Profire(PFIE)2023-11-08 21:09Financial 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].