Profire(US:PFIE)2024-03-14 22:42Financial Data and Key Metrics Changes - The company achieved its best year in history with revenue of $58.2 million, a 27% increase from the previous year [12][19] - Net income for the fourth quarter was approximately $3.3 million or $0.06 per diluted share, while net income for the full year was approximately $10.8 million or $0.22 per diluted share, compared to $3.9 million or $0.08 per diluted share last year [7][17] - Gross profit increased to $30.5 million with a gross margin of 52.5%, up from 47.1% in the prior year [15] - Total operating expenses for the year were approximately $18.7 million, an increase from $16.5 million in 2022, but the growth rate of expenses was lower than revenue growth [44] Business Line Data and Key Metrics Changes - The upstream oil and gas segment represented nearly 83% of total revenue, down from 90% in 2022, but still achieved nearly 17% growth year-over-year [22] - Revenue from critical energy infrastructure and non-oil and gas markets accounted for over 17% of total revenue, up from 10% in 2022, with a 300% increase year-over-year [30][40] - The company reported $5.6 million in revenue from critical energy infrastructure, compared to $1.4 million in 2022 [56] Market Data and Key Metrics Changes - The combined onshore rig count for the U.S. and Canada averaged 848 rigs in 2023, a 4% decrease from the prior year [6] - The average WTI price per barrel in 2023 was $78, representing an 18% decrease from the previous year [6] - North American oil and gas production reached record highs in 2023 despite a 26% drop in overall rig counts [53] Company Strategy and Development Direction - The company plans to continue its diversification efforts into critical energy infrastructure and non-oil and gas markets, which are expected to grow significantly [30][61] - Investment in research and product development remains critical, with a balanced approach to short-, mid-, and long-term product development [61] - The company is actively pursuing M&A opportunities to add scale and enter new markets [87] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued growth in 2024, driven by a strong project pipeline and backlog [60][113] - The company is monitoring geopolitical factors that could impact the industry, including situations in Eastern Europe and the Middle East [23] - Management noted that while oil prices may not replicate record profits from previous years, the industry remains resilient [91] Other Important Information - The company repurchased $2 million worth of stock as part of its share repurchase program [18] - Cash flow from operations for the full year was $7.1 million, with cash and other investments totaling $20 million at year-end [46] Q&A Session Summary Question: Can you provide insight into the project backlog and pipeline for 2024? - Management indicated that the project backlog is higher than last year, with a strong growth outlook for 2024 [64] Question: What is the reason for the increase in inventory? - The increase in inventory is attributed to long lead time orders and the transition between the 2100 and 2200 systems [74][95] Question: Is there any improvement in international activity? - Management noted an uptick in international inquiries, but emphasized that the focus remains on North America for the foreseeable future [80][101]