Profire(US:PFIE)2022-05-07 04:27Financial Data and Key Metrics Changes - Revenue for Q1 2022 was $9.5 million, representing a 15% increase from Q4 2021 and an 87% increase year-over-year [13] - Gross profit increased to $4.6 million, with a gross margin of 47.9%, up from 41.6% in Q4 2021 [14] - Net income for Q1 was approximately $627,000, or $0.01 per diluted share, compared to a net loss of $145,000 in Q4 2021 [16] - Cash flow from operations was negative $1.2 million, down from positive $1.8 million in the prior year quarter [17] Business Line Data and Key Metrics Changes - The traditional upstream and midstream business streams benefited from a 16% increase in the average onshore rig count in the U.S. and Canada [22] - The average WTI price per barrel in Q1 was $95.81, a 23% increase from the previous quarter [23] - The company expects to double last year's revenue related to the growth segment in fiscal year 2022, tracking with a run rate approaching $1.5 million [27] Market Data and Key Metrics Changes - Oil demand increased significantly due to the removal of COVID-related restrictions and geopolitical factors, leading to oil and natural gas prices reaching 14-year highs [10] - The U.S. drilled but uncompleted well count decreased to 4,273 at the end of the quarter, representing a 52% drop from its peak in June 2020 [23] Company Strategy and Development Direction - The company is focused on returning to profitability while investing in future growth and scaling operations as market demand improves [21] - Profire is diversifying into alternative industries, generating revenue from projects in biogas, power generation, mining, and landfills [27] - The company is developing a solution for real-time carbon emissions data collection, with early product trials showing promising results [32][33] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing strong order activity and the essential nature of North American oil and gas production [66] - Challenges remain due to supply chain issues and underinvestment in the industry, but the company is adapting well [68] - Management anticipates ongoing challenges throughout the fiscal year but believes they are well-positioned to navigate these issues [31] Other Important Information - The company repurchased 510,000 shares for approximately $622,000 during the quarter, with $632,000 remaining for additional repurchases [18] - Inventory at the end of Q1 was approximately $7.7 million, up from $7.2 million at the end of 2021 [19] Q&A Session Summary Question: Can you elaborate on the carbon emissions initiative? - Management confirmed that they have installed a minimum viable product with four partners and are gathering feedback to improve the solution [45][46] Question: What is driving the growth in the 3,100 projects? - The growth is attributed to building a stable customer base and brand awareness, with half of the business being repeat customers [56][58] Question: How do you see the demand environment with high oil prices? - Management is optimistic about continued demand, despite supply chain challenges, and believes that North American oil and gas production is essential [66][68] Question: Can you comment on the pace of revenue for the next year? - Management acknowledged challenges in the supply chain but believes they are well-prepared for future growth [75][80] Question: What is the status of the DUC inventories? - Management estimates that around 50% of drilled but uncompleted wells may never be completed, indicating a need for increased investment in the industry [85][90] Question: How are operating expenses expected to change? - Management does not anticipate significant changes in operating expenses but acknowledges ongoing inflationary pressures [92][93]