Profire Energy Inc (PFIE) 2023 Q2 法說會逐字稿

Good morning, everyone, and thank you for participating in today's conference call to discuss Profire Energy's quarterly operating and financial performance for the period ended June 30, 2023. I will now turn the call over to John Beisler, Investor Relations Consultant at Three Part Advisors to get the call started. Please go ahead.

大家早上好，感謝大家參加今天的電話會議，討論 Profire Energy 截至 2023 年 6 月 30 日的季度運營和財務業績。我現在將電話轉給 Three Part Advisors 的投資者關係顧問 John Beisler開始通話。請繼續。

Thank you, operator. With me on the call today, is the Co-CEO and CFO of Profire Energy, Ryan Oviatt; and co-CEO, Cameron Tidball. Yesterday, after the market closed, the company filed its Form 10-Q with the SEC and discussed the quarter's highlights in a press release. As always, both of those documents are available on the Investors section of the company's website. A transcript of this call will be posted in the coming days.

謝謝你，接線員。今天與我一起參加電話會議的是 Profire Energy 的聯合首席執行官兼首席財務官 Ryan Oviatt；聯合首席執行官卡梅倫·蒂德博爾 (Cameron Tidball)。昨天收盤後，該公司向 SEC 提交了 10-Q 表格，並在新聞稿中討論了本季度的亮點。與往常一樣，這些文件都可以在公司網站的投資者部分找到。此次通話的文字記錄將在未來幾天內發布。

Before we begin today's call, I would like to take a moment to read the company's Safe Harbor statement. Statements made during this call that are not historical are forward-looking statements.

在我們開始今天的電話會議之前，我想花點時間閱讀該公司的安全港聲明。本次電話會議期間發表的非歷史性聲明均為前瞻性聲明。

This call contains forward-looking statements, including but not limited to statements regarding the company's expected growth, revenue diversification, product availability, industry efforts in the production of clean energy, growth in our customer base in the natural gas market, inventory balances, potential acquisition opportunities, the availability of company resources to make beneficial investments in 2023 and into 2024, and the company's future financial performance.

本次電話會議包含前瞻性陳述，包括但不限於有關公司預期增長、收入多元化、產品可用性、清潔能源生產行業努力、天然氣市場客戶群增長、庫存餘額、潛力的陳述收購機會、公司資源可用於在2023 年和2024 年進行有益投資，以及公司未來的財務業績。

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

所有此類前瞻性陳述都受到不確定性和情況變化的影響。前瞻性陳述不是對未來結果或業績的保證，涉及風險、假設和不確定性，可能導致實際事件或結果與前瞻性陳述中描述或預期的事件或結果存在重大差異。

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

可能對此類前瞻性陳述產生重大影響的因素包括公司向美國證券交易委員會提交的定期報告中確定的某些經濟、商業、公開市場和監管風險因素。

All forward-looking statements are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. All forward-looking statements are made only as of the date of this release, and the company assumes no obligation to update forward-looking statements to reflect subsequent events or circumstances, except as required by law. Readers should not place undue reliance on these forward-looking statements.

所有前瞻性陳述均根據 1995 年《私人證券訴訟改革法案》的安全港條款作出。所有前瞻性陳述僅截至本新聞稿發布之日作出，公司不承擔更新前瞻性陳述的義務反映後續事件或情況的陳述，法律要求的除外。讀者不應過分依賴這些前瞻性陳述。

I would like to remind everyone that this call is being recorded and will be available for replay through August 24, 2023, starting later today and will be accessible via the link provided in yesterday's press release as well as through the company's website at ProfireEnergy.com. Following the remarks by Mr. Oviatt and Mr. Tidball, we will open the call for your questions.

我想提醒大家，本次電話會議正在錄音，從今天晚些時候開始，可在 2023 年 8 月 24 日之前重播，並可通過昨天新聞稿中提供的鏈接以及公司網站 ProfireEnergy.com 進行訪問。在 Oviat 先生和 Tidball 先生髮言之後，我們將開始電話提問。

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

現在我想將電話轉給 Profire Energy 聯合首席執行官兼首席財務官 Ryan Oviatt 先生。瑞安，請繼續。

Thank you, John, and welcome to all of you who are joining us on the call today. Our second-quarter 2023 results reflect the sustained momentum across our business. We recorded our fourth consecutive quarter of revenue in excess of $12 million and posted our highest-ever quarterly net income and EBITDA.

謝謝約翰，並歡迎今天加入我們電話會議的所有人。我們 2023 年第二季度的業績反映了我們整個業務的持續增長勢頭。我們連續第四個季度的收入超過 1200 萬美元，並公佈了有史以來最高的季度淨利潤和 EBITDA。

The last six-month and 12-month periods represent the best ever consecutive six- and 12-month periods in company history. We are excited about the path we are on and our ability to continue to operate at these record-setting levels.

最近 6 個月和 12 個月期間代表了公司歷史上連續 6 個月和 12 個月期間的最佳表現。我們對我們所走的道路以及我們繼續以創紀錄水平運營的能力感到興奮。

We are a much better and stronger company today than we were when we last achieved this level of quarterly revenues, profits, and cash flow. We have more products to offer. Our customer base is larger. Our technology keeps getting better and better, and we believe the outlook for our business is strong for the next several years.

與上次達到這一季度收入、利潤和現金流水平時相比，如今我們是一家更好、更強大的公司。我們有更多的產品可以提供。我們的客戶群更大。我們的技術越來越好，我們相信未來幾年我們的業務前景強勁。

This quarter's performance is the result of a number of strategic actions taken over the past 12 to 18 months, including strategic staffing efforts, investments in revenue diversification initiatives, inventory management in response to supply chain issues, and pricing initiatives to offset inflationary pressures.

本季度的業績是過去 12 至 18 個月採取的一系列戰略行動的結果，包括戰略人員配置、收入多元化計劃投資、應對供應鏈問題的庫存管理以及抵消通脹壓力的定價舉措。

As we have previously stated, we believe hydrocarbons will continue to play a significant role in global energy requirements for the foreseeable future. Recently, multiple LNG projects have been announced that will add billions of cubic feet of capacity.

正如我們之前所說，我們相信在可預見的未來，碳氫化合物將繼續在全球能源需求中發揮重要作用。最近，多個液化天然氣項目已宣布，將增加數十億立方英尺的產能。

S&P expects global demand for LNG to increase more than 50% over the next decade. EQT, one of our top customers for the past several years, is the US's largest natural gas producer and is one of the major players in the LNG production space.

標準普爾預計未來十年全球液化天然氣需求將增長 50% 以上。 EQT 是我們過去幾年的最大客戶之一，是美國最大的天然氣生產商，也是液化天然氣生產領域的主要參與者之一。

We subscribe to their mantra that quote, unleashing US LNG and replacing international coal with American natural gas is the largest green initiative on the planet and the world's best weapons to address climate change and growth, they stated so eloquently. There is a great opportunity to help the climate and to meet our own and the rest of the world's energy needs through the clean production of US natural gas.

我們贊同他們的口號，他們雄辯地說，釋放美國液化天然氣並用美國天然氣替代國際煤炭是地球上最大的綠色倡議，也是世界應對氣候變化和增長的最佳武器。通過美國天然氣的清潔生產，有一個很好的機會來改善氣候並滿足我們自己和世界其他地區的能源需求。

The world continues to demand more energy in all of its forms, not less. The recent upward moves in crude oil and natural gas prices in July are a tailwind to our business, particularly as E&P companies continue their focus on maintenance that has been deferred for many years as well as invest in improved efficiency and ESG initiatives.

世界繼續需要更多而不是更少的各種形式的能源。最近 7 月份原油和天然氣價格的上漲對我們的業務來說是有利的，特別是勘探與生產公司繼續關注已推遲多年的維護工作，並投資於提高效率和 ESG 舉措。

The EIA short-term energy forecast for July shows a reversal of their same forecast at the start of the year as it relates to oil prices. The forecast now shows prices increasing for the next 18 months into the 80s, even though we have already surpassed that in the month of July alone.

EIA 7 月份短期能源預測顯示，與年初的石油價格相關預測出現了逆轉。現在的預測顯示，未來 18 個月價格將上漲至 80 年代，儘管僅 7 月份就已經超過了這一水平。

Similarly, their natural gas forecast continues to show prices getting back to the mid to upper $3 range. These forecasts, combined with the capital discipline being demonstrated by US and Canadian exploration and production companies is part of what gives us confidence in the strength and resilience of the oil and gas industry for the next several years.

同樣，他們的天然氣預測繼續顯示價格將回到 3 美元的中上位置。這些預測，加上美國和加拿大勘探和生產公司所展示的資本紀律，使我們對未來幾年石油和天然氣行業的實力和彈性充滿信心。

With that, let me turn my remarks to Profire financial results for the second quarter of 2023. During the second quarter, we recognized $14.4 million in revenue compared to $14.6 million in the first quarter and $9.6 million in the prior-year quarter.

接下來，讓我談談 Profire 2023 年第二季度的財務業績。在第二季度，我們確認了 1440 萬美元的收入，而第一季度為 1460 萬美元，去年同期為 960 萬美元。

Typically, revenue for the second quarter declined sequentially as oil and gas activities closed entering the summer months and resulting from the spring breakup cycle in Canada.

通常情況下，第二季度的收入會連續下降，因為石油和天然氣活動進入夏季並受到加拿大春季解體週期的影響。

For comparison, in the two years prior to the pandemic, second-quarter revenue decreases were approximately 7% compared to the first quarter. The year-over-year increase was primarily driven by ongoing customer demand, pricing initiatives, and continued progress across our strategic diversification efforts.

相比之下，在疫情爆發前的兩年裡，第二季度的收入較第一季度下降了約 7%。同比增長主要是由持續的客戶需求、定價舉措以及我們戰略多元化努力的持續進展推動的。

Gross profit for the second quarter was $7.4 million compared to $7.8 million in the prior quarter and $4.4 million in the second quarter of 2022. Gross margin was 51.3% of revenues compared to 53.8% in the prior quarter and 45.7% in the second quarter of 2022.

第二季度毛利潤為740 萬美元，上一季度為780 萬美元，2022 年第二季度為440 萬美元。毛利率佔收入的51.3%，上一季度為53.8%，2022 年第二季度為45.7 %。 2022 年。

The sequential decrease is primarily related to the product and customer mix, while the year-over-year increase was the result of the greater fixed cost coverage from higher revenues, price increases, as well as typical fluctuations in inventory and warranty reserves.

環比下降主要與產品和客戶組合有關，而同比增長是由於收入增加、價格上漲以及庫存和保修準備金的典型波動導致固定成本覆蓋範圍擴大的結果。

Total operating expenses for the second quarter were approximately $4.2 million compared to $4.5 million in the first quarter and $4.3 million in the year-ago quarter. The sequential and year-over-year decreases reflect the non-recurring recognition of the second half of an employee retention tax credit available through the CARES Act, which more than offset the impact of headcount additions and overall cost inflation across the business.

第二季度的總運營費用約為 420 萬美元，而第一季度為 450 萬美元，去年同期為 430 萬美元。環比和同比下降反映了對下半年通過 CARES 法案提供的員工保留稅收抵免的非經常性認可，這足以抵消員工人數增加和整個企業總體成本通脹的影響。

Net income for the second quarter was approximately $2.9 million or $0.06 per diluted share. This compares to net income of $2.6 million or $0.05 per diluted share in the first quarter of 2023 and net income of $284,000 or $0.01 per diluted share in the second quarter of last year.

第二季度淨利潤約為 290 萬美元，或攤薄後每股收益 0.06 美元。相比之下，2023 年第一季度的淨利潤為 260 萬美元，即稀釋後每股收益 0.05 美元，去年第二季度的淨利潤為 284,000 美元，即稀釋後每股收益 0.01 美元。

Cash flow from operations in the second quarter was approximately $1.3 million compared to $1.8 million in the prior-year quarter. Our working capital balances are strong and have the ability to continue to generate positive cash flows for our business in the coming quarters. We continue to monitor these balances and work to optimize them where possible in the challenging supply chain environment we have to operate under.

第二季度運營現金流約為 130 萬美元，而去年同期為 180 萬美元。我們的營運資金餘額強勁，有能力在未來幾個季度繼續為我們的業務產生正現金流。我們將繼續監控這些平衡，並努力在我們必鬚麵臨的充滿挑戰的供應鏈環境中盡可能優化它們。

Our inventory balance at the end of the quarter was approximately $13 million compared to $10.6 million at the end of the first quarter. Our efforts over the past six to 12 months to procure the product and components necessary for our solutions is starting to pay off, although there are still issues with sourcing and quality from certain suppliers.

本季度末我們的庫存餘額約為 1,300 萬美元，而第一季度末的庫存餘額為 1,060 萬美元。儘管某些供應商的採購和質量仍然存在問題，但我們過去 6 到 12 個月為採購解決方案所需的產品和組件所做的努力已開始獲得回報。

We continue to think long term and are already working with our suppliers to ensure we will have the necessary product for 2024 to support our customer demand. As noted above, we are optimistic about the second half of 2023 and 2024, thanks to the strength of our legacy business, our diversification efforts, and our robust sales pipeline.

我們繼續著眼長遠，並已與我們的供應商合作，以確保我們能夠在 2024 年擁有必要的產品來支持我們的客戶需求。如上所述，由於我們傳統業務的實力、多元化的努力以及強勁的銷售渠道，我們對 2023 年下半年和 2024 年感到樂觀。

We ended the quarter with $17.4 million in cash and liquid investments and remained debt free. Late in the quarter, we were able to begin repurchasing stock under our previously approved and announced share repurchase program. We repurchased approximately 47,000 shares of our stock in the period.

本季度結束時，我們擁有 1,740 萬美元的現金和流動投資，並且保持無債務狀態。本季度末，我們能夠根據之前批准和宣布的股票回購計劃開始回購股票。在此期間，我們回購了約 47,000 股股票。

We continue to evaluate opportunities to use cash beyond the share repurchase program, including increases to our sales and marketing spend, allocating additional resources to product development, and potential acquisition opportunities.

我們繼續評估股票回購計劃之外使用現金的機會，包括增加我們的銷售和營銷支出、為產品開發分配更多資源以及潛在的收購機會。

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

現在，我將把電話轉給 Cam，概述我們的業務。凸輪？

Thank you, Ryan. Q2's performance represented our second-best top-line revenue quarter in the last 12 months, and as Ryan mentioned, ranks amongst our best results in company history. Our team continues to deliver a strong financial performance as a result, consistent operational execution, and focused delivery of an excellent product with superior customer experience.

謝謝你，瑞安。第二季度的業績代表了我們過去 12 個月中第二好的營收季度，正如 Ryan 提到的，這也是我們公司歷史上最好的業績之一。我們的團隊繼續提供強勁的財務業績、一致的運營執行以及專注於交付具有卓越客戶體驗的卓越產品。

Our customer-centric team and culture remains focused on our strategic initiatives. Support and attention to our traditional legacy business, coupled with strategic development of diversified revenue streams within the energy industry as well as new industries remains paramount to our strategy.

我們以客戶為中心的團隊和文化仍然專注於我們的戰略舉措。對我們傳統業務的支持和關注，加上能源行業和新興行業內多元化收入來源的戰略發展，仍然是我們戰略的重中之重。

This consistent focus throughout the organization guides our sales and marketing strategies as well as our product and business development process.

整個組織的這種一致的關注指導著我們的銷售和營銷策略以及我們的產品和業務開發流程。

Commodity prices, drilling, and completion activity as well as our customers' ESG initiatives impact Profire's revenue in the upstream and midstream energy segments. In the quarter, WTI averaged $73 per barrel, slightly below Q1's average of $76 per barrel. Natural gas prices averaged $2.16 in the quarter versus $2.64 in quarter one.

大宗商品價格、鑽井和完井活動以及客戶的 ESG 計劃都會影響 Profire 在上游和中游能源領域的收入。本季度，WTI 平均價格為每桶 73 美元，略低於第一季度每桶 76 美元的平均價格。本季度天然氣平均價格為 2.16 美元，而第一季度平均價格為 2.64 美元。

Drill count in Q2 averaged 815 versus Q1's average of 977. US completions activity declined with a monthly average of 1,013 in Q2, while Q1 averaged 1,101.

第二季度的平均鑽探次數為 815 次，而第一季度的平均鑽探次數為 977 次。美國完井活動有所下降，第二季度月平均為 1,013 次，而第一季度平均為 1,101 次。

Despite the softening of some of these industry metrics, our business remained steady due to customers continuing their focus on internal ESG goals related to improving emissions, increasing automation, and lowering overall carbon footprint.

儘管其中一些行業指標有所疲軟，但由於客戶繼續關注與改善排放、提高自動化程度和降低總體碳足跡相關的內部 ESG 目標，我們的業務保持穩定。

Profire products and solutions play a significant role in lowering the requirement for gas-driven pneumatic devices, increasing combustion efficiency of heated appliances, maximizing uptime of equipment that ensures destruction of volatile organic compounds, and decreasing the necessity for site visits from operators.

Profire 產品和解決方案在降低對氣體驅動氣動設備的要求、提高加熱設備的燃燒效率、最大限度地延長設備的正常運行時間以確保銷毀揮發性有機化合物以及減少操作員現場考察的必要性方面發揮著重要作用。

All of these factors contribute to the reduction of greenhouse gas and methane emissions at our customers' operations. Profire technology supports the clean and efficient production of crude oil and better positions producers to develop and provide affordable reliable, clean natural gas, which we believe to be one of the globe's most impactful tools to support the world's current and future energy requirements.

所有這些因素都有助於減少客戶運營中的溫室氣體和甲烷排放。 Profire 技術支持清潔高效的原油生產，使生產商能夠更好地開發和提供負擔得起的可靠清潔天然氣，我們相信天然氣是支持世界當前和未來能源需求的全球最具影響力的工具之一。

We continue to support upstream and midstream customers such as EQT, Chesapeake, Chevron, Conoco, Oxy, CNRL, and many more as they bring on new production, retrofit existing pads and fields, as well as seek opportunities to increase efficiency and lower emissions as they continue to produce the valuable resources critical to a reliable energy infrastructure.

我們繼續為 EQT、Chesapeake、Chevron、Conoco、Oxy、CNRL 等上游和中游客戶提供支持，幫助他們進行新生產、改造現有墊片和油田，並尋求提高效率和降低排放的機會他們繼續生產對可靠的能源基礎設施至關重要的寶貴資源。

In the quarter, we continued to gain momentum with our proprietary burner technology, which is being used by a major producer in Canada to achieve significant reductions in the amount of fuel gas required onsite by as much as 35%, thus drastically lowering the burden and impact of federal carbon taxes on their business as well as a reduction in their CO2 emissions.

本季度，我們憑藉專有的燃燒器技術繼續取得發展勢頭，加拿大一家主要生產商正在使用該技術，將現場所需的燃氣量大幅減少多達 35%，從而大大減輕了負擔和聯邦碳稅對其業務的影響以及二氧化碳排放量的減少。

We continued to demonstrate that our solutions can help customers increase efficiencies, thus lowering their overall emissions and operating costs. In the quarter, we commenced a project with a major producer in the Permian Basin, which could lead to significant upgrade opportunities stemming from our expertise in optimizing combustion efficiency of heated appliances.

我們不斷證明我們的解決方案可以幫助客戶提高效率，從而降低總體排放量和運營成本。本季度，我們與二疊紀盆地的一家主要生產商啟動了一個項目，由於我們在優化加熱設備燃燒效率方面的專業知識，這可能會帶來重大的升級機會。

Our proven experience in supporting our customers and dealing with operational challenges related to emissions, efficiency, and protection of human life and assets continues to elevate Profire's reputation as the leading provider of burner and combustion management solutions.

我們在支持客戶以及應對與排放、效率以及保護人類生命和資產相關的運營挑戰方面擁有豐富的經驗，不斷提升 Profire 作為燃燒器和燃燒管理解決方案領先供應商的聲譽。

Our success in the upstream and midstream business leverages into the downstream utility and natural gas transmission markets. We enable operators in this space to achieve safety, automation, and appliance efficiency.

我們在上游和中游業務上的成功影響到了下游公用事業和天然氣輸送市場。我們幫助該領域的操作員實現安全、自動化和設備效率。

Our customer base is supported by valued distribution partners as well as direct end-user relationships. We continue to develop this area of our business with our existing sales force and through efforts to expand our partner and distribution network.

我們的客戶群得到了重要的分銷合作夥伴以及直接的最終用戶關係的支持。我們繼續利用現有的銷售隊伍並努力擴大我們的合作夥伴和分銷網絡來發展我們的這一業務領域。

as part of our diversification strategy, revenue generation in critical energy infrastructure continues to grow. This space is characterized by applications that perform critical functions related to the treating, processing, NGL fractionation, storage, and transmission.

作為我們多元化戰略的一部分，關鍵能源基礎設施的收入持續增長。該領域的特點是執行與處理、加工、液化天然氣分餾、存儲和傳輸相關的關鍵功能的應用程序。

Customers such as Kinder Morgan, Enterprise Products, Williams, TC Energy, Energy Transfer, MPLX, AltaGas, and DCP Midstream represent a small sample of the customers we are working with to support new construction as well as retrofit activity.

Kinder Morgan、Enterprise Products、Williams、TC Energy、Energy Transfer、MPLX、AltaGas 和 DCP Midstream 等客戶只是我們為支持新建和改造活動而合作的一小部分客戶。

In Q2, we saw an increase in projects delivered and the associated revenue, coupled with some exciting bids with existing and new customers for future projects. We believe this momentum will enable us to achieve our annual revenue targets in this diversified space.

在第二季度，我們看到交付的項目和相關收入有所增加，加上現有和新客戶對未來項目的一些令人興奮的投標。我們相信，這種勢頭將使我們能夠在這個多元化領域實現年度收入目標。

Turning to our diversification progress in non-oil and gas and industrial markets, as expected and communicated previously, our progress from a revenue recognition and project win perspective has been inconsistent on a quarterly basis.

談到我們在非石油和天然氣以及工業市場的多元化進展，正如之前預期和溝通的那樣，我們從收入確認和項目贏得角度來看的進展按季度不一致。

Sales and project cycles in this space are longer than our traditional legacy business. Despite our results to date, we remain extremely encouraged by the quantity of projects we are bidding, the volume of purchase orders received, as well as our sales pipeline.

該領域的銷售和項目週期比我們傳統的遺留業務更長。儘管我們迄今為止取得了成績，但我們對正在投標的項目數量、收到的採購訂單數量以及我們的銷售渠道仍然感到非常鼓舞。

In the quarter, we installed and commissioned projects related to food and beverage production, managing vented hydrogen supply at a lithium battery factory, incineration of biogas at a renewables landfill, critical aiming reboilers utilized at waste management landfills, as well as maintenance and support at a pulp and paper mill.

本季度，我們安裝並調試了與食品和飲料生產相關的項目，管理鋰電池工廠的通風氫氣供應，可再生能源垃圾填埋場的沼氣焚燒，廢物管理垃圾填埋場使用的關鍵目標再沸器，以及維護和支持紙漿造紙廠

We also continue to find and receive new opportunities for projects from repeat customers. Profire continues to gain traction with renewable natural gas producers who collaborate with landfills to take biogas and transform it into pipeline-quality renewable natural gas. We see this area as a growing market for Profire and an area where our technology and expertise are easily leveraged.

我們還繼續從回頭客那裡尋找並獲得新的項目機會。 Profire 繼續受到可再生天然氣生產商的關注，這些生產商與垃圾填埋場合作，獲取沼氣並將其轉化為管道質量的可再生天然氣。我們認為該領域是 Profire 不斷增長的市場，也是我們的技術和專業知識可以輕鬆利用的領域。

On our Q1 call, we mentioned that we were invited to scope and assess potential upgrades for thermal appliances at a small batch refinery. We are excited to report that we have been awarded a purchase order to conduct an engineering FEED study, which we believe could result in formal bids to retrofit several heaters within the refinery.

在第一季度的電話會議上，我們提到我們被邀請對一家小批量煉油廠的熱力設備進行潛在升級的範圍和評估。我們很高興地報告，我們已獲得一份進行工程 FEED 研究的採購訂單，我們相信這可能會導致正式投標以改造煉油廠內的多個加熱器。

Towards the end of Q2, we began talks with a leading provider of steam reforming gasification systems that are used at state-of-the-art integrated biorefinery facilities. Since our initial discussions, we have submitted a proposal to support applications which take biomass material and transform it into jet fuel. We have been shortlisted and believe that we have a strong chance to win this project, which will again add to our growing list of applications that we can support with our technology and solutions.

在第二季度末，我們開始與一家領先的蒸汽重整氣化系統供應商進行洽談，該系統用於最先進的綜合生物煉製設施。自我們初步討論以來，我們提交了一份提案，支持將生物質材料轉化為噴氣燃料的應用。我們已入圍，並相信我們有很大機會贏得這個項目，這將再次添加到我們不斷增長的應用程序列表中，我們可以用我們的技術和解決方案支持這些應用程序。

Revenue diversification in oil and gas as well as in new industries remains a critical area of focus for Profire. We continue to invest resources in support of our growing customer and application base. We remain optimistic that we can continue to attract new customers, partners, and applications with our technology solutions, products, process, design and support.

石油和天然氣以及新行業的收入多元化仍然是 Profire 關注的關鍵領域。我們繼續投入資源來支持不斷增長的客戶和應用程序基礎。我們仍然樂觀地認為，我們可以通過我們的技術解決方案、產品、流程、設計和支持繼續吸引新的客戶、合作夥伴和應用。

We are confident that our brand and value proposition and reputation as a leading provider of industrial burner and combustion management solutions and technologies will continue to increase. Our research and development investment remains critical to our future.

我們相信，我們作為工業燃燒器和燃燒管理解決方案和技術領先供應商的品牌、價值主張和聲譽將繼續提高。我們的研發投資對我們的未來仍然至關重要。

We continue to employ a strategically balanced approach to short-, mid-, and long-term product development and research. We continue to place time and energy on the investigation of accretive acquisitions. Our strategy remains intact to pursue opportunities that will help us in smart and strategic growth.

我們繼續對短期、中期和長期的產品開發和研究採取戰略平衡的方法。我們繼續投入時間和精力來調查增值收購。我們的戰略保持不變，以尋求有助於我們實現明智和戰略增長的機會。

Before we turn to questions, Ryan and I thank you individually for your interest and support of Profire. To our team, thank you for your contributions to supporting our customers, our business, and our team. What you do each day makes a difference to the safety of our customers, the protection and efficiency of their equipment, and the protection of our environment.

在我們開始提問之前，Ryan 和我分別感謝您對 Profire 的興趣和支持。對於我們的團隊，感謝您為支持我們的客戶、我們的業務和我們的團隊所做的貢獻。您每天所做的事情都對我們客戶的安全、設備的保護和效率以及我們的環境的保護產生影響。

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

接線員，請您提供適當的說明，以便我們開始問答？

Of course. (Operator Instructions) Jim McIlree, Dawson James.

當然。 （操作員說明）Jim McIlree、Dawson James。

Yes, thanks. Good morning. Hey, guys. In your commentary, I was a little bit confused. It seemed like you were pointing to certain aspects of the market that would suggest either a slowing or a peaking out of growth. But other parts you seem to be much more bullish.

對了謝謝。早上好。大家好。在你的評論中，我有點困惑。您似乎指出了市場的某些方面，表明增長要么放緩，要么達到頂峰。但其他方面你似乎更加樂觀。

I'm just hoping you could maybe characterize what you're seeing in the market right now, or are you seeing any weakness or any pullback from your customers?

我只是希望您能描述一下您現在在市場上看到的情況，或者您是否看到客戶有任何弱點或撤退？

Yes. Good question, Jim, and I'll let Cam comment as well on this, but it's the crazy market that we're in, right? There are signs that show both positive and potential pullback. I know -- the broader economy, there's still talk about whether or not a recession will happen. Some believe we're past it, some believe it's still coming.

是的。好問題，吉姆，我也會讓卡姆對此發表評論，但我們所處的市場是瘋狂的，對吧？有跡象顯示積極和潛在的回調。我知道，就更廣泛的經濟而言，仍然有人在討論是否會發生衰退。有些人相信我們已經過去了，有些人相信它仍然會到來。

We're of the opinion, and hopefully our prepared remarks indicated at least some of this, that despite any of the short-term movements, up or down, which we've talked about Q1 to Q2 of July as a result, we think longer term, over the next one to two years, that the oil and gas market is going to remain strong; that there is upward movement; that natural gas is going to continue to be a major need, just like I mentioned about EQT and their view of American natural gas and LNG and the potential that the US has there with that.

我們認為，並且希望我們準備好的言論至少表明了其中的一些內容，儘管我們已經討論了 7 月第一季度到第二季度的任何短期波動，無論是上升還是下降，我們認為從長遠來看，在未來一到兩年內，石油和天然氣市場將保持強勁；有向上運動；天然氣將繼續成為主要需求，就像我提到 EQT 以及他們對美國天然氣和液化天然氣以及美國在這方面的潛力的看法一樣。

And we certainly believe that. We buy into that message and that our customers are going to continue to benefit from those types of movements in the market. So yes, we do see some of that kind of shorter-term quarter-to-quarter volatility up and down. And that does have an impact on our business.

我們當然相信這一點。我們相信這一信息，並且我們的客戶將繼續從市場的這些類型的變動中受益。所以，是的，我們確實看到了一些短期季度間波動性的上下波動。這確實對我們的業務產生了影響。

We did try to also highlight that even though the movements in so those metrics were larger, Q1 to Q2, it didn't have as big of an impact on our business because of a lot of the strategic things we're doing, but also because of the effort that our customers continue to demonstrate their discipline in how they're investing in their businesses right now. Cam, anything you want to add to that?

我們確實試圖強調，儘管從第一季度到第二季度這些指標的變動較大，但由於我們正在做的許多戰略性工作，它對我們的業務影響並不大，而且因為我們的客戶在目前的業務投資方式上繼續表現出他們的紀律。卡姆，你還有什麼要補充的嗎？

Yes. The only thing I'd add to that, Ryan, is the fact that our customers' sentiment is still the same. They're focused on making their shareholders' money not at ensuring stability in supply and demand on the supply side in the energy markets in the United States and Canada.

是的。瑞安，我唯一要補充的是，我們客戶的情緒仍然是一樣的。他們專注於為股東賺錢，而不是確保美國和加拿大能源市場供應方的供需穩定。

But when it comes down to it again, as Ryan mentioned, some of the metrics softened slightly. But even since the end of Q2, we've obviously seen an increase in oil price, natural gas price. We believe it's going to go up, and all these things help us.

但當再次歸結為這一點時，正如瑞安提到的，一些指標略有軟化。但即使自第二季度末以來，我們也明顯看到石油價格、天然氣價格上漲。我們相信它會上漲，所有這些都對我們有幫助。

But again, the underlying tone of what Profire's products and solutions do for our customers, we're seeing this deferred maintenance, deferred capital allocation to automation strategies, moving to more efficiency to avoid carbon taxes in the Canadian market.

但同樣，Profire 的產品和解決方案為我們的客戶提供的基本基調是，我們看到了這種推遲維護、推遲對自動化策略的資本分配、提高效率以避免加拿大市場的碳稅。

All these things are perfect for Profire's solutions to come in and support and help. So we still feel very optimistic about things despite some of the metrics softening, obviously, to a larger degree than our revenue in the last quarter.

所有這些都非常適合 Profire 解決方案的介入、支持和幫助。因此，儘管某些指標明顯軟化，但我們仍然對事情感到非常樂觀，其軟化程度顯然比我們上季度的收入更大。

And Ryan, you talked about that quarter-to-quarter change in this year is much stronger than it was prior to the pandemic. Is there any -- is there a chance that maybe some of your customers were pulling in orders in order to avoid a price increase, or they're looking at inventory issues as well? I mean, is there a little bit of a potential that customers were ordering now for fear of what might be coming in the second half?

瑞安（Ryan），您談到今年的季度變化比大流行之前要強得多。是否有可能您的一些客戶正在取消訂單以避免價格上漲，或者他們也在考慮庫存問題？我的意思是，客戶現在訂購是否有一點潛力，因為擔心下半年會發生什麼？

Cam, do you want to take that one?

卡姆，你想拿那個嗎？

Our pipeline right now is very strong, meaning the orders that we've taken that we haven't delivered on, there definitely is the idea out there, and we've planted it. We've planted it back even prior to 2022 -- it's to -- that the orders need to be in in order to ensure that product is there and available.

我們現在的渠道非常強大，這意味著我們已經接受但尚未交付的訂單，肯定有這個想法，並且我們已經種植了它。我們甚至在 2022 年之前就已經安排好了訂單，以確保產品到位並可用。

We saw -- we thought we'd see more of a spike at the end of last year to avoid price increase. But I think our customers just believe it's going to happen. You see it more from resellers and OEMs than you do end users, any of our clients and customers that stock inventory and things like that. You saw a little bit of it.

我們認為，去年年底我們會看到更多的飆升，以避免價格上漲。但我認為我們的客戶只是相信這將會發生。您從經銷商和原始設備製造商那裡看到的比最終用戶、我們的任何客戶和庫存庫存等的客戶更多。你看到了一點點。

But for the most part, we've kind of seen a little bit of more of a normal behavior now, but customers are still ordering out further in advance than they had in previous years by far.

但在大多數情況下，我們現在看到了更多的正常行為，但客戶仍然比前幾年提前訂購。

Okay, thank you. And my last question is on the inventory and receivable balances. It's just -- I know you you've been working hard to bring these down, but it just seems to be very difficult.

好的謝謝。我的最後一個問題是關於庫存和應收賬款餘額。只是——我知道你一直在努力降低這些，但這似乎非常困難。

I'm wondering if maybe we -- I shouldn't -- I should stop expecting those balances to come down. And maybe that's just the cost of being in business right now is to have those high receivable and inventory balances.

我想知道也許我們——我不應該——我應該停止期望這些餘額會下降。也許這就是目前開展業務的成本就是擁有高額應收賬款和庫存餘額。

Yes, good question. It's certainly something that's on our minds and we continue to monitor. I would probably characterize our actions as of late and even up until now more about trying to make sure we have enough product, then strictly on bringing the balances down, still coming out of the supply chain challenges related to COVID and the pandemic.

是的，好問題。這當然是我們關心的事情，並且我們會繼續關注。我可能會描述我們最近甚至到現在的行動更多的是努力確保我們有足夠的產品，然後嚴格降低餘額，仍然擺脫與新冠病毒和大流行相關的供應鏈挑戰。

We've been -- and have to order parts, sometimes at least a year in advance in order to ensure that we will have it when we need it, when our customers want it. And even then, we still have a backlog of orders. So that's where the focus has been.

我們一直並且必須訂購零件，有時至少提前一年，以確保我們在需要時、在客戶需要時能夠獲得零件。即便如此，我們仍然有積壓的訂單。這就是焦點所在。

We are seeing things continue to get a little bit better every day in that. But there's still, as I mentioned, a ways to go. We still have some quality issues and availability issues with certain customers. So from an inventory perspective, I'm optimistic that it will come down.

我們看到事情每天都在變得更好。但正如我提到的，仍有很長的路要走。我們仍然與某些客戶存在一些質量問題和可用性問題。因此，從庫存角度來看，我對它的下降持樂觀態度。

Is that going to come down next quarter? I can't guarantee that. We're still looking at what do we need to have on hand. What do we need to have on order for 2024 to get us through that timeframe? So there's -- we still have a lot that is on order, and there are some timing challenges of when that's going to come in, when it's going to be available.

下個季度會下降嗎？我不能保證這一點。我們仍在考慮手頭需要什麼。 2024 年我們需要訂購什麼才能度過這個時間範圍？因此，我們仍然有很多訂單，而且在何時進入、何時可用方面存在一些時間挑戰。

Specifically in Q2, a lot of the product that we put on order in Q4 of last year, was finally starting to flow in in a consistent manner. So that's been part of that increase of just over $2 million in inventory that we saw in Q2.

特別是在第二季度，我們去年第四季度訂購的很多產品終於開始以一致的方式流入。這是我們在第二季度看到的庫存增加略高於 200 萬美元的一部分。

We also have -- continued to have the dynamic of the eventual shift from our 2100 product to our 2200 product. The 2200 components and systems have been much harder to get over the last year and a half than the 2100. So we've been building inventory on both of those.

我們還繼續保持著從 2100 產品最終轉向 2200 產品的動力。在過去的一年半里，2200 組件和系統比 2100 更難獲得。因此，我們一直在這兩個方面建立庫存。

And then the switching is a challenge because we can't go back and forth with a customer. We can't sell them 2100 today, 2200 the next week and then switching back to 2100 after that. They don't really like that behavior.

然後轉換是一個挑戰，因為我們無法與客戶來回交換。我們不能今天賣2100，下週賣2200，然後再賣回2100。他們真的不喜歡這種行為。

So we have been building a bit more supply on the 2200 side. And now that we've got that, we can start switching customers over and know that we'll be able to continue to supply them with those newer systems going forward. So there are a number of dynamics in there over the longer term.

因此，我們一直在 2200 方面增加一點供應。現在我們已經做到了這一點，我們可以開始轉換客戶，並且知道我們將能夠繼續向他們提供這些更新的系統。因此，從長遠來看，存在許多動態。

I would say over the next 12 to 18 months, we certainly want to be bringing those balances down, but we also care more about making sure we have the product on hand to sell to our customers, then the reverse of running out.

我想說，在接下來的 12 到 18 個月裡，我們當然希望減少這些餘額，但我們也更關心確保我們手頭有產品可以出售給我們的客戶，而不是耗盡產品。

On the AR side, some of that is timing as well. Even within the quarter, we see some lumpiness in the month, and that's been with kind of some of the labor challenges that we've had. We've had some turnover here and there in the warehouses, and then had to restaff mid-quarter and then also the timing of when products are coming in during the quarter.

在 AR 方面，其中一些也是時機問題。即使在本季度內，我們也看到本月出現了一些波動，這與我們遇到的一些勞動力挑戰有關。我們的倉庫裡到處都有一些人員流動，然後必須在季度中期重新安排人員，然後還要調整本季度產品的進貨時間。

So in this last quarter, we had a lot more product available in June than we did in April. Until we are able to ship more out, that just means that that flows later into AR in the quarter than if it were smooth every month. So again, just some timing issues. Largely, I think AR will be able to come down sooner. The inventory will, but that's how we're viewing it, how we're looking at it.

因此，在最後一個季度，我們 6 月份的可用產品比 4 月份多得多。在我們能夠交付更多產品之前，這僅意味著該季度流入 AR 的時間比每個月都順利。再說一遍，只是一些時間問題。很大程度上，我認為 AR 能夠更快地落地。庫存會的，但這就是我們看待它的方式，我們看待它的方式。

That's great. Thanks a lot, guys. That's it for me.

那太棒了。非常感謝，伙計們。對我來說就是這樣。

Thanks, Jim.

謝謝，吉姆。

Rob Brown, Lake Street Capital Markets.

羅布·布朗，湖街資本市場。

Hey, Rob.

嘿，羅布。

Good morning, Cam and Ryan. I just wanted to follow up on the pricing changes that you've made. Is that fully now implemented in results, or is there still more to go there in terms of [margin]?

早上好，卡姆和瑞安。我只是想跟進您所做的定價更改。現在這是否已經完全落實到結果中，或者在[利潤]方面還有更多的工作要做？

Cam, do you want to tackle that one?

卡姆，你想解決這個問題嗎？

Yes, you bet. So yes, fully implemented the -- obviously, the 2023 price changes. But with that being said, some of our resell products and even some of our proprietary products, if there is a change in our ability to procure, the prices have -- they continued to fluctuate. We pass those along to the customer.

是的，你敢打賭。所以，是的，完全實施了——顯然，2023 年的價格變化。但話雖這麼說，我們的一些轉售產品，甚至一些我們的專有產品，如果我們的採購能力發生變化，價格就會繼續波動。我們將這些傳遞給客戶。

We've been able to hold our own proprietary products for the most part for the year. But we've had some of those that we have to move here and there. But it's well expected that we will be looking at price increases for 2024 year as well.

今年的大部分時間我們都能夠持有自己的專有產品。但我們有一些必須搬到這里或那裡。但預計我們也會考慮 2024 年的價格上漲。

It's just the way it is, and nobody's business is becoming less costly to run. It's only more cost, and it has to go somewhere. But for the most, really, we've been able to implement across if we don't have any old outstanding orders really of any substance that are still on old pricing.

事情就是這樣，沒有人的業務運營成本會變得更低。只是成本更高，而且必須去某個地方。但實際上，大多數情況下，如果我們沒有任何仍按舊定價的任何實質內容的舊未完成訂單，我們就能夠實施。

Okay. And then in terms of where are you at in terms of your diversification of revenue, are you -- your goal was 10% plus. But where is that at today?

好的。然後就您的收入多元化而言，您的目標是 10% 以上。但今天它在哪裡呢？

We're on the critical energy infrastructure side or what we've called in the past, like the downsides of midstream or downstream of midstream. We're ahead of target for ourselves, the internal targets we set for -- and goals that we set for ourselves. We're doing very well there.

我們處於關鍵的能源基礎設施方面，或者我們過去所說的，比如中游或中游下游的缺點。我們領先於我們自己的目標、我們設定的內部目標以及我們為自己設定的目標。我們在那裡做得很好。

In terms of revenue recognition, as per the remarks on the call in non-oil and gas, we're behind on where we'd like to be. However, we're still on track to do better than last year, but the sales orders we brought in exceed where we were last year. So we'll definitely have an increase in the ability to hit.

在收入確認方面，根據非石油和天然氣電話會議的評論，我們落後於我們想要的水平。然而，我們仍然有望做得比去年更好，但我們帶來的銷售訂單超過了去年。所以我們的打擊能力肯定會增強。

We're still potentially in that round to be able to hit that 10%. But what we're really encouraged about is just the number of bids and the opportunities and the breadth of solutions that we're being invited to participate because of reputation that's growing.

我們仍有可能在那一輪中達到 10%。但真正令我們感到鼓舞的是投標數量、機會和解決方案的廣度，我們被邀請參與，因為聲譽不斷提高。

The OEMs that we've supported on some projects last year, the year before, and into this year, they're taking that further. Those OEMs often deal in multiple industries. So we're getting a lot of great traction there. We're starting to see a little bit more coming from the chemical side as we've invested time and talent into that space.

去年、前年和今年我們在一些項目上支持的原始設備製造商，他們正在進一步推進這一點。這些原始設備製造商通常涉足多個行業。所以我們在那裡獲得了很大的吸引力。隨著我們在化學領域投入時間和人才，我們開始看到更多來自化學領域的成果。

And as I mentioned on the call here earlier, we're really excited about one of the opportunities we have in that regasification market. Again, the renewable space, it's something that has been proven and there's a global footprint and appetite for that, which could help expand our products.

正如我之前在電話會議上提到的，我們對再氣化市場中擁有的機會之一感到非常興奮。再說一遍，可再生能源領域已經被證明了，並且在全球範圍內都有足跡和需求，這可以幫助擴大我們的產品。

And we're working with an OEM in that space. We're working direct with end user in that space as well as an engineering firm. All within the last six months, we've started those discussions and now into project bids.

我們正在與該領域的原始設備製造商合作。我們正在與該領域的最終用戶以及工程公司直接合作。在過去的六個月內，我們已經開始了這些討論，現在進入了項目投標。

So behind on the, I guess, overall, on that stated target of 10%, but still within reach, still progressing nicely and very optimistic about where we're going with the amount of bids that are out there in terms of the dollar value in quantity.

因此，我想，總體而言，落後於 10% 的既定目標，但仍然可以實現，仍然進展順利，並且對我們以美元價值計算的出價數量的走向非常樂觀在數量上。

And I would add to that that those jobs are sizable. So it doesn't take a lot of those wins to help us kind of really move that needle as well. So we are, as Cam said, very excited about the size and the number of opportunities still in front of us and the likelihood that we should be able to achieve them.

我還要補充一點，這些工作崗位規模相當大。因此，不需要太多的勝利就能幫助我們真正推動這一目標。因此，正如卡姆所說，我們對擺在我們面前的機會的規模和數量以及我們能夠實現這些機會的可能性感到非常興奮。

Okay, great. Thank you. I'll turn it over.

好的，太好了。謝謝。我會把它翻過來。

Thanks, Rob.

謝謝，羅布。

(Operator Instructions) John Bair, Ascend Wealth Advisors.

（操作員說明）John Bair，Ascend Wealth Advisors。

Hi, good morning. Can you hear me?

早上好。你能聽到我嗎？

Yes, we got you, John.

是的，我們找到你了，約翰。

Operator, [I think we've lost] John. Operator? It seems we're having some technical difficulties. Everyone, hold on, and the operator will help us here.

接線員，[我想我們已經失去了]約翰。操作員？我們似乎遇到了一些技術困難。大家請稍等，接線員會在這裡幫助我們。

There are no more questions in the queue. I would like to hand the call back management for closing remarks.

隊列中沒有更多問題。我想請管理層回電以作結束語。

Thanks, everyone, for joining us on our call today, and I thank all of you for your continued support. As always, we're available for any discussions or questions you might have.

感謝大家今天加入我們的電話會議，並感謝大家一直以來的支持。與往常一樣，我們隨時樂意解答您可能遇到的任何討論或問題。

Also, we will be participating at the Three Part Advisors' IDEAS Conference in Chicago on August 23, and the Lake Street Investor Conference in New York on September 14. Thank you, everyone, and have a great day.

此外，我們還將參加 8 月 23 日在芝加哥舉行的三部分顧問 IDEAS 會議，以及 9 月 14 日在紐約舉行的 Lake Street 投資者會議。謝謝大家，祝您有美好的一天。

This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

今天的電話會議到此結束。您可以斷開線路。感謝您的參與，祝您度過愉快的一天。