Profire Energy (PFIE) 10-Q 7 Aug 19 2019 Q2 Quarterly report Financial data

Cover Page

Cover Page - shares	6 Months Ended
	Jun. 30, 2019	Aug. 05, 2019
Cover page.
Entity Registrant Name	PROFIRE ENERGY INC
Document Type	10-Q
Document Period End Date	Jun. 30, 2019
Trading Symbol	PFIE
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Entity Common Stock, Shares Outstanding		48,208,158
Entity Filer Category	Accelerated Filer
Amendment Flag	false
Entity Central Index Key	0001289636
Current Fiscal Year End Date	--12-31
Title of 12(b) Security	Common, $0.001 Par Value
Security Exchange Name	NASDAQ
Entity Tax Identification Number	20-0019425
Entity Address, Postal Zip Code	84042
Entity Address, Address Line One	321 South 1250 West, Suite 1
Entity Incorporation, State or Country Code	NV
Document Quarterly Report	true
Document Transition Report	false
City Area Code	801
Local Phone Number	796-5127
Entity File Number	001-36378
Entity Address, City or Town	Lindon
Entity Address, State or Province	UT
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Jun. 30, 2019	Dec. 31, 2018
CURRENT ASSETS
Cash and cash equivalents	$ 11,487,778	$ 10,101,932
Short-term investments	726,782	961,256
Short-term investments - other	2,400,000	3,596,484
Accounts receivable, net	6,395,332	6,885,296
Inventories, net	9,071,479	9,659,571
Prepaid expenses & other current assets	512,292	473,726
Income tax receivable	473,093	173,124
Total Current Assets	31,066,756	31,851,389
LONG-TERM ASSETS
Net deferred tax asset	0	85,092
Long-term investments	8,433,185	7,978,380
Financing right-of-use asset	149,484	0
Property and equipment, net	9,108,234	8,020,462
Intangibles and goodwill	997,701	997,701
Intangible assets, net	1,699,312	429,956
Total Long-Term Assets	20,387,916	17,511,591
TOTAL ASSETS	51,454,672	49,362,980
CURRENT LIABILITIES
Accounts payable	1,415,824	1,177,985
Accrued vacation	373,995	311,435
Accrued liabilities	1,679,279	1,445,510
Current financing lease liability	76,559	0
Income taxes payable	199,792	1,172,191
Total Current Liabilities	3,745,449	4,107,121
LONG-TERM LIABILITIES
Net deferred income tax liability	120,222	0
Long-term financing lease liability	76,382	0
TOTAL LIABILITIES	3,942,053	4,107,121
STOCKHOLDERS' EQUITY
Preferred shares: $0.001 par value, 10,000,000 shares authorized: no shares issued or outstanding	0	0
Common shares: $0.001 par value, 100,000,000 shares authorized: 50,016,979 issued and 47,466,192 outstanding at June 30, 2019, and 49,707,805 issued and 47,932,305 outstanding at December 31, 2018	50,017	49,708
Treasury stock, at cost	(3,943,063)	(2,609,485)
Additional paid-in capital	28,593,552	28,027,742
Accumulated other comprehensive loss	(2,525,586)	(2,895,683)
Retained earnings	25,337,699	22,683,577
TOTAL STOCKHOLDERS' EQUITY	47,512,619	45,255,859
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 51,454,672	$ 49,362,980

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2019	Dec. 31, 2018
Stock Transactions, Parenthetical Disclosures [Abstract]
Preferred stock, par value (dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (shares)	10,000,000	10,000,000
Preferred stock, shares issued (shares)	0	0
Preferred stock, shares outstanding (shares)	0	0
Common stock, par value (dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (shares)	100,000,000	100,000,000
Common stock, shares issued (shares)	50,016,979	49,707,805
Common stock, shares outstanding (shares)	47,466,192	47,932,305

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations and Other Comprehensive Income (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
REVENUES
Total Revenues	$ 10,124,031	$ 11,339,761	$ 20,957,089	$ 23,509,478
COST OF SALES
Total Cost of Goods Sold	4,936,993	5,431,094	10,005,179	11,470,671
GROSS PROFIT	5,187,038	5,908,667	10,951,910	12,038,807
OPERATING EXPENSES
General and administrative expenses	3,566,698	3,364,826	6,728,228	6,706,726
Research and development	512,871	317,002	861,929	720,221
Depreciation and amortization expense	110,910	129,070	227,133	257,787
Total Operating Expenses	4,190,479	3,810,898	7,817,290	7,684,734
INCOME FROM OPERATIONS	996,559	2,097,769	3,134,620	4,354,073
OTHER INCOME (EXPENSE)
Gain on sale of fixed assets	21,410	21,254	38,340	86,085
Other expense	(413)	(4,164)	(964)	(5,956)
Interest income	85,887	174,771	177,590	225,479
Total Other Income	106,884	191,861	214,966	305,608
INCOME BEFORE INCOME TAXES	1,103,443	2,289,630	3,349,586	4,659,681
INCOME TAX EXPENSE	117,939	575,363	695,464	1,069,183
NET INCOME	985,504	1,714,267	2,654,122	3,590,498
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation gain (loss)	102,435	(427,307)	251,850	(394,072)
Unrealized gains (losses) on investments	49,495	9,226	118,247	(24,009)
Total Other Comprehensive Income (Loss)	151,930	(418,081)	370,097	(418,081)
COMPREHENSIVE INCOME	$ 1,137,434	$ 1,296,186	$ 3,024,219	$ 3,172,417
BASIC EARNINGS PER SHARE (dollars per share)	$ 0.02	$ 0.04	$ 0.06	$ 0.07
FULLY DILUTED EARNINGS PER SHARE (dollars per share)	$ 0.02	$ 0.03	$ 0.06	$ 0.07
BASIC WEIGHTED AVG NUMBER OF SHARES OUTSTANDING (shares)	47,348,137	48,266,199	47,392,534	48,467,136
FULLY DILUTED WEIGHTED AVG NUMBER OF SHARES OUTSTANDING (shares)	48,124,208	49,095,575	48,192,849	49,237,938
Product
REVENUES
Total Revenues	$ 9,559,255	$ 10,724,409	$ 19,757,890	$ 22,179,024
COST OF SALES
Total Cost of Goods Sold	4,568,666	4,959,539	9,139,654	10,517,249
Service
REVENUES
Total Revenues	564,776	615,352	1,199,199	1,330,454
COST OF SALES
Total Cost of Goods Sold	$ 368,327	$ 471,555	$ 865,525	$ 953,422

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
OPERATING ACTIVITIES
Net income	$ 2,654,122	$ 3,590,498
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	483,063	442,959
Gain on sale of fixed assets	(38,340)	(76,703)
Bad debt expense	229,792	141,348
Stock awards issued for services	749,547	861,189
Changes in operating assets and liabilities:
Changes in accounts receivable	605,009	548,419
Changes in income taxes receivable/payable	(1,261,267)	(790,946)
Changes in inventories	1,831,865	(2,074,974)
Changes in prepaid expenses	(35,637)	114,907
Changes in deferred tax asset/liability	205,314	91,890
Changes in accounts payable and accrued liabilities	(115,813)	274,744
Net Cash Provided by Operating Activities	5,307,655	3,123,331
INVESTING ACTIVITIES
Proceeds from sale of equipment	39,810	159,449
Sale of investments	1,109,297	368,379
Purchase of fixed assets	(1,429,735)	(1,184,126)
Payments to Acquire Intangible Assets	(2,088,814)	0
Net Cash Used in Investing Activities	(2,369,442)	(656,298)
FINANCING ACTIVITIES
Value of equity awards surrendered by employees for tax liability	(184,433)	(736,160)
Cash received in exercise of stock options	0	174,002
Purchase of Treasury stock	(1,333,578)	(4,000,000)
Principal paid towards lease liability	(32,185)	0
Net Cash Used in Financing Activities	(1,550,196)	(4,562,158)
Effect of exchange rate changes on cash	(2,171)	(51,997)
NET INCREASE (DECREASE) IN CASH	1,385,846	(2,147,122)
CASH AT BEGINNING OF PERIOD	10,101,932	11,445,799
CASH AT END OF PERIOD	11,487,778	9,298,677
CASH PAID FOR:
Interest	2,832	0
Income taxes	1,793,281	1,691,397
NON-CASH FINANCING AND INVESTING ACTIVITIES:
Acquisition of assets (Preliminary estimate)	$ 237,032	$ 0

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($)	Total	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Treasury Stock	Retained Earnings
Balance, beginning of period (shares) at Dec. 31, 2017		48,606,425
Balance, beginning of period at Dec. 31, 2017	$ 44,047,424	$ 53,931	$ 27,535,469	$ (2,200,462)	$ (6,890,349)	$ 25,548,835
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock based compensation	390,585		390,585
Stock issued in exercise of stock options (shares)		81,229
Stock issued in exercise of stock options	0	$ 81	(81)
Stock issued in settlement of RSUs (shares)		118,762
Stock issued in settlement of RSUs	258,892	$ 119	258,773
Tax withholdings paid related to stock based compensation	(83,600)		(83,600)
Foreign currency translation	(239,129)			(239,129)
Unrealized gains on investments	(33,235)			(33,235)
Net income	1,876,228					1,876,228
Balance, end of period (shares) at Mar. 31, 2018		48,806,416
Balance, end of period at Mar. 31, 2018	46,217,165	$ 54,131	28,101,146	(2,472,826)	(6,890,349)	27,425,063
Balance, beginning of period (shares) at Dec. 31, 2017		48,606,425
Balance, beginning of period at Dec. 31, 2017	44,047,424	$ 53,931	27,535,469	(2,200,462)	(6,890,349)	25,548,835
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	3,590,498
Balance, end of period (shares) at Jun. 30, 2018		48,082,423
Balance, end of period at Jun. 30, 2018	43,513,927	$ 54,685	27,828,804	(2,618,543)	(10,890,349)	29,139,330
Balance, beginning of period (shares) at Mar. 31, 2018		48,806,416
Balance, beginning of period at Mar. 31, 2018	46,217,165	$ 54,131	28,101,146	(2,472,826)	(6,890,349)	27,425,063
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock based compensation	292,450		292,450
Stock issued in exercise of stock options (shares)		445,038
Stock issued in exercise of stock options	0	$ 445	(445)
Stock issued in settlement of RSUs (shares)		108,923
Stock issued in settlement of RSUs	121,834	$ 109	121,725
Tax withholdings paid related to stock based compensation	(686,072)		(686,072)
Treasury stock repurchased (shares)		(1,277,954)
Treasury stock repurchased	(4,000,000)				(4,000,000)
Foreign currency translation	(154,943)			(154,943)
Unrealized gains on investments	9,226			9,226
Net income	1,714,267					1,714,267
Balance, end of period (shares) at Jun. 30, 2018		48,082,423
Balance, end of period at Jun. 30, 2018	43,513,927	$ 54,685	27,828,804	(2,618,543)	(10,890,349)	29,139,330
Balance, beginning of period (shares) at Dec. 31, 2018		47,932,305
Balance, beginning of period at Dec. 31, 2018	45,255,859	$ 49,708	28,027,742	(2,895,683)	(2,609,485)	22,683,577
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock based compensation	66,714		66,714
Stock issued in exercise of stock options (shares)		2,483
Stock issued in exercise of stock options	0	$ 2	(2)
Stock issued in settlement of RSUs (shares)		148,723
Stock issued in settlement of RSUs	379,861	$ 149	379,712
Tax withholdings paid related to stock based compensation	(143,022)		(143,022)
Treasury stock repurchased (shares)		(775,287)
Treasury stock repurchased	(1,333,578)				(1,333,578)
Foreign currency translation	149,415			149,415
Unrealized gains on investments	68,752			68,752
Net income	1,668,618					1,668,618
Balance, end of period (shares) at Mar. 31, 2019		47,308,224
Balance, end of period at Mar. 31, 2019	46,112,619	$ 49,859	28,331,144	(2,677,516)	(3,943,063)	24,352,195
Balance, beginning of period (shares) at Dec. 31, 2018		47,932,305
Balance, beginning of period at Dec. 31, 2018	45,255,859	$ 49,708	28,027,742	(2,895,683)	(2,609,485)	22,683,577
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	2,654,122
Balance, end of period (shares) at Jun. 30, 2019		47,466,192
Balance, end of period at Jun. 30, 2019	47,512,619	$ 50,017	28,593,552	(2,525,586)	(3,943,063)	25,337,699
Balance, beginning of period (shares) at Mar. 31, 2019		47,308,224
Balance, beginning of period at Mar. 31, 2019	46,112,619	$ 49,859	28,331,144	(2,677,516)	(3,943,063)	24,352,195
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock based compensation	303,977		303,977
Stock issued in exercise of stock options (shares)		9,174
Stock issued in exercise of stock options	0	$ 9	(9)
Stock issued in settlement of RSUs (shares)		148,794
Stock issued in settlement of RSUs	0	$ 149	(149)
Tax withholdings paid related to stock based compensation	(41,411)		(41,411)
Foreign currency translation	102,435			102,435
Unrealized gains on investments	49,495			49,495
Net income	985,504					985,504
Balance, end of period (shares) at Jun. 30, 2019		47,466,192
Balance, end of period at Jun. 30, 2019	$ 47,512,619	$ 50,017	$ 28,593,552	$ (2,525,586)	$ (3,943,063)	$ 25,337,699

CONDENSED FINANCIAL STATEMENTS

CONDENSED FINANCIAL STATEMENTS	6 Months Ended
	Jun. 30, 2019
Condensed Financial Information Disclosure [Abstract]
CONDENSED FINANCIAL STATEMENTS	CONDENSED FINANCIAL STATEMENTS Except where the context otherwise requires, all references herein to the "Company," "Profire," "we," "us," "our," or similar words and phrases are to Profire Energy, Inc. and its wholly owned subsidiary, taken together. The accompanying financial statements have been prepared by the Company without audit. In the opinion of Management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at June 30, 2019 and for all periods presented herein have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the Company's audited financial statements contained in its annual report on Form 10-K for the year ended December 31, 2018 ("Form 10-K"). The results of operations for the three and six month periods ended June 30, 2019 and 2018 are not necessarily indicative of the operating results for the full years.

ORGANIZATION AND SUMMARY OF SIG

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Jun. 30, 2019
Accounting Policies [Abstract]
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Line of Business This Organization and Summary of Significant Accounting Policies of Profire Energy, Inc. and its subsidiary (the "Company") is presented to assist in understanding the Company's condensed consolidated financial statements. The Company's accounting policies conform to accounting principles generally accepted in the United States of America ("US GAAP"). The Company provides burner- and chemical-management products and services for the oil and gas industry primarily in the US and Canadian markets. Significant Accounting Policies There have been no changes to the significant accounting policies of the Company from the information provided in Note 1 of the Notes to the Consolidated Financial Statements in the Company's most recent Form 10-K, except as discussed below. Leases In February of 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2016-02 - Leases (Topic 842), which significantly amends the way companies are required to account for leases. Under the updated leasing guidance, some leases that did not have to be reported previously are now required to be presented as an asset and liability on the balance sheet. In addition, for certain leases, what was previously classified as an operating expense must now be allocated between amortization expense and interest expense. The Company adopted this update as of January 1, 2019 using the modified retrospective transition method. Prior periods have not been restated. Upon implementation, the Company recognized an initial right-of-use asset of $132,488 and lease liability of $132,488. Due to the simplistic nature of the Company's leases, no change to retained earnings was required. See Note 8 for further details. Recent Accounting Pronouncements The Company has evaluated all recent accounting pronouncements and determined that the adoption of pronouncements applicable to the Company has not had or is not expected to have a material impact on the Company's financial position, results of operations or cash flows. Reclassification

INVENTORY

INVENTORY	6 Months Ended
	Jun. 30, 2019
Inventory Disclosure [Abstract]
INVENTORY	INVENTORY Inventories consisted of the following at each balance sheet date: As of June 30, 2019 December 31, 2018 Raw materials $ 41,291 $ 76,319 Finished goods 9,883,394 10,474,522 Work in process — — Subtotal 9,924,685 10,550,841 Reserve for obsolescence (853,206) (891,270) Total $ 9,071,479 $ 9,659,571

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY	6 Months Ended
	Jun. 30, 2019
Equity [Abstract]
STOCKHOLDERS' EQUITY	STOCKHOLDERS' EQUITY As of June 30, 2019, and December 31, 2018, the Company held 2,550,787 and 1,775,500 shares of its common stock in treasury at a total cost of $3,943,063 and $2,609,485, respectively. On April 22, 2019, the Board of Directors (the “Board”) of Profire Energy, Inc. (the “Company”) approved the 2019 Executive Incentive Plan (the “EIP”) for Brenton W. Hatch, the Company’s President and Chief Executive Officer, Ryan W. Oviatt, the Company’s Chief Financial Officer, Cameron M. Tidball the Company’s Chief Business Development Officer, Jay G. Fugal, the Company’s Vice President of Operations, and Patrick D. Fisher, the Company’s Vice President of Product development. The EIP provides for the potential award of bonuses to the participants based on the Company’s financial performance in fiscal 2019. If earned, the bonuses will be payable in cash and stock, and the stock portion of the bonuses is intended to constitute an award under the Company’s 2014 Equity Incentive Plan, as amended (the “Plan”). In addition to the EIP, the Board also approved as a long term incentive plan the grants of a restricted stock unit awards to Messrs. Oviatt, Tidball, Fugal, and Fisher pursuant to the Plan (the “2019 LTIP”). 2019 EIP Under the terms of the EIP, each participating executive officer has been assigned a target bonus amount for fiscal 2019. The target bonus amount for Mr. Hatch is $412,000, the target bonus amount for Mr. Oviatt is $90,125, the target bonus amount for Mr. Tidball is $84,357, the target bonus for Mr. Fugal is $41,200, and the target bonus for Mr. Fisher is $38,750 CAD. Under no circumstance can the participants receive more than two times the assigned target bonus. Participants will be eligible to receive bonuses based upon reaching or exceeding performance goals established by the Board or its Compensation Committee for fiscal 2019. The performance goals in the EIP are based on the Company’s total revenue, net income, free cash flow, and product development milestones. Each of these performance goals will be weighted 25% in calculating bonus amounts. The bonus amounts earned under the EIP, if any, will be paid 50% in cash and 50% in shares of Restricted Stock under the Plan. In no event shall the total award exceed 200% of the target bonus amount for each participant, or exceed any limitations otherwise set forth in the Plan. The actual bonus amounts, if any, will be determined by the Compensation Committee of the Board upon the completion of fiscal 2019 and paid by March 15, 2020, subject to all applicable tax withholding. 2019 LTIP The 2019 LTIP consists of total awards of up to 66,213 restricted stock units (“Units”) to Mr. Oviatt, up to 51,646 Units to Mr. Tidball, up to 35,313 Units to Mr. Fugal, and up to 24,862 Units to Mr. Fisher pursuant to two separate Restricted Stock Unit Award Agreements to be entered between the Company and each participant. One such agreement will cover 33% of each award recipient’s Units that are subject to time-based vesting, and the other such agreement will cover the remaining 67% of such award recipient’s Units that may vest based on performance metrics. Upon vesting, the award agreements entitle the award recipients to receive one share of the Company’s common stock for each vested Unit. The vesting period of the 2019 LTIP began on January 1, 2019 and terminates on December 31, 2021 (the “Performance Vesting Date”). On March 14, 2019, our Board of Directors approved a grant of 85,000 restricted stock units ("RSUs") to various employees. The awards vest annually over five years and will result in total compensation expense of $149,600 to be recognized over the vesting period. On June 12, 2019, the Board of Directors approved a grant of 183,942 restricted stock units ("RSUs") to Independent Directors. Half of the RSUs vest immediately on the date of grant and the remaining 50% of the RSUs will vest on the one year anniversary of the grant date or at the Company's next Annual Meeting of Stockholders, whichever is earlier. The awards will result in total compensation expense of $252,000 to be recognized over the vesting period.

SEGMENT INFORMATION

SEGMENT INFORMATION	6 Months Ended
	Jun. 30, 2019
Segment Reporting [Abstract]
SEGMENT INFORMATION	SEGMENT INFORMATION The Company operates in the United States and Canada. Segment information for these geographic areas is as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, Sales 2019 2018 2019 2018 Canada $ 1,056,781 $ 1,272,056 $ 1,992,419 $ 2,570,888 United States 9,067,250 10,067,705 18,964,670 20,938,590 Total Consolidated $ 10,124,031 $ 11,339,761 $ 20,957,089 $ 23,509,478 For the Three Months Ended June 30, For the Six Months Ended June 30, Profit (Loss) 2019 2018 2019 2018 Canada $ (547,202) $ (265,830) $ (929,242) $ (700,494) United States 1,532,706 1,980,097 3,583,364 4,290,992 Total Consolidated $ 985,504 $ 1,714,267 $ 2,654,122 $ 3,590,498 As of Long-Lived Assets June 30, 2019 December 31, 2018 Canada $ 3,058,272 $ 2,079,173 United States 6,049,962 5,941,289 Total Consolidated $ 9,108,234 $ 8,020,462

REVENUE

REVENUE	6 Months Ended
	Jun. 30, 2019
Revenue from Contract with Customer [Abstract]
REVENUE	REVENUE Performance Obligations Our performance obligations include providing product and servicing our product. We recognize product revenue performance obligations in most cases when the product is delivered to the customer. Occasionally, if we are shipping the product on a customer’s account, we recognize revenue when the product has been shipped. At that point in time, the control of the product is transferred to the customer. When we perform service work, we apply the practical expedient that allows us to recognize service revenue when we have the right to invoice the customer for the work completed. We do not engage in transactions acting as an agent. The time needed to complete our performance obligations varies based on the size of the project; however, we typically satisfy our performance obligations within a few months of entering into the contract. Contract Balances We have elected to use the practical expedient in ASC 340-40-25-4 (regarding recognition of the incremental costs of obtaining a contact) for costs related to contracts that are estimated to be completed within one year. All of the current contracts are expected to be completed within one year, and as a result, we have not recognized a contract asset account. If we had chosen not to use this practical expedient, we would not expect a material difference in the contract balances. We also did not have any material contract liabilities because we typically do not receive payments in advance of recognizing revenue. Disaggregation of Revenue All revenue recognized in the income statement is considered to be revenue from contracts with customers. The table below shows revenue by category:

BASIC AND DILUTED EARNINGS PER

BASIC AND DILUTED EARNINGS PER SHARE	6 Months Ended
	Jun. 30, 2019
Earnings Per Share [Abstract]
BASIC AND DILUTED EARNINGS PER SHARE	BASIC AND DILUTED EARNINGS PER SHARE The following table is a reconciliation of the numerator and denominators used in the earnings per share calculation: For the Three Months Ended June 30, 2019 2018 Income (Numerator) Weighted Average Shares (Denominator) Per-Share Income (Numerator) Weighted Average Shares (Denominator) Per-Share Basic EPS Net income available to common stockholders $ 985,504 47,348,137 $ 0.02 $ 1,714,267 48,266,199 $ 0.04 Effect of Dilutive Securities Stock options & RSUs — 776,071 — 829,376 Diluted EPS Net income available to common stockholders + assumed conversions $ 985,504 48,124,208 $ 0.02 $ 1,714,267 49,095,575 $ 0.03 Options to purchase 244,600 shares of common stock at a weighted average price of $3.88 per share were outstanding during the three months ended June 30, 2019, but were not included in the computation of diluted EPS because the impact of these shares would be antidilutive. These options, which expire between November 2019 and May 2020, were still outstanding at June 30, 2019. No shares were excluded for the three months ended June 30, 2018. For the Six Months Ended June 30, 2019 2018 Income (Numerator) Weighted Average Shares (Denominator) Per-Share Income (Numerator) Weighted Average Shares (Denominator) Per-Share Basic EPS Net income available to common stockholders $ 2,654,122 47,392,534 $ 0.06 $ 3,590,498 48,467,136 $ 0.07 Effect of Dilutive Securities Stock options & RSUs — 800,315 — 770,802 Diluted EPS Net income available to common stockholders + assumed conversions $ 2,654,122 48,192,849 $ 0.06 $ 3,590,498 49,237,938 $ 0.07

LEASES (Notes)

LEASES (Notes)	6 Months Ended
	Jun. 30, 2019
Leases [Abstract]
LEASES	LEASES We have leases for office equipment and office space. The leases for office equipment are classified as financing leases and the typical term is 36 months. We have the option to extend most office equipment leases, but we do not intend to do so. Accordingly, no extensions have been recognized in the right-of-use asset or lease liability. The office equipment lease payments are not variable and the lease agreements do not include any non-lease components, residual value guarantees, or restrictions. There are no interest rates implicit in the office equipment lease agreements, so we used our incremental borrowing rate as the discount rate. Our weighted average discount rate is 4.50% and the weighted average remaining lease term is 27.4 months. The following table shows the components of financing lease cost: Financing Lease Cost For the Three Months Ended June 30, 2019 For the Six Months Ended June 30, 2019 Amortization of right-of-use assets $ 19,280 $ 35,641 Interest on lease liabilities 1,421 2,832 Total financing lease cost $ 20,701 $ 38,473 The following table reconciles future minimum lease payments to the discounted finance lease liability: Years ending December 31, Amount 2019 $ 43,694 2020 62,995 2021 40,921 2022 13,599 2023 — Thereafter — Total future minimum lease payments $ 161,209 Less: Amount representing interest 8,268 Present value of future payments $ 152,941 Current portion $ 76,559 Long-term portion $ 76,382 Because our office space leases are short-term, we have elected not to recognize them on our balance sheet under the short-term recognition exemption. During the three and six months ended June 30, 2019, we recognized $13,411 and $22,318, respectively in short-term lease costs associated with office space leases.

ACQUISITION (Notes)

ACQUISITION (Notes)	6 Months Ended
	Jun. 30, 2019
Business Combinations [Abstract]
ACQUISITION	ACQUISITIONOn June 18, 2019, our wholly-owned subsidiary, Profire Combustion, Inc., acquired substantially all the assets from Millstream Energy Products, LTD., a Canadian corporation ("MEP"). MEP is a privately-held Canadian company that develops a line of high-performance burners, economy burners, flame arrestor housings, secondary air control plates, and other related combustion components. MEP’s full line of products became available for sale by Profire’s existing sales team immediately after closing of the transaction. These products complement our burner-management system (BMS) product offerings and should enable us to supply a larger portion of the total BMS package sale to our customers. The acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations . The purchase accounting process has not been completed primarily because the valuation of acquired assets has not been finalized. We expect to complete the purchase accounting as soon as practicable but no later than one year from the acquisition date. We do not believe there will be material adjustments. The purchase price of $2,325,846 USD was funded through existing cash. MEP will also receive a 4.5% royalty on proprietary MEP product revenue generated during the next five years. Based on the estimated fair value at the time of purchase, the Company recorded an estimate of intangible assets in the amount of $1,268,930 USD which may include goodwill once the final valuation analysis is completed. The purchase price calculation is a follows: Cash $ 2,088,814 Liabilities 237,032 $ 2,325,846 The following table summarizes the preliminary estimated fair value of the assets acquired and liabilities assumed at the date of purchase: Accounts receivable $ 308,431 Inventory 1,123,922 Intangibles and goodwill 1,268,930 Accounts payable (114,187) Accrual liabilities (261,250) $ 2,325,846 Transaction and related costs directly related to the acquisition of MEP, consisting primarily of professional fees and integration expenses, have amounted to approximately $42,780 and were expensed as incurred and are included in general and administrative expenses.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	6 Months Ended
	Jun. 30, 2019
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	SUBSEQUENT EVENTS In accordance with ASC 855 "Subsequent Events," Company Management reviewed all material events through the date this report was issued and the following subsequent events occurred: On August 1, 2019, our Board of Directors authorized an additional $2,000,000 for the share repurchase plan that was put in place on October 30, 2018. This plan allows for the repurchase of our stock at Management's discretion through October 31, 2019. As of this filing, no shares have been repurchased under this plan. On August 5, 2019, Profire Energy, Inc., a Nevada corporation (the “Company”), entered into definitive agreement (the “Agreement”) to acquire Midflow Services, LLC. (“Midflow”). The Agreement contains certain customary representations, warranties and covenants. The transaction closed on August 5, 2019. The Company has agreed to pay a total purchase price of $3.4 million, $2.4 million in cash and $1 million in Profire stock, in exchange for all the stock of Midflow. The purchase price is subject to an adjustment based on working capital at closing.

ORGANIZATION AND SUMMARY OF S_2

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Jun. 30, 2019
Accounting Policies [Abstract]
Leases	LeasesIn February of 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2016-02 - Leases (Topic 842), which significantly amends the way companies are required to account for leases. Under the updated leasing guidance, some leases that did not have to be reported previously are now required to be presented as an asset and liability on the balance sheet. In addition, for certain leases, what was previously classified as an operating expense must now be allocated between amortization expense and interest expense. The Company adopted this update as of January 1, 2019 using the modified retrospective transition method. Prior periods have not been restated
Recent Accounting Pronouncements	Recent Accounting Pronouncements The Company has evaluated all recent accounting pronouncements and determined that the adoption of pronouncements applicable to the Company has not had or is not expected to have a material impact on the Company's financial position, results of operations or cash flows. Reclassification
Revenue From Contract With Customer	Performance Obligations Our performance obligations include providing product and servicing our product. We recognize product revenue performance obligations in most cases when the product is delivered to the customer. Occasionally, if we are shipping the product on a customer’s account, we recognize revenue when the product has been shipped. At that point in time, the control of the product is transferred to the customer. When we perform service work, we apply the practical expedient that allows us to recognize service revenue when we have the right to invoice the customer for the work completed. We do not engage in transactions acting as an agent. The time needed to complete our performance obligations varies based on the size of the project; however, we typically satisfy our performance obligations within a few months of entering into the contract. Contract Balances We have elected to use the practical expedient in ASC 340-40-25-4 (regarding recognition of the incremental costs of obtaining a contact) for costs related to contracts that are estimated to be completed within one year. All of the current contracts are expected to be completed within one year, and as a result, we have not recognized a contract asset account. If we had chosen not to use this practical expedient, we would not expect a material difference in the contract balances. We also did not have any material contract liabilities because we typically do not receive payments in advance of recognizing revenue.

INVENTORY (Tables)

INVENTORY (Tables)	6 Months Ended
	Jun. 30, 2019
Inventory Disclosure [Abstract]
Schedule of Inventory	Inventories consisted of the following at each balance sheet date: As of June 30, 2019 December 31, 2018 Raw materials $ 41,291 $ 76,319 Finished goods 9,883,394 10,474,522 Work in process — — Subtotal 9,924,685 10,550,841 Reserve for obsolescence (853,206) (891,270) Total $ 9,071,479 $ 9,659,571

SEGMENT INFORMATION (Tables)

SEGMENT INFORMATION (Tables)	6 Months Ended
	Jun. 30, 2019
Segment Reporting [Abstract]
Schedule of Segment Information for Geographic Areas	Segment information for these geographic areas is as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, Sales 2019 2018 2019 2018 Canada $ 1,056,781 $ 1,272,056 $ 1,992,419 $ 2,570,888 United States 9,067,250 10,067,705 18,964,670 20,938,590 Total Consolidated $ 10,124,031 $ 11,339,761 $ 20,957,089 $ 23,509,478 For the Three Months Ended June 30, For the Six Months Ended June 30, Profit (Loss) 2019 2018 2019 2018 Canada $ (547,202) $ (265,830) $ (929,242) $ (700,494) United States 1,532,706 1,980,097 3,583,364 4,290,992 Total Consolidated $ 985,504 $ 1,714,267 $ 2,654,122 $ 3,590,498 As of Long-Lived Assets June 30, 2019 December 31, 2018 Canada $ 3,058,272 $ 2,079,173 United States 6,049,962 5,941,289 Total Consolidated $ 9,108,234 $ 8,020,462

REVENUE (Tables)

REVENUE (Tables)	6 Months Ended
	Jun. 30, 2019
Revenue from Contract with Customer [Abstract]
Disaggregation of Revenue by Product Line	The table below shows revenue by category: For the Three Months Ended June 30, For the Six Months Ended June 30, 2019 2018 2019 2018 Electronics $ 4,139,283 $ 4,413,545 $ 8,785,880 $ 9,220,574 Manufactured 492,969 814,731 923,562 1,769,510 Re-Sell 4,927,003 5,496,133 10,048,448 11,188,940 Service 564,776 615,352 1,199,199 1,330,454 Total Revenue $ 10,124,031 $ 11,339,761 $ 20,957,089 $ 23,509,478

BASIC AND DILUTED EARNINGS PE_2

BASIC AND DILUTED EARNINGS PER SHARE (Tables)	6 Months Ended
	Jun. 30, 2019
Earnings Per Share [Abstract]
Schedule of Earnings Per Share, Basic and Diluted	The following table is a reconciliation of the numerator and denominators used in the earnings per share calculation: For the Three Months Ended June 30, 2019 2018 Income (Numerator) Weighted Average Shares (Denominator) Per-Share Income (Numerator) Weighted Average Shares (Denominator) Per-Share Basic EPS Net income available to common stockholders $ 985,504 47,348,137 $ 0.02 $ 1,714,267 48,266,199 $ 0.04 Effect of Dilutive Securities Stock options & RSUs — 776,071 — 829,376 Diluted EPS Net income available to common stockholders + assumed conversions $ 985,504 48,124,208 $ 0.02 $ 1,714,267 49,095,575 $ 0.03

LEASES (Tables)

LEASES (Tables)	6 Months Ended
	Jun. 30, 2019
Leases [Abstract]
Components of Financing Lease Cost	The following table shows the components of financing lease cost: Financing Lease Cost For the Three Months Ended June 30, 2019 For the Six Months Ended June 30, 2019 Amortization of right-of-use assets $ 19,280 $ 35,641 Interest on lease liabilities 1,421 2,832 Total financing lease cost $ 20,701 $ 38,473
Future Minimum Lease Payments to Discounted Finance Lease Liability	The following table reconciles future minimum lease payments to the discounted finance lease liability: Years ending December 31, Amount 2019 $ 43,694 2020 62,995 2021 40,921 2022 13,599 2023 — Thereafter — Total future minimum lease payments $ 161,209 Less: Amount representing interest 8,268 Present value of future payments $ 152,941 Current portion $ 76,559 Long-term portion $ 76,382

ACQUISITION (Tables)

ACQUISITION (Tables)	6 Months Ended
	Jun. 30, 2019
Business Combinations [Abstract]
Business Combinations	The purchase price calculation is a follows: Cash $ 2,088,814 Liabilities 237,032 $ 2,325,846 The following table summarizes the preliminary estimated fair value of the assets acquired and liabilities assumed at the date of purchase: Accounts receivable $ 308,431 Inventory 1,123,922 Intangibles and goodwill 1,268,930 Accounts payable (114,187) Accrual liabilities (261,250) $ 2,325,846

ORGANIZATION AND SUMMARY OF S_3

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	Jun. 30, 2019	Jan. 01, 2019	Dec. 31, 2018
Accounting Policies [Abstract]
Financing right-of-use asset	$ 149,484	$ 132,488	$ 0
Finance lease liability	$ 152,941	$ 132,488

INVENTORY (Details)

INVENTORY (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Inventory Disclosure [Abstract]
Raw materials	$ 41,291	$ 76,319
Finished goods	9,883,394	10,474,522
Work in process	0	0
Subtotal	9,924,685	10,550,841
Reserve for Obsolescence	(853,206)	(891,270)
Total	$ 9,071,479	$ 9,659,571

STOCKHOLDERS' EQUITY (Details)

STOCKHOLDERS' EQUITY (Details)	Jun. 12, 2019USD ($)shares	Apr. 22, 2019USD ($)shares	Mar. 14, 2019USD ($)shares	Jun. 30, 2019USD ($)shares	Apr. 22, 2019CAD ($)	Dec. 31, 2018USD ($)shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Treasury stock (in shares) | shares				2,550,787		1,775,500
Treasury stock, at cost				$ 3,943,063		$ 2,609,485
2019 EIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance goal weight		25.00%			25.00%
Percentage of bonus paid in cash		50.00%			50.00%
Percentage of bonus paid in stock		50.00%			50.00%
Maximum percentage of target bonus		200.00%			200.00%
2019 LTIP | Time-based
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of award covered by metric		33.00%			33.00%
2019 LTIP | Performance-based
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of award covered by metric		67.00%			67.00%
2019 LTIP | Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted (shares) | shares	183,942		85,000
Award vesting period	1 year		5 years
Unrecognized compensation cost	$ 252,000		$ 149,600
Award vesting percentage	50.00%
Chief Executive Officer | 2019 EIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Executive compensation target bonus payout		$ 412,000
Chief Business Development Officer | 2019 EIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Executive compensation target bonus payout		$ 84,357
Chief Business Development Officer | 2019 LTIP | Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted (shares) | shares		51,646
Chief Financial Officer | 2019 EIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Executive compensation target bonus payout		$ 90,125
Chief Financial Officer | 2019 LTIP | Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted (shares) | shares		66,213
Vice President of Operations | 2019 EIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Executive compensation target bonus payout		$ 41,200
Vice President of Operations | 2019 LTIP | Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted (shares) | shares		35,313
Vice President of Product Development | 2019 EIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Executive compensation target bonus payout					$ 38,750
Vice President of Product Development | 2019 LTIP | Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted (shares) | shares		24,862

SEGMENT INFORMATION (Details)

SEGMENT INFORMATION (Details) - USD ($)	3 Months Ended				6 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Segment Reporting Information [Line Items]
Sales	$ 10,124,031		$ 11,339,761		$ 20,957,089	$ 23,509,478
Net income	985,504	$ 1,668,618	1,714,267	$ 1,876,228	2,654,122	3,590,498
Long-lived assets	9,108,234				9,108,234		$ 8,020,462
Canada
Segment Reporting Information [Line Items]
Sales	1,056,781		1,272,056		1,992,419	2,570,888
Net income	(547,202)		(265,830)		(929,242)	(700,494)
Long-lived assets	3,058,272				3,058,272		2,079,173
United States
Segment Reporting Information [Line Items]
Sales	9,067,250		10,067,705		18,964,670	20,938,590
Net income	1,532,706		$ 1,980,097		3,583,364	$ 4,290,992
Long-lived assets	$ 6,049,962				$ 6,049,962		$ 5,941,289

REVENUE - Narrative (Details)

REVENUE - Narrative (Details)	6 Months Ended
	Jun. 30, 2019
Revenue from Contract with Customer [Abstract]
Timing of satisfaction, performance obligation	All of the current contracts are expected to be completed within one year, and as a result, we have not recognized a contract asset account.

REVENUE - Disaggregation of Rev

REVENUE - Disaggregation of Revenue (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Disaggregation of Revenue [Line Items]
Revenue recognized in the income statement by product line	$ 10,124,031	$ 11,339,761	$ 20,957,089	$ 23,509,478
Electronics
Disaggregation of Revenue [Line Items]
Revenue recognized in the income statement by product line	4,139,283	4,413,545	8,785,880	9,220,574
Manufactured
Disaggregation of Revenue [Line Items]
Revenue recognized in the income statement by product line	492,969	814,731	923,562	1,769,510
Re-Sell
Disaggregation of Revenue [Line Items]
Revenue recognized in the income statement by product line	4,927,003	5,496,133	10,048,448	11,188,940
Service
Disaggregation of Revenue [Line Items]
Revenue recognized in the income statement by product line	$ 564,776	$ 615,352	$ 1,199,199	$ 1,330,454

BASIC AND DILUTED EARNINGS PE_3

BASIC AND DILUTED EARNINGS PER SHARE (Details) - USD ($)	3 Months Ended				6 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2019	Jun. 30, 2018
Income (Numerator)
Net income available to common stockholders	$ 985,504	$ 1,668,618	$ 1,714,267	$ 1,876,228	$ 2,654,122	$ 3,590,498
Stock options & RSUs	0		0		0	0
Net income available to common stockholders assumed conversions	$ 985,504		$ 1,714,267		$ 2,654,122	$ 3,590,498
Weighted Average Shares (Denominator)
Weighted average basic shares outstanding (shares)	47,348,137		48,266,199		47,392,534	48,467,136
Effect of Dilutive Securities, Stock options & RSUs (shares)	776,071		829,376		800,315	770,802
Weighted average diluted shares outstanding (shares)	48,124,208		49,095,575		48,192,849	49,237,938
Per-Share Amount
Basic earnings per share (dollars per share)	$ 0.02		$ 0.04		$ 0.06	$ 0.07
Diluted earnings per share (dollars per share)	$ 0.02		$ 0.03		$ 0.06	$ 0.07
Antidilutive securities excluded from computation of earnings per share (shares)	244,600				244,600	251,600
Weighted average (dollars per share)	$ 3.88				$ 3.88	$ 3.89

LEASES - Narrative (Details)

LEASES - Narrative (Details)	3 Months Ended	6 Months Ended
	Jun. 30, 2019USD ($)	Jun. 30, 2019USD ($)
Leases [Abstract]
Lease term	36 months	36 months
Weighted average discount rate	4.50%	4.50%
Weighted average remaining lease term	2 years 3 months 10 days	2 years 3 months 10 days
Short-term lease cost	$ 13,411	$ 22,318

LEASES - Components of Financin

LEASES - Components of Financing Lease Cost (Details) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019
Leases [Abstract]
Amortization of right-of-use assets	$ 19,280	$ 35,641
Interest on lease liabilities	1,421	2,832
Total financing lease cost	$ 20,701	$ 38,473

LEASES - Future Minimum Lease P

LEASES - Future Minimum Lease Payments to Discounted Finance Lease Liability (Details) - USD ($)	Jun. 30, 2019	Jan. 01, 2019	Dec. 31, 2018
Years ending December 31,
2019	$ 43,694
2020	62,995
2021	40,921
2022	13,599
2023	0
Thereafter	0
Total future minimum lease payments	161,209
Less: Amount representing interest	8,268
Present value of future payments	152,941	$ 132,488
Current financing lease liability	76,559		$ 0
Long-term financing lease liability	$ 76,382		$ 0

ACQUISITION (Details)

ACQUISITION (Details) - MEP	Jun. 18, 2019USD ($)
Business Acquisition [Line Items]
Acquisition purchase price	$ 2,325,846
Royalty percentage	4.50%
Cash	$ 2,088,814
Liabilities	237,032
Accounts receivable	308,431
Inventory	1,123,922
Inventory	1,268,930
Accounts payable	114,187
Liabilities	261,250
Net	2,325,846
Acquisition related costs	$ 42,780

SUBSEQUENT EVENTS (Details)

SUBSEQUENT EVENTS (Details) - Subsequent Event - USD ($)	Aug. 05, 2019	Aug. 07, 2019	Aug. 01, 2019
Subsequent Event [Line Items]
Authorized shares, amount			$ 2,000,000
Shares repurchased (in shares)		0
Midflow Services, LLC
Subsequent Event [Line Items]
Acquisition purchase price	$ 3,400,000
Acquisition purchase price, paid in cash	2,400,000
Acquisition purchase price, paid in stock	$ 1,000,000