Profire Energy (PFIE) 9 May 242024 Q1 Earnings call transcript

Good afternoon, everyone, and thank you for participating in today's conference call to discuss Profire Energy's First Quarter 2024 Earnings Call. I will now turn the call over to Steven Hooser, Investor Relations, to get the call started. Thank you.

Thank you, operator. With me on the call today is Co-CEO and CFO of Profire Energy, Ryan Oviatt; and Co-CEO, Cameron Tidball. closed, and filed in discussed release. market with Form a the SEC the the after the its company XX-Q press Yesterday, quarter's highlights

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

are call, call expected planned call like company's in to performance. forward-looking begin statements new new to in forward-looking statement. harbor of and diversification Before that safe but the to, moment not potential made a growth, not performance This today's markets, All statements products, such company's changes Statements we existing and revenue financial this forward-looking pipeline, take sales success, research and statements, uncertainties including, I regarding circumstances. would during future subject contains and future are are historical the statements. to limited M&A read the future projects, opportunities development company's the

to these results assumes www.profireenergy.com. involve to except the the Readers Act events business, not statements. Factors required described subsequent the actual to available Litigation economic, I safe the statements link will materially will Securities update like date statements statements. through include pursuant events or regulatory release, from on recorded via everyone filed guarantees place materially identified only yesterday's Forward-looking that press law. could release today. forward-looking risk made and harbor or are be factors for provided such no the Starting Private market forward-looking certain anticipated as later as provision XXXX. differ It the call the Reform company's remind in reflect forward-looking the events and the public All be affect or the performance of that that statements Exchange by cause not made forward-looking are and Securities risks, reliance is in or of XXXX. would and of with reports periodic website or accessible statements could uncertainties of forward-looking forward-looking of Commission. All assumptions and results as are future to to by company well undue XX, and at obligation should replay this circumstances, being in as the statements May company's results

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

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

all us you Thank today. on joining call and of you, who to are welcome the Steven,

the first legacy efforts. with quarter underlying diversification business traction and Our reflect results our strength our of continued

The be natural the Our view, lapped significant highly business year-over-year foreseeable natural due exports to for role several third industry trends recent automation gas long-term wells associated and hydrocarbons our and January declined existing decisions not off the of in capital months even companies will to E&P fully the the in many projects some company slowed energy best maintenance subsequent expenditure prices. has vital shut favorable. global deferred demand at sources near production as catch-up and a continue will our capable load in in periods. performance legacy investments. and our believe we to for influenced producers play permits to LNG In history production deferred multiyear as continue the gas Biden pause play drop saw alternative to remain for customers in future. future on revenue by and energy quarterly shouldering pending announcement Administration's revenue We

global a capitalize be well North on this believe positioned key LNG energy long-term that for opportunity. we to are solution and American However, to continues producers

belief and above our all partially controls safety remained be disruptions, This electrification OPEC the and world low XX% to production. required massive but increase do automation the versus through by abundant rates the need sources, Morgan of the that will energy and they infrastructure. years IEA and increase led XXXX. the commodity energy barrel, impact of supply for including have the overall quarter be driven broader AI annual steadily demand fossil X data of predictions XXXX. trends Profire an supply during more driven reliable energy to in to the the and The and/or will demand continue demand civil fuels. meaningful growth primarily and over by Middle ever from $XX production a These in including unrest economies, in that Recent any not As recently by prices next American growth lead East. per increase by at so, significant to on an need rose centers. the increase could have North power and critical generative X.X% ongoing Stanley support for escalation AI for prices predicted conflict to increased further mid-X% a we their Oil events of being forecast will average cuts achieved supplier XXXX

year with the As strong be in we performance. the and year. have optimistic previously, of higher stated half and the about second believe long-term revenues prospects another income quarterly short-term very will We company despite we fluctuations for medium- Profire's remain in XXXX

position investment strong to my that, Profire's turn move quarter Our With our continues growth me strategic results financial us with and financial to forward XXXX. allow for first opportunities acquisition remarks let objectives. we to new the as of evaluate

fashion in compares growth consistent first quarter. noted compared the and in compared prior The operate in activity. fourth to of share. quarter to diluted XXXX. despite to quarter of for million quarter approximately million continue million warranty $X.X lower of diluted quarter increased inflation or revenue $XX.X and quarter of million of were ago as diluted per movements, in and the fixed impact year quarter strategic margin the first and share XX% of of XXXX share business year-over-year the fourth sold. in quarter. year net compared the million impact the or activity. and to Profire's income or prior average support first first $X.X in challenges, indicates an and XX% first sequential in in Net year-over-year revenues prior and we quarter, net $X.X recognized million for and has reflects the percent to was in of of Gross $X.XX a and XXXX. revenue increase the revenue goods $X.X of of on quarter in $XX.X reserve million in to last for $X.X quarter related the profit to million our $X the per which year. During income primarily headcount million within cost million fourth additional inflation the the in XX% million the was was coverage inflation $XX.X quarter $X.XX XX%, compared revenue and growth scalable This of the here business first XX-year that or $X.X inventory we in was XX% periods annual $X.X cost the compared the operating of mix, income operating Gross is of the XX% in weighted with cost to and normal revenue quarter effective revenue or expenses decrease performance or Total The $X of first XX% product approximately $X.XX the quarter per approximately million

periods of from quarter in increases accrued the call, last million been was first in and year As reduced. income net as in current comparable losses operations $XXX,XXX approximately inventory cash lower noted our in by in past liabilities. Without largely current performance necessary prior subsidiary lower efforts, tax our regarding the the would to in operating due Cash of have quarter. credits benefiting efforts reductions Canadian as the driven compared these U.S. earnings This significantly deferred is in in years was in quarter performance $X.X retention the the the generated the net to quarter our difference planning employee large the well approximately part on in and taxes, used several

million quarter million Cam? $XX.X I of million We remained the $XX.X over debt provide in end at end turn with quarter investments our the to and Cam business. overview cash free. balance the will to call Our quarter. ended approximately the an of at $XX.X inventory the fourth and of the was now compared liquid to

Thank Ryan. you,

our top As of on internal expectations. are QX the our we we matched overall, And pleased results quarter. revenue the line with reflect performance,

plays. best revenue we on of season and improving report solutions activity industry automation our emissions, business was to resulting In crude States ranking and for our the focus metrics received. technology, we excited natural our amongst and results, optimizing reducing Despite sector. to and safety able spend achievement in were to on their values our remain and total included lower exemplify these and integration in exploration proven and strong on Challenging value commodity diversified core production the QX Profire drilling top team from strong quarters our billion which XXXX QX, gas goals operations history to committed reduced financial facing provides processes We providing sequential impacted to factors, gas historically. doubling to combined company control production shut-ins X diversification upstream were nearly core oil gas acquisitions of achieve prices, strongest contiguous the to through performance-driven traditional The the our of warmest Canada, our of thermal revenue. the sales continues of winter and applications. vital energy products completion line orders $XXX We by workplace able related deliver and supporting customers' over and companies. factors United The and are and natural the mergers also in record

we and first and of nearly tripled and These compared non-oil encouraging find customers gas are industrial Our quarter as results revenue obtain projects. new the continue to business repeat XXXX. to and

energy biofuel were and results derived landfill, including diversification refining, industries, infrastructure, QX from operations, Our generation power biogas, critical mining.

waste-to-energy into In in a leverage control renewable a and to combined and who to gas, in In able organic and the highly develop advanced project opportunity projects leading with where outputs, as with variety their of natural hydrogen, gas, we solutions a be activated occupy can and these is transformed our burner to processing this to We be producer. develops Profire media. we new and plants leveraged. able to useful of were solution, transportation. we with this be syngas believe combustion including clean find each relationship pyrolysis and potential refining proprietary to that continued into solid products develops technology. quarter, win valuable who the Through industry-leading needs waste management Woody continue We which space. services which and first tech well for biofuel with match note, OEM high-temperature and environmental petrochemical direct firms biochar, first to biocarbon exciting Profire to burner were our the future third we filtration awarded execute fired waste to solutions, can or lead the diversification business. which be We natural technology project were plan who this quarter, integrating and a Profire who In of innovator used biochar applications transformed can expertise as renewable projects, awarded used firm on materials our leading Of green quarter, work management repeat facilities. have we new will XXXX. other combustion an the our first also some exciting heaters

towards goals. in this wins represents customer it as sample small new a repeat progress engineering and a to our of business As process trust diversification of are XXXX, earn products. making we These we performance the pleased to Profire our in represent are our

of sales and pace infrastructure critical current have backlog us energy pipeline results energy to in in this exceed XXXX's on the Our area sector.

to bid orders track XXXX. Our our our to have strategy. committed us We non-oil record-breaking project industrial and diversification on exceed and of pipeline, and opportunities current results sales gas remain

our experience in line our gain applications in future. teams is development provide enabling being internal industries and support as customer new by vision we We to product into shaped intend a insights continue to and and our to we the develop them individuals, mission. with learnings Future

impacted in Nino drilling we impacted lead orders previously, navigate activity. procurement factors new the temperatures year as and at high, feedstock ability positive robust, feel throughout turn, to discussions XXXX. our in the to purchase El The winter their to commodity and results although and remained invoicing. XXXX Mergers exceeding demand many be or feel natural that attributed shut As also contacts, and and which, of gas record-breaking of operational impact experienced M&A slowed storage for Warm as completion part were to prices decisions. LNG have make levels processes production, as execute overall deliver normal producers an customers developments for was activity new ability forced that to project mentioned impacted We integration occurred new our software and acquisitions engineering, will Profire. to several

However, some delays may as integration have or impact their they short-term navigate projects.

demand again we continue production, the are The by health hydrocarbons record-setting and to and day. to the XXXX, will towards global production adding and OPEC analysis monitor for U.S. production of strong is In ideological of growth Consensus not demand As X battle XXXX. related the levels be outperforming between per remains same increase sector narrative hydrocarbon barrels over growth continues strong energy the currently. U.S. the to the trending OPEC's achieve percentage in the that regarding generated to however, IEA IEA. million XXXX, achieved

healthy $XX.X We QX, point continue business E&Ps the X in lies the see current we as breakeven seen we programs. price the remain believe return which remained have shareholders. last disciplined price average commodity of a to change the their have years, in includes shale a within a as economics capital spend, respect X With pricing breakeven allocation stable relatively Though to points with an for WTI model. that and well to to

a model cost capital, the we we includes however, the activity, see increase At believe returning that remain return a shareholders. stable. to new of not prices, to in current will dramatic addition it rig will In

independents. to We continue and majors and work with U.S. Canadian

Conoco, specified meet movement We in help to the EPA growing and support support cleanest, emissions.Profire and that means EQT, reducing and be energy to Vital, Quad-O continues and are North our potential American to demand they products produced part meet that including operators, have sector. most and Chesapeake, by to service CNRL, American affordable or directly reliable, Tax standards, are these and offerings and the meet reaffirm partners Energy, most improvements of best-in-class numerous valued North to world's Our many customers Southwestern solutions Chevron, continue Profire Legislation We Carbon We through Cenovus to initiatives others. OEMs. expected energy, and making hydrocarbons for essential producers the have support be GHG growth ethically demand. are believe the that incredible produced to in this cause. impacting

well products efforts. develop as for traditional support solutions to diversification continue and We our current our markets of in

that develop production recently Our potential has E&P the with oil Permian research future reduce provide Basin. on evolve collaborate and preliminary, team global the are value emissions. and work development a major to the project see the Though a has of and we can to in solutions that confident to we been project to opportunities invited to

remains and approach intact. mid- development long-term balanced to product Our short-,

activity continues finding we opportunities. process analyzing and M&A on for as methodical focus Our follow a

we companies current initiatives support that markets have meet accretive and scale and Profire's customers. with to growth continue and with look our for feel future who We and businesses

and coming years, As and we and to look our are I quarters excited about future. optimistic Ryan

in traditional place customers continue look Our the appliances. regulations point lowering improvement GHG our and Profire emissions, and their their to that need continue new existing They efficiencies automate to for of will are to overall will enable heated to solutions. to

value burner combustion experience new industries and to to industries to and markets. combustion over repeatedly momentum as related years we progress of gain diversification continues XXX several our Our that solutions in prove management brings

and you interest all the our for To team each our and get so can support and support I we instructions to other. shareholders you would you and all Profire. our customers of provide started? thank appropriate the Before for Ryan turn members, your you do Q&A in Operator, of thank questions, to we please

Instructions]. [Operator

The with Capital first Street question comes Rob Lake Brown from Markets.

out well. went months? Or to half Do on minuses, the stabilize? XX question legacy these through First you in for you back how growth the crosscurrents resume of do pretty business this in as see and the pluses the next macro just playing some the you expect environment,

Our things better is play we that are that coming a the regard. cloudy yours it crystal probably with there better ball into likely and could to point half. be might be in as do of second should fact think the But as that number be

As we that mentioned, because few we did projects have a of on a readiness, pushed customer quarter preparation, out side. issues their some

second potentially. So or will quarter in, come the quarter, in those third

that the to don't winter, top that this this the things seen fall. rapid think in season which, have But already like second dynamics in will a million that their winter Middle what strengthening in them that challenges again, mentioned, of the would to up. are most or do East know would QX. an we ongoing natural picking But own we EIA have which invest in we But then producers, next those think of another will to The be prices, be on the we are on recovery of as in have into infrastructure. are with combined means U.S. in summer their commodity forecasts prices think been we produce, continue quarter. to another heading coming pretty about revenue that, I going gas of back and winter impact $X willingness

of we think that things improve will overall, So this in to year. the yes, continue coming quarters

and of what in. activity? there size line just pipeline you're orders quarter you of and maybe more little sales strong seeing the bit But On of a pretty it get there's a this this and could about pipeline, project then a the time revenue a diversification the of terms the you in think characterize to of I efforts, a doubling sales talked sense the year, about know I

in on efforts you diversification some more do give color want Yes, certainly. the pipeline? to Cam,

bet. you Yes,

first As those energy far. leads so charge we it's look of obviously, side the at as for infrastructure been part just the on really working of us big percentage business the plants quarter, our are that critical we've because overall midstream, that a downstream bigger an

about we helped we're from that is or ago from things so abatement. overall When methane really renewable business like to coming year talk the natural most for And related Profire finding the RNG, quarter, production double. gas us to of gas tripling projects and non-oil the

those is a it's And the so so sources natural gas we're gas and new need natural compared still the gas, us. really, seeing or seeing sites whether bit. at are It's little whether more but production then it on, maybe natural different very be abatement, really okay, a small hit facilities. around of projects so industries renewable lot traction, and just that methane for like, for moving But just landfills, which coming manufacturing for we're overall that at be more agricultural it many to

we So When last we diversification. said, we about but the as we these results give don't confident, are are opportunities obviously, that the of great believe out Profire. year's for pipeline, fully numbers, we're to exceed track on talk very we

longer they're right set even procure till those, deliver. one are done you cycle. marketing shows longer from is we're total projects around total bid stage just They that able But members more last who which, It just a existing pipeline results. comfortable. that but line the more more orders, able team comfortable great from with And again, everything was seeing to some exceed the our land, repeat year. and that from these the deliver be has performance is highest revenue, our QX to focused never that, year, reference that design going year with to to doing gas just The So projects, that. to exceed have sales the stronger, customers the now, take more of we're be we top XX% pipeline existing finishing great team leads, pipeline able We some our cases, non-oil mentioned, diversification can which with take The longer-term and as of to and to been growing and ever. getting to not we're with actually we're last thing. getting believe just

Congrats on the all on progress.

John question next The comes Advisors. Ascend Instructions]. [Operator from with Bair

of the looking couple Western and go seeing help And some light Can up. on pipelines that companies, of a any maybe as their forth any you pipelines those that? There shed from it are we production fill Canadian to ramp ramping [Indiscernible] that interest are if forward. to so or just you're up producers I'm and increase wondering

breakup. and on drilling breakup Well, period. the So this we've like and it's and And not and as winter wonderful odd been gone fill part; activity in all we obviously, percentage XXs States. then pipelines Saskatchewan that United received seen coming have that's has in week snow be the XXs But with spring Canada, We've anomaly the a very to board already. spring, finally, pipelines in overpriced Alberta the spring have having interesting in the a markets for warm last seen these a able And shift anticipation the gone the down built. to most pipeline. called this

has increase an the the activity to new takes seeing probably it see because usually to do lesson these the we that with the a the -- yes, usually way, because production of an discount market and Canada all sell-through Western hydrocarbon go in we're improvement it to in drilling select accesses Canadian of So markets, and cashing.

and access there's through European new markets Asian Now pipelines. these to

do see a in Canada. short, expect players yes, little more activity we to in from So

customers an may you might smaller newer had are products? interest or be you? that So or any you Profire there anticipate might be have increasing maybe different -- nonexisting existing approach do in that increase say, there's previously their customers indication Or some

that it consolidation already is has here. just some United and saw market just part, our lot players year market we'll for overall most the sure just of States oldest scale The are a market, Canada cost. consolidation for know But last to I'm really they're The going We There lowering but Canada. acreage. are will yes, aren't And there occurred as existing into it's se, existing per exploiting any Profire lower left. always the and see comes players. price still to, share in the dominant work barrel trying customers. doing in when in pick than place more they what they we There A really But a holds the customers be down obviously retrofit many, things. be would with. interest to players really more are would Automation John many have to They're existing new here. opportunities per activity. strategies up

the And that thing? for place there are stimulate on regulatory demand products laws of help your front, that for would new in any abatement, for methane kind capture

Yes, that's definitely couple been last the years. of a driver really

everything got You've EPA. from

is You there. have the moving Act, inflation Reduction things which

You us. Canada, it and to have and points combustion, at so and assets would, solutions, raising year. I products things things the in C I of you of where that aggressive take Profire it ahead Quad care the arrow is focused because gotten Yes, point do but a it doesn't are not have B companies has which complete efficiencies, say the on. tax more carbon on an these is, have does right to your just need lot of all in what much Profire guess they many of methane, terms become of. It wish venting it to legislative. Profire, programs this so not really legislation. States areas working O It's But United

escape in here methane to wells monitor here. orphan question to and considered whatever and state wells them Here are Ohio, out either from or natural program at where Ohio, abandoned provide department you the perhaps existing that out and new do trying outlet a Last an reached they're older say whatnot. or at P&A, going states of or production actually for and state P&A like work resources in all, or perhaps? matter Have with level we customer wells with wells have that

know the that don't but be exactly seems it far I interesting undertakes to as that, So activity state do how an as market. might that works it the

are that certainly shut That's do resources. done any customers it. are abandoned number that doing or wells that an own departments being of or mines we interesting their of doing have themselves a states We either haven't that for other But perspective on or outreach companies or specific behalf. to are coal on that natural down their

number being have where systems of the at resources their are methane our end So down applications of are shut we types do for and those equipment equipment of and capture a destruction that or lives. capture mothballed on

an awful lot wells there. No, out of old there's

be So an interesting that opportunity. of I might area would think

of is Ohio tackling orphan well well-funded. project. It's probably most the at Well, the forefront the

funding out there's for way Ohio. think XXXX I in into that

So they're ahead of capture when there it, to them clean many there. mentioned, the these fit do are comes Ryan like down And But as are that. at firms tech products OEMs, problems. solutions call I'll it or and our game engineering that looking

venting. online several for websites like, see can Naphtha go example, that got You've is you you everything can where and

that could generated Sometimes and Profire, it's bodies customers for But get conversations our there just and leads as things to be dated. at these challenge from legislative to sometimes a we're be going directly brought themselves. see if is would little But into definitely the just sales a is the marketing initiative to space. challenge, a at we into do Profire a those right look

further no to there in would I the gentlemen, to hand the for like management remarks. questions and call back you. Thank queue. are Ladies closing

you, for everyone, us thanks, joining your and on call our Well, you all today, thank continued of for support.

we discussions you or available may always, are questions for have. As any

New you there. have Three in great also day. Advisors will XX York a IDEAS to you, and at Conference hope on be We Thank see June participating Part the and

This concludes call. conference today's

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