Core Viewpoint - Profire Energy, Inc. has announced a share buyback program authorized by its Board of Directors, allowing the company to repurchase up to $2 million of its common stock until June 30, 2025 [1][2]. Group 1: Share Buyback Program - The share buyback program is intended to opportunistically return capital to shareholders, with repurchases made at Management's discretion based on attractive pricing and the best interests of the company and its shareholders [2]. - Repurchases may occur under a Rule 10b5-1 plan, allowing shares to be bought back even when the company is restricted from doing so under insider trading laws [2]. Group 2: Management's Perspective - Co-CEO and CFO Ryan Oviatt emphasized the strong financial position and cash flow generation of the company, viewing the buyback as a strategic investment for long-term shareholder value [3]. - Co-CEO Cameron Tidball expressed optimism about future prospects, highlighting the robustness of the legacy business and progress in diversifying revenue streams, aligning the buyback with a balanced capital allocation strategy [3]. Group 3: Company Overview - Profire Energy specializes in enhancing the efficiency, safety, and reliability of industrial combustion appliances, primarily serving the oil and gas industry across upstream, midstream, and downstream segments [4]. - The company has expanded its market by completing installations of burner-management solutions in various industries, with a focus on engineering and design of combustion management systems [4]. - Profire's products and services are primarily marketed in North America, supported by a team of sales and service professionals strategically located across the United States and Canada [4].

LINDON, Utah, May 22, 2024 (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 announced the approval of a share buyback program by its Board of Directors. Under this program, Profire Energy is authorized to repurchase up to $2 million of the Company's common stock between now and June 30, 2025. Cautionary Note Regarding Forward-Looking Statements ...

Financial Data and Key Metrics Changes - In Q1 2024, the company reported approximately $13.6 million in revenue, down from $14.5 million in Q4 2023 and $14.7 million in Q1 2023 [6] - Gross profit for Q1 2024 was $6.8 million, compared to $7.8 million in both the prior quarter and the same quarter last year, resulting in a gross margin of 50% [6] - Net income for Q1 2024 was approximately $1.4 million or $0.03 per diluted share, down from $2.6 million or $0.05 per diluted share in Q1 2023 and $3.3 million or $0.07 per diluted share in Q4 2023 [21] Business Line Data and Key Metrics Changes - The company achieved strong diversification results, nearly doubling its diversified revenue compared to Q1 2023, with non-oil and gas industrial revenue nearly tripling [23] - The company secured new projects in clean tech and environmental services, indicating a successful diversification strategy [10] Market Data and Key Metrics Changes - Oil prices rose steadily during the quarter, remaining above $80 per barrel, influenced by OPEC supply cuts and civil unrest in the Middle East [5] - The IEA forecasts a 3.5% increase in energy demand over the next three years, driven by electrification and AI data centers [5] Company Strategy and Development Direction - The company continues to focus on automation and safety controls for North American LNG producers, positioning itself as a critical supplier [5] - The company is committed to developing products for traditional markets while also pursuing diversification efforts in new industries [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the medium- and long-term prospects of the company despite short-term fluctuations, expecting higher revenues and income in the second half of 2024 [20] - The company noted that ongoing challenges in the Middle East and natural gas price fluctuations could impact production decisions by U.S. producers [20] Other Important Information - Cash used in operations in Q1 2024 was approximately $2.7 million, a significant decrease from cash generated in the prior year quarter [7] - The company ended the quarter with $16.2 million in cash and liquid investments and remained debt-free [7] Q&A Session Summary Question: Expectations for growth in the legacy business in the next 12 months - Management indicated that they expect growth to resume in the legacy business as crosscurrents stabilize, with some projects deferred to later quarters [27] Question: Insights on the sales pipeline and project activity - Management characterized the sales pipeline as strong, particularly in critical energy infrastructure, and noted that they are on track to exceed last year's diversification results [29] Question: Interest from Canadian producers in ramping up production - Management confirmed that existing customers are likely to increase activity, particularly in light of new pipeline access to markets [32] Question: Consideration of outreach to state departments for methane capture projects - Management acknowledged the potential for opportunities in methane capture and noted that existing customers are already engaging in such initiatives [35]

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) Profire Energy reported first-quarter 2024 revenue of $13.6 million and net income of $1.4 million, maintaining a strong balance sheet with $16.2 million in cash and investments and zero debt despite year-over-year declines Q1 2024 Key Financial Metrics (vs. Q1 2023) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Revenue | $13.6 million | $14.7 million | | Gross Profit | $6.8 million | $7.8 million | | Gross Margin | 49.5% | 53.3% | | Net Income | $1.4 million | $2.6 million | | Diluted EPS | $0.03 | $0.05 | | EBITDA | $2.0 million | $3.6 million | - The company's balance sheet remains **strong**, with **$16.2 million** in cash and investments, **no debt**, and sufficient inventory for timely product deliveries[3](index=3&type=chunk)[6](index=6&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management highlighted the underlying strength of the legacy business and progress in diversification efforts, noting record sales orders and optimism due to favorable industry tailwinds despite lower natural gas prices - Co-CEO Ryan Oviatt stated that Q1 results reflect the continued strength of the legacy business and diversification efforts, despite lapping a historically strong quarter and a significant decline in natural gas prices[3](index=3&type=chunk) - Co-CEO Cameron Tidball emphasized strong business fundamentals, citing the best two sequential quarters for sales orders in company history, expressing optimism based on industry tailwinds like LNG and renewable natural gas expansion, coupled with growing global electrification demand[9](index=9&type=chunk) [Financial Performance Analysis](index=1&type=section&id=Financial%20Performance%20Analysis) This section provides a detailed breakdown of the company's financial performance, comparing Q1 2024 results to prior periods, covering revenues, profitability, and operating expenses [Revenue and Gross Profit](index=1&type=section&id=Revenue%20and%20Gross%20Profit) Q1 2024 revenue was $13.6 million, a decrease from $14.7 million in Q1 2023, partly due to the timing of customer orders, with gross profit falling to $6.8 million and gross margin to 49.5% due to product mix, inventory fluctuations, and inflation Revenue and Gross Profit Comparison (Q1 2024 vs. Q1 2023) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Total Revenues | $13.6 million | $14.7 million | | Gross Profit | $6.8 million | $7.8 million | | Gross Margin | 49.5% | 53.3% | - The year-over-year decrease in gross margin was attributed to product mix, typical fluctuations in inventory and warranty reserves, and inflation[5](index=5&type=chunk) [Operating Expenses and Net Income](index=2&type=section&id=Operating%20Expenses%20and%20Net%20Income) Total operating expenses increased to $5.0 million from $4.5 million year-over-year, driven by inflation and increased headcount for strategic growth, resulting in a net income of $1.4 million, or $0.03 per diluted share, a significant decrease from Q1 2023 - The year-over-year increase in operating expenses was primarily due to ongoing inflation and increased headcount to support strategic growth, with General & Administrative expenses rising **12%** and Research & Development expenses decreasing **11%**[7](index=7&type=chunk) Net Income and EPS Comparison (Q1 2024 vs. Q1 2023) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net Income | $1.4 million | $2.6 million | | Diluted EPS | $0.03 | $0.05 | [Financial Statements](index=5&type=section&id=Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for the period ending March 31, 2024, including the Balance Sheet, Statement of Income and Comprehensive Income, and Statement of Cash Flows, providing a comprehensive view of the company's financial position and performance [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2024, Profire reported total assets of $65.3 million and total liabilities of $7.1 million, maintaining a strong liquidity position with $43.3 million in total current assets and no debt, while total stockholders' equity increased to $58.3 million Balance Sheet Summary | Metric | March 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $7.2 million | $10.8 million | | Total Current Assets | $43.3 million | $44.5 million | | Total Assets | $65.3 million | $66.3 million | | Total Liabilities | $7.1 million | $9.5 million | | Total Stockholders' Equity | $58.3 million | $56.8 million | [Condensed Consolidated Statements of Income and Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) For the three months ended March 31, 2024, the company generated total revenues of $13.6 million and a net income of $1.4 million, representing a decline from the prior-year period's revenue of $14.7 million and net income of $2.6 million Income Statement Summary (Three Months Ended March 31) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Total Revenues | $13,641,140 | $14,684,628 | | Gross Profit | $6,756,772 | $7,833,108 | | Income from Operations | $1,737,089 | $3,305,800 | | Net Income | $1,434,375 | $2,589,621 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For Q1 2024, net cash used in operating activities was $(2.7) million, a significant negative shift from the $0.5 million provided by operations in Q1 2023, primarily driven by an increase in inventories and a decrease in accrued liabilities, resulting in a $3.6 million decrease in cash Cash Flow Summary (Three Months Ended March 31) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $(2,692,138) | $521,780 | | Net Cash Used in Investing Activities | $(531,267) | $(446,417) | | Net Cash Used in Financing Activities | $(318,808) | $(249,453) | | Net Decrease in Cash | $(3,571,095) | $(165,222) | | Cash at End of Period | $7,196,424 | $7,219,356 | [Non-GAAP Financial Measures](index=4&type=section&id=Non-GAAP%20Financial%20Measures) The company utilizes EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) as a non-GAAP financial measure for performance evaluation, reporting $2.0 million for Q1 2024, a decrease from $3.6 million in Q1 2023, with a detailed reconciliation provided - Management uses the non-GAAP measure of EBITDA for financial and operational decision-making and to evaluate period-to-period performance[17](index=17&type=chunk) EBITDA Reconciliation (Three Months Ended March 31) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Net Income | $1,434,375 | $2,589,621 | | Income Tax Expense | $393,148 | $816,815 | | Net Interest Expense | $(68,952) | $(57,114) | | Depreciation & Amortization | $267,654 | $262,039 | | **EBITDA** | **$2,026,225** | **$3,611,361** | [Company Overview and Outlook](index=2&type=section&id=Company%20Overview%20and%20Outlook) Profire Energy is a technology company providing combustion management solutions primarily for the oil and gas industry, with a strategy to expand into other industrial sectors, expressing optimism about future growth driven by revenue diversification, strong sales orders, and favorable industry trends, while acknowledging forward-looking statement risks - Profire Energy provides solutions to enhance the efficiency, safety, and reliability of industrial combustion appliances, primarily in the oil and gas industry, but is expanding its addressable market to other industries[12](index=12&type=chunk)[13](index=13&type=chunk) - The company's outlook is **optimistic**, supported by revenue diversification, strong sales orders, and favorable industry tailwinds such as LNG expansion[9](index=9&type=chunk) - The report contains a cautionary note that forward-looking statements regarding expected growth and revenues are not guarantees of future performance and involve risks and uncertainties[14](index=14&type=chunk)

Revenue and Rig Count - Total revenues for the quarter ended March 31, 2024, decreased by 7% or $1,043,488 compared to the same quarter in 2023, attributed to a decrease in North America rig count and lower natural gas prices [96]. - The average rig count for North America in Q1 2024 was 810, down from 977 in the same period last year, while average natural gas prices decreased by 19% [96]. Profitability and Income - Gross profit margin for Q1 2024 was 49.5%, down 3.8% from the same quarter last year and down 4.4% from Q4 2023 [97]. - Income from operations for Q1 2024 was $1,737,089, a significant decrease from $3,305,801 in Q1 2023 [99]. - Net income for Q1 2024 was $1,434,375, compared to $2,589,621 in Q1 2023 and $3,290,545 in Q4 2023 [100]. Operating Expenses and Cash Flow - Operating expenses for Q1 2024 increased by $492,375 compared to the same quarter last year, primarily due to increases in headcount and cost inflation [98]. - Operating cash flow for Q1 2024 was negative at $(2,692,138), compared to positive cash flows of $521,780 in Q1 2023 and $4,395,818 in Q4 2023 [101]. Working Capital and Investments - Working capital at March 31, 2024, was $36,521,702, an increase from $35,377,246 at December 31, 2023 [102]. - The company used $531,267 in cash from investing activities to purchase property and equipment during Q1 2024 [103]. - As of March 31, 2024, the company held $16,233,347 in cash and investments, representing its core excess liquidity [103].

Profire Energy, Inc. (NASDAQ:PFIE) Q4 2023 Earnings Conference Call March 14, 2024 8:30 AM ET Company Participants Steven Hooser - IR Ryan Oviatt - Co-CEO and CFO Cameron Tidball - Co-CEO Conference Call Participants Rob Brown - Lake Street Capital Markets John Bair - Ascend Wealth Advisors Operator Good morning, everyone, and thank you for participating in today's conference call to discuss Profire Energy's Fourth Quarter and Full Year 2023 ended December 31, 2023. [Operator Instructions] I would now like ...

[Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) Profire Energy achieved record financial results in fiscal year 2023, driven by strong revenue growth and improved profitability, while management expressed confidence in continued expansion and diversification [Full-Year Fiscal 2023 Performance](index=1&type=section&id=Full-Year%20Fiscal%202023%20Performance) Profire Energy achieved record financial results in fiscal year 2023, marked by substantial growth in revenue, net income, and gross margin Fiscal Year 2023 Financial Highlights | Metric | FY 2023 ($) | FY 2022 ($) | Change | | :--- | :--- | :--- | :--- | | **Revenue** | $58.2 million | $45.9 million | +27% | | **Gross Profit** | $30.5 million | $21.7 million | +40.6% | | **Gross Margin** | 52.5% | 47.1% | +540 bps | | **Net Income** | $10.8 million | $3.9 million | +174% | | **Diluted EPS** | $0.22 | $0.08 | +175% | | **EBITDA** | $13.2 million | N/A | N/A | | **Cash & Liquid Investments** | $20.0 million | $16.0 million | +25% | - Revenue growth was primarily driven by improved customer demand and progress in the Company's revenue diversification efforts[7](index=7&type=chunk) - The increase in gross margin to **52.5%** was attributed to better fixed cost leverage resulting from the higher revenue base[7](index=7&type=chunk) - Operating expenses decreased as a percentage of revenue to **32%** from **36%** in the prior year, reflecting effective cost management despite inflationary pressures[8](index=8&type=chunk) - The company repurchased **1.2 million shares** for **$2 million** during the fiscal year[6](index=6&type=chunk) - Net income results for 2023 included a **$1.9 million benefit**, or **$0.04 per diluted share**, from various tax planning strategies, including a one-time deferred tax adjustment of **$828,000**[9](index=9&type=chunk)[10](index=10&type=chunk) [Fourth Quarter 2023 Performance](index=1&type=section&id=Fourth%20Quarter%202023%20Performance) The fourth quarter of 2023 saw robust year-over-year growth in gross profit and net income, driven by significant gross margin expansion Q4 2023 vs. Q4 2022 Financials | Metric | Q4 2023 ($) | Q4 2022 ($) | Change | | :--- | :--- | :--- | :--- | | **Revenue** | $14.4 million | $14.0 million | +2.9% | | **Gross Profit** | $7.8 million | $6.6 million | +18.2% | | **Gross Margin** | 54.3% | 47.0% | +730 bps | | **Net Income** | $3.3 million | $1.8 million | +83.3% | | **Diluted EPS** | $0.07 | $0.04 | +75% | | **EBITDA** | $3.1 million | N/A | N/A | - The sequential and year-over-year increase in gross margin was attributed to pricing incentives and better fixed cost coverage[13](index=13&type=chunk) - Q4 net income included a one-time benefit of **$828,000**, or **$0.02 per diluted share**, from a deferred tax adjustment[15](index=15&type=chunk) [Management Commentary and Outlook](index=1&type=section&id=Management%20Commentary%20and%20Outlook) Management highlighted 2023 as a record year, driven by strong demand and successful diversification, expressing confidence in continued growth and market expansion for 2024 - Co-CEO Ryan Oviatt emphasized the record revenue, net income, and EBITDA, and highlighted the company's solid balance sheet which allows for business investment, share repurchases, and other strategic opportunities[4](index=4&type=chunk) - Co-CEO Cameron Tidball noted that the company's diversification strategy now represents more than **13% of total revenue**, a significant increase from less than **1%** in 2021[16](index=16&type=chunk) - The company expects to attract new users for its applications beyond the oil and gas markets in 2024[17](index=17&type=chunk) [Consolidated Financial Statements](index=7&type=section&id=Consolidated%20Financial%20Statements) The company's consolidated financial statements for 2023 reflect significant revenue and net income growth, a strengthened balance sheet with increased assets and equity, and robust cash generation from operations [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) The consolidated statements of operations for 2023 show substantial year-over-year growth in total revenues, gross profit, and net income, reflecting strong operational performance Consolidated Statement of Operations (Year Ended Dec 31) | Account | 2023 ($) | 2022 ($) | | :--- | :--- | :--- | | **Total Revenues** | **$58,208,060** | **$45,936,643** | | **Gross Profit** | **$30,532,018** | **$21,651,390** | | **Income from Operations** | **$11,854,100** | **$5,194,608** | | **Net Income** | **$10,776,714** | **$3,947,760** | | **Diluted EPS** | **$0.22** | **$0.08** | [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) As of December 31, 2023, the consolidated balance sheet reflects a strengthened financial position with increased total assets and stockholders' equity, while maintaining a debt-free status Consolidated Balance Sheet Highlights (As of Dec 31) | Account | 2023 ($) | 2022 ($) | | :--- | :--- | :--- | | **Cash and cash equivalents** | $10,767,519 | $7,384,578 | | **Total Current Assets** | $44,472,716 | $32,033,626 | | **Total Assets** | **$66,293,845** | **$53,929,536** | | **Total Liabilities** | **$9,455,619** | **$7,345,056** | | **Total Stockholders' Equity** | **$56,838,226** | **$46,584,480** | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The consolidated statements of cash flows for 2023 show significant cash generation from operating activities, supporting investments and share repurchases, resulting in a net increase in cash Consolidated Statement of Cash Flows (Year Ended Dec 31) | Activity | 2023 ($) | 2022 ($) | | :--- | :--- | :--- | | **Net Cash Provided by Operating Activities** | **$7,064,050** | **$516,077** | | **Net Cash Provided by (Used in) Investing Activities** | **($1,266,492)** | **$10,657** | | **Net Cash Used in Financing Activities** | **($2,454,519)** | **($1,375,011)** | | **Net Increase (Decrease) in Cash** | $3,382,941 | ($803,692) | | **Cash at End of Period** | $10,767,519 | $7,384,578 | [Supplementary Information](index=3&type=section&id=Supplementary%20Information) Supplementary information includes reconciliation of non-GAAP EBITDA, details on Profire Energy's business focus and market expansion, and logistical information for the financial results conference call [Non-GAAP Financial Measures (EBITDA Reconciliation)](index=6&type=section&id=Non-GAAP%20Financial%20Measures%20(EBITDA%20Reconciliation)) This section provides a reconciliation of the non-GAAP measure EBITDA to net income for both the fourth quarter and the trailing twelve months ended December 31, 2023 EBITDA Reconciliation (12/31/2023) | Metric | 3 Months ($) | TTM ($) | | :--- | :--- | :--- | | **Net Income** | $3,290,547 | $10,776,715 | | **EBITDA** | **$3,054,210** | **$13,174,792** | - Management uses non-GAAP measures like EBITDA for financial and operational decision-making and to evaluate period-to-period comparisons[24](index=24&type=chunk) [About Profire Energy](index=3&type=section&id=About%20Profire%20Energy) Profire Energy is a technology company specializing in industrial combustion solutions, primarily for the oil and gas industry, with ongoing expansion into other sectors - The company's primary focus is the upstream, midstream, and downstream segments of the oil and gas industry[19](index=19&type=chunk) - Profire is expanding its addressable market by installing its burner-management solutions in other industries beyond oil and gas[19](index=19&type=chunk) [Conference Call Information](index=3&type=section&id=Conference%20Call%20Information) Details for the financial results conference call, including date, time, dial-in information, and webcast access, are provided for stakeholder convenience - Conference Call Date: **Thursday, March 14, 2024, at 8:30 a.m. ET**[17](index=17&type=chunk) - A replay of the call will be available until **March 28, 2024**[18](index=18&type=chunk)

PART I [Business](index=5&type=section&id=Item%201.%20Business) Profire Energy, Inc. provides solutions to enhance industrial combustion appliances, primarily for the oil and gas industry, while expanding into diversified industrial markets - The company's core business is providing **burner-management systems** for the **oil and gas industry**, focusing on enhancing safety, efficiency, and environmental compliance[14](index=14&type=chunk)[15](index=15&type=chunk) - Profire's principal markets are major oil and gas basins in the **United States and Western Canada**, with strategic expansion into **non-oil and gas industries** like biogas, power generation, and agriculture[26](index=26&type=chunk)[28](index=28&type=chunk) - The company competes with **smaller firms** like Clear Rush and Combustex, and is expanding to compete with **larger entities** such as Honeywell and Emerson in more complex applications[29](index=29&type=chunk)[30](index=30&type=chunk) - No single customer accounted for more than **10% of total revenues** in fiscal years 2023 or 2022[36](index=36&type=chunk) Research and Development Expenses | Fiscal Year | R&D Expense ($) | | :--- | :--- | | 2023 | $917,123 | | 2022 | $1,051,858 | [Risk Factors](index=9&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant business risks from oil and gas industry volatility, supply chain dependencies, and regulatory changes, alongside common stock risks from price volatility and insider ownership - Financial performance is heavily dependent on the capital spending of oil and natural gas customers, influenced by **volatile commodity prices**[54](index=54&type=chunk)[55](index=55&type=chunk) - Dependency on **contract manufacturers** for outsourced processes creates risk of adverse impact on product market entry if they fail to perform[52](index=52&type=chunk) - Executive officers, directors, and beneficial owners collectively owned approximately **25% of common stock** as of December 31, 2023, influencing stockholder approval matters[106](index=106&type=chunk) - The company has **never paid cash dividends** and does not anticipate doing so, intending to retain earnings for operations and expansion[114](index=114&type=chunk) - Nevada's control share and business combination laws may **discourage or delay potential takeovers** of the company[115](index=115&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk) [Unresolved Staff Comments](index=20&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments as of the reporting period - Not applicable[120](index=120&type=chunk) [Cybersecurity](index=20&type=section&id=Item%201C.%20Cybersecurity) The company maintains a cybersecurity risk management program with governance by the CFO and IT Manager, overseen by the Audit Committee - The cybersecurity program includes **periodic risk assessments**, governance policies, an **incident response plan**, and ongoing **employee training**[121](index=121&type=chunk) - Governance is managed by a cybersecurity team (**CFO and IT Manager**) reporting quarterly to the **Audit Committee** of the Board of Directors[125](index=125&type=chunk)[126](index=126&type=chunk) - Prior cybersecurity incidents have not had a **material adverse effect** on the business or financial condition[128](index=128&type=chunk) [Properties](index=21&type=section&id=Item%202.%20Properties) Profire owns its corporate headquarters in Utah and a facility in Alberta, while leasing additional office and warehouse spaces across several US states Company Facilities | Location | Ownership | Use | Square Footage | | :--- | :--- | :--- | :--- | | Lindon, Utah | Owned | Corporate HQ & Warehouse Assembly | 50,500 | | Acheson, Alberta | Owned | Office & Warehouse Assembly | 25,500 | | Odessa, Texas | Leased | Office & Warehouse Assembly | 6,300 | | Victoria, Texas | Leased | Office & Warehouse Assembly | 3,250 | | Homer City, Pennsylvania | Leased | Office & Warehouse Storage | 2,100 | | Millersburg, Ohio | Leased | Office & Warehouse Assembly | 1,600 | [Legal Proceedings](index=21&type=section&id=Item%203.%20Legal%20Proceedings) Management is unaware of any pending legal proceedings expected to materially impact operations or financial statements as of December 31, 2023 - The company is not aware of any pending legal proceedings that could have a **material impact** on its operations or financial statements as of December 31, 2023[130](index=130&type=chunk) [Mine Safety Disclosures](index=21&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Not applicable[131](index=131&type=chunk) PART II [Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities](index=22&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Shareholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on NASDAQ under 'PFIE', has not paid dividends, and completed a **$2 million** share repurchase program in 2023 - The company's common stock is traded on the **NASDAQ Capital Market** under the symbol **"PFIE"**[133](index=133&type=chunk) - The company has **not declared or paid any dividends** in the past two years and does not intend to do so in the foreseeable future[134](index=134&type=chunk) - The company completed a **$2,000,000 share repurchase program** by December 31, 2023, having spent the full allotment[136](index=136&type=chunk)[137](index=137&type=chunk) 2023 Share Repurchases | Period | Shares Purchased | Average Price Paid Per Share ($) | | :--- | :--- | :--- | | June | 47,073 | $1.23 | | July | 83,034 | $1.33 | | August | 109,609 | $1.58 | | October | 33,417 | $1.80 | | November | 550,292 | $1.79 | | December | 381,808 | $1.58 | | **Total** | **1,205,233** | | [Selected Financial Data](index=23&type=section&id=Item%206.%20Selected%20Financial%20Data) This item is reserved and contains no information - Item 6 is reserved[139](index=139&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Profire achieved a **27% revenue increase** to **$58.2 million** in 2023, with gross profit up **41%** to **$30.5 million** and a strong **$20.0 million** cash position [Results of Operations](index=23&type=section&id=Results%20of%20Operations) Total revenues increased **27%** to **$58.2 million** in 2023, with gross profit rising **41%** to **$30.5 million** and gross margin improving to **52%** Fiscal Year 2023 vs. 2022 Performance | Metric | 2023 ($) | 2022 ($) | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $58,208,060 | $45,936,643 | $12,271,417 | 27% | | Total Cost of Goods Sold | $27,676,042 | $24,285,253 | $3,390,789 | 14% | | Gross Profit | $30,532,018 | $21,651,390 | $8,880,628 | 41% | | Gross Margin | 52% | 47% | N/A | N/A | - Revenue growth in 2023 occurred despite an **18% decrease in average oil price** and a **4% decrease in North American onshore rig count**[141](index=141&type=chunk) Operating Expenses | Expense Category | 2023 ($) | 2022 ($) | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | General and administrative | $17,184,917 | $14,776,905 | $2,408,012 | 16% | | Research and development | $917,123 | $1,051,858 | ($134,735) | (13)% | [Liquidity and Capital Resources](index=24&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a debt-free liquidity position, with total cash and investments increasing **25%** to **$20.0 million** and operating cash flow reaching **$7.1 million** in 2023 - The company has **no long-term debt** and is committed to maintaining strong liquidity[146](index=146&type=chunk) Cash and Investments Position | Category | Dec 31, 2023 ($) | Dec 31, 2022 ($) | % Change | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $10,767,519 | $7,384,578 | 46% | | Short-term investments | $2,799,539 | $1,154,284 | 143% | | Long-term investments | $6,425,582 | $7,503,419 | (14)% | | **Total** | **$19,992,640** | **$16,042,281** | **25%** | Cash Flow Summary | Activity | 2023 ($) | 2022 ($) | | :--- | :--- | :--- | | Net Cash from Operating Activities | $7,064,050 | $516,077 | | Net Cash from (Used in) Investing Activities | ($1,266,492) | $10,657 | | Net Cash Used in Financing Activities | ($2,454,519) | ($1,375,011) | [Quantitative and Qualitative Disclosures About Market Risk](index=25&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not required for the registrant - This section is not required[154](index=154&type=chunk) [Financial Statements and Supplementary Data](index=26&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for 2023 and 2022, along with the independent auditor's unqualified opinion and detailed notes Key Financial Statement Highlights (2023 vs 2022) | Metric | 2023 ($) | 2022 ($) | | :--- | :--- | :--- | | **Total Revenues** | $58,208,060 | $45,936,643 | | **Gross Profit** | $30,532,018 | $21,651,390 | | **Income from Operations** | $11,854,100 | $5,194,608 | | **Net Income** | $10,776,714 | $3,947,760 | | **Diluted EPS** | $0.22 | $0.08 | | **Total Assets** | $66,293,845 | $53,929,536 | | **Total Stockholders' Equity** | $56,838,226 | $46,584,480 | [Note 9 – Stockholders' Equity](index=40&type=section&id=Note%209%20%E2%80%93%20STOCKHOLDERS'%20EQUITY) This note details equity activities, including share repurchases and executive compensation plans, featuring time-based and performance-based restricted stock units - The company repurchased **1,205,233 shares** in 2023 and **961,221 shares** in 2022 under authorized programs[231](index=231&type=chunk) - The 2023 Executive Incentive Plan (EIP) awards are based on performance goals for total revenue, EBITDA, revenue diversification, and safety, with payouts split **50% cash** and **50% restricted stock**[233](index=233&type=chunk)[236](index=236&type=chunk)[237](index=237&type=chunk) - The 2023 Long-Term Incentive Plan (LTIP) grants restricted stock units (RSUs) vesting over three years, with **33% time-based** and **67% performance-based** on Total Shareholder Return, Relative TSR, and EBITDA margin[238](index=238&type=chunk)[240](index=240&type=chunk) [Note 10 - Revenue](index=43&type=section&id=Note%2010%20-%20REVENUE) This note outlines revenue recognition policies and disaggregates revenue streams, with Electronics, Re-Sell, and Manufactured goods as the largest categories Revenue by Category | Category | 2023 Revenue ($) | 2022 Revenue ($) | | :--- | :--- | :--- | | Electronics | $22,329,182 | $16,439,208 | | Manufactured | $13,188,773 | $9,282,342 | | Re-Sell | $18,766,340 | $16,596,713 | | Service | $3,923,765 | $3,618,380 | | **Total Revenue** | **$58,208,060** | **$45,936,643** | [Note 13 – Basic and Diluted Earnings Per Share](index=51&type=section&id=Note%2013%20%E2%80%93%20BASIC%20AND%20DILUTED%20EARNINGS%20PER%20SHARE) Basic EPS for 2023 was **$0.23** and diluted EPS was **$0.22**, significantly higher than **$0.08** for both in 2022, reflecting increased profitability Earnings Per Share (EPS) Calculation | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Net Income ($) | $10,776,714 | $3,947,760 | | Basic Weighted Average Shares | 47,355,978 | 47,161,101 | | **Basic EPS ($)** | **$0.23** | **$0.08** | | Diluted Weighted Average Shares | 49,127,558 | 48,447,342 | | **Diluted EPS ($)** | **$0.22** | **$0.08** | [Note 14 – Segment Information](index=51&type=section&id=Note%2014%20%E2%80%93%20SEGMENT%20INFORMATION) The company operates in two geographic segments, with the United States accounting for approximately **73% of total revenues** and **82% of total net income** in 2023 2023 Revenue and Net Income by Geographic Segment | Segment | Revenue ($) | Net Income ($) | | :--- | :--- | :--- | | Canada | $15,692,080 | $1,934,718 | | United States | $42,515,980 | $8,841,996 | | **Total** | **$58,208,060** | **$10,776,714** | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=53&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) No changes in or disagreements with accountants on accounting and financial disclosure were reported - None[301](index=301&type=chunk) [Controls and Procedures](index=53&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2023 - Management concluded that the company's disclosure controls and procedures were **effective** as of December 31, 2023[302](index=302&type=chunk) - Management concluded that the company's internal control over financial reporting was **effective** as of December 31, 2023[306](index=306&type=chunk) - The company is **exempt from external audit** on the effectiveness of its internal financial reporting controls as a smaller reporting company[308](index=308&type=chunk) [Other Information](index=54&type=section&id=Item%209B.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the period - No directors or officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the period[311](index=311&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=54&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - This item is not applicable[312](index=312&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=55&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information for this item is incorporated by reference from the company's Definitive Proxy Statement for the Annual Meeting of Stockholders - Information is incorporated by reference to the company's Proxy Statement[314](index=314&type=chunk) [Executive Compensation](index=55&type=section&id=Item%2011.%20Executive%20Compensation) Information for this item is incorporated by reference from the company's Definitive Proxy Statement - Information is incorporated by reference to the company's Proxy Statement[315](index=315&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=55&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information for this item is incorporated by reference from the company's Definitive Proxy Statement - Information is incorporated by reference to the company's Proxy Statement[316](index=316&type=chunk) [Certain Relationships and Related Transactions and Director Independence](index=55&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%20and%20Director%20Independence) Information for this item is incorporated by reference from the company's Definitive Proxy Statement - Information is incorporated by reference to the company's Proxy Statement[317](index=317&type=chunk) [Principal Accounting Fees and Services](index=55&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Sadler, Gibb & Associates, LLC serves as the independent registered public accounting firm, with further details incorporated by reference from the Proxy Statement - The company's independent registered public accounting firm is **Sadler, Gibb & Associates, LLC**, with additional information incorporated by reference to the Proxy Statement[318](index=318&type=chunk)[319](index=319&type=chunk) PART IV [Exhibits, Financial Statement Schedules](index=56&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section provides a comprehensive list of all exhibits filed as part of the Form 10-K report, including corporate documents and agreements - This item provides a comprehensive list of all exhibits filed with the annual report[321](index=321&type=chunk) [Form 10-K Summary](index=58&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company has opted not to include an optional summary of the information required by the Form 10-K - The Company has chosen not to include an optional Form 10-K summary[324](index=324&type=chunk)

Profire Energy, Inc. (NASDAQ:PFIE) Q3 2023 Earnings Conference Call November 9, 2023 8:30 AM ET Company Participants Steven Hooser - Investor Relations Ryan Oviatt - Co-Chief Executive Officer and Chief Financial Officer Cameron Tidball - Co-Chief Executive Officer Conference Call Participants Rob Brown - Lake Street Capital Markets James McIlree - Dawson James Operator Good morning, everyone and thank you for participating in today’s Conference Call to discuss Profire Energy’s Quarterly Operating and Finan ...

Financial Performance - Total revenues for the quarter ended September 30, 2023, increased by 16% or $1,999,598 compared to the same quarter in 2022, driven by strong customer demand and supply chain improvements [89]. - Income from operations for the quarter ended September 30, 2023, was $2,543,603, compared to $2,117,893 for the same quarter in 2022 [93]. - Net income for the quarter ended September 30, 2023, was $2,039,390, compared to $1,210,748 for the same quarter in 2022 [94]. - Total revenues for the nine months ended September 30, 2023, increased by 37.1% to $43,825,975 compared to $31,965,625 in the same period of 2022 [96]. - Net income for the nine months ended September 30, 2023, was $7,486,169, a significant increase of 252.7% from $2,122,738 in the same period of 2022 [98]. Profitability Metrics - Gross profit margin for the third quarter of 2023 was 50.4%, up 2.7% from the same quarter last year but down 0.9% from the previous quarter [91]. - Gross profit percentage rose to 51.9%, an increase of 4.7% from 47.2% in the prior year, driven by product mix changes and inventory adjustments [97]. Operating Expenses - Operating expenses for the quarter ended September 30, 2023, increased by $932,498 from the same quarter last year, primarily due to headcount increases and cost inflation [92]. - Operating expenses increased by 12.1% to $13,651,321, attributed to headcount growth and general cost inflation [98]. Cash Flow and Working Capital - Operating cash generation for the quarter ended September 30, 2023, was $885,573, compared to operating cash outflows of $1,818,322 during the same quarter of 2022 [95]. - Operating cash flow improved to $2,668,232 in 2023, compared to a cash outflow of $1,196,632 in 2022, reflecting changes in net income and working capital [99]. - Working capital as of September 30, 2023, was $34,973,679, up from $25,245,311 at December 31, 2022 [100]. - The company generated $2,668,232 from operating activities, while using $1,029,240 for investing activities and $690,042 for financing activities during the nine months ended September 30, 2023 [101][102]. - As of September 30, 2023, the company held $17,354,606 in cash and investments, representing its core excess liquidity [102]. Industry Insights - The average rig count for North America in the third quarter of 2023 was 817, down from 942 in the same period last year [89]. - The average rig count in North America increased to 870, up from 859 in the same period last year, indicating strong customer demand in the oil and gas sector [96]. Company Strategy and Compliance - The company continues to invest in expansion efforts in diversified industries where its combustion technology can be utilized [82]. - The company’s burner-management systems are designed to comply with safety and industrial codes and standards in North America [81]. - The company’s products play a crucial role in supporting customers' initiatives regarding workplace safety and environmental impacts [83]. - The company has not engaged in any off-balance sheet arrangements and does not plan to do so in the foreseeable future [103].