Profire Energy Inc (PFIE) has reported an 83.70 percent plunge in profit for the quarter ended Dec. 31, 2016. The company has earned $0.08 million in the quarter, compared with $0.48 million for the same period last year. Revenue during the quarter surged 111.63 percent to $15.99 million from $7.55 million in the previous year period. Gross margin for the quarter contracted 226 basis points over the previous year period to 50.67 percent. Operating margin for the quarter stood at negative 2.12 percent as compared to a positive 6.48 percent for the previous year period.
Operating loss for the quarter was $0.34 million, compared with an operating income of $0.49 million in the previous year period.
"The stabilization of oil prices has had a positive effect on our Company as our customers appear to have gained confidence in the oil markets and have returned to spending their capex budgets" said Brenton Hatch, president and chief executive officer of Profire Energy. "The oil industry is still recovering and while we don't know how oil prices will react throughout our next fiscal year, many analysts believe oil prices will average in the mid $50's price range. We remain optimistic that the stabilization of commodity prices will allow us to maintain the growth we have achieved in the final two quarters of the period."
Operating cash flow drops significantly
Profire Energy Inc has generated cash of $2.38 million from operating activities during the nine month period, down 58.76 percent or $3.40 million, when compared with the last year period. The company has spent $10.69 million cash to meet investing activities during the nine month period as against cash inflow of $0.05 million in the last year period
The company has spent $3.60 million cash to carry out financing activities during the nine month period as against cash outgo of $0.04 million in the last year period.
Cash and cash equivalents stood at $9.32 million as on Dec. 31, 2016, down 51.68 percent or $9.97 million from $19.28 million on Dec. 31, 2015.
Working capital declines
Profire Energy Inc has witnessed a decline in the working capital over the last year. It stood at $26.88 million as at Dec. 31, 2016, down 22.54 percent or $7.82 million from $34.69 million on Dec. 31, 2015. Current ratio was at 16.62 as on Dec. 31, 2016, up from 15.64 on Dec. 31, 2015.
Cash conversion cycle (CCC) has decreased to 70 days for the quarter from 321 days for the last year period. Days sales outstanding went down to 36 days for the quarter compared with 82 days for the same period last year.
Days inventory outstanding has decreased to 46 days for the quarter compared with 269 days for the previous year period. At the same time, days payable outstanding went down to 12 days for the quarter from 30 for the same period last year.
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