LINDON, Utah, Nov. 02, 2022 (GLOBE NEWSWIRE) -- 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 third quarter ending September 30, 2022. A conference call will be held on Thursday, November 3, 2022, at 8:30 a.m. ET to discuss the results.

Third Quarter Summary

Revenue of $12.8 million, an 85% increase from prior-year quarter
Gross margin improved 280 basis points year-over-year to 47.7%
Net income of $1.2 million or $0.02 per diluted share
Generated EBITDA of $2.4 million¹
Revenue from strategic diversification efforts nearly doubled sequentially to $1 million, or 7.7% of revenue

"Our third quarter results represent the best quarter in the company's recent history, with our highest revenue period since 2014 and highest quarterly net income since the first quarter of 2019," said Ryan Oviatt, Co-Chief Executive Officer and CFO of Profire Energy. "We are pleased with the significant recovery we have been able to demonstrate this year for our business despite the many challenges of today's economy. We remain committed to our strategic objectives of sustainable growth and industry diversification."

Third Quarter 2022 Financial Results

Total revenues for the period equaled $12.8 million, compared to $9.6 million in the second quarter and $6.9 million in the third quarter of 2021. The sequential and year-over-year increase was primarily driven by improving customer demand, a rise in natural gas prices, and an increase in drilling and completion activity.

Gross profit was $6.1 million, compared to $4.4 million in the second quarter of 2022 and $3.1 million in the prior-year quarter. Gross margin was 47.7% of revenues, compared to 45.7% of revenues in the prior quarter and 44.9% of revenues in the third quarter of 2021. The increase in gross profit and margin reflects higher revenue and greater fixed cost coverage, partially offset by inflationary cost pressure including higher costs of freight, shipping and direct labor.

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¹ See "About Non-GAAP Financial Measures" below

Total operating expenses were $4.0 million, compared to $4.3 million in the second quarter and $3.4 million in the year-ago quarter. The year-over-year increase is primarily due to increases in headcount and cost inflation across the business, while the sequential decrease is related to an employee retention payroll tax credit (ERC) earned under the CARES Act. Without the decrease in payroll tax expenses provided by the ERC, operating expenses for the quarter would have been relatively flat sequentially.

Compared with the same quarter last year, operating expenses for G&A increased 15% and R&D increased 50%, while depreciation decreased 8% from the third quarter of 2021.

Net income was $1.2 million or $0.02 per diluted share, compared to net income of $284,829 or $0.01 per diluted share in the second quarter and net $92,246 or breakeven on a diluted share basis in the third quarter last year.

"We continue to experience increased levels of interest from our traditional oil and gas customer base resulting from increased drilling and completion, retrofit programs, and other capital projects that were deferred during the pandemic," stated Cameron Tidball, Co-CEO of Profire Energy. "Revenues outside our traditional oil and gas business nearly doubled sequentially this quarter to $1 million, as we booked orders and completed projects related in the metal manufacturing, heat treating, landfill, food and beverage and renewable natural gas industries. We continue to evaluate our opportunities and believe this segment can become a meaningful contributor to the company's overall revenue. We remain well-positioned as we close out 2022 to deliver long-term value to our shareholders."

Conference Call

Profire Energy Executives will host the call, followed by a question-and-answer period.

Date: Thursday, November 3, 2022

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 the Profire investor relations webpage: https://ir.profireenergy.com/news-events. The webcast replay will be available for one year.

Please call the conference telephone number at least 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 November 17, 2022.

Toll-free replay number: 1-844-512-2921

International replay number: 1-412-317-6671

Replay Pin Number: 10020052

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, it has started to succeed in several diversified non-oil and gas markets as well. 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, delivering long-term value to shareholders, committing to strategic objectives, and financial performance through 2022 & 2023. 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 Advisors

Steven Hooser & John Beisler

214-872-2710

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.

For the three Months Ended September 30,	2022
EBITDA Calculation
Net Income	$	1,210,748
Add back net income tax expense	$	958,300
Add back net interest expense	$	(45,107)
Add back depreciation and amortization	$	272,204
EBITDA calculated	$	2,396,145

PROFIRE ENERGY, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
(Unaudited)
	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2022			2021			2022			2021
REVENUES (note 8)
Sales of products, net	$	11,895,881		$	6,296,736		$	29,634,986		$	16,328,810
Sales of services, net		933,457			646,462			2,330,639			1,741,020
Total Revenues		12,829,338			6,943,198			31,965,625			18,069,830

COST OF SALES
Cost of sales - product		5,960,311			3,217,655			14,873,075			8,666,168
Cost of sales - services		750,151			606,075			2,013,825			1,451,775
Total Cost of Sales		6,710,462			3,823,730			16,886,900			10,117,943

GROSS PROFIT		6,118,876			3,119,468			15,078,725			7,951,887

OPERATING EXPENSES
General and administrative		3,413,048			2,980,945			10,591,986			8,319,353
Research and development		435,059			290,657			1,105,571			848,993
Depreciation and amortization		152,876			166,155			479,473			500,492
Total Operating Expenses		4,000,983			3,437,757			12,177,030			9,668,838

INCOME (LOSS) FROM OPERATIONS		2,117,893			(318,289	)		2,901,695			(1,716,951	)

OTHER INCOME (EXPENSE)
Gain on sale of assets		12,887			31,685			323,570			144,078
Other income (expense)		(6,839	)		(2,984	)		(43,567	)		1,755
Interest income		45,107			33,067			86,959			82,698
Total Other Income		51,155			61,768			366,962			228,531

INCOME (LOSS) BEFORE INCOME TAXES		2,169,048			(256,521	)		3,268,657			(1,488,420	)

INCOME TAX BENEFIT (EXPENSE)		(958,300	)		348,767			(1,145,919	)		582,000

NET INCOME (LOSS)	$	1,210,748		$	92,246		$	2,122,738		$	(906,420	)

OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation gain (loss)	$	(591,282	)	$	(263,908	)	$	(723,209	)	$	39,183
Unrealized gains (losses) on investments		(172,802	)		(20,811	)		(594,596	)		26,744
Total Other Comprehensive Income (Loss)		(764,084	)		(284,719	)		(1,317,805	)		65,927

COMPREHENSIVE INCOME (LOSS)	$	446,664		$	(192,473	)	$	804,933		$	(840,493	)

BASIC EARNINGS (LOSS) PER SHARE	$	0.03		$	—		$	0.04		$	(0.02	)
FULLY DILUTED EARNINGS (LOSS) PER SHARE	$	0.02		$	—		$	0.04		$	(0.02	)

BASIC WEIGHTED AVG NUMBER OF SHARES OUTSTANDING		47,036,012			48,239,236			47,201,611			48,095,404
FULLY DILUTED WEIGHTED AVG NUMBER OF SHARES OUTSTANDING		48,558,207			49,328,808			48,761,346			48,095,404

These financial statements should be read in conjunction with the Form 10-Q and accompanying footnotes.

PROFIRE ENERGY, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
	As of
	September 30, 2022			December 31, 2021
ASSETS	(Unaudited)
CURRENT ASSETS
Cash and cash equivalents	$	5,639,865		$	8,188,270
Short-term investments		867,658			1,013,683
Accounts receivable, net		8,933,905			6,262,799
Inventories, net (note 3)		10,205,207			7,185,248
Prepaid expenses and other current assets (note 4)		2,642,512			1,025,276
Income tax receivable		—			560,445
Total Current Assets		28,289,147			24,235,721
LONG-TERM ASSETS
Net deferred tax asset		185,772			163,254
Long-term investments		7,944,181			8,259,809
Financing right-of-use asset		132,760			65,280
Property and equipment, net		10,374,126			11,185,539
Intangible assets, net		1,312,660			1,549,138
Goodwill		2,579,381			2,579,381
Total Long-Term Assets		22,528,880			23,802,401
TOTAL ASSETS	$	50,818,027		$	48,038,122

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	2,008,126		$	1,822,559
Accrued liabilities (note 5)		3,157,221			1,872,348
Current financing lease liability (note 6)		53,084			30,214
Income taxes payable		570,430			—
Total Current Liabilities		5,788,861			3,725,121
LONG-TERM LIABILITIES
Net deferred income tax liability		480,105			136,106
Long-term financing lease liability (note 6)		80,684			35,912
TOTAL LIABILITIES		6,349,650			3,897,139

STOCKHOLDERS' EQUITY (note 7)
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: 52,078,283 issued and 47,040,153 outstanding at September 30, 2022, and 51,720,142 issued and 47,643,233 outstanding at December 31, 2021		52,079			51,720
Treasury stock, at cost		(7,336,323	)		(6,107,593	)
Additional paid-in capital		31,570,226			30,819,394
Accumulated other comprehensive loss		(3,418,272	)		(2,100,467	)
Retained earnings		23,600,667			21,477,929
TOTAL STOCKHOLDERS' EQUITY		44,468,377			44,140,983
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	50,818,027		$	48,038,122

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,
	2022			2021
OPERATING ACTIVITIES
Net income (loss)	$	2,122,738		$	(906,420	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization expense		831,036			971,712
Gain on sale of property and equipment		(314,059	)		(144,078	)
Gain on sale of intangibles		(9,511	)		—
Bad debt expense		40,948			2,622
Stock awards issued for services		605,955			474,881
Changes in operating assets and liabilities:
Accounts receivable		(2,620,155	)		(904,325	)
Income taxes receivable/payable		1,130,931			(606,128	)
Inventories		(3,190,546	)		946,865
Prepaid expenses and other current assets		(1,668,442	)		532,519
Deferred tax asset/liability		307,663			49,851
Accounts payable and accrued liabilities		1,566,810			540,322
Net Cash Provided by (Used in) Operating Activities		(1,196,632	)		957,821

INVESTING ACTIVITIES
Proceeds from sale of property and equipment		464,574			101,169
Proceeds from sale of intangibles		85,000			—
Purchase of investments		(133,371	)		(881,588	)
Purchase of property and equipment		(370,791	)		(138,562	)
Net Cash Provided by (Used in) Investing Activities		45,412			(918,981	)

FINANCING ACTIVITIES
Value of equity awards surrendered by employees for tax liability		(94,802	)		(42,829	)
Cash received in exercise of stock options		31,084			2,673
Purchase of treasury stock		(1,228,731	)		—
Principal paid towards lease liability		(28,145	)		(31,911	)
Net Cash Used in Financing Activities		(1,320,594	)		(72,067	)

Effect of exchange rate changes on cash		(76,591	)		14,331

NET DECREASE IN CASH		(2,548,405	)		(18,896	)
CASH AT BEGINNING OF PERIOD		8,188,270			9,148,312
CASH AT END OF PERIOD	$	5,639,865		$	9,129,416

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

CASH PAID FOR:
Interest	$	2,331		$	2,689
Income taxes	$	21,000		$	17,150
NON-CASH FINANCING AND INVESTING ACTIVITIES
Common stock issued in settlement of accrued bonuses	$	212,787		$	—

These financial statements should be read in conjunction with the Form 10-Q and accompanying footnotes.

Profire Energy Reports Financial Results for Third Quarter Fiscal Year 2022