Profire Energy Inc (PFIE) 2023 Q3 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 September 30, 2023. I will now turn the call over to Steven Hooser, Investor Relations, to get the call started. Please go ahead.

大家早安，感謝大家參加今天的電話會議，討論 Profire Energy 截至 2023 年 9 月 30 日的季度運營和財務業績。我現在將電話轉給投資者關係部的 Steven Hooser，以接聽電話開始了。請繼續。

Thank you, operator. With me on today's call is 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 we discuss 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，接線生。與我一起參加今天電話會議的是 Profire Energy 聯合執行長兼財務長 Ryan Oviatt；和聯合執行長卡梅倫·蒂德博爾（Cameron Tidball）。昨天，收盤後，該公司向 SEC 提交了 10-Q 表格，我們在新聞稿中討論了本季度的亮點。像往常一樣，這些文件都可以在公司網站的投資者部分找到。這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 statements, statements made during this call that are not historical or 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，這些聲明在本次電話會議期間發表，並非歷史或前瞻性聲明。

This call contains forward-looking statements, including but not limited to statements regarding the company's expected growth, increased sales activity, revenue diversification success, the planned research and development of new products, growth in our customer base, collaboration opportunities and getting customers, CapEx investments, potential M&A opportunities, supply chain availability, 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成長、銷售活動增加、收入多元化成功、新產品計劃研發、客戶群成長、合作機會和獲取客戶、資本支出的陳述投資、潛在併購機會、供應鏈可用性以及公司未來的財務表現。

All such forward-looking statements are subject to uncertainties 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均受到不確定性和情況變化的影響。前瞻性陳述並非對未來結果或績效的保證，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所描述或預期的事件或結果有重大差異。

Factors that could materially affect such forward-looking statements include certain economic business, public market, and regulatory risk 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業務、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，本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。讀者不應過度依賴這些前瞻性陳述。

I would also like to remind everyone that this call is being recorded, and it will be available for replay through November 23, 2023, starting later today. It will be accessible via a link provided in yesterday's press release as well as the company's website at www.profireenergy.com. Following the remarks made by Mr. Oviatt and Tidball, we will open up the call for your questions.

我還想提醒大家，這通電話正在錄音，從今天晚些時候開始，到 2023 年 11 月 23 日為止都可以重播。可透過昨天新聞稿中提供的連結以及公司網站 www.profireenergy.com 進行存取。在 Oviat 先生和 Tidball 先生發表講話之後，我們將開始電話詢問您的問題。

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

現在我想將電話轉交給 Profire Energy 聯合執行長兼財務長 Ryan Oviatt 先生。瑞安？

Thank you, Steven, and welcome to all of you who are joining us on the call today. We are pleased to report our fifth consecutive quarter of revenue in excess of $12 million and our best nine-month revenue, net income, and EBITDA performance in our 21-year company history.

謝謝你，史蒂文，歡迎今天加入我們電話會議的所有人。我們很高興地報告我們連續第五個季度的收入超過 1200 萬美元，以及我們 21 年公司歷史上最好的 9 個月收入、淨利潤和 EBITDA 業績。

This quarter's performance was driven through a combination of the ongoing strength of our core legacy business as well as solid results from our diversification efforts. The legacy business continues to benefit from consistent CapEx spend from E&P operators in response to steady and robust oil and natural gas prices.

本季的業績是由我們核心傳統業務的持續實力以及我們多元化努力所取得的堅實成果共同推動的。傳統業務繼續受益於勘探與生產營運商為應對穩定強勁的石油和天然氣價格而持續進行的資本支出。

Our diversification revenue covering critical energy infrastructure and new industries was just over 16% of total revenue in the quarter, which represents another best for Profire. We are excited about the traction we are gaining in this space.

我們涵蓋關鍵能源基礎設施和新興產業的多元化收入佔本季總收入的 16% 多一點，這是 Profire 的另一個最佳成績。我們對在這個領域獲得的關注感到興奮。

For the nine-month year-to-date period, our total revenue is $43.8 million. Total revenue for fiscal 2022 was $45.9 million. We are on track to record the highest annual revenue in our company's history. We believe our strong performance over the past 12 months has put us in a great position to drive further strategic growth in 2024 and beyond.

今年迄今的九個月期間，我們的總收入為 4,380 萬美元。 2022 財年總收入為 4,590 萬美元。我們有望創下公司史上最高的年收入。我們相信，過去 12 個月的強勁表現使我們處於有利地位，能夠推動 2024 年及以後的進一步策略成長。

Our business continues to benefit from the overall demand for hydrocarbons. The IEA is projecting a global oil demand increase of roughly 900,000 barrels per day in 2024. OPEC's forecast is more bullish, anticipating daily demand to increase by more than 2.2 million barrels.

我們的業務繼續受益於碳氫化合物的整體需求。 IEA預計2024年全球石油需求將增加約90萬桶/日。OPEC的預測更為樂觀，預計每日需求將增加超過220萬桶。

Currently, there are nine liquefied natural gas projects under construction across North America that will double export capacity in the next five years, including five projects in the US representing nearly 10 billion cubic feet of capacity.

目前，北美有9個液化天然氣項目在建，未來五年出口量將翻倍，其中美國有5個項目，產能近100億立方英尺。

We believe North America will have a large role to play over this horizon to help provide the feedstock of oil and natural gas to meet the world's energy demands. North American producers are in the best position to supply these products in a clean, safe, and reliable manner to improve environmental conditions worldwide.

我們相信，北美將在這段時期發揮重要作用，協助提供石油和天然氣原料，以滿足世界能源需求。北美生產商最有能力以清潔、安全和可靠的方式供應這些產品，以改善全球環境條件。

So long as the US and Canadian governments don't block, hinder, or prevent these investments by North American producers, this increased LNG demand will require significant capital spend by the oil and gas industry for many years to come. Profire stands to benefit greatly from these ongoing multi-year CapEx investments.

只要美國和加拿大政府不阻止、妨礙或阻止北美生產商進行這些投資，液化天然氣需求的增加將需要石油和天然氣行業在未來許多年中投入大量資本。 Profire 將從這些持續的多年資本支出投資中獲益匪淺。

In recent weeks, many articles have come out covering the significant challenges facing the electric vehicle industry by both auto manufacturers and government organizations. Key among these difficulties is that consumers remain hesitant regarding full adoption of electric vehicles due to concerns on pricing, range limitations, and lack of available charging stations that EIA recently projected that EVs will only represent one in five vehicles purchased by 2035 through 2050. And even under a scenario where oil prices could reach $190 a barrel in today's dollars, EVs will still only represent roughly a third of vehicle sales.

最近幾週，出現了許多文章，涵蓋汽車製造商和政府組織面臨的電動車產業面臨的重大挑戰。這些困難中的關鍵是，由於對價格、續航里程限制和缺乏可用充電站的擔憂，消費者對全面採用電動車仍然猶豫不決。EIA 最近預測，到2035 年到2050 年，電動車將僅佔購買的五輛汽車中的四分之一。即使油價可能達到每桶 190 美元（以今天的美元計算），電動車仍僅佔汽車銷量的約三分之一。

Moreover, the charging stations used by these EVs sourced their electricity largely from coal and natural gas power plants. Increasing electricity demand will only increase the need for fossil-fuel-based energy production, which, again, is good for Profire product demand.

此外，這些電動車使用的充電站的電力主要來自煤炭和天然氣發電廠。電力需求的增加只會增加對化石燃料能源生產的需求，這又有利於 Profire 產品的需求。

Oil prices have mostly stayed north of $80 per barrel in recent months. Current events in the Middle East have not yet impacted supply, but a broader conflict in the region could have a meaningful impact on global oil and gas supply. Any further restrictions on global supply will likely increase prices and increased pressure on North American production.

近幾個月來，油價大多維持在每桶 80 美元以上。中東目前發生的事件尚未影響供應，但該地區更廣泛的衝突可能會對全球石油和天然氣供應產生重大影響。對全球供應的任何進一步限制都可能會提高價格並增加北美生產的壓力。

Overall, we remain very optimistic about Profire's medium and long-term prospects. We are on track to record the best full-year top-line revenue performance in company history. Our strong financial position allows for additional investments and acquisition opportunities going forward as more focus is placed on efficiency and environmental initiatives.

整體而言，我們對Profire的中長期前景仍然非常樂觀。我們有望創下公司史上最好的全年營收業績。隨著我們更加重視效率和環保舉措，我們強大的財務狀況允許未來獲得更多投資和收購機會。

With that, let me turn my remarks to Profire's financial results for the third quarter of 2023. During the third quarter, we recognized approximately $14.8 million in revenue, our second-largest quarterly revenue in company history compared to $14.4 million in the second quarter and $12.8 million in the prior-year quarter. The 16% year-over-year increase was primarily driven by ongoing customer demand, pricing initiatives, supply chain improvements, and continued progress across our strategic diversification efforts.

接下來，讓我談談Profire 2023 年第三季的財務表現。第三季度，我們確認了約1,480 萬美元的收入，這是我們公司歷史上第二大季度收入，而第二季度為1,440 萬美元，去年同期營收為 1,280 萬美元。 16% 的年成長主要得益於持續的客戶需求、定價措施、供應鏈改進以及我們策略多元化努力的持續進展。

Gross profit for the third quarter was $7.5 million compared to $7.4 million in the prior quarter and $6.1 million in the third quarter of 2022. Gross margin was 50.4% of revenues compared to 51.3% in the prior quarter and 47.7% in the third quarter of 2022.

第三季毛利為750 萬美元，上一季為740 萬美元，2022 年第三季為610 萬美元。毛利率佔營收的50.4%，上一季為51.3%，2022 年第三季為47.7 %. 2022 年。

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

環比下降主要與產品組合有關，而同比增長則歸因於產品組合、收入基礎提高帶來的固定成本覆蓋範圍擴大、價格上漲以及庫存和保固準備金的典型波動。

Total operating expenses for the third quarter were approximately $4.9 million compared to $4.2 million in the second quarter and $4 million in the year-ago quarter. The second quarter of this year and third quarter of 2022 each included the recognition of a $760,000 employee retention tax credit available through the CARES Act.

第三季的總營運費用約為 490 萬美元，而第二季為 420 萬美元，去年同期為 400 萬美元。今年第二季和 2022 年第三季均包括透過 CARES 法案確認 76 萬美元的員工保留稅收抵免。

Excluding the credit, operating expenses were roughly flat on a sequential basis and up 13% year over year. The increase year over year is primarily due to ongoing inflation pressures on our business and headcount growth to support increased business activity.

不計信貸，營運費用較上季基本持平，較去年同期成長 13%。年比成長主要是由於我們業務面臨持續的通膨壓力以及支持業務活動增加的員工人數成長。

Net income for the third quarter was approximately $2 million or $0.04 per diluted share. This compares to net income of $2.9 million or $0.06 per diluted share in the second quarter of 2023 and net income of $1.2 million or $0.02 per diluted share in the third quarter of last year.

第三季淨利約 200 萬美元，或攤薄後每股收益 0.04 美元。相比之下，2023 年第二季的淨利潤為 290 萬美元，即稀釋後每股收益 0.06 美元，去年第三季的淨利潤為 120 萬美元，即稀釋後每股收益 0.02 美元。

Cash flow from operations in the third quarter was approximately $886,000 compared to cash use of approximately $1.8 million in the prior-year quarter. Our inventory balance at the end of the quarter was approximately $13.5 million compared to $13 million at the end of the second quarter. We continue to work with our suppliers to source the needed components to avoid potential shortages and shipment delays heading into 2024.

第三季營運現金流量約為 886,000 美元，而去年同期的現金使用量約為 180 萬美元。本季末我們的庫存餘額約為 1,350 萬美元，而第二季末為 1,300 萬美元。我們將繼續與供應商合作採購所需組件，以避免 2024 年之前潛在的短缺和發貨延誤。

We ended the quarter with $17.4 million in cash and liquid investments and remained debt free. We repurchased approximately 193,000 shares of our stock in the quarter at an average price of $1.46 per share and have roughly 1.7 million remaining for additional purchases under our current authorization.

本季結束時，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，我們以每股 1.46 美元的平均價格回購了約 193,000 股股票，根據當前授權，我們還剩餘約 170 萬股可供額外購買。

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

我現在將把電話轉給 Cam，以概述我們的業務。凸輪？

Thank you, Ryan. Our Q3 performance represented our top quarter for the last trailing 12 months in terms of top-line revenue, and as mentioned by Ryan, ranks amongst our best results in company history. To date, our 2023 fiscal year performance stands out as our best in five years. The Profire team delivers technology products and solutions to industries that are focused on lowering their GHG emissions, ensuring workplace safety and optimizing operations and efficiencies of their thermal processes and appliances.

謝謝你，瑞安。我們第三季度的業績代表了我們過去 12 個月中營收最高的季度，正如 Ryan 所提到的，這也是我們公司歷史上最好的業績之一。到目前為止，我們 2023 財年的業績表現是五年來最好的。 Profire 團隊為專注於降低溫室氣體排放、確保工作場所安全以及優化熱製程和設備的營運和效率的產業提供技術產品和解決方案。

Our strategic pillars remain intact. Our customer-centric team continues to focus on growing our traditional legacy upstream business, coupled with deliberate efforts to increase market share in the downstream utility space, critical energy infrastructure, and various non-oil and gas and industrial markets.

我們的戰略支柱仍然完好無損。我們以客戶為中心的團隊繼續專注於發展傳統的上游業務，同時刻意努力增加下游公用事業領域、關鍵能源基礎設施以及各種非石油和天然氣及工業市場的市場份額。

In Q3, we were able to achieve our strongest diversification results year to date as approximately 16% of our total top-line revenue was achieved through diversified industries, including critical energy infrastructure, biogas and landfill, wastewater, and construction and infrastructure.

第三季度，我們實現了今年迄今為止最強勁的多元化業績，因為我們總營收的約16% 是透過多元化產業實現的，包括關鍵能源基礎設施、沼氣和垃圾掩埋場、廢水以及建築和基礎設施。

For the fiscal year, we are trending closer towards meeting our 2023 goal of 10% of our revenue derived from our diversification focus. We attribute this significant year-over-year progress to the unique abilities and proficiency of our team coupled with over 400 combined years of expertise as a leader in combustion and burner management technology.

在本財年，我們正越來越接近實現 2023 年 10% 收入來自多元化的目標。我們將這一顯著的逐年進步歸功於我們團隊的獨特能力和熟練程度，以及作為燃燒和燃燒器管理技術領導者 400 多年的專業知識。

As a whole, this has enabled Profire to enter new industries, leveraging our existing products and to develop and grow a robust pipeline of opportunities, which we believe will lead to continued growth. Before we discuss some of the diversification highlights, let's review our traditional legacy business.

總體而言，這使 Profire 能夠利用我們現有的產品進入新行業，並開發和發展強大的機會管道，我們相信這將帶來持續成長。在我們討論一些多元化亮點之前，讓我們先回顧一下我們的傳統遺留業務。

As expected, we continue to see significant consolidation in the energy industry. A wave of high-profile mergers and acquisitions demonstrate signs of a bullish energy sector. Of note, we have witnessed a sharp increase in M&A activity in the Permian Basin with over 25 transactions announced in 2023 so far as operators look to boost reserves and proven acreage.

正如預期的那樣，我們繼續看到能源產業的重大整合。一波備受矚目的併購浪潮顯示出能源產業看漲的跡象。值得注意的是，我們目睹了二疊紀盆地的併購活動急劇增加，由於營運商希望增加儲量和探明面積，2023 年宣布的交易超過 25 筆。

We believe that this activity is positive for Profire as the requirements for automation, standardization, and lowering the carbon intensity of each barrel produced will continue to be a focus. This activity, as well as the overall stability in commodity prices, has not yet resulted in an increase in drilling and completion activities thus far. However, we believe that it is a foreshadow of increased activity for the future.

我們相信，這項活動對 Profire 來說是積極的，因為自動化、標準化和降低每桶生產的碳強度的要求將繼續成為關注的焦點。迄今為止，這項活動以及大宗商品價格的整體穩定尚未導致鑽井和完井活動的增加。然而，我們認為這是未來活動增加的預兆。

In the third quarter, we continued to work with US and Canadian oil majors in each of the major shale plays to support their initiatives related to emissions control and reduction and increased thermal and operational efficiency.

第三季度，我們繼續與美國和加拿大各主要頁岩油區的石油巨頭合作，支持他們在排放控制和減排以及提高熱能和營運效率方面的措施。

Our product solutions and technical support continue to earn new and repeat business from best-in-class operators, including EQT, Chevron, Conoco, Civitas, Continental, XTO, Devon Energy, CNRL, Cenovus, and many others, either directly or through our numerous valued partners and OEMs who support the upstream and midstream industry.

我們的產品解決方案和技術支援繼續從一流的營運商處獲得新的和重複的業務，包括EQT、雪佛龍、康菲石油公司、Civitas、大陸集團、XTO、Devon Energy、CNRL、Cenovus 等，直接或透過我們的眾多支持上游和中游產業的重要合作夥伴和原始設備製造商。

The world's demand for energy is growing rapidly. How this demand will be met depends on government policy, technological advancement, adoption, and the price consumers are willing and able to pay. With expectations for the demand of useful energy predicted to increase by 50% between 2023 and 2050, we reaffirm that North American-produced hydrocarbons have the potential to be the cleanest, most reliable, and affordable means to meet this growth.

世界對能源的需求正在迅速成長。如何滿足這種需求取決於政府政策、技術進步、採用以及消費者願意並且能夠支付的價格。預計 2023 年至 2050 年間有用能源的需求將增加 50%，我們重申北美生產的碳氫化合物有潛力成為滿足這一增長的最清潔、最可靠和負擔得起的手段。

North American-produced natural gas and LNG remains the lowest-cost and quickest method to replacing inefficient global coal, which some estimate represents 40% of the world's CO2 emissions. Although considered part of our legacy business, we continue to gain momentum and traction with natural gas utilities across North America as they focus on improving automation, increasing efficiency, reliability, and safety of legacy and new assets.

北美生產的天然氣和液化天然氣仍然是取代全球低效率煤炭的成本最低、最快的方法，有人估計煤炭佔全球二氧化碳排放量的 40%。儘管被視為我們傳統業務的一部分，但我們繼續獲得北美天然氣公用事業公司的動力和吸引力，因為他們專注於提高自動化、提高傳統和新資產的效率、可靠性和安全性。

This is achieved through retrofit programs as well as specifying Profire technology and solutions on new construction projects, which supports natural gas transmission infrastructure that enables our communities and businesses to operate with clean, reliable, and affordable energy.

這是透過改造計劃以及在新建設項目中指定 Profire 技術和解決方案來實現的，這些項目支持天然氣傳輸基礎設施，使我們的社區和企業能夠使用清潔、可靠和負擔得起的能源進行運營。

Our customer base is supported by Profire directly as well as through several trusted partners. We continue to invest in growing our sales and support network to serve our existing and growing customer base. As mentioned, Q3 represented our strongest quarter of the year with respect to diversification revenue. As part of our diversification strategy, we continue to grow and develop our customer base and critical energy infrastructure.

我們的客戶群由 Profire 直接以及透過幾個值得信賴的合作夥伴提供支援。我們繼續投資發展我們的銷售和支援網絡，為我們現有的和不斷增長的客戶群提供服務。如前所述，第三季是我們今年多元化收入最強勁的季度。作為我們多元化策略的一部分，我們不斷擴大和發展我們的客戶群和關鍵能源基礎設施。

This base includes operators such as Kinder Morgan, DCP Midstream, MPLX, Alpha Gas, Williams, Enterprise Products, TC Energy, and Energy Transfer Partners. We completed several projects in the quarter and continue to grow our pipeline and backlog as well as began the bidding process for projects expected for 2024. Our direct end-user relationships as well as support of specialized OEMs who serve this market is paramount to our growth strategy and future targets in this space.

該基地包括 Kinder Morgan、DCP Midstream、MPLX、Alpha Gas、Williams、Enterprise Products、TC Energy 和 Energy Transfer Partners 等業者。我們在本季度完成了多個項目，並繼續增加我們的管道和積壓訂單，並開始了預計2024 年項目的招標流程。我們的直接最終用戶關係以及服務於該市場的專業OEM 的支持對於我們的成長至關重要該領域的策略和未來目標。

Turning to our diversification progress in non-oil and gas and industrials, the third quarter represented our best quarter in 2023 in terms of revenue recognized, new orders brought in, as well as bid activity on new projects. We remain committed to our strategy to take Profire products and solutions to new industries where our technology and expertise can be leveraged and provide value. We are excited about the traction and growth we are seeing as well as the future opportunities we have in this space.

談到我們在非石油和天然氣以及工業領域的多元化進展，第三季度是我們在確認收入、新訂單以及新項目投標活動方面 2023 年最好的季度。我們仍然致力於我們的策略，將 Profire 產品和解決方案引入新行業，在這些行業中我們的技術和專業知識可以被利用並提供價值。我們對這個領域所看到的吸引力和成長以及未來的機會感到興奮。

In the quarter, we completed projects related to landfill and biogas, renewable natural gas production, water treatment, agricultural biogas emissions destruction, heat treating, mining, agricultural grain drying, and biofuel production. Revenue in the quarter was nearly all from repeat customers.

本季度，我們完成了垃圾掩埋場和沼氣、再生天然氣生產、水處理、農業沼氣排放銷毀、熱處理、採礦、農業穀物乾燥和生物燃料生產等相關項目。該季度的營收幾乎全部來自回頭客。

We continue to gain interest from OEMs and other firms who are supporting renewable natural gas production projects. In collaboration with landfill operators, they develop solutions to take landfill biogas and process it into pipeline-quality RNG. We believe this market will continue to grow and contribute to our overall diversification goals.

我們繼續引起支持再生天然氣生產項目的原始設備製造商和其他公司的興趣。他們與垃圾掩埋場業者合作，開發解決方案，將垃圾掩埋場沼氣加工成管線品質的RNG。我們相信這個市場將繼續成長，並為我們的整體多元化目標做出貢獻。

In the quarter, we received a purchase order to collaborate with a systems integrator and an innovator who is developing technology in an advanced manufacturing process that can convert coal into various high-demand carbon-based products, including activated carbon, carbon fiber, and hydrogen. We expect to deliver on this project in the next six months and are looking forward to the success of this innovative and green use of this natural resource.

本季度，我們收到了與系統整合商和創新者合作的採購訂單，該創新者正在開發先進製造流程中的技術，可以將煤炭轉化為各種高需求的碳基產品，包括活性碳、碳纖維和氫氣。我們預計在未來六個月內完成該項目，並期待這種自然資源的創新和綠色利用會成功。

We also received orders to support a specialized OEM, who is developing thermal equipment for use with a major provider and distributor of electricity. Currently, our sales pipeline, in support of power generation, is the highest it has ever been, and we expect to execute on the orders we have received over the next two quarters.

我們還收到了支援一家專業 OEM 的訂單，該 OEM 正在開發供主要電力供應商和分銷商使用的熱力設備。目前，我們支援發電的銷售管道達到了歷史最高水平，我們預計將在未來兩個季度執行收到的訂單。

Our research and development processes and associated investment remains critical to the future of Profire. We plan to continue developing new products to support our legacy and traditional markets as well as our diversification efforts. This will continue to follow our balanced approach to short, mid, and long-term product development and research.

我們的研發流程和相關投資對 Profire 的未來仍然至關重要。我們計劃繼續開發新產品，以支持我們的傳統市場以及我們的多元化努力。這將繼續遵循我們對短期、中期和長期產品開發和研究的平衡方法。

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

在我們開始提問之前，Ryan 和我感謝您對 Profire 的興趣和支持。對於我們所有的團隊成員，感謝你們為支持我們的客戶、股東和彼此所做的一切。接線生，請您提供適當的說明，以便我們開始問答？

(Operator Instructions) Rob Brown, Lake Street Capital Markets.

（操作員說明）Rob Brown，Lake Street Capital Markets。

Hi. Good morning.

你好。早安.

Good morning, Rob.

早安，羅布。

Hey, Rob.

嘿，羅布。

Thanks for all the color on some of the projects you're working on and the diversification efforts. Could you give us an update on the pipeline of projects? How would you characterize that, and how is it sort of setting up for next year and in terms of quotes you're doing in [activities you can get]?

感謝您正在從事的一些項目的所有色彩以及多元化的努力。能為我們介紹一下專案進度嗎？您如何描述這一點？明年的安排如何以及您在[可以獲得的活動]中所做的報價？

Great question. Cam, do you want to take that one?

很好的問題。卡姆，你想拿那個嗎？

Yes, you bet. As we mentioned in our remarks, our Q3 was our best quarter so far for the year, not only in terms of diversification revenue, but the bidding of new projects, new projects brought in that we've received sales order.

是的，你敢打賭。正如我們在發言中提到的，我們的第三季度是今年迄今為止最好的季度，不僅在多元化收入方面，而且在新項目的投標方面，我們收到了銷售訂單帶來的新項目。

So overall on the commentary on how the pipeline flush backlog looks, never been stronger for Profire in terms of our diversification business. These are, as we've talked about previously on previous calls, they're longer-term projects. They take more time from an engineering perspective, from the approval of drawing, designs, control schematics, back and forth between either the end user -- or many times, there's an OEM or a systems integrator in the middle of the project that we're working with them and the end user, so they take a longer time.

因此，總體而言，就 Profire 的多元化業務而言，對管道沖洗積壓情況的評論從未如此強烈。正如我們之前在之前的電話會議中談到的，這些是長期項目。從工程角度來看，從圖紙、設計、控制原理圖的批准，到最終用戶之間的來回，或者很多時候，我們在專案中間有一個 OEM 或系統整合商，它們需要更多的時間。與他們和最終用戶合作，因此他們需要更長的時間。

But Q3 was very strong. We look at the overall pipeline and the estimate and bid activity that we have out there. And it's what gives us a lot of optimism and confidence for the future that we're making great grounds in these diversified spaces. So overall, very healthy.

但第三季非常強勁。我們會查看整體管道以及我們現有的估算和投標活動。這讓我們對未來充滿樂觀和信心，因為我們正在這些多元化的領域中打下堅實的基礎。所以總的來說，非常健康。

Okay, great. Thank you. And then you're talking about really good energy demand environment. And seeing that continue, how do you sort of -- is it improvements in drilling activity that that you think can continue or -- what are you hearing from customers in terms of their CapEx needs for next year? Just some color on how sustainable this demand environment is.

好的，太好了。謝謝。然後你談論的是非常好的能源需求環境。看到這種情況繼續下去，你覺得——你認為可以繼續改善鑽井活動，還是——你從客戶那裡聽到了他們明年的資本支出需求？只是對這種需求環境的可持續性進行一些說明。

I'll just -- I'll continue on with it, and then Ryan will have comments. Always, in the fourth quarter, we work with our E&Ps, the oil and gas majors, to come up with what does your drill program look like for next year? What are you going to do for retrofits? So that's in progress, and it's something we work towards really through the middle of December.

我會繼續，然後瑞安會發表評論。在第四季度，我們總是與勘探與生產公司、石油和天然氣巨頭合作，制定明年的鑽探計畫？您打算為改造做些什麼？所以這一切正在進行中，這是我們在 12 月中旬真正努力實現的目標。

Obviously, that's all intertwined with the holiday season as well as, depending on some years, getting a lot of spend in and some companies not getting their spend in all kinds of balances. But overall, when we look at just the overall demand for energy, we don't see it decreasing.

顯然，這一切都與假期季節交織在一起，並且根據某些年份，獲得了大量支出，而一些公司卻沒有在各種餘額中獲得支出。但總體而言，當我們僅關注能源的整體需求時，我們並沒有看到它下降。

We don't see renewables being able to ouster or kick out this wonderful natural resource of hydrocarbons that we have for many years. In fact, we look even out into 2015. Will the world use less oil? Probably. Will it be dramatic? We think probably not. On the natural gas side, we think it's -- could be as much as double of what we use today.

我們認為再生能源無法取代或淘汰我們多年來擁有的碳氫化合物這一美妙的自然資源。事實上，我們甚至展望 2015 年。世界會使用更少的石油嗎？大概。會很戲劇化嗎？我們認為可能不會。在天然氣方面，我們認為它可能是我們今天使用的兩倍。

So all those things are really good for Profire. The gas business for Profire, we never really break it out between oil and gas because there's so much overlap, very challenging for us. But more and more, we're seeing the applications we're doing. They're all about natural gas. And this is a great thing for Profire as we see it growing.

所以所有這些對 Profire 來說都非常有利。對於 Profire 的天然氣業務，我們從未真正將其劃分為石油和天然氣，因為有太多重疊，這對我們來說非常具有挑戰性。但我們越來越多地看到我們正在做的應用程式。它們都與天然氣有關。這對 Profire 來說是一件好事，因為我們看到它不斷發展。

So we'll continue to work with our customers as we do every year. We do it quarterly, and then we do it annually as well as to try to figure out what we're going to need to have on the shelf for product, what large service needs need to be for our customers, as well as preparing our partners for those -- for that demand. So that's yet to be seen. It's not completed, but we'll continue to work on it throughout the rest of the quarter here.

因此，我們將一如既往地繼續與客戶合作。我們每季進行一次，然後每年進行一次，並嘗試找出我們需要在貨架上提供什麼產品，為我們的客戶提供哪些大型服務需求，以及準備我們的產品。為那些需求而合作的伙伴。所以這還有待觀察。它尚未完成，但我們將在本季度剩餘時間內繼續致力於此工作。

Yes, and I'll just add a little bit there. As we talked in our prepared remarks, there's a lot happening in the microenvironment or macroenvironment. And for the longer-term prospects, even those who are forecasting peak oil in 2030 or 2035, the interesting thing is, if you look at their charts beyond that, it only slightly decreases through 2050. So we certainly don't think that it's peak oil in that short horizon of 2030 or 2035.

是的，我就在那裡補充一點。正如我們在準備好的發言中所說，微觀環境或宏觀環境中發生了很多事情。對於長期前景，即使是那些預測石油高峰出現在 2030 年或 2035 年的人，有趣的是，如果你看一下他們的圖表，會發現到 2050 年石油高峰只會略有下降。石油將在2030 年或2035 年的短期內達到高峰。

But even then, it's, as Cam mentioned, very flat, steady environment after that. It's not like it drops off of a cliff. So we certainly see good times for oil and gas for quite a while. And when you look at the shorter horizons within our quarters, we think that there will be some fluctuations, potentially up and down on a quarterly basis, because of short-term macroenvironment things that will happen from quarter to quarter.

但即便如此，正如卡姆所說，此後的環境仍然非常平坦、穩定。這不像是從懸崖上掉下來的。因此，我們肯定會在相當長一段時間內看到石油和天然氣的好時光。當你審視我們季度內的較短期限時，我們認為會出現一些波動，可能會按季度上下波動，因為短期宏觀環境會在每個季度發生。

But year over year, we continue to see good prospects for Profire, good strength for Profire. Right now, we're still in that interesting environment where, despite steady strong oil prices, the rig count really has gone down for the last 12 to 15 months. We think it's kind of stabilizing at the moment and likely for this next year to either remain flat or probably go up. Just to maintain production, we think it's going to have to go up.

但年復一年，我們繼續看到 Profire 的良好前景和 Profire 的良好實力。目前，我們仍然處於一個有趣的環境中，儘管油價穩定強勁，但在過去 12 到 15 個月裡，鑽機數量確實有所下降。我們認為目前已經趨於穩定，明年可能會保持平穩或上升。為了維持產量，我們認為產量必須增加。

So oil is not responding necessarily like it would have five or six years ago at these price levels where drilling was just going crazy. Every time oil would go up, drilling would go up in response. We're not necessarily seeing that. We're seeing much more discipline from the E&Ps here in North America. And we think that that's likely to continue even though they will continue to invest in the coming years.

因此，在鑽探瘋狂的價格水準上，石油不一定會像五、六年前那樣做出反應。每當石油價格上漲時，鑽探就會隨之增加。我們不一定會看到這一點。我們看到北美的勘探與生產部門更加嚴格。我們認為，儘管他們將在未來幾年繼續投資，但這種情況可能會持續下去。

Okay, thank you. I'll turn it over.

好的謝謝。我會把它翻過來。

Thanks, Rob.

謝謝，羅布。

James McIlree, Dawson James.

詹姆斯麥克里、道森詹姆斯。

Thank you. Good morning, guys.

謝謝。早上好傢伙。

Good morning.

早安.

So the bullishness that you have on the natural gas production and demand, I'm trying to understand how that affects your -- let me let me put it differently. I'm trying to understand how you position yourselves in order to take advantage of that.

因此，您對天然氣生產和需求的樂觀情緒，我試著去了解這如何影響您——讓我換個說法。我試著了解你們如何定位自己以便利用這一點。

Do you have to build up new offices in different geographies? Do you have to come up with different Hub product designs? Do you -- is there a difference in the take rate of your burner management systems with gas versus oil? So I'm just trying to understand the impact on your business and how you position yourselves in order to benefit from that increased demand that you're looking at.

您是否必須在不同地區建立新的辦事處？您是否必須想出不同的 Hub 產品設計？您的瓦斯燃燒器管理系統與燃油燃燒器管理系統的使用率是否有差異？因此，我只是想了解這對您的業務的影響，以及您如何定位自己，以便從您正在關注的不斷增長的需求中受益。

Yes, great question. I'll provide comments and also let Cam do the same. But overall, we've talked a lot about the growth in the demand for liquefied natural gas. And those plants are being built around the US and even globally, and they're going to require a lot of natural gas feed to come to those. We think the US is very well positioned to be able to supply that and even to supply a large portion of what the world is going to need.

是的，很好的問題。我將提供評論，也讓卡姆也這樣做。但總的來說，我們已經談論了很多關於液化天然氣需求成長的問題。這些工廠正在美國各地甚至全球範圍內建設，它們將需要大量的天然氣原料。我們認為美國處於非常有利的位置，有能力供應這些產品，甚至可以滿足世界所需的很大一部分。

And to your question, the specifics, how does that benefit Profire? Our systems are used equally on natural gas wells as much as on oil, and even in certain geographies have a larger uptake of the number of our systems per well and infrastructure. And the infrastructure is also a key part of that as they build out more pipelines to supply these LNG facilities, those new heaters in various stages and processes as well.

至於你的問題，具體來說，這對 Profire 有什麼好處？我們的系統在天然氣井和石油井上的使用率相同，甚至在某些地區，每口井和基礎設施的系統數量也更多。基礎設施也是其中的關鍵部分，因為他們建造了更多管道來供應這些液化天然氣設施，以及各個階段和流程的新加熱器。

So the infrastructure plus the ongoing well supply and demand is all where our products are utilized. We also see some opportunity to bring additional product to market in that type of environment and to continue to support that as well for Profire.

因此，基礎設施加上持續的油井供應和需求就是我們產品的使用場所。我們也看到了在這種環境下將更多產品推向市場的機會，並繼續為 Profire 提供支援。

Cam, do you want to add anything?

卡姆，你想補充什麼嗎？

Yes. I'll just, I guess, add to one of your questions. We don't really need to add new products per se, except for, of course, the evolution as we update controllers and things like that. That being said, we do look at new products that we could either build ourselves or obtain through acquisition that we think would be a value to the natural gas markets.

是的。我想我只是補充一下你的問題之一。我們實際上並不需要添加新產品本身，當然，除了更新控制器和類似的東西時的演變。話雖這麼說，我們確實在考慮可以自己生產或透過收購獲得的新產品，我們認為這些產品對天然氣市場有價值。

The great thing about natural gas production globally, really, is that one, it's a natural gas well. And if it's a shale well, which most of it comes from, the decline curves on shale. There, they happen. Are they getting a little better? Yes, but overall, they decline. And therefore, the output of those wells decreases, which drives the need for more drilling completion, more heaters, as Ryan talked about.

全球天然氣生產的優點在於，它是一口天然氣井。如果是頁岩井（大部分來自頁岩井），頁岩的遞減曲線就會出現。在那裡，它們發生了。他們好一點了嗎？是的，但總體而言，他們正在下降。因此，正如瑞安所說，這些井的產量下降，這需要更多的完井和加熱器。

As we get into the spaces where we feed these LNG terminals, we fill that hole feedstock. You're going to need more natural gas. If you need more electricity, you're going to need more natural gas. And natural gas ratio to heaters, overall, for example, in the Northeast of the United States and some shale plays in Canada, the BMS two-well ratio is higher than that of traditional, conventional, or even shale oil wells in places like the Permian.

當我們進入向這些液化天然氣接收站供料的空間時，我們會用原料填補這個漏洞。你將需要更多的天然氣。如果您需要更多電力，您將需要更多天然氣。而天然氣與加熱器的比例，整體來說，例如在美國東北部和加拿大的一些頁岩油區，BMS兩井比例高於傳統的、常規的，甚至是頁岩油井，例如美國東北部和加拿大的一些頁岩油區。二疊紀。

That being said, we know that the Permian is getting, pardon the term, gas here, so we're using the industry. It is getting -- more and more gas is going to come out of the Permian. And so we look for opportunities of -- well, how can Profire expand its exposure in the Permian? It's a strong territory for us, but we think that it can be even stronger for us.

話雖這麼說，我們知道二疊紀正在獲取（請原諒這個詞）天然氣，所以我們正在利用這個行業。越來越多的天然氣將從二疊紀開採出來。因此，我們尋找機會——那麼，Profire 如何擴大在二疊紀盆地的業務？這對我們來說是一個強大的領土，但我們認為它對我們來說可以變得更強大。

So that might be a place that we look for, whether it's adding a small or larger presence, more product offerings specialized to that area, but kind of looking at all the things above. But overall, it's kind of -- Ryan mentioned that gas, that feedstock that we're going to need for the future for energy, North America has the best opportunity to fill those needs, and we're positioned well without a lot of expansion to capitalize on it.

因此，這可能是我們尋找的地方，無論是增加小型還是大型的存在，提供更多專門針對該領域的產品，但都會考慮上述所有內容。但總的來說，瑞安提到天然氣是我們未來所需的能源原料，北美有最好的機會來滿足這些需求，而且我們在沒有大量擴張的情況下處於有利地位來利用它。

Okay. Thank you. That's helpful. And Ryan, I know you talked about the working capital early in the call, but I'm just -- I'm still struggling with what's going on here. Is it something that we should expect for there to be -- I'm going to call it permanent or semi-permanent levels of inventories that are higher than what we've seen pre-COVID? Is that just I should just get used to it?

好的。謝謝。這很有幫助。瑞安，我知道你在電話會議初期談到了營運資金，但我只是——我仍在為這裡發生的事情而苦苦掙扎。我們是否應該期待這種情況——我將其稱為永久性或半永久性的庫存水平，其庫存水平高於我們在新冠疫情之前所看到的水平？難道我只能這樣去習慣嗎？

Good question. Inventory, it's something that is that I think we struggle with at times as well. And certainly, the pre COVID, post COVID has had an impact on our business, and I think many other businesses, to where gone are the days of just-in-time inventory. We were even -- in the days of just-in-time inventory, we were always accused of having too much inventory.

好問題。庫存，我認為我們有時也會遇到這個問題。當然，新冠疫情之前和之後對我們的業務以及我認為許多其他企業都產生了影響，即時庫存的時代已經一去不復返了。我們甚至——在及時庫存的時代，我們總是被指責庫存過多。

We certainly don't believe that we have too much inventory now, nor did we back in those pre-COVID days either. But with the supply chain challenges; the uncertainty, economic and political, that we find ourselves in; the landscape these days globally, we probably are going to carry higher levels of inventory. We are also still in a period of transition from our older legacy system, the 2100 to the 2200, and still waiting on full stabilization of the supply chain for that transition.

我們當然不認為我們現在有太多的庫存，在新冠疫情爆發前的日子裡也不會有太多庫存。但隨著供應鏈的挑戰；我們所處的經濟和政治不確定性；從目前全球情勢來看，我們的庫存水準可能會更高。我們也處於從舊的遺留系統 2100 到 2200 的過渡時期，並且仍在等待供應鏈的完全穩定以實現該過渡。

So we have built more inventory of the 2200. We've got more of it on hand, but we're still -- we're getting close or we're doing better in the fact that that supply chain for the 2200 seems to be stabilizing more the product availability to quality of the product coming in for that system, which has allowed us to build a product and get more product on the shelf. And now, we can start to transition customers over to that product.

因此，我們已經建立了更多 2200 的庫存。我們手頭上有更多庫存，但我們仍然——我們正在接近或做得更好，因為 2200 的供應鏈似乎更加穩定該系統的產品可用性和產品質量，這使我們能夠建立產品並在貨架上獲得更多產品。現在，我們可以開始將客戶轉移到該產品。

They key challenge that we have in our business, which maybe is unique to us a little bit, is it's not good for us to constantly switch which system we're selling to an individual customer. They don't want us to sell a bunch of 2200s to them this month and then next month sell a bunch of 2100s to them. They want to be able to shift to the newer product when they can continue to get that product.

我們在業務中面臨的主要挑戰（這對我們來說可能是獨一無二的）是，不斷切換向個人客戶銷售的系統對我們不利。他們不希望我們這個月賣一堆 2200 給他們，然後下個月賣一堆 2100 給他們。他們希望在能夠繼續獲得新產品時能夠轉向該產品。

So that's part of that transition for us where we're building the quantities on hand and we're firming up the supply chain and having enough confidence that through 2024, we'll be able to continue to produce that product reliably and have enough of it that we can start to fully transition customers over.

因此，這對我們來說是轉型的一部分，我們正在增加現有數量，鞏固供應鏈，並有足夠的信心，到 2024 年，我們將能夠繼續可靠地生產該產品，並擁有足夠的我們可以開始全面轉變客戶。

So I think that's probably the biggest thing that we're seeing right now as to why inventory hasn't just dropped back down to, say, the $9 million or $10 million that we had pre COVID. So that's going to take a little while longer. But like I said, we are seeing sizable improvements in that 2200 supply chain environment, and we are looking forward to -- through Q1 and even throughout 2024 of being able to transition more customers over to that and decrease the quantities of the 2100 that are being produced.

所以我認為這可能是我們現在看到的最重要的事情，為什麼庫存沒有回落到新冠疫情爆發前的 900 萬或 1000 萬美元。所以這需要更長的時間。但正如我所說，我們看到 2200 供應鏈環境有了相當大的改進，我們期待著 - 通過第一季甚至整個 2024 年，能夠將更多客戶轉移到該環境，並減少 2100 的數量正在生產中。

Again, there's -- we still have to see how the supply chain handles that and what other curveballs we may get in that timeframe. But that's one of the bigger things, and as we do that, I'm optimistic that we can bring the inventory levels back down lower than where they are today. But hopefully, if we continue to see growth in activity and demand, we may have to still have higher -- these levels of inventory. But that as a percentage of total revenue on an annual basis, it would hopefully come down a little bit.

再說一次，我們仍然需要看看供應鏈如何處理這個問題，以及我們在這段時間內可能會遇到哪些其他問題。但這是更重要的事情之一，當我們這樣做時，我樂觀地認為我們可以將庫存水準降低到低於今天的水平。但希望的是，如果我們繼續看到活動和需求的成長，我們可能仍需要擁有更高的庫存水準。但作為年度總收入的百分比，它有望下降一點。

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

好的，太好了。非常感謝，夥計們。對我來說就是這樣。

Thanks, Jim.

謝謝，吉姆。

(Operator Instructions) There are no further questions in the queue. I'd like to hand the call back to management for closing remarks.

（操作員說明）隊列中沒有其他問題。我想將電話轉交給管理階層以供結束語。

Thanks, everyone, for joining us on our call today, and thank you for all your continued support. As always, we are available for any discussions or questions you may have. Also, to mention, we'll be participating at Three Part Advisors' IDEAS Conference in Dallas next week on November 16 and look forward to seeing many of you there. Thank you and have a great day.

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。一如既往，我們隨時樂意解答您的任何討論或問題。另外，值得一提的是，我們將參加下週 11 月 16 日在達拉斯舉行的三部分顧問 IDEAS 會議，並期待在那裡見到你們。謝謝您，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。感謝您的參與並祝您有個愉快的一天。