Profire Energy (PFIE) 9 Mar 232022 Q4 Earnings call transcript

Good morning, everyone, and thank you for participating in today's conference call to discuss Profire Energy's Fourth Quarter and Full Year 2022 Operating and Financial Performance for the Period Ended December 31, 2022.

As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there'll be an opportunity to ask questions. [Operator Instructions]

I will now turn the call over to Steven Hooser, Investor Relations at Three Part Advisors to get the call started.

thank for and today's operator, you, you joining everyone call. Thank is on and CFO the me Co-CEO Co-CEO, call Tidball. Oviatt; With Ryan today and Energy, of Cameron Profire

XX-K closed, and quarter year's highlights release. filed the discuss press full the a after SEC and market its Yesterday, Form with in the the company

company's documents posted of transcript this will be of As on Investor The always, those both Relations website. the the coming days. in available are section of the call

success, a I this including, call, new This future read would the development research beneficial not base make today's diversification the investments moment begin regarding take availability statement. during to our forward-looking market, but company's customer to to made XXXX historical increase we planned statements products, to, call and the harbor the in safe the and statements, in Before of limited call company's contains statements. the natural gas expected like of company's the are not financial or in in Statements performance. the forward-looking expenses, that growth, and growth resources operating company's revenue beyond,

such All are uncertainties to changes circumstances. statements subject in and forward-looking

statements. performance Forward-looking to the that of guarantees are results involve results described or future or uncertainties by events statements assumptions forward-looking risks, differ anticipated and could or the events not actual from cause and results materially or in

and regulatory the identified Commission. affect could with materially Exchange factors such forward-looking public statements risk that market economic, the Factors reports and certain company's include in Securities filed periodic business,

undue to events on no only Litigation these Reform statements. forward-looking XXXX. statements the date of harbor place forward-looking update circumstances, as reflect pursuant forward-looking Private All not statements Readers company except as and Securities provisions of the All to obligation are this the safe of required of law. by made forward-looking are release reliance subsequent made to should Act the or assumes statements

be via link will well company's this through XX, call available press evening. accessible as everyone yesterday's XXXX, website March and in is this I starting being www.profireenergy.com. the recorded to that provided remind the at be later for would as like release replay will It

Following and open your Oviatt to Mr. will made the Tidball, call the up questions. remarks by we

like Energy, to CFO Ryan to Oviatt. Now over Co-CEO I and the of turn call Mr. would Profire Ryan?

Steven, to followed you, start financial are on will the of to and us results, the Cam industry provide welcome some our outlook, the by strategy. Thank I call providing direction turn of review discuss updates all diversification by joining a over to our the will I strategic our and you call business, on an call and on today. update who then and

global have through business years, strategic Over recovered. the the ourselves the initiatives implemented for two economy position growth past to number as pandemic we of sustain to and a our

of teams. and We and half for burner in in have for operations oil aggressive recovery our markets. gradual at the time. to in with the that resulted diversification legacy and our continued highest our efforts progress from first management legacy invested inventory pursued avenues third year. prior revenue service of procuring third show We've been In results use the our sales, of our Profire for quarterly and the business XXXX, ever quarter, our outside traction In gas solutions have the

inflation, strained previous and EBITDA company reported historically of quarter. second high the rising This we costs labor supply history. momentum chain, also we the improved net and night the end revenue over continued through Despite the last income in highest reported XXXX and quarter

business. tailwind for multiple our demand deferred pent-up American an North across upgrades and created years gas maintenance industry, provides The of the and core by oil ongoing

across revenue to continue to acceptance markets. previous non-oil should year, of than accounted in strategy, in less which gain the for diversification further XXXX compared Our and also X% gas X%

business, to believe invest legacy least wells, continue Profire. and in core new gas our advancements. technology, This new maintain costs E&P completions continue likely oil new Looking to and for remains be should at the to and outlook and positive companies at technology operating industry current will strong we levels through control production

of increases increase over historically energy gas, ongoing to and increase quarter. primarily that, year-over-year strong quarter, With me financial increased recognized prior for global In Profire’s XX% diversification million a to XXXX. across growth full $XX and which approximately quarter are let represents QX revenue, and sequential and high results fourth year prices the consumption turn a The my remarks year fourth the the we in oil due X% our over efforts. the and

$X.X $X.X mix. ago to quarter. fluctuations profit XX.X% the slightly year million to quarter Gross Gross $X.X the quarter, third the XXXX XX% increased million due customer million decreased from to in revenues normal in of and in as of margin prior in to product and compared

products reserves. the XXX inventory and the of Gross $X in increased implemented expenses quarter $X.X and and quarter margin to our prior quarter, costs third basis thanks the Total were increases million XXXX. freight points for year fourth to in fourth million the for quarter $X.X improvement price compared approximately from million operating in

$X.X with and XXXX, the income per increases increases in compensation. well increased based diluted reflect diluted net Net the customer fourth loss or $X.XX of $X.X net $XXX,XXX our year-over-year as impact the sequential last per break-even of This year. share for as quarter increases approximately $X.XX variable of in fourth compares share of was share. on in The to million costs or performance and the deliveries quarter of quarter million inflation a third in per cost or business income associated and

compared the prior a operations the million quarter. year was approximately fourth quarter negative $X.X Cash to $XXX,XXX flow in in from

$XX.X in for recognized year gas earlier in increase related the recovery million to the to This factors compares and For The due ongoing and demand COVID XXXX, million full $XX.X primarily is we to revenue. the oil XX% production XXXX. from pandemic. stated

from gross to prior both the on to price, year-over-year in of year. compared revenue million primarily coverage XX.X% increased $XX.X the million the XX.X% prior of variable as of inflationary fixed costs. in help margin margin pressures Gross resulting due This $XX.X increase from to the increase increased and which profit is year. sales Gross in revenues to better costs in to offset

operating compared in $XX.X service recovery of to were $XX.X expenses approximately is restaffing Total as the our the The million as in expense business increases related overall resulting from million for variable to G&A product from resulting increase XXXX. inflation. revenue. in higher year higher The costs primarily positions and well correlated to cost

depreciation XX% compared prior increased our was year last Nevertheless, $XXX,XXX other was year. the overall income to amortization costs operating revenue during rate year. compared XX% for and for Total decreased the and year. of than rate the lower growth $XXX,XXX R&D increase the to expense

to improved to attributable and losses as a share million $X.XX by of sales gains well The million million fixed asset compares income year-over-year, or increase loss for the $X.X increased $X diluted interest as the Net or or per $X.XX net investments. is associated approximately liquid year to income primarily last per on This $X.X share. year.

$XXX,XXX, year-end. in for expenditures. The $X.X the $XXX,XXX million or totaled on Cash operations $XX million year-over-year flow result debt no investments borrowings approximately decrease had the $XX.X a sheet We repurchases of spent the was other Profire capital was of from at at to full in and other XXXX. share on balance our cash and compared cash and end million the year

of was in the some to the compared the demand million, Our replenishing XXXX. at taken customer while us The to levels. end inventory $X.X of end respond balance $XX.X XXXX have million at pre-pandemic year increased our allowed approximately of to initiatives early to inventory

of portions However, to chain types products see to these we are the continue expected the disruption for challenges throughout our coming year. supply of linger and of

to to continue necessary and solutions will with secure parts our require. our components We proactively the work suppliers

many all a with a was and positioned stronger years, to levels Profire. the XXXX not than and performance were of for seen the challenges Even and financial are we we better then. year operational great much We company year, recovered past for

forward. in are the ability going leverage We our confident success to

business. I of Cam call to the an to over will overview provide turn now our Cam?

Ryan. you, Thank

years the our company and results products. trusted leader the Top combustion in and Our in of be market and meaningful solutions. QX burner revenue, initiatives brand, one quarters Profire and strength market of history. team the line management increased and traction our our partner diversification in to represent combined continues demonstrate share, our and strongest XXXX

In markets. infrastructure, markets. energy gas diversification XXXX, and and oil we segments were These core as our critical able significant upstream non-oil other year-over-year and to growth in include industrial midstream downstream utility, and achieve as gas, and well

stability and and upstream business in midstream overall in from increases commodity user benefited completion In activity, drilling, prices, year, solutions. automation steady investment moderate and the end our fiscal

our including has opportunities partners. regulation led support CNRL, efficiency, which combined with for Devon the EQT, focus for tailwinds continues Profire, Energy, retrofits sophisticated and and their ESG E&Ps improving attract renewed and to caused Chevron, increased Concho. most to pressures and E&Ps on Profire by Antero, Oxy the

represents business, This our over segment XX% by grew XX% year-over-year. which of we

As look remains and beyond, opportunity. we XXXX we a there significant believe to

that are by solutions. We segment well products from global current supported focus optimistic on and energy an automation this efficiency, demand safety, are and increased Profire’s

banner were than terms of achieve for utility year generation a able revenue providers. marked XXXX Profire to year, with in XX% fiscal year-over-year. greater we growth the In natural gas

with to well Our heated collaborate support Profire new heaters in as that as as continues customer grow ensuring this solutions we online appliances brought existing upgrading base segment on specifications. are

OEMs Grid, ATCO and Fuel, as partners Gas, such Pipeline includes and as as base National Our Solutions, strategic customer [indiscernible]. well numerous Dominion Mulcare National Energy,

called bring In the segment revenue we Over and have have we solutions the area. we and side strategic products XXXX, of in the our achieved strategy this intentions midstream. last infrastructure critical to nearly year-over-year or downstream XXX% three discussed our growth what energy years, into

in Energy DCP Midstream, this several not Midstream, with in Energy, OEMs Williams we had Products, traditionally Resources, Targa Enterprise TC the Alta as past. Partners, that Kinder base customer Gas, Our includes worked as Morgan, Transfer well segment

segment is the business to trust testament this projects. on of ability deliver a New team’s to and and in repeat products in our our reliability

critical non-oil for We are The and gas space credibility this solutions in gain appliances significant the continue gained segment traction surface scratching Profire and and to our this reliability focus momentum The and opportunity. of and this the XXXX. barely and that for customers. continues in we performance strength our are found Profire deliver industrial supply energy to to in chain area long-term believe

of year, to United supporting with work to In emissions producers one renewable production XXXX, year-over-year we the gas revenue. and We were in biogas energy. part related renewable the at XXX% the biomass the solution to COX In we landfills. and largest able over States completed as RNG of fiscal their reduce natural achieved of in projects growth produce

food that renewable to able were gas support believe as for gain grow this potential opportunity sources to our that We with the demand continues of we industries natural momentum. has to the Other burner drying, reforming, and combustion treat as beverage manufacturing, water as heat metal processes, at fractionation, and fly gravel hydrogen ash include processing well production, hydrocarbon micro and and treatment, refineries. technology sand LNG

in efforts service Our diversification future and areas continues capability, the add development company. strength support space, about and investment to strategy our we engineering marketing, in are the will to and and this excited this product focus sales of

equated X% Our revenue which over XXXX of represents XXX% $X.X combined growth to approximately year-over-year. million, diversification total nearly revenue for or

We up believe you keeping in markets. on that these see diversification to progress. we are We to continue to our growth to date positioned look forward

forward we As XXXX. look to

grow. record We of will cash strategies. should industry which benefited continues tailwinds demand earned XXXX gas XXXX, to continue. oil from sufficient flow that are and their in The for optimistic to we continue many in XXXX funding provide the energy profits Global

and and will Profire. Aligning policy in and oil as continue the the diversification shifted to gas garner industry. focus expect natural gas. gas strategy, industry to energy natural gas liquefied that has natural with we of attention Energy stable will Clean energy remains increased more believe continue investment favor and production through in from We benefit our

remain factors drives initiatives activity, demand investment we an at Research intentional We balanced should to and and and service These short, maintain development. Profire development Profire’s investment products critical look product as future. and solutions. business mid, and effort support which for and long-term

solve to today industry. implement approach solutions to a to voice believe will critical We problems Profire We of and the entrepreneurial development. that look and enable products our continue develop the product We customers of to future. the customer remain to energy

Our and to value our strong. existing customers proposition markets remain

new and capability to We provide engineering provide exciting in compelling a many and of and competition value service our alternative have proven industries. solutions, expertise that our technology that technical

efficiency, and are we solutions continue industry safety, we markets, will to develop confident and core with that As compliance protection. new provide our reliability, both environmental

other, commitment and turn would Ryan each to to we Profire. customers and each our ongoing to to like you every enable and Before To Profire do success. you for your for and our for thank team, you questions, interest and supportive creativity, the that your thank I the perseverance, in work day and

would so we Q&A can please that Operator, the provide the get appropriate instructions started? you

Certainly.

Brown begin first Street Capital now Lake question-and-answer go will We comes [Operator Our Instructions] Rob the question Please of from session. ahead. Markets.

Rob. morning, Good

Hi, quarter. Ryan and on a congratulations Cam, good

you. Thank

Thank Yes. you.

you amount of that it’s activity and on would had First, in you’ve years? that terms does new do breadth the into growth projects see. ranges gave – and great detail result How that of few you size characterize customers activity a repeat how those kind how great the vertical in and of to next of

as Excellent lot Cam a question, is There's mentioned. there Rob. happening obviously

And Cam you provide some to and additional turn over for there. so it him I'll let details

range be that them is that them there little morning, others a could XX being beyond. XXX could Rob. lumpy $XX,XXX and more and terms a to some Good could $XX,XXX to in of be bet. range. we see you be There bit Yes, we wide projects that could Those of in

what depending question already, so scale down we projects in the the or previous for close type lumpy, on. requests that could of starting some of repeat that's starting quarter. around we're larger repeat We're repeat now to working by and it in that see scope on business, are you And talked about we're mean plants up I these be larger to scale potentially But bids, your to which calls. we – business automation some of it facilities earnings and projects,

is and again, possible you to points we mentioned get and When guide area – scratching even really this critical in gas we start pain as done. mid spaces, development of future infrastructure. surface learn that experiencing. It in be energy into non-oil a you what of in see and more degree, these – and the combined can as for of our the So well to There's as even much not the that, they're maybe to problems long-term. comments, influence

bigger legacy the we and size double they're at be to upstream definitely order, on our average here core more talked So than at average, our with potential the on on space projects, those about much business, of but which midstream significant. sales average the least

this continue and into demand you. of about for growth great. of into Do half those XXXX? Okay, And back the trends is visibility XXXX? how ramp had prices how issues then the the Thank as on see strong. that You But think do were good timing energy sort a kind into year? you you trends any

Yes, lots obviously space great question, happening again. opportunity lots lot also about. a excited There's of that the in and of challenges, we're but things

increase in activity coming far in activity. visibility certain commodity that rig right the steady, counts the pretty drilling and looking As happening now and legacy significant and we're necessarily don't with rig things or and small see counts in pretty a months. We what's over been at that's quarters last XX the flat, in increases, really are completions drilling prices as goes, completion business the

will that that continue. think we So

count bit the count parody as completions we're drilling, even averaging little just rig the and rig still X,XXX wells levels likely a concerned, gotten basis, completions the far around the So of to kind as new X,XXX with a month. more, on and each coming below pre-pandemic is they've a monthly and up

are gas WTI predictions. the recovering that even high still we these threes levels a see according the fours to These be bit by continues Profire. price the and steady from XXXX a to So of overall low fairly our be and into think to we strong at perspective, we for end natural back EIAs activity levels, see continuing good, continues fairly which historically

coming steady kind year. with of really modest growth just over think some legacy we it's for with our So that, the business,

very opportunities there? again, and to about the the in there. wise do for We and the talk about are, Cam, the growth year visibility want growth potential diversification what you seeing excited coming we're

that's Yes, – over is we XXX%. it growth in Do in year definitely. and critical gas Obviously, – we do over is triple the we XXX% goes every probably are or engineering We of and strong XXX% planning. When term at into and Yes, growth don't non-oil opportunity never these double of I the digits. we think possible? pipeline but potential? digits very longer last combining there, look XXX% that this high projects. over expect we – There's a a year that and non-oil XXX% infrastructure, energy guess, can from gas, more a it opportunities, growth

doing You're one burner. just more than

You're doing probably multiple burners.

the process, facility. You're you're looking at of elements with integration at other looking

this projects of to we've more into does see of that the continue first carbon legacy hit, even to for from of each somewhat with like it these taxes Things year, build with or but little and are last in, started time the that the act backlog is government So reverting federal the border to on our out a year take grow year a of reduction that's started business. trickle kind come which Canada. methane north we core that to into small as

are solutions Those greater are of efficiency. giving that supporting Profire’s things all

reducing and just ish. able One a system and improving – for That the coupled that fully Oil what fuel venting is Profire overall. – on, do, they're with they'll a now. it's right atmosphere our a working eliminate electric we'll things but say, we're pollutions and trend. of right. plays these We've think are knows all control in customers of able they're stable-ish, some the been Who big and again, other great Obviously, what show BMS to issues. all we put prices stable keys seeing devices lot time pneumatic Profire and emissions got applications, we're do? can and we part really time a is with meat that to horsepower behind, venting and we've of efficiency, that to

a we're just type traditional us all work alternatives visibility for that which for of we getting people they're continues way the more the get, looking we future, for to to DeltaV, that these referred. efforts on is and EPCs again, are the getting, traction web OEMs from marketing because perspective focus. Profire to Profire. Its to, we're can the from looking grow alternatives, of in back the bring types again, as and see these contacts So Siemens, see we'll projects, Honeywell, that these Fireye, to more It that backlog perfect different that, bringing finding applications,

the great. Thank over. Okay, for it turn color. all you I'll

Rob. Thanks,

Please Jim James. from comes go of Dawson question next Our McIlree ahead.

you. Thank the second the can saw you Management just And through second you just increase? equally six you're in months, in that then increase System, or and then So oil Was traditional trends the natural Was versus the focus me I business and And for gas Burner that Can driven guys. oil could on in half? of Management those Good gas next a again, both oil half, the morning an on both? Burner System traditional we was hoping focusing it again, driven you the discuss markets. was say, gas? extend that seeing you're increase? in that what that the seeing it walk

Yes, certainly.

to all, first in calls challenges of chain of we was for second prior versus half, the us. that relation year last the big half about in First things talked of one supply

than the the XXXX had the significantly The lot supply second the half. XXXX time first to first half challenged side our of half half. in of second manufacturers was harder from a compared We systems on getting more chain

orders. demand as each our and that across the all And certainly, of of all spread So in there oil good both basins activity in of and areas and customers the growth of was business, our the chain supply good across between our natural and all pent-up gas, customers of well. both their across seeing those was and with

those the the a in half China. are go and of the aren’t The contributor seem the So that chain between still are difference now into originating the side second that we to we the that that one halves. electronics, ultimately things big doesn’t because be things sources all lot success mean mostly seeing for supply challenges, come from was challenges that of on to the there chips, little component BMS certainly systems,

been able to second of the So those there, year. half systems more still are we get challenges but in the have

a that we’re And XXXX, continues time pop-up. one we going into continue that still to likely that solve one, seeing challenges. to there’s be new there’s Every to

about year. of versus played our talk oil being what that seasonality, and over of that And between So to you the able in to gas want timing our deliver part us stability some if the of big has the customers? to natural certainly a customers. we Cam, will, trends you specifically maybe do saw last more

when example, or Unless producers, to us bet. it’s Canada. these, look the Alberta, great of and a you in the for okay, you an saw because You some at shale plays really Northeast, gas you a – identify, Northeast. at United When about in talk is oil? look difficult that We lot definitely natural growth for States certain the

With companies at were very the those like Appalachia, look like Southwestern, EQT, producers you Ascent, Antero, busy.

LNG They aligned were very in towards of be all one. those can’t strategy. without American, trains much North a States gas feed seemed course. And They’re to natural very even working you LNG United

see did natural is Russia demand helped that natural higher pickup a prices in with impacting with remains we that. that The Obviously gas. Europe that. world’s So that gas still for drive Ukraine, still and conflict big

more a even use natural well, a transition maybe governments we comments, in mentioned fuel. Europe, As maybe or green we’re more can gas saying, we in and that seeing the as okay, is

very And away all in last were fuels. so traditional transition not which a believes sources. fossil this the Profire that’s market. Permian is busy from energy this needing We diversification a Basin where is oil a year, It’s

they natural produced of lot gas well. a as However,

it gas? – future. So for pickup we pipeline do pipeline your Absolutely, was about quantify with ethane all it extractions, dealing both percentage, that critical to the did companies, plants from strong that, Profire With different a very you’re and talk see but when for treating the us we overall, and year were a for banner energy last it’s your was tremendous a infrastructure a we there difficult say to was there. say natural if benefit you I would year

to our do really a I user, hard end know always I It’s interesting, it’s list at all really both percentage. user because lot United quantify do reviewing and directly and that. in the to was Jim, sell them end it the difficult was Canada. hard because we quantify what States of actually don’t to do – it’s they So but we really

That’s Thank helpful. and as gas Ukraine trying yet just seen was the I come recently things natural has natural secondly, you. to gas you’ve have Obviously, reaction couple through of the Right. puzzle to And made of curious that a Europe. then the in prices the if essentially I’m any gas side. on down from your U.S. supplier customers. war to

And so the share it’s a that looks like shift market States. to be to United going permanent

Any either comments So you. that should benefit issues? of those on

for especially up, Europe, gain. warm allowed overall season the were did, the called had to I all pretty it’s has about. And it’s prices not winter, that the but for. worried this been We for been to warm winters. piles coming was they sure. natural come, week, say it the down, even though been are and summer concern. stock Yes, real expected terrible, next we for the We’ve a which wouldn’t it’s me cooling That’s gas it’s But that. going – problem’s It’s this winter winter

you for build build requirement make demand. of at a you good prices better these is more are stay, enough panels, any the much can’t as probably you gap to enough global able the that these as Ryan to predicting, that operating this solar want we sources can’t enough build it’s for producers world wind can’t So than going don’t gave range up exists be still under. conflicts used energy but we’re gas energy to natural in alternative LNG, to just And turbines,

So as we and We a are huge for oil. in products lot great – It’s why runway our that. the for Northeast of gas for see we why natural invested see a that’s have. we all

great. All to right. guys, That’s a me. Thanks and later. That’s it for talk you lot

Yes. Jim. Thanks

Ascend go John Wealth ahead. of comes next [Operator Please Instructions] Our Bair question Advisors. from

morning, Good and you. Ryan Thank Cam.

addressed questions user to with caller in of due seeing drop You natural trends my one any last regards the here, end gas. to in you’re demand the

got you you pretty $XX short-term other investments, though. about million and cash in cash. indicate release, you well a indicate covered. ones that So in $X.X showed your in couple was press I’ve yet $X.X In million million

So I’m is difference $X.X the up the versus that that wondering with roughly accounts million, right? I prepaid? put I your so the come about two where partly if is together, in million, receivable that difference $XX Because Am I being $XX higher seeing there million.

Actually that Yes. piece liquid, other long-term and on shows they’re which missing investments, it one there’s long-term are our side. up think you’re the It’s I bonds.

be cash that secure market as able for And our as are $X have which we those into which got investments, overall assets to is So as bonds portfolio, some are stated short-term have need. you us we then to tap CDs some well. money liquid number. But in We’ve that million we and accounts. of all highly are

about we’re pieces. when of investments, So and each picking cash liquid three up talk we those

when is million. three then to And the $XX get on add you all of those that. you top of receivable So together, accounts the

So cash us. will be item that that another for shortly be would

Great.

seeing sooner cycle you taking working? your on seeing how’s the it you change payment to that you Are your receivable? longer there? or regards accounts or pay or are people paid getting in Is that you same with – what about So a any the little

end fiscal of bit towards see it think the and little slowdown. year, full comes goes any a I of a we Overall,

payment. with end. then very balance able start think on to after the happy of what been on sheet to on tend year turns. the I pay we’ve customers But hang their achieve the year it as we keep to our to companies shortly to cash are with again most But overall,

within above reputation a natural natural and oil was our of and had oil the think sometimes team. to gas pay. I pushed taking majority Historically to companies days. gas our of really historically even XXX, the that We out with pay companies XX for forever industry, customers number work XXX or hard

paying on We’re hold out orders. communications basis. customers when And aren’t regular on a – we back their timely, send we proactive. We next

this willing and our but even we cash through through very customers supply times need like and and deal a current they’re proves even Doesn’t and the time. and difficult. environment the and That of they’re and And much COVID customers. we’re they’re how We of paying chain us to criticality and to crunch. are I pay bills. an little paying through that been We pretty the So quite treating customers validity mean have XXXX where XXXX. pleased bigger overall our were we with, on would’ve pay paying products is in and difficult those we there with We surprised don’t importance all people their really are just anticipated even that it challenged product, some think well. do that they now, challenges to have even

That’s good hear. to very

of build that X.X% yet And XX% and into up kind you that inventory is indicated that able about levels. roughly sequentially your year-over-year. your up my next also OpEx was question So leads back pandemic pre to quarter-over-quarter that you’re and to levels

million-ish cash and given start levels where can increase back – is question and improve you maybe prices is to build your something some do see levels? your the supply then therefore that into constraints you the maybe XX So or that above does up chain margins

overall things impacting of that number a into that statement I multiple are guess, the built questions there. Certainly Yes.

a like things every quarter-over-quarter, on couple business just our increased have obviously, out there. year-over-year, So the trends costs

come the impact we’re of Thankfully, down inflation on little its rates fighting We’re the and a business. on inflation our battle seeing bit.

helping been right and have to happy that numbers in there. move direction started we’re the those that’s So

in U.S. had On the employee with government. that out businesses able available to an retention from increase, that’s in a to recognition there for a we quarter-over-quarter of do QX, were the that the of credit lot fact benefit

So hitting and for there, overall benefit our that credit reduced we QX. qualified which payroll a taxes

down and So annual fairly overall we’re QX, XX% from actually have OpEx But certainly margin annual to was are quarter that’s from increases but on similar was We an margin basis, in inter basis, QX helped on margin. XX% we employed – an in the up perspective. and trend, move with QX and able to levels. price QX just that on

some seeing there. increase impacts certainly So price

customers our our believe comp inflation the compensation line as that and as and plans as hit. and as where variable other some in sales we fight much variable structure And the we in much increase with to we’ll as is such as of and we continue to need that well off cost can G&A commissions to continue do

as as costs also our grow. grows, those variable we perform better, So revenue

to the we – either at we’ll in So overall, we’ll continue impacts. we to can But in much or to as offset them to look reduce growth control areas and can. increases variable to simply just costs periods, continue as OpEx costs to try as try we’ll in continue to other we tied possibly growth see continue best those some price that’s

of Okay. from one you’d try supply and away kind forth. to get so been being And the of last sourcing? issues here, from domestically other dependent North source component and chain electronics either have you on from some China the America to doing causing in forth coming mentioned, What or regions, Chinese so

question and Yes, interest there. lots of great

direct but some chain ultimately us China. for ties by company, and then specifically their comes sourcing that from U.S. we to buy where impacted And something companies many also China. supply have back we for are indirect may we a think I from

our purchasing to So have actually a we very year. indirect But perspective, direct that this direct more on reliance China from past over difficult and reduced direct manage relationship.

One our to products. we’ve previously means we onshore faster out move big Arrestors Housings. Flame component don’t was a sourcing which be Flame opportunities deliveries And good it’s and of Arrestors as we benefit and to carry started to other China for And that those of that to is were proving us. have many our

that for And BMS gone we airplates, some would that other we our at continue source items continue for look China opportunities for out of burners enclosures be as looking things transition and directly well. well to to systems. and So other we’re onshore has those

because that’s so the of And concerned that’s that there, committed much of is we’re to. a standpoint, perspective So and that find challenge long-term from are ongoing chips tied about into specifically. a want and an to China electronics, opportunities relationships process bigger back other Asia we because the component,

manufacturers alternative. to with stuff continue get and is another short some their of great in We work to supply demand. through short alternates possible are supply, things to But those in high find Japan, and contract be continue wherever all of our suppliers we which that

environment, we without trying in procure very we it’s on that wherever a realizing to to but relationship balance going increases continues massive cost challenging something be So possible certainly are and that focused how forward.

you the for questions. good. on Very or Congratulations much taking the very momentum so. that year Thank you’ve the the and quarter built past over

Thank talking you, you very John. to Good much.

to with Good Yes. chat you.

for like turn the remarks. any would over to closing management This question-and-answer conference I concludes the back to session.

all you joining everyone XXXX support. continued to on like call us our full fourth and discuss year your results. quarter We’d thank [ph] to of today for our Thanks for

or to great Also, As available for many Capital Thank Conference and Roth may always, meeting participating look any we the discussions of you and forward Partners day. we next with there. a in are you you will questions be week have have.

This concludes today’s conference call.

Thank a have disconnect day. you may for your participating You lines. pleasant and