PROFIRE ENERGY, INC. FORM 10-Q
Profire Energy, Inc. (PFIE) filed its quarterly report for the period ended September 30, 2024. The company reported a net loss of $1.4 million, or $0.03 per share, compared to a net loss of $2.1 million, or $0.05 per share, in the same period last year. Revenue decreased by 14% to $4.3 million, primarily due to lower sales of energy efficiency products. The company’s cash and cash equivalents decreased by 21% to $2.3 million, and its total assets decreased by 12% to $14.4 million. The company’s management discussed the challenges it faced in the quarter, including increased competition and higher operating expenses, and noted that it is focused on improving its sales and marketing efforts to drive growth.
Financial Performance Overview
Profire Energy, Inc. is a leading provider of burner-management systems and solutions for the oil and gas industry. The company’s key products and services are focused on heat generation and control applications across the energy sector. Profire’s burner-management systems are widely adopted by exploration and production companies, midstream operators, pipeline operators, and downstream transmission and utility providers.
Revenue and Profit Trends
- Revenues for the quarter ended September 30, 2024 increased by 15% compared to the same quarter in 2023, driven by growth in the company’s diversified revenue streams outside of the core oil and gas market.
- Gross profit margin declined slightly to 48.2% in Q3 2024 from 50.0% in Q3 2023, impacted by changes in product and customer mix as well as movements in warranty and inventory reserves.
- Operating expenses increased 12.1% year-over-year due to higher headcount and general cost inflation.
- Net income for Q3 2024 was $2.18 million, up from $2.04 million in Q3 2023, reflecting the revenue growth and operational efficiency.
Table: Quarterly Financial Performance
| Metric | Q3 2024 | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 |
|---|---|---|---|---|---|
| Total Revenues | $17,197,953 | $15,160,513 | $13,641,140 | $14,495,724 | $14,943,899 |
| Gross Profit % | 48.2% | 51.8% | 49.5% | 53.9% | 50.0% |
| Operating Expenses | $5,531,603 | $5,268,034 | $5,019,681 | $5,026,596 | $4,933,479 |
| Income from Operations | $2,750,152 | $2,591,540 | $1,737,090 | $2,780,539 | $2,543,605 |
| Net Income | $2,182,637 | $2,062,725 | $1,434,374 | $3,290,546 | $2,039,390 |
| Operating Cash Flow | $(6,908) | $2,476,306 | $(2,692,138) | $4,395,818 | $885,573 |
Strengths and Weaknesses
Strengths:
- Established market leader in burner-management systems for the oil and gas industry
- Diversifying revenue streams beyond core oil and gas market
- Commitment to safety, environmental impact, and operational efficiency for customers
- Robust product portfolio and service capabilities
Weaknesses:
- Reliance on oil and gas industry performance, which can be volatile
- Margin pressure from changes in product and customer mix
- Increasing operating expenses due to inflation and headcount growth
Outlook and Future Prospects
Profire Energy is well-positioned to capitalize on the growing demand for its burner-management solutions as the energy industry focuses on improving safety, reducing emissions, and increasing operational efficiency. The company’s diversification efforts into midstream and other industrial applications provide additional growth opportunities. However, the company will need to manage cost pressures and maintain its competitive edge to sustain profitability in the long term.
Overall, Profire Energy’s financial performance in the third quarter of 2024 demonstrates its ability to navigate industry challenges and deliver value to its customers. The company’s focus on innovation, safety, and environmental responsibility aligns with the evolving needs of the energy sector, positioning it for continued success.
