Profire Energy, Inc (NASDAQ:PFIE) Q2 2023 Earnings Conference Call August 10, 2023 8:30 AM ET Company Participants John Beisler - Investor Relations Ryan Oviatt - Co-Chief Executive Officer and Chief Financial Officer Cameron Tidball - Co-Chief Executive Officer Conference Call Participants Jim McIlree - Dawson James 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’ ...

[PART I — FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The unaudited condensed consolidated financial statements cover balance sheets, operations, equity, and cash flows [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (June 30, 2023 vs. December 31, 2022) | Metric | June 30, 2023 | December 31, 2022 | Change | % Change | | :-------------------------- | :------------ | :---------------- | :----- | :------- | | **ASSETS** | | | | | | Total Current Assets | $39,546,100 | $32,033,626 | $7,512,474 | 23.45% | | Total Long-Term Assets | $21,759,537 | $21,895,910 | $(136,373) | -0.62% | | **TOTAL ASSETS** | **$61,305,637** | **$53,929,536** | **$7,376,101** | **13.68%** | | **LIABILITIES** | | | | | | Total Current Liabilities | $7,449,050 | $6,788,315 | $660,735 | 9.73% | | Total Long-Term Liabilities | $786,940 | $556,741 | $230,199 | 41.35% | | **TOTAL LIABILITIES** | **$8,235,990** | **$7,345,056** | **$890,934** | **12.13%** | | **STOCKHOLDERS' EQUITY** | | | | | | Total Stockholders' Equity | $53,069,647 | $46,584,480 | $6,485,167 | 13.92% | [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)%20(Unaudited)) Condensed Consolidated Statements of Operations Highlights | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | % Change (YoY) | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | % Change (YoY) | | :---------------------------------- | :------------------------------- | :------------------------------- | :-------------- | :----------------------------- | :----------------------------- | :-------------- | | Total Revenues | $14,443,577 | $9,633,147 | 50.0% | $28,997,039 | $19,136,287 | 51.5% | | Gross Profit | $7,414,445 | $4,403,145 | 68.4% | $15,247,554 | $8,959,849 | 70.2% | | Income from Operations | $3,223,908 | $94,807 | 3300.0% | $6,529,711 | $783,802 | 733.1% | | Net Income | $2,857,157 | $284,829 | 903.1% | $5,446,778 | $911,990 | 497.2% | | Basic Earnings Per Share | $0.06 | $0.01 | 500.0% | $0.12 | $0.02 | 500.0% | | Fully Diluted Earnings Per Share | $0.06 | $0.01 | 500.0% | $0.11 | $0.02 | 450.0% | [Condensed Consolidated Statements of Stockholders' Equity (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20(Unaudited)) Changes in Stockholders' Equity (Six Months Ended June 30, 2023) | Item | Amount | | :------------------------------------ | :------- | | Balance, December 31, 2022 | $46,584,480 | | Stock based compensation | $583,493 | | Stock issued in settlement of RSUs and accrued bonuses | $378,526 | | Tax withholdings paid related to stock based compensation | $(249,681) | | Foreign currency translation | $272,804 | | Unrealized gains (losses) on investments | $45,871 | | Net income | $5,446,778 | | Treasury stock repurchased | $(57,958) | | Balance, June 30, 2023 | $53,069,647 | [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Condensed Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30) | Activity | 2023 | 2022 | Change | % Change | | :-------------------------------- | :----------- | :----------- | :------- | :------- | | Net Cash Provided by Operating Activities | $1,782,659 | $621,690 | $1,160,969 | 186.7% | | Net Cash Used in Investing Activities | $(703,333) | $(41,908) | $(661,425) | 1578.3% | | Net Cash Used in Financing Activities | $(255,552) | $(1,316,939) | $1,061,387 | -80.6% | | Effect of exchange rate changes on cash | $37,740 | $(32,286) | $70,026 | -217.0% | | **NET CHANGE IN CASH** | **$861,514** | **$(769,443)** | **$1,630,957** | **-211.9%** | | Cash at End of Period | $8,246,092 | $7,418,827 | $827,265 | 11.2% | [Notes to the Condensed Consolidated Financial Statements (Unaudited)](index=8&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) [NOTE 1 - CONDENSED FINANCIAL STATEMENTS](index=8&type=section&id=NOTE%201%20-%20CONDENSED%20FINANCIAL%20STATEMENTS) The unaudited statements conform to US GAAP with condensed disclosures and are not indicative of full-year results - The financial statements are unaudited and include only normal recurring adjustments necessary for fair presentation[20](index=20&type=chunk) - Certain information and footnote disclosures normally included in US GAAP financial statements have been condensed or omitted[21](index=21&type=chunk) - Results for the three- and six-month periods ended June 30, 2023 and 2022, are **not necessarily indicative of full-year operating results**[21](index=21&type=chunk) [NOTE 2 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=8&type=section&id=NOTE%202%20%E2%80%93%20ORGANIZATION%20AND%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) The company provides burner-management products to the oil and gas industry and is expanding into new markets - The Company provides burner-management products, solutions, and services primarily for the oil and gas industry within the US and Canadian markets[22](index=22&type=chunk) - The Company is making progress in expansion efforts outside of these markets into other industries with combustion and burner management requirements, as well as into other international locations[22](index=22&type=chunk) - There have been **no changes to the significant accounting policies** from the Company's most recent Form 10-K[23](index=23&type=chunk) - The adoption of recent accounting pronouncements is **not expected to have a material impact** on the Company's financial position, results of operations, or cash flows[24](index=24&type=chunk) [NOTE 3 – INVENTORIES](index=8&type=section&id=NOTE%203%20%E2%80%93%20INVENTORIES) Total net inventories increased to $13.02 million, primarily driven by a rise in finished goods Inventories, Net | Category | June 30, 2023 | December 31, 2022 | Change | % Change | | :--------------- | :------------ | :---------------- | :----- | :------- | | Raw materials | $219,388 | $166,927 | $52,461 | 31.4% | | Finished goods | $13,148,684 | $10,452,930 | $2,695,754 | 25.8% | | Subtotal | $13,368,072 | $10,619,857 | $2,748,215 | 25.9% | | Reserve for obsolescence | $(351,880) | $(325,877) | $(26,003) | 8.0% | | **Total** | **$13,016,192** | **$10,293,980** | **$2,722,212** | **26.4%** | [NOTE 4 – PREPAID EXPENSES AND OTHER CURRENT ASSETS](index=9&type=section&id=NOTE%204%20%E2%80%93%20PREPAID%20EXPENSES%20AND%20OTHER%20CURRENT%20ASSETS) Prepaid expenses and other current assets increased to $2.40 million, largely due to a rise in prepaid inventory Prepaid Expenses and Other Current Assets | Category | June 30, 2023 | December 31, 2022 | Change | % Change | | :-------------------------- | :------------ | :---------------- | :----- | :------- | | Prepaid inventory | $1,803,652 | $784,420 | $1,019,232 | 129.9% | | Accrued receivables | $127,551 | $881,176 | $(753,625) | -85.5% | | Prepaid insurance | $115,800 | $240,785 | $(124,985) | -51.9% | | Interest receivables | $79,407 | $72,761 | $6,646 | 9.1% | | Tax credits | $33 | $118,035 | $(118,002) | -99.9% | | Other | $273,233 | $217,462 | $55,771 | 25.7% | | **Total** | **$2,399,676** | **$2,314,639** | **$85,037** | **3.7%** | [NOTE 5 – ACCRUED LIABILITIES](index=9&type=section&id=NOTE%205%20%E2%80%93%20ACCRUED%20LIABILITIES) Accrued liabilities increased to $4.37 million, driven by higher inventory-related payables and deferred revenue Accrued Liabilities | Category | June 30, 2023 | December 31, 2022 | Change | % Change | | :-------------------- | :------------ | :---------------- | :----- | :------- | | Employee-related payables | $1,904,768 | $2,404,848 | $(500,080) | -20.8% | | Deferred revenue | $619,612 | $420,827 | $198,785 | 47.2% | | Inventory-related payables | $1,422,623 | $285,109 | $1,137,514 | 399.0% | | Tax-related payables | $136,165 | $54,762 | $81,403 | 148.6% | | Warranty liabilities | $100,156 | $74,103 | $26,053 | 35.2% | | Other | $191,304 | $334,345 | $(143,044) | -42.8% | | **Total** | **$4,374,628** | **$3,573,994** | **$800,634** | **22.4%** | [NOTE 6 – LEASES](index=9&type=section&id=NOTE%206%20%E2%80%93%20LEASES) The company details its financing and operating lease arrangements for office equipment and warehouse space - Financing leases for office equipment have typical terms of 36 to 60 months, with a **weighted average discount rate of 4.50%** and a **weighted average remaining lease term of 3.0 years**[29](index=29&type=chunk) - The Company leases one warehouse space as an operating lease and considers other office space leases short-term, electing not to recognize them on the balance sheet[32](index=32&type=chunk) - Operating lease expense recognized for the six months ended June 30, 2023, was **$37,204** (compared to $36,914 in 2022)[32](index=32&type=chunk) Financing Lease Cost (Six Months Ended June 30) | Component | 2023 | 2022 | | :-------------------------- | :------- | :------- | | Amortization of right-of-use assets | $14,478 | $21,068 | | Interest on lease liabilities | $1,787 | $1,252 | | **Total financing lease cost** | **$16,265** | **$22,320** | [NOTE 7 – STOCKHOLDERS' EQUITY](index=10&type=section&id=NOTE%207%20%E2%80%93%20STOCKHOLDERS'%20EQUITY) This note details treasury stock, a new share repurchase program, and various equity incentive plans - As of June 30, 2023, the Company held **5,085,203 shares of common stock in treasury** at a total cost of $7,394,281[34](index=34&type=chunk) - A share repurchase program was authorized on May 9, 2023, allowing the Company to repurchase up to **$2,000,000 worth of common stock** through April 30, 2024[35](index=35&type=chunk) - Outstanding equity awards as of June 30, 2023, include **785,995 restricted stock units (RSUs)**, **1,057,044 performance-based RSUs**, and **673,450 stock options**, with $986,064 in remaining compensation expense[36](index=36&type=chunk) - The 2023 Executive Incentive Plan (EIP) for executive officers is based on total revenue, EBITDA, revenue source diversification, and safety/environmental performance, with earned compensation paid **50% in cash and 50% in restricted stock**[41](index=41&type=chunk)[42](index=42&type=chunk) - The 2023 Long-Term Incentive Plan (LTIP) includes time-based and performance-vesting RSUs for executives, with performance metrics such as **Total Shareholder Return and EBITDA as a Percentage of Total Revenue** over a three-year period (January 1, 2023, to December 31, 2025)[43](index=43&type=chunk)[45](index=45&type=chunk)[47](index=47&type=chunk) [NOTE 8 – REVENUE](index=14&type=section&id=NOTE%208%20%E2%80%93%20REVENUE) Revenue is recognized upon product delivery or when service invoicing rights arise, with significant growth shown across all categories - Product revenue is recognized when the product is delivered to the customer or shipped on a customer's account, transferring control to the customer[61](index=61&type=chunk) - Service revenue is recognized when the Company has the right to invoice the customer for the work completed[61](index=61&type=chunk) Disaggregation of Revenue by Category | Category | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | % Change (YoY) | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | % Change (YoY) | | :----------- | :------------------------------- | :------------------------------- | :-------------- | :----------------------------- | :----------------------------- | :-------------- | | Electronics | $5,530,863 | $3,596,755 | 53.8% | $11,616,476 | $7,131,762 | 62.8% | | Manufactured | $3,272,774 | $1,765,916 | 85.3% | $6,397,599 | $3,673,455 | 74.2% | | Re-Sell | $4,799,247 | $3,498,011 | 37.2% | $9,217,321 | $6,933,888 | 33.0% | | Service | $840,693 | $772,465 | 8.8% | $1,765,643 | $1,397,182 | 26.4% | | **Total Revenue** | **$14,443,577** | **$9,633,147** | **50.0%** | **$28,997,039** | **$19,136,287** | **51.5%** | [NOTE 9 – BASIC AND DILUTED EARNINGS (LOSS) PER SHARE](index=16&type=section&id=NOTE%209%20%E2%80%93%20BASIC%20AND%20DILUTED%20EARNINGS%20(LOSS)%20PER%20SHARE) This note reconciles the calculation of basic and diluted earnings per share, showing significant year-over-year increases Earnings Per Share (EPS) Summary | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic EPS | $0.06 | $0.01 | $0.12 | $0.02 | | Fully Diluted EPS | $0.06 | $0.01 | $0.11 | $0.02 | | Basic Weighted Average Shares Outstanding | 47,393,768 | 47,092,275 | 47,284,749 | 47,285,782 | | Fully Diluted Weighted Average Shares Outstanding | 49,473,080 | 48,699,208 | 49,349,488 | 48,865,186 | [NOTE 10 – SEGMENT INFORMATION](index=17&type=section&id=NOTE%2010%20%E2%80%93%20SEGMENT%20INFORMATION) Financial data by geographic segment shows strong sales growth in both the US and Canada, driving consolidated profit higher Sales by Geographic Segment (Six Months Ended June 30) | Segment | 2023 | 2022 | % Change | | :------------ | :----------- | :----------- | :------- | | Canada | $4,186,352 | $3,883,583 | 7.8% | | United States | $24,810,687 | $15,252,704 | 62.6% | | **Total Consolidated** | **$28,997,039** | **$19,136,287** | **51.5%** | Profit (Loss) by Geographic Segment (Six Months Ended June 30) | Segment | 2023 | 2022 | | :------------ | :----------- | :----------- | | Canada | $(956,458) | $(954,005) | | United States | $6,403,236 | $1,865,995 | | **Total Consolidated** | **$5,446,778** | **$911,990** | Long-Lived Assets by Geographic Segment | Segment | June 30, 2023 | December 31, 2022 | | :------------ | :------------ | :---------------- | | Canada | $5,130,003 | $5,067,965 | | United States | $5,654,642 | $5,476,238 | | **Total Consolidated** | **$10,784,645** | **$10,544,203** | [NOTE 11 – SUBSEQUENT EVENTS](index=17&type=section&id=NOTE%2011%20%E2%80%93%20SUBSEQUENT%20EVENTS) Management reviewed all material events through the report's issuance date and found none requiring disclosure - Company management reviewed all material events through the date this report was issued[72](index=72&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition And Results of Operations](index=18&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20And%20Results%20of%20Operations) Management discusses financial performance, highlighting significant growth driven by demand and improved supply chains [Overview](index=18&type=section&id=Overview) - Profire Energy, Inc is a technology company providing solutions to enhance the efficiency, safety, and reliability of industrial combustion appliances, primarily in the oil and gas industry[79](index=79&type=chunk) - The Company's legacy business focuses on upstream, midstream, and downstream transmission segments of the oil and gas industry in the US and Canadian markets[79](index=79&type=chunk) - Profire is **actively expanding into other industries** with combustion and burner management requirements and into other international locations[79](index=79&type=chunk)[84](index=84&type=chunk) [Principal Products and Services](index=19&type=section&id=Principal%20Products%20and%20Services) - The Company's burner-management systems ignite, monitor, and manage pilot and burner systems used in various oil and gas applications requiring heat generation[80](index=80&type=chunk) - Profire's technology enables remote operation, reducing the need for manual interaction, **improving safety, and helping reduce emissions** by safely reigniting failed flames[80](index=80&type=chunk)[81](index=81&type=chunk) - Burner-management systems help oil and gas companies achieve increased safety, greater operational efficiencies, and improved compliance with industry regulations[81](index=81&type=chunk)[82](index=82&type=chunk) - Profire burner-management systems are designed to comply with North American safety and industrial codes and standards, including **CSA, UL, and SIL**[83](index=83&type=chunk) [Environmental, Social and Governance Focus](index=19&type=section&id=Environmental,%20Social%20and%20Governance%20Focus) - Profire's products and solutions are developed with a core focus on safety, environmental impacts, reliability, and efficiency, aiming to protect human life, the environment, and customer investments[85](index=85&type=chunk) - Profire technology and solutions are integrated into applications to **significantly reduce the release of methane and volatile organic compounds** into the environment[87](index=87&type=chunk) - Remote monitoring capabilities of Profire's controls reduce the need for field personnel travel, improving safety, reducing emissions, and decreasing operating costs[88](index=88&type=chunk) - Operator safety is central to the burner-management solution technology, ensuring proper fuel gas shut-off and increasing physical distance between humans and combustion processes[89](index=89&type=chunk) [Results of Operations](index=20&type=section&id=Results%20of%20Operations) - Revenues for Q2 2023 **increased by 50%** ($4,810,429) compared to Q2 2022, driven by strong customer demand, increased sales prices, and supply chain improvements[91](index=91&type=chunk) - Gross profit margin for Q2 2023 was **up 5.6 percentage points** from Q2 2022, but down 2.5 percentage points from Q1 2023, influenced by product, service, and customer mix[93](index=93&type=chunk) - Operating expenses for Q2 2023 **decreased YoY and QoQ** primarily due to an employee retention payroll tax credit, offsetting increases in headcount and cost inflation[94](index=94&type=chunk) Quarter-over-Quarter Financial Performance | Metric | June 30, 2023 | March 31, 2023 | December 31, 2022 | September 30, 2022 | June 30, 2022 | | :---------------------- | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Total Revenues | $14,443,577 | $14,553,461 | $13,971,018 | $12,829,338 | $9,633,148 | | Gross Profit Percentage | 51.3% | 53.8% | 47.0% | 47.7% | 45.7% | | Operating Expenses | $4,190,537 | $4,527,308 | $4,279,751 | $4,000,983 | $4,308,337 | | Income from Operations | $3,223,908 | $3,305,800 | $2,292,914 | $2,117,893 | $94,806 | | Net Income | $2,857,157 | $2,589,621 | $1,825,022 | $1,210,748 | $284,829 | | Operating Cash Flow | $1,260,879 | $521,780 | $1,712,709 | $(1,818,322) | $1,814,039 | Six Months Ended June 30, 2023 vs. 2022 Financial Performance | Metric | 2023 | 2022 | $ Change | % Change | | :---------------------- | :----------- | :----------- | :------- | :------- | | Total Revenues | $28,997,039 | $19,136,287 | $9,860,752 | 51.5% | | Gross Profit Percentage | 52.6% | 46.8% | | 5.8% | | Operating Expenses | $8,717,843 | $8,176,047 | $541,796 | 6.6% | | Income from Operations | $6,529,711 | $783,802 | $5,745,909 | 733.1% | | Net Income | $5,446,778 | $911,990 | $4,534,788 | 497.2% | | Operating Cash Flow | $1,782,659 | $621,690 | $1,160,969 | 186.7% | [Liquidity and Capital Resources](index=21&type=section&id=Liquidity%20and%20Capital%20Resources) - Working capital **increased to $32,097,050** at June 30, 2023, from $25,245,311 at December 31, 2022[99](index=99&type=chunk) - The Company generated **$1,782,659 of cash from operating activities** during the six months ended June 30, 2023, primarily due to increased net income[100](index=100&type=chunk) - Net cash used in investing activities was **$703,333**, primarily for purchases of investments, property, and equipment[100](index=100&type=chunk) - Net cash used in financing activities was **$255,552**, mainly related to taxes paid on employee stock awards[100](index=100&type=chunk) - As of June 30, 2023, the Company held **$17,355,141 in cash and investments**, representing its core excess liquidity[100](index=100&type=chunk) [Off-Balance Sheet Arrangements](index=21&type=section&id=Off-Balance%20Sheet%20Arrangements) - The Company has **not engaged in any off-balance sheet arrangements** and does not plan to in the foreseeable future[102](index=102&type=chunk) [Item 3. Quantitative and Qualitative Disclosure about Market Risk](index=22&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20about%20Market%20Risk) This section is not required for the company - This section is **not required** for the Company[103](index=103&type=chunk) [Item 4. Controls and Procedures](index=22&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal controls over financial reporting were effective [Evaluation of Disclosure Controls and Procedures](index=22&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - Management, including the Principal Executive Officers and Principal Financial Officer, concluded that the disclosure controls and procedures were **effective as of June 30, 2023**[104](index=104&type=chunk) [Changes in Internal Control over Financial Reporting](index=22&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - Management concluded that **no material change** in internal control over financial reporting occurred during the quarter ended June 30, 2023[105](index=105&type=chunk) [PART II — OTHER INFORMATION](index=23&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=23&type=section&id=Item%201.%20Legal%20Proceedings) There are no known pending or threatened legal proceedings that would materially impact the company - To the best of management's knowledge, there are **no legal proceedings pending or threatened** against the Company that may have a material impact[106](index=106&type=chunk) - There are no actions pending or threatened against any of the Company's directors or officers that are adverse to the Company[106](index=106&type=chunk) [Item 1A. Risk Factors](index=23&type=section&id=Item%201A.%20Risk%20Factors) Readers are directed to the Form 10-K for detailed risk factors, noting that unknown risks may also exist - Readers should carefully consider the risks discussed in the Company's annual report on **Form 10-K for the year ended December 31, 2022**[107](index=107&type=chunk) - Additional risks and uncertainties not currently known or deemed immaterial may also have a material, adverse effect on the business[107](index=107&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=23&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 47,073 shares in June, with $1.94 million remaining under the authorized plan Share Repurchases (Three Months Ended June 30, 2023) | Period | Total Number of Shares Purchased | Weighted Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans | Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans | | :----- | :------------------------------- | :------------------------------------ | :---------------------------------------------------------------- | :-------------------------------------------------------------------- | | April | — | — | — | — | | May | — | — | — | $2,000,000 | | June | 47,073 | $1.23 | 47,073 | $1,942,051 | | **Total** | **47,073** | | **47,073** | | [Item 3. Defaults Upon Senior Securities](index=23&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the company - This item is **not applicable** to the Company[109](index=109&type=chunk) [Item 4. Mine Safety Disclosures](index=23&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is **not applicable** to the Company[110](index=110&type=chunk) [Item 5. Other Information](index=23&type=section&id=Item%205.%20Other%20Information) This item is not applicable to the company - This item is **not applicable** to the Company[111](index=111&type=chunk) [Item 6. Exhibits](index=24&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the report, including incentive plans and officer certifications - The exhibits include the Profire Energy, Inc **2023 Equity Incentive Plan** (Exhibit 10.1)[113](index=113&type=chunk) - Certifications of Co-Principal Executive Officers and Principal Financial Officer are included (Exhibits 31.1, 31.2, 31.3, 32.1, 32.2)[113](index=113&type=chunk) - XBRL Instance Document and Taxonomy Extension documents are provided[113](index=113&type=chunk) [Signatures](index=24&type=section&id=Signatures) The report was officially signed on August 9, 2023, by the company's Co-Chief Executive Officers - The report was signed on **August 9, 2023**[117](index=117&type=chunk) - Signatories include Ryan W Oviatt (Co-Chief Executive Officer and Chief Financial Officer) and Cameron M Tidball (Co-Chief Executive Officer)[117](index=117&type=chunk)

Profire Energy, Inc (NASDAQ:PFIE) Q1 2023 Earnings Conference Call May 10, 2023 8:30 AM ET Company Participants John Beisler - 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 Jim McIlree - Dawson James John Bair - Ascend Wealth Advisors Operator Good morning, everyone, and thank you for participating in today’s conference call to discuss Profire Energy’s quarterly ...

Financial Performance - Total revenues for the quarter ended March 31, 2023, increased by 53% or $5,050,321 compared to the same quarter in 2022, driven by strong customer demand and higher sales prices [85]. - Gross profit margin for Q1 2023 was 53.8%, up 5.9% from Q1 2022 and up 6.8% from Q4 2022, influenced by price increases and higher margin products sold [87]. - Income from operations for Q1 2023 was $3,305,800, significantly higher than $688,995 in Q1 2022 and $2,292,914 in Q4 2022 [89]. - Net income for Q1 2023 was $2,589,621, compared to $627,160 in Q1 2022 and $1,825,022 in Q4 2022 [90]. - Operating cash flows for Q1 2023 increased by $521,780 compared to a decrease of $1,192,349 in Q1 2022, primarily due to increased net income [91]. Expenses and Costs - Operating expenses for Q1 2023 increased by $659,599 compared to Q1 2022, primarily due to headcount increases and cost inflation [88]. Working Capital and Investments - Working capital at March 31, 2023, was $29,067,153, up from $25,245,311 at December 31, 2022 [92]. - The company continues to invest in expanding its market presence in diversified industries beyond oil and gas [78]. Market Activity - The average rig count for North America in Q1 2023 was 977, a 20% increase from 816 in the same period last year [85]. Off-Balance Sheet Arrangements - The company has not engaged in any off-balance sheet arrangements and does not plan to in the foreseeable future [94].

7 UP STREAM MID STREAM DOWN STREAM OFFSHORE DRILLING 0 0 9 HISTORICALLY HIGH WTI AND GOOD NATURAL GAS PRICES, RIG COUNT HAS PLATEAUED JUST UNDER PRE-PANDEMIC 14 Combustion based product line | --- | --- | --- | |-------------------------------------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | NASDAQ : PFIE INVESTOR PRESENTATION | | | | MARCH 2023 | | | IMPORTANT CAUTIONS REGARDING FORWARD-LOOKING STATEMENTS COMBUSTION REQUIREMENT SPAN MANY INDUSTRIES WHERE PROF ...

Financial Data and Key Metrics Changes - In Q4 2022, the company recognized approximately $14 million in revenue, representing a 9% increase over Q3 and a 69% increase year-over-year [35] - Gross profit increased to $21.7 million compared to $11.4 million in the prior year, with gross margin rising to 47.1% from 43.3% [70] - Net income for Q4 was approximately $1.8 million or $0.04 per diluted share, compared to $1.2 million or $0.02 per diluted share in Q3 2022, and a net loss of $145,000 in Q4 2021 [69] - Cash flow from operations for the full year was $516,000, with total cash and investments at $16 million, down from $17.5 million at the end of 2021 [38] Business Line Data and Key Metrics Changes - The diversification strategy accounted for 6% of revenue in 2022, up from less than 1% in the previous year, indicating significant growth in non-oil and gas markets [34] - The company achieved over 400% growth in year-over-year revenue in the non-oil and gas segment, with nearly 100% growth in critical energy infrastructure [57][78] Market Data and Key Metrics Changes - The North American market showed pent-up demand due to deferred maintenance and upgrades across the oil and gas industry, providing ongoing support for core business [34] - The company noted that the oil and gas industry remains stable, with E&P companies likely to continue investing in new technology and wells [47] Company Strategy and Development Direction - The company has invested in sales, service, and operations teams, and has been aggressive in procuring inventory to support growth [33] - The focus on diversification into non-oil and gas markets is expected to continue, with significant opportunities identified in renewable energy and critical energy infrastructure [56][80] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued global energy demand and the potential for increased investment in natural gas and LNG [59] - The company is committed to addressing supply chain challenges and is actively working with suppliers to secure necessary components [39][107] Other Important Information - The company reported a significant increase in operating expenses, with total operating expenses for the year at approximately $16.5 million compared to $13.4 million in 2021, primarily due to inflation and restaffing [49] - The company had no borrowings or other debt on the balance sheet at year-end [38] Q&A Session Summary Question: What trends are being seen in end-user demand due to the drop in natural gas prices? - Management noted that while natural gas prices have decreased, the focus remains on long-term demand driven by global energy needs and the ongoing conflict in Europe [112] Question: How is the company addressing supply chain challenges? - Management indicated that while supply chain issues persist, particularly with components sourced from China, they have been able to improve system deliveries in the second half of the year [107] Question: What is the visibility on growth into 2023? - Management expressed confidence in continued growth, particularly in diversification markets, although they do not expect the same level of growth as seen in 2022 [86][90]

U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended __December 31, 2022___ OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period Commission File Number 001-36378 PROFIRE ENERGY, INC. (Name of registrant as specified in its charter) Nevada 20-0019425 (State or other jurisdiction of incorporation or organization) ...

Profire Energy, Inc. (NASDAQ:PFIE) Q3 2022 Earnings Conference Call November 3, 2022 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 John White – ROTH Capital Jim McIlree – Dawson James Securities John Bair – Ascend Wealth Advisors Operator Good morning, everyone, and thank you for participating in today's co ...

| --- | --- | |-------------------------------------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | NASDAQ : PFIE INVESTOR PRESENTATION | | | NOVEMBER 2022 | | IMPORTANT CAUTIONS REGARDING FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. All statements other than historical facts are forward-looking statements, including without limitation, those regarding activities, events, financial resu ...

| --- | --- | |-----------------------|-------| | | | | | | | | | | | | | | | | | | | | | | INVESTOR PRESENTATION | | | NASDAQ : PFIE | | | AUGUST 2022 | | IMPORTANT CAUTIONS REGARDING FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. All statements other than historical facts are forward-looking statements, including without limitation, those regarding activities, events, financial results or developments th ...