Profire(US:PFIE)2023-03-09 18:18Financial 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]