Profire(PFIE) - 2023 Q4 - Annual Results

Financial Performance Overview 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 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] - The increase in gross margin to 52.5% was attributed to better fixed cost leverage resulting from the higher revenue base[7] - Operating expenses decreased as a percentage of revenue to 32% from 36% in the prior year, reflecting effective cost management despite inflationary pressures[8] - The company repurchased 1.2 million shares for $2 million during the fiscal year[6] - 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 $828,000[9][10] Fourth Quarter 2023 Performance The fourth quarter of 2023 saw robust year-over-year growth in gross profit and net income, driven by significant gross margin expansion Q4 2023 vs. Q4 2022 Financials | Metric | Q4 2023 ($) | 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] - Q4 net income included a one-time benefit of $828,000, or $0.02 per diluted share, from a deferred tax adjustment[15] Management Commentary and Outlook Management highlighted 2023 as a record year, driven by strong demand and successful diversification, expressing confidence in continued growth and market expansion for 2024 - Co-CEO Ryan Oviatt emphasized the record revenue, net income, and EBITDA, and highlighted the company's solid balance sheet which allows for business investment, share repurchases, and other strategic opportunities[4] - Co-CEO Cameron Tidball noted that the company's diversification strategy now represents more than 13% of total revenue, a significant increase from less than 1% in 2021[16] - The company expects to attract new users for its applications beyond the oil and gas markets in 2024[17] Consolidated Financial Statements The company's consolidated financial statements for 2023 reflect significant revenue and net income growth, a strengthened balance sheet with increased assets and equity, and robust cash generation from operations Consolidated Statements of Operations The consolidated statements of operations for 2023 show substantial year-over-year growth in total revenues, gross profit, and net income, reflecting strong operational performance Consolidated Statement of Operations (Year Ended Dec 31) | Account | 2023 ($) | 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 | $0.08 | Consolidated Balance Sheets As of December 31, 2023, the consolidated balance sheet reflects a strengthened financial position with increased total assets and stockholders' equity, while maintaining a debt-free status Consolidated Balance Sheet Highlights (As of Dec 31) | Account | 2023 ($) | 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 | $46,584,480 | Consolidated Statements of Cash Flows The consolidated statements of cash flows for 2023 show significant cash generation from operating activities, supporting investments and share repurchases, resulting in a net increase in cash Consolidated Statement of Cash Flows (Year Ended Dec 31) | Activity | 2023 ($) | 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 | $7,384,578 | Supplementary Information Supplementary information includes reconciliation of non-GAAP EBITDA, details on Profire Energy's business focus and market expansion, and logistical information for the financial results conference call Non-GAAP Financial Measures (EBITDA Reconciliation) This section provides a reconciliation of the non-GAAP measure EBITDA to net income for both the fourth quarter and the trailing twelve months ended December 31, 2023 EBITDA Reconciliation (12/31/2023) | Metric | 3 Months ($) | 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] About Profire Energy 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] - Profire is expanding its addressable market by installing its burner-management solutions in other industries beyond oil and gas[19] Conference Call Information 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] - A replay of the call will be available until March 28, 2024[18]