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 fourth quarter and full fiscal
year ending December 31, 2022. A conference call will be held on
Thursday, March 9, 2023 at 8:30 a.m. ET to discuss the results.
Fourth Quarter Summary
- Revenue of
$14.0 million, a 69% increase from prior year quarter
- Gross profit
of $6.6 million, a 91% increase compared to the same quarter of
2021
- Gross margin
of 47.0%, a 540 basis point increase from prior year quarter
- Net Income of
$1.8 million, or $0.04 per diluted share
- Generated
EBITDA of $2.6 million
Full-year Fiscal 2022 Summary
- Revenue of
$45.9 million, a 74% increase from prior year
- Gross profit
of $21.7 million, a 90% increase over the prior year
- Gross Margin
of 47.1%, 380 basis point increase from 2021
- Net profit of
$3.9 million or $0.08 per diluted share
- Generated
EBITDA of $6.6 million
- Repurchased
961,221 shares of stock for $1.2 million
- Cash and
liquid investments of $16 million and remained debt-free
“We closed 2022 on a very strong note, posting our
second-highest quarterly revenue in company history, and our best
annual revenue since 2018,” said Ryan Oviatt, Co-Chief Executive
Officer and CFO of Profire Energy. “We were able to replenish much
of our inventory to pre-pandemic levels despite the ongoing global
supply chain challenges, which we expect to continue throughout the
coming year. We also generated operating cash flow and repurchased
approximately two percent of our outstanding shares while remaining
debt free. We remain well-positioned to capitalize on further
diversification efforts and new business opportunities that become
available thanks to our solid financial performance and our strong
balance sheet.”
Fourth Quarter 2022 Financial
Results
Total revenues for
the period equaled $14.0 million, compared to $12.8 million in the
third quarter of 2022 and $8.3 million in the prior-year quarter.
The sequential and year-over-year increase was primarily driven
through sustained historically high oil prices, an increase in rig
counts and steady completion activity.
Gross profit was $6.6 million, compared to $6.1 million in the
third quarter of 2022 and $3.4 million in the prior-year quarter.
Gross margin was 47.0% of revenues, compared to 47.7% of revenues
in the prior quarter and 41.6% of revenues in the fourth quarter of
2021. The increase in gross profit is due to higher revenue which
generates additional fixed cost coverage, while the sequential
gross margin decrease reflects product and service mix fluctuations
and ongoing inflationary pressures.
Total operating expenses were $4.3 million, compared to $4.0
million in the third quarter of 2022 and $3.7 million in the
year-ago quarter. The increase is related to inflationary pressures
across the business as well as increases in variable costs, like
sales commissions, due to the increase in business performance and
activity.
Compared with the same quarter last year, operating expenses for
G&A increased 18%, R&D increased 20% and depreciation
decreased by 46%.
Net income was $1.8 million, or $0.04 per diluted share,
compared to net income of $1.2 million or $0.02 per diluted share
in the third quarter of 2022 and net loss of ($145,123) or ($0.00)
per share in the same quarter last year.
Full Year 2022 Financial
Results
Total revenues for the year equaled $45.9 million, versus $26.4
million in the prior year. The increase was primarily driven by
improved global demand for oil and gas production as economies
recovered from the COVID-19 pandemic, and by significant progress
in the Company's revenue diversification efforts.
Gross profit was $21.7 million compared to $11.4 million last
year. Gross margin was 47.1% of total revenues, compared to 43.3%
of revenues in the prior year. The increase was driven by better
fixed cost leverage as a result of the higher revenue base and
price increases on the products we sell.
Total operating expenses were $16.5 million versus $13.4 million
in the prior year. The increase is primarily due to inflationary
pressures in all areas of our business, ongoing supply chain
challenges, and increases in variable costs, like commissions and
incentive compensation, that grow with strong business performance
and increased activity.
Compared with last year, operating expenses for G&A
increased 25%, R&D increased 28% and depreciation decreased
18%.
Net income was $3.9 million or $0.08 per diluted share, compared
to a net loss of $1.1 million or ($0.02) per share last year.
Cash and liquid investments totaled $16.0 million on December
31, 2022 compared to $17.5 million at the end of 2021. The Company
invested $1.2 million during the year in its share repurchase
program and spent $600,000 on capital expenditures. The Company
continues to operate debt-free.
“Our 2022 results reflect growth achieved in our strategic areas
of focus including upstream & midstream oil and gas, critical
energy infrastructure, utility and transmission as well as
meaningful progress in our diversification efforts.” stated Cameron
Tidball, Co-CEO of Profire Energy. “While oil prices declined in
the second half of 2022, there remains pent-up demand for our
products due to multiple years of under investment, deferred
capital expenditures and continued demand for energy derived from
hydrocarbons. We are confident that we are in a position to further
build on these strong results in 2023.”
Conference Call
Profire Energy Executives will host the call, followed by a
question and answer period. |
Date: Thursday, March 9, 2023 |
Time: 8:30 a.m. ET (6:30 a.m. MT) |
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:
https://viavid.webcasts.com/starthere.jsp?ei=1585244&tp_key=1ffc4d0989 |
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 12:30 p.m. ET on the same day through March 23,
2023. |
|
Toll-free replay number: 1-844-512-2921 |
International replay number: 1-412-317-6671 |
Replay Pin Number: 10020758 |
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, the Company has commenced successful sales of
its solutions in other industries with significant combustion
requirements. 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; Homer,
Pennsylvania; 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, the Company’s
expected revenues from recent acquisitions, the Company’s plans to
make internal and external investments, and the availability of
Company resources to make beneficial investments in 2022 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 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,
Partner214-872-2710
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.
|
12/31/2022 |
12/31/2022 |
EBITDA
Calculation: |
3 months |
TTM |
Net Income |
$ |
1,825,024 |
|
$ |
3,947,762 |
|
add back net income tax expense |
$ |
592,503 |
|
$ |
1,738,422 |
|
add back net interest expense |
$ |
(90,166 |
) |
$ |
(177,125 |
) |
add back depreciation and amortization |
$ |
270,008 |
|
$ |
1,101,044 |
|
EBITDA calculated |
$ |
2,597,369 |
|
$ |
6,610,103 |
|
EBITDA Margin
Calculation: |
|
|
EBITDA |
$ |
2,597,369 |
|
$ |
6,610,103 |
|
divided by total revenue |
$ |
13,971,018 |
|
$ |
45,936,642 |
|
EBITDA Margin |
|
18.6% |
|
|
14.4% |
|
PROFIRE ENERGY, INC. AND SUBSIDIARIES |
Consolidated Balance Sheets |
|
|
As of |
ASSETS |
|
December 31, 2022 |
|
December 31, 2021 |
CURRENT ASSETS |
|
|
|
|
Cash and cash equivalents |
|
$ |
7,384,578 |
|
|
$ |
8,188,270 |
|
Short-term investments (note 2) |
|
|
1,154,284 |
|
|
|
1,013,683 |
|
Accounts receivable, net |
|
|
10,886,145 |
|
|
|
6,262,799 |
|
Inventories, net (note 3) |
|
|
10,293,980 |
|
|
|
7,185,248 |
|
Prepaid expenses and other current assets (note 4) |
|
|
2,314,639 |
|
|
|
1,025,276 |
|
Income tax receivable |
|
|
— |
|
|
|
560,445 |
|
Total Current Assets |
|
|
32,033,626 |
|
|
|
24,235,721 |
|
|
|
|
|
|
LONG-TERM ASSETS |
|
|
|
|
Net deferred tax asset |
|
|
— |
|
|
|
163,254 |
|
Long-term investments (note 2) |
|
|
7,503,419 |
|
|
|
8,259,809 |
|
Financing right-of-use asset |
|
|
120,239 |
|
|
|
65,280 |
|
Property and equipment, net (note 5) |
|
|
10,423,964 |
|
|
|
11,185,539 |
|
Intangible assets, net (note 6) |
|
|
1,268,907 |
|
|
|
1,549,138 |
|
Goodwill (note 6) |
|
|
2,579,381 |
|
|
|
2,579,381 |
|
Total Long-Term Assets |
|
|
21,895,910 |
|
|
|
23,802,401 |
|
TOTAL ASSETS |
|
$ |
53,929,536 |
|
|
$ |
48,038,122 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
Accounts payable |
|
$ |
2,955,506 |
|
|
$ |
1,822,559 |
|
Accrued liabilities (note 7) |
|
|
3,573,994 |
|
|
|
1,872,348 |
|
Current financing lease liability (note 8) |
|
|
53,646 |
|
|
|
30,214 |
|
Income taxes payable |
|
|
205,169 |
|
|
|
— |
|
Total Current Liabilities |
|
|
6,788,315 |
|
|
|
3,725,121 |
|
LONG-TERM LIABILITIES |
|
|
|
|
Net deferred income tax liability |
|
|
488,858 |
|
|
|
136,106 |
|
Long-term financing lease liability (note 8) |
|
|
67,883 |
|
|
|
35,912 |
|
TOTAL LIABILITIES |
|
|
7,345,056 |
|
|
|
3,897,139 |
|
|
|
|
|
|
STOCKHOLDERS' EQUITY (note
9) |
|
|
|
|
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:
52,143,901 issued and 47,105,771 outstanding at December 31, 2022,
and 51,720,142 issued and 47,643,233 outstanding at December 31,
2021 |
|
|
52,144 |
|
|
|
51,720 |
|
Treasury stock, at cost |
|
|
(7,336,323 |
) |
|
|
(6,107,593 |
) |
Additional paid-in capital |
|
|
31,737,843 |
|
|
|
30,819,394 |
|
Accumulated other comprehensive loss |
|
|
(3,294,873 |
) |
|
|
(2,100,467 |
) |
Retained earnings |
|
|
25,425,689 |
|
|
|
21,477,929 |
|
TOTAL STOCKHOLDERS' EQUITY |
|
|
46,584,480 |
|
|
|
44,140,983 |
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
$ |
53,929,536 |
|
|
$ |
48,038,122 |
|
These financial
statements should be read in conjunction with the Form 10-K and
accompanying footnotes.
PROFIRE ENERGY, INC. AND SUBSIDIARIES |
Consolidated Statements of Operations and Comprehensive Income |
|
|
For the Year Ended December 31, 2022 |
|
For the Year Ended December 31, 2021 |
REVENUES (note 10) |
|
|
|
|
Sales of goods, net |
|
$ |
42,318,263 |
|
|
$ |
23,690,994 |
|
Sales of services, net |
|
|
3,618,380 |
|
|
|
2,665,182 |
|
Total Revenues |
|
|
45,936,643 |
|
|
|
26,356,176 |
|
|
|
|
|
|
COST OF SALES |
|
|
|
|
Cost of goods sold-product |
|
|
21,425,176 |
|
|
|
12,825,906 |
|
Cost of goods sold-services |
|
|
2,860,077 |
|
|
|
2,129,255 |
|
Total Cost of Goods Sold |
|
|
24,285,253 |
|
|
|
14,955,161 |
|
|
|
|
|
|
GROSS PROFIT |
|
|
21,651,390 |
|
|
|
11,401,015 |
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
General and administrative |
|
|
14,396,763 |
|
|
|
11,533,496 |
|
Research and development |
|
|
1,432,000 |
|
|
|
1,120,080 |
|
Depreciation and amortization |
|
|
628,019 |
|
|
|
762,439 |
|
Total Operating Expenses |
|
|
16,456,782 |
|
|
|
13,416,015 |
|
|
|
|
|
|
INCOME (LOSS) FROM
OPERATIONS |
|
|
5,194,608 |
|
|
|
(2,015,000 |
) |
|
|
|
|
|
OTHER INCOME (EXPENSE) |
|
|
|
|
Gain on sale of fixed assets |
|
|
318,075 |
|
|
|
192,183 |
|
Other income (expense) |
|
|
(3,626 |
) |
|
|
8,715 |
|
Interest income |
|
|
177,125 |
|
|
|
133,201 |
|
Total Other Income |
|
|
491,574 |
|
|
|
334,099 |
|
|
|
|
|
|
INCOME (LOSS) BEFORE INCOME
TAXES |
|
|
5,686,182 |
|
|
|
(1,680,901 |
) |
|
|
|
|
|
INCOME TAX BENEFIT (EXPENSE)
(Note 12) |
|
|
(1,738,422 |
) |
|
|
629,358 |
|
|
|
|
|
|
NET INCOME (LOSS) |
|
$ |
3,947,760 |
|
|
$ |
(1,051,543 |
) |
|
|
|
|
|
OTHER COMPREHENSIVE INCOME
(LOSS) |
|
|
|
|
Foreign currency translation gain (loss) |
|
$ |
(670,167 |
) |
|
$ |
54,006 |
|
Unrealized losses on investments |
|
|
(524,239 |
) |
|
|
(5,549 |
) |
Total Other Comprehensive Income (Loss) |
|
|
(1,194,406 |
) |
|
|
48,457 |
|
|
|
|
|
|
COMPREHENSIVE INCOME
(LOSS) |
|
$ |
2,753,354 |
|
|
$ |
(1,003,086 |
) |
|
|
|
|
|
BASIC EARNINGS (LOSS) PER
SHARE (note 13) |
|
$ |
0.08 |
|
|
$ |
(0.02 |
) |
FULLY DILUTED EARNINGS (LOSS)
PER SHARE (note 13) |
|
$ |
0.08 |
|
|
$ |
(0.02 |
) |
BASIC WEIGHTED AVG NUMBER OF
SHARES OUTSTANDING |
|
|
47,161,101 |
|
|
|
48,070,581 |
|
FULLY DILUTED WEIGHTED AVG
NUMBER OF SHARES OUTSTANDING |
|
|
48,447,342 |
|
|
|
48,070,581 |
|
These financial statements should be read in
conjunction with the Form 10-K and accompanying footnotes.
PROFIRE ENERGY, INC. AND SUBSIDIARIES |
Consolidated Statements of Cash Flows |
|
|
For the Year Ended December 31, 2022 |
|
For the Year Ended December 31, 2021 |
OPERATING ACTIVITIES |
|
|
|
|
Net income (loss) |
|
$ |
3,947,760 |
|
|
$ |
(1,051,543 |
) |
Adjustments to reconcile net
loss to net cash provided by operating activities: |
|
|
|
|
Depreciation and amortization expense |
|
|
1,101,044 |
|
|
|
1,255,647 |
|
Gain on sale of fixed assets |
|
|
(318,075 |
) |
|
|
(192,183 |
) |
Bad debt expense |
|
|
77,704 |
|
|
|
15,979 |
|
Stock awards issued for services |
|
|
814,769 |
|
|
|
567,077 |
|
Changes in operating assets
and liabilities: |
|
|
|
|
Accounts receivable |
|
|
(4,745,871 |
) |
|
|
(2,595,483 |
) |
Income taxes receivable/payable |
|
|
765,650 |
|
|
|
(101,990 |
) |
Inventories |
|
|
(3,240,049 |
) |
|
|
1,247,004 |
|
Prepaid expenses and other current assets |
|
|
(1,337,076 |
) |
|
|
705,575 |
|
Deferred tax asset/liability |
|
|
512,274 |
|
|
|
(524,791 |
) |
Accounts payable and accrued liabilities |
|
|
2,937,947 |
|
|
|
1,323,635 |
|
Net Cash Provided by Operating Activities |
|
|
516,077 |
|
|
|
648,927 |
|
|
|
|
|
|
INVESTING ACTIVITIES |
|
|
|
|
Proceeds from sale of property and equipment |
|
|
520,068 |
|
|
|
177,851 |
|
Sale (purchase) of investments |
|
|
91,601 |
|
|
|
(826,827 |
) |
Purchase of property and equipment |
|
|
(601,012 |
) |
|
|
(168,527 |
) |
Net Cash Provided by (Used in) Investing Activities |
|
|
10,657 |
|
|
|
(817,503 |
) |
|
|
|
|
|
FINANCING ACTIVITIES |
|
|
|
|
Value of equity awards surrendered by employees for tax
liability |
|
|
(145,930 |
) |
|
|
(46,873 |
) |
Cash received in exercise of stock options |
|
|
33,863 |
|
|
|
6,053 |
|
Purchase of treasury stock |
|
|
(1,228,730 |
) |
|
|
(754,574 |
) |
Principal paid towards lease liability |
|
|
(34,214 |
) |
|
|
(40,745 |
) |
Net Cash Used in Financing Activities |
|
|
(1,375,011 |
) |
|
|
(836,139 |
) |
|
|
|
|
|
Effect of exchange rate
changes on cash |
|
|
44,585 |
|
|
|
44,673 |
|
|
|
|
|
|
NET DECREASE IN CASH |
|
|
(803,692 |
) |
|
|
(960,042 |
) |
CASH AT BEGINNING OF
PERIOD |
|
|
8,188,270 |
|
|
|
9,148,312 |
|
|
|
|
|
|
CASH AT END OF PERIOD |
|
$ |
7,384,578 |
|
|
$ |
8,188,270 |
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION |
|
|
|
|
|
|
|
|
|
CASH PAID FOR: |
|
|
|
|
Interest |
|
$ |
17,726 |
|
|
$ |
3,205 |
|
Income taxes |
|
$ |
847,712 |
|
|
$ |
17,150 |
|
NON-CASH FINANCING AND
INVESTING ACTIVITIES: |
|
|
|
|
Common stock issued in settlement of accrued bonuses |
|
$ |
212,788 |
|
|
$ |
— |
|
These financial statements should be read in
conjunction with the Form 10-K and accompanying footnotes.
Profire Energy (NASDAQ:PFIE)
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