters.  Our revenues increased in Q2 while operating costs decreased slightly compared to the previous quarter. Our cost cutting initiatives combined with ongoing cost management have positioned us well to respond to the market in the second half of our fiscal year."

Conference Call

Profire management will host a conference Thursday, November 10, 2016 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: Thursday, November 10, 2016 Time: 1:30 p.m. EST (11:30 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=121783. 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 after 5:00 p.m. EST on the same day through November 17, 2016.

Toll-free replay number: 1-844-512-2921 International replay number: 1-412-317-6671 Replay ID: 13649080

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; Houston, Texas; Shelocta, 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 statements regarding the Company holding a conference call on November 10, 2016 regarding 2017 second fiscal quarter results; the Company's ability to manage macro-economic conditions; or, the Company's expectation that industry conditions will improve; or, the Company developing new products, diversifying into new market; and, the decisions made over the past year positioning the Company to capture future opportunities and deliver long-term shareholder value. 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.

 
PART I. FINANCIAL INFORMATION
Item 1 Financial Information
PROFIRE ENERGY, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
           
  As of
ASSETS   September 30, 2016     March 31, 2016
    (Unaudited)      
CURRENT ASSETS          
Cash and cash equivalents $   11,674,786     $   21,292,595  
Accounts receivable, net     3,695,422         4,132,137  
Inventories, net     8,921,196         11,046,682  
Income tax receivable     507,526         268,326  
Short term investments     2,172,410         -  
Investments - other     3,000,000         -  
Prepaid expenses & other current assets     463,287         315,757  
           
Total Current Assets     30,434,627         37,055,497  
           
LONG-TERM ASSETS          
Deferred tax asset     455,504         452,431  
Long Term Investments     5,950,473         -  
           
PROPERTY AND EQUIPMENT, net     7,715,964         8,232,911  
           
OTHER ASSETS          
Goodwill     997,701         997,701  
Intangible assets, net of accumulated amortization     508,276         529,300  
           
Total Other Assets     1,505,977         1,527,001  
           
TOTAL ASSETS $   46,062,544     $   47,267,840  
           
LIABILITIES AND STOCKHOLDERS' EQUITY            
           
CURRENT LIABILITIES          
Accounts payable $   802,218     $   893,822  
Accrued liabilities     478,108         620,783  
Income taxes payable     -         335,375  
           
Total Current Liabilities     1,280,326         1,849,980  
           
LONG-TERM LIABILITIES          
Deferred income tax liability     558,829         632,732  
           
TOTAL LIABILITIES     1,839,155         2,482,712  
           
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:          
53,325,215 issued and 53,109,905 outstanding at September 30, 2016              
and 53,256,296 issued and outstanding at March 31, 2016     53,325         53,256  
Treasury stock, at cost     (261,544 )       -  
Additional paid-in capital     26,617,570         26,164,622  
Accumulated other comprehensive loss     (2,505,050 )       (2,282,682 )
Retained earnings     20,319,089         20,849,932  
           
Total Stockholders' Equity     44,223,390         44,785,128  
           
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $   46,062,544     $   47,267,840  
           

PROFIRE ENERGY, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations and Other Comprehensive Income (Loss)
(Unaudited)
                       
                       
  For the Three Months Ended September 30,   For the Six Months Ended September 30,
  2016   2015   2016   2015
REVENUES                      
Sales of goods, net $   4,507,044     $   7,291,846     $   7,969,936     $   13,503,816  
Sales of services, net     483,769         805,448         994,919         1,470,721  
Total Revenues     4,990,813         8,097,294         8,964,855         14,974,537  
                       
COST OF SALES                      
Cost of goods sold-product     1,977,658         3,445,188         3,690,300         6,413,106  
Cost of goods sold-services     388,496         623,992         735,645         1,219,530  
Total Cost of  Sales     2,366,154         4,069,180         4,425,945         7,632,636  
                       
GROSS PROFIT     2,624,659         4,028,114         4,538,910         7,341,901  
                       
OPERATING EXPENSES                      
General and administrative expenses     2,328,100         2,919,862         4,713,665         6,361,000  
Research and development     263,712         295,146         514,435         599,635  
Depreciation and amortization expense     160,216         137,999         319,455         245,454  
                       
Total Operating Expenses     2,752,028         3,353,007         5,547,555         7,206,090  
                       
INCOME (LOSS) FROM OPERATIONS     (127,369 )       675,107         (1,008,645 )       135,811  
                       
OTHER INCOME (EXPENSE)                      
Gain (Loss) on sale of fixed assets     -         754         (2,592 )       19,391  
Other income     82,452         352,310         87,207         243,320  
Interest income     19,667         5,517         47,609         26,640  
                       
Total Other Income     102,119         358,581         132,224         289,351  
                       
NET INCOME (LOSS) BEFORE INCOME TAXES     (25,249 )       1,033,689         (876,420 )       425,162  
                       
INCOME TAX EXPENSE (BENEFIT)     (99,701 )       254,781         (345,578 )       105,067  
                       
NET INCOME (LOSS) $   74,452     $   778,907     $   (530,843 )   $   320,095  
                       
OTHER COMPREHENSIVE INCOME (LOSS)                    
Foreign currency translation loss $   (202,520 )   $   (1,084,519 )   $   (201,747 )   $   (751,147 )
Unrealized losses on investments     (20,621 )       -         (20,621 )       -  
                       
Total Other Comprehensive Loss     (223,141 )       (1,084,519 )       (222,368 )       (751,147 )
                       
TOTAL COMPREHENSIVE LOSS $   (148,689 )   $   (305,612 )   $   (753,211 )   $   (431,052 )
                       
BASIC EARNINGS PER SHARE $   0.00     $   0.01     $   (0.01 )   $   0.01  
                       
FULLY DILUTED EARNINGS PER SHARE $   0.00     $   0.01     $   (0.01 )   $   0.01  
                       
BASIC WEIGHTED AVG NUMBER OF SHARES OUTSTANDING     53,215,385         53,236,979         53,235,747         53,230,892  
                       
FULLY DILUTED WEIGHTED AVG NUMBER OF SHARES OUTSTANDING     54,091,419         53,344,291         53,235,747         53,338,204  
                       
 

PROFIRE ENERGY, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
       
      For the Six Month Period Ended,
      September 30, 2016   September 30, 2015
OPERATING ACTIVITIES            
  Net Income (Loss)   $   (530,843 )   $   320,095  
  Adjustments to reconcile net income to            
  net cash provided by operating activities:            
  Depreciation and amortization expense       505,117         476,548  
  (Gain) Loss on sale of fixed assets       2,592         (19,391 )
  Bad debt expense       208,628         86,494  
  Stock options issued for services       447,691         325,334  
  Changes in operating assets and liabilities:            
  Changes in accounts receivable       163,107         2,567,419  
  Changes in income taxes receivable/payable       (577,575 )       (253,794 )
  Changes in inventories       2,082,532         1,600,797  
  Changes in prepaid expenses       (147,750 )       (262,547 )
  Changes in deferred tax asset/liability       (76,976 )       (73,268 )
  Changes in accounts payable and accrued liabilities       (231,168 )       373,484  
               
  Net Cash Provided by Operating Activities       1,845,355         5,141,171  
               
INVESTING ACTIVITIES            
  Proceeds from sale of equipment       16,896         119,935  
  Purchase of investments       (11,143,504 )       -  
  Purchase of fixed assets       (7,140 )       (28,572 )
               
  Net Cash Provided by (Used in) Investing Activities       (11,133,748 )       91,363  
               
FINANCING ACTIVITIES            
  Value of equity awards surrendered by employees for tax liability       -         (39,243 )
  Purchase of Treasury stock       (261,544 )       -  
               
  Net Cash Used in Financing Activities       (261,544 )       (39,243 )
               
  Effect of exchange rate changes on cash       (67,872 )       (383,797 )
               
  NET INCREASE (DECREASE) IN CASH       (9,617,809 )       4,809,494  
  CASH AT BEGINNING OF PERIOD       21,292,595         14,144,796  
               
  CASH AT END OF PERIOD   $   11,674,786     $   18,954,290  
               
SUPPLEMENTAL DISCLOSURES OF            
CASH FLOW INFORMATION            
               
  CASH PAID FOR:            
  Interest   $   -     $   -  
  Income taxes   $   -     $   -  
                   
Contact:Profire Energy, Inc.Ryan Oviatt, CFO(801) 796-5127

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