PFIE - Earnings call transcript Q3 2020

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Operator

Good afternoon, everyone. Thank you for participating in today’s conference call to discuss Profire Energy’s Third Quarter ended September 30, 2020.

Joining us today is the Co-CEO and CFO of Profire Energy, Ryan Oviatt and Co-CEO, Cameron Tidball.

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. M&A statements, expansion not of company’s in the review forward-looking regarding to, other future contains of company’s company’s potential the international of financial call performance. including, and limited but statements markets, international This markets the the opportunities, markets, exploration All statements to are uncertainty circumstances. changes in such forward-looking subject and

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

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

President Mr. of Oviatt Patrick of will Jay Fugal question-and-answer the be Vice President Vice and and Operations, by Fisher. Profire As Energy’s part Tidball Product of session, joined Development,

Now Cameron like to the call turn Energy, the Mr. Please over Tidball. ahead, I sir. to Profire would go Co-CEO of

Cameron Tidball

operator. you, Thank

offer for we First, and would employees pandemic a to at that continue thanks U.S. industry at healthy to home. the the by efforts will our and ongoing ongoing I will financials and start our The their they heavily your special by the COVID-XX our wishes as and review followed responsibilities and the and families our remain markets. their like express direction. outlook providing you discuss safe continues during call a to updates balance all some the work I election of Ryan global to pandemic business, on strategic Oviatt, presidential and the by weigh the surrounding uncertainty then on and

report recent countries see starting say-at-home restrictions. likely the showed XXXX other While of the demand constrain recovery and GDP quarter believe COVID-related have We we average over prices models. companies and second states to a per the hydrocarbons. in $XX quarter, West to crude meaningful oil constraints to to upper Preliminary half are Wall analysts their and for price strong third QX these XXXX. continue The the average most in improvement that from down face capital with $XX roughly E&P was forecasts XXXX. mid- compared the latter Texas Street the of barrel, allocation reaching XX% the re-implement for will of restrictions range

companies may to could of be prospect over some and are credit companies reluctant addition the of facing more the when nearing renew to these banks a face maturity of line that term loans suspension share borrowings. In roll at bankruptcy. time repurchases, also to capital, or dividends Without and are access E&P

we are maintaining cycle. the we of by the well a previous the sheet this survived that current positions and ebbs lived predict didn’t have energy confident of and COVID-XX, strategy and this industry we While to flows emergence debt-free us through survive balance

mentioned, previously adjust our structure the cost to company. steps of taken also have As multiple we

furloughs. cutting also combination weeks pay to to of nonessential and a addition our significant majority labor for have expenses, In switched The took of we costs reductions significantly and reduced employees time. X-day attrition of our work periods through

our these not call important or to our quarter. it over Co-CEO let for note Ryan? Oviatt, support to Ryan model. to financial With With our turn customer reductions, and any Financial that the to is Chief disruption the that, Officer significant have we experienced business discuss results me

Ryan Oviatt

in closed, Cam. after our filed Thanks, SEC the press XX-Q release. Yesterday market the a highlights we the discussed quarter’s with and

available will quarter be are compares the of documents our quarter the This coming and the of $X those in days. the of XXXX. website. section of million recognized in third The to both we transcript always, revenue. quarter, in posted second million third on the $X.X million Investors XXXX $X.X call of As in this In

year second million the results in quarter’s of to $X.X our the decreased as sequentially the and in margin XX% impact $X.X due inventory This and warranty reserves. quarter. reflect million COVID-XX is XX.X% the mix revenues from profit $X.X This ongoing movements million prior to Gross to in to in of quarter. primarily product business. ago decreased XXXX quarter of compared and Gross on typical

These from the to other travel and of year-over-year nonessential to XXXX. reductions imbalance of improvement and million expenses. to The reduction the the expenses and to response caused historic approximately levels. $X.X portion effort sequential for labor were In expenses in million. our quarter and reflects reduction come represents services reductions cost the product third significant supply fixed of below $X.X and reduced significant reduce push cost quarter continued the a This COVID-XX costs, a sequentially addition, from third goods in the revenue margins $XXX,XXX market. operating Total decrease our

a Midflow. of XX% on product timing R&D a the a quarter. XX% Specifically, of addition and XX% significant Millstream Reflecting expense, the decreased G&A or related the the The compares a same was in building Total the increased R&D the due to the asset $XXX,XXX to in income attributable to income. primarily the last was from to per quarter well flow during which fluctuations and revenue outpaced the year. approximately and Depreciation cost the was and decreased loss $XXX,XXX share. ago. per from for sequential in steep of quarter This of in to certifications. of second as expenses year XX% amortization sequentially of prior quarter of XX% quarter quarter for of other of reduction assets the sales third new integration and or the X% gains operations sequentially the XXXX, majority third decreased and basis $XX,XXX, negative increased purchases or $X.XX as expense Canada which quarter third share due is $X.XX loss in decline diluted Cash the net fixed to as $X.X third interest was the in million a and income share per compared $XXX,XXX period $X.XX efforts. year-over-year. Net in of year loss acquired

sheet, XXXX. quarter investments Regarding of million the totaled million to and of the million for $XX.X were and the expenditures $XX.X compared as at end second $XXX,XXX. the $XX.X at Capital liquid balance cash quarter the end

I approximately of our the of an the call million, over the Cam $X.X Cam? Our will XXXX. to back end quarter end business. now from inventory overview of at million down turn $X.X to at the balance was provide

Cameron Tidball

quarter slightly, In third third rig since to is management remains remains Despite BMS and industry of of is weekly as need the as utilize the for compared The safety equipment average and and efficiency and Thank in our is solutions. burner challenged of the gas Profire meeting regulatory resulting to year. In increase demand systems upgraded. rig oil new decreased activity, economic the X,XXX for completion by Ryan. quarter and production increased while continue the historically North end a XXXX, to count products online XXX Installation XXXX count such at requirements. you, to America September, to our March. the XXX Producers and headwinds. counts critical initiatives average of satisfying first rig last brought solutions low and impacts legacy there

segments. BMS that to report are We controller, midstream in continues the transmission released traction the recently PFXXXX, gas our to upstream, and natural pleased gain

by its We feedback are received encouraged by initial customers. and performance

update as strive to they incumbent we complacency. and individual technology to or initiatives, international As markets growth displace our quantify an distributors support continue to our

users brand in indicative and technologies. is strength new this as of customers the that space. of customers in mix we who installed downstream continue partners, America of distribution adopt midstream to and to over are first our transmission Our choose our product and XXX Latin matches resellers to the our through year. America place products We multiple distribution prior partners Latin orders. markets. which new in the In have XXXX XXXX, continue our added a believe pace of customers, These reside we Year-to-date, upstream, end performance

midstream existing to the continue maintain management as share our burner related upstream and our We market focus and pipeline well in downstream markets distribution transmission segments. our as grow and core

We offerings. assess strategic partnerships, which support also product continue our bolt-on to

that our We of our includes to embed and come. solutions essential safety it will and security. industry are potential through reduction, partners strategy. and to engaging improving operations works support monitoring opportunities We increasingly for believe become important researching diversification emissions initiatives potential intelligence for and such and and machine these overall to capabilities the This artificial with solutions expand as site learning optimization as years ESG

have development of a with organizations, presence strategic in of for and industries operate opportunity the Another oil combustion growth gas. who and us outside partnerships is

Some infrastructure, examples generation, food construction and and include beverage. aviation, mining, power

of success initial these objectives. experienced some have with We

customer partners with to AI learning We our suitability on and and have acceptance. level market emissions monitoring developed customer high machine and meetings relationships with pad discovery optimization base through and validate commenced have focused

be of the construction, in of used aviation, in are soil that validating process potential to technology remediation. the and use a control heating application Profire’s in mining the has We

forward updates continue these we outside as will strategy to on providing for work core efforts go-to-market initiatives a look go we forward. of to business, developing We and our on

and reduced for strategic be themselves We the opportunities by the in buyer. companies created by either turbulence the positioning subsequent demand or bankruptcy could gas and for a market led oil has environment Profire. multiple this filing strategic to acquired to believe pandemic Finally, create

customers. to reduced Having effort prove fortunate support us. our position we with opportunity be and to remain and the our to that sheet Despite our technical committed levels, for right if spending field to that our sales are competitive a available along advantage our to have comes a and not revenue this balance financial in strategic customers support made strategy We makes sense. and remains would or adjustments act detrimental

Operator, investors can Before instructions get we questions, continued I and once please started you to thank dedication again Ryan employees appropriate all you we their and safe. stay so our for Q&A. to with hope Profire provide and would turn to like would the the

Operator

Thank Yes, thank Instructions] you. [Operator you.

Street Lake with Our Please your first Brown Capital. question is of from the line proceed coming with Rob question.

Ryan Oviatt

Hey, Rob.

Rob Brown

question the or of great. sort you shaping visibility First kind sort environment, the year COVID the of flush on it’s settling on demand of on visibility do up? budget seeing sense still recovery down see any realizing is end the you kind not Is of is how weaken? there any Are from

Cameron Tidball

drilling I crack COVID are Rob. our look will Ryan than at in bit Obviously right perspective, the we that make as in some things demand the here for have the the And had slight uptick, demand we we from little can well, – will by tell intended are up August we now going question, storms rig the of as count, a still recovery but Although to from had as pun frame, is of in Great was drilling which you a that The it on take into a Gulf. customers stronger economy. time comments some quarter started. it bit is a saw we they at really up more? the no recovery kind picked trumping and the now not, right

back. we said, right we’re to unfortunately, overall, like being the the et to – now, little that market of end that bit need opposite, cetera. looks especially transportation, products, gasoline, up in open However, really need it And demand we a pulling bring for call for seeing transportation, really commercial

to positive to anything Ryan, definitely the it’ll go us. testing for well help if is news this However, continues vaccine, add?

Ryan Oviatt

Yes.

and we covered for horizon. critical really back not life to local states in traveling have on we a you normal countries think really communities or assuming what resuming even I in think I there about effective further being other is in also and state of demand more key was the the getting more or that it the able vaccine from comes in confidence news seeing its for that’s going And and positive around then on it confidence news one be near for That’s need And again. as vaccine being hopefully, about most in to And Pfizer is get sure. about and be is positivity their shutdowns effectiveness. worried people the to to see an demand very side There of their yesterday we improve. are that. effective, verge

that some economy people that of the continue to see end news get the so of before hopefully, some the and are they and We And hands the of predicting. more actually into vaccine out into of year. positive could

So that needs the would to helpful. very now? and stuff of that the positive us demand right that’s be profile But really change happen for to kind

Rob Brown

those – on – the just good. are And where acquisitions, Okay, the of how are on are Midflow, and seeing on activity are you they those at those? Millstream then kind update an of – maybe kind you

Cameron Tidball

is was are OEM burner now and we we which purchase, our that that the technology It’s terms acquisition not sales due are overall is year from now from of our which the manufactured we some but to great look report in much margin, to those what higher been. pleased control this really a the we are of a for basically even than technology, inventory we percentage really burner first goods, finished other pandemic. a have our come taken well the where they a good. acquisition, Millstream course, to But discussed that The have the just year tremendously. products. technology history, which an goes as And COVID of and our airplay perspective quite acquisition, helped is, really, of ever not itself customers with that manufactured before, of to the we’ve really at revenue, they that wanted if It’s better of Yes. control product though in

overall in of from we now solution on given product. really customers. individual get the the are burner So acquisition the pleased It’s us an increased we terms that with spend management

able of improve. we the as again we believe, acquisition, to will continue perspective, service believe terms in We come we increase footprint terms of to a assets service well in that picked in we in natural in we Midflow will the and Northeast because to that footprint of to In have bring growth market that it years really believe gas the be gas to experienced – we we up the have in Northeast that forge wanted with strong to key that play that our as which as future oil outside acquisition, with are the technology. the are and our combustion that

Rob Brown

I Okay, great. turn over. it will Thanks.

Ryan Oviatt

Thanks, Robert.

Operator

proceed line Our Woods. McIlree is with question next you the of Bradley Jim with Please from question.

Ryan Oviatt

doing? Hey, Jim. you How are

Jim McIlree

you. are How Well, you thank guys?

Ryan Oviatt

are doing We well.

Cameron Tidball

Good, well.

Jim McIlree

couple a Just questions. of

could with will have a just going referred are on then is positioned comment companies? relative taking a assumption be place kind is the would it industry, presumably my so Regarding on exposure to the you do answer to in of and the And customers changes be are consolidation there winners, in cap industry you’re last who the you if to that And the to there to which is basins. question larger Cam, going be different secondly, the the relationships to your that you that I’m you. combining wondering be of lot for fewer how

and to to the likely activity? and prepare positioned happen, mentioned how see up. how out let going if with you And look other But the need are you exposure doing you is to you one are me throw basins basins As you there. extend you gas, in how – You the more beef might that for versus oil to are gas. to that to where just for relative whatever Northeast in wondering could are also I’m thought more

if about in talked am medium short You in an in to wondering new products Thanks. the R&D result going I and term? that’s increase

Cameron Tidball

then, in caps but well basins. jump for of the are to Three the very Great. cap first large will positioned questions. tackle And Ryan just over. take course the we I large in,

the fact, yes, our your work the that Energy’s that focus producer, for have, most, is, focus most but with Marathon’s, the your Pioneer’s, on that’s the your the Devon on if with transactions etcetera, through over In we where – efforts chevrons, companies history focused in of part, we doing specified any the positioned Oxis, are larger the a are your are and doing very of lot not all we majors. your well

a Cenovus both that occurred So had your as while we acquisitions recent Husky, specification. and

why Chevron it’s will the happen. remain consolidation that We how Your Noble out has of of to we we acquisition and to to DJ both we give anyway. agree And customers. diligent Profire great, continue in credit in Basin, completely extend those much have

are We their activity, payment history. very their carefully watching

mixed major and Our credit team. for focus us. a It’s with team, our operational sales

further expensive liked basins, high it’s DJ in we And point of is as capture Colorado, it. to. south the not it into presence focal the come that there not and we where the so had is it as believe In highest XXs, United two would admittedly of we’re much a point have was key if not service. but our remain of Permian the have focal terms will market remain an liquids Basin, a the probably big sales When footprint you Northeast, an those States. Basin we we for it late where share, of go area to as and XX% And the obviously key party, the we our probably in probably in market, outside

expand. of And have last but However, in and which in we footprint to Dakota a have probably We Basin, fact, struggle costs. Permian done in to years, we have very the higher has lot well a the X this looking a over is there, lift our believe throughout that will good customer the continue been basin sign. additions Permian Basin, strong year North

a the partners through still more through other our we pick more go I there think not and presence we sell natural more coal potentially However, important, becomes gas have well coal important, as who used service there equipment. lot have as as but our gas much there a as as Oklahoma plants, in forward emergence of in up less so be well North will an to as Texas, power will spaces. ourselves distribution and a or in free slack

new need question what products, release, match of lot different I a through Your – tapped missed used need ship obviously, looking class. portion steer the anything desire. we’ve what help are just into on are be on upstream on it Right R&D have control They well with into we is of look in world and Ryan, of last there? going we definitely venture in a world-class as our oil again, required forward areas. us We expense, oil R&D as markets, do our we still we we of space. product small we believe X,XXX, are which to working stated will appliances line. products, midstream the efforts they now, that both of the our we to going market And and in gain at in inside as can as only our really we way look to we which our Anything customer to to we’re we strategic and that terms as continue partnerships combustion are updating the to validation information it. of gas, gas features mainly more for as territory. different which complex we and outside and do want

Ryan Oviatt

The the I it I on is very only add R&D covered side. think thing you well. would

new will right jump to see as an annual that that. as or certifications can have up increase come committed technologies on noted looking the things are technologies are even of But quarters not of R&D we results, largely, my continuing And and the overall any be say or far that new basis We in a to R&D capabilities the that place now. spend review adding I out. to bit. in features And we develop products to as where quarterly certainly to some does we related

manage believe We’re where have the looking efforts to will and the reprioritize our value. costs we they most

So allow in R&D we significant opportunity but still the invest. shouldn’t ourselves see to costs, increases any

Jim McIlree

Thanks Fantastic. with guys good for luck answers everything. the and

Ryan Oviatt

Thanks, Jim.

Operator

of with proceed [indiscernible] next is from Capital line with Our question Please your Pioneer Group. the question.

Unidentified Analyst

Thank you.

Ryan Oviatt

Brad. Hi,

Unidentified Analyst

kind it’s market? where you R&D, development terms follow-up the of In getting in it question on Hi. to and product of regards expectations to – a actually, are the of last

Cameron Tidball

there Well, little there. and last in more on commercial – launch the is upstream here The the this XXXX late have that get forward year of X,XXX midstream to would just disguise. planned. space, out, actually is a more obviously, and a year rolling we executed product early blessing launched them we have there’d demand in liked been it’s a but We more as have of of this bit

be their test where to You get – question. would to for I allow that’s a more And the a lines more as in opportunity needs technology your to be probably product an I’m of fully, along bring bit markets. little great controllers customers fleet. question other it into is the your slowly your combustion guess

we We as in and productive a a their strategic as to Really, already some support expert put And to opportunities. are point looking dabbling different installations where firms asphalt it for the sand we’re some begun can larger finding grow of some and technology who believe markets, have presence them own, a a trying in in the applications. instead and we’re industries. we’ve it in automation those very done organically. a the some partners now then calling plants, already biogas some right manufacturer drying lot be work technology agricultural We’ve that have of that we plants, of

now. A months, And but diversify technology potentially market, lot, strategic to right be strong our a we will doesn’t. large again, we research revenue No, every believe we industry? our help match it bring does it But in at looking a bunch the to on them? match some year a XXXX is does. the can some being it Profire opportunity next Does the streams. really partners is forward of really and that more where So putting development that’s, we control coming look of over

Unidentified Analyst

Okay, thank you.

Ryan Oviatt

Thanks.

Operator

The from Capital. with the next your Askeladden with line Patel proceed question Samir question. of is Please

Cameron Tidball

Hey, Samir.

Ryan Oviatt

Good morning.

Cameron Tidball

Samir, maybe mute? on are you

Samir Patel

you me hear Can now?

Cameron Tidball

We you now. can hear

Samir Patel

it I the and on job was cheer it. cost will just better Got get saying discipline soon. good up,

Cameron Tidball

you. Thank

Samir Patel

Yes.

So reduction, stuff. were talking about emissions Were didn’t ESG about about saying the that the you first you you you organic go development question, I didn’t could I what or product understand, were M&A? quite if over again? understand talking

Cameron Tidball

at turn are do There call, as we that they our right? knows start a pivot. footprint, we or might to some in have partners continue to with E&Ps. it the work Could plethora customer early opportunity right, not area to now, of They want will we savings mentioned from And Who to If potentially unless a to just our for is is get our is in into this And going able cheaper all get get mainstream. for partner. a we’re And their M&A? arena. base way. to great out this don’t This hope with exists. that be Yes, technologies technology looking to partner you adopters, is that cannot point. feel they partners get Drilling we more not there use that But and opportunity strategy go to it. in where is to drilling. focus that best strategic our it

do driving rely intelligence at they of can’t look a artificial believe, and ton ton and people through So and we at on, out to a in They of they line, learning. things. have staring have people screens it to to machine operations get

wins Samir. on forward as more we be And for sharing a that at look strategy we partnership area. so least this this will that But us, some to get point, at in

Samir Patel

Okay, understood.

Ryan, up? for was you kind right are are of doing now demand about for some million until margin, or question on EBITDA, kind there And your gross reasonable two burn didn’t reserves or those margins quarter there a what $X quarter, of of the in of were is one-off? kind cash a just flow picks something there understand next is second The I like inventory rate,

Ryan Oviatt

questions good Some for there sure.

is that a there lot that margin is of as lot or gross our a the being play of come that some significantly. structure have things normal as far is As there part revenues concerned, as into and amplified dropped of of

that than some there or portions revenues. So is now as are have they come higher where certainly depreciation there periods previous larger we that would periods overhead through be a fixed in and percentage in

there actual Another does products come and the that go the into to. is are the that sold they factor play during also that customers period

of a meeting those larger that customers aren’t of that more have tends discount We of are to bit customers higher numbers. quarters much purchase be some some other larger compared quantities the who types in get it are in a to like things little where doing buying down, same the those And than customers this, of other customers.

of Warranty are into movements of and If bit in highly was that drawing a these the customer bit mix well. overall, was anything we more. obviously, come any saw were hold the now, don’t But forward look play right things number it’s and give rate to either kind do inventory there product nothing down in or well. gross items. or those, as that we’re up reserves It has just movements margin up down unusual little impact will abnormal there move and little as a naturally So reasonable mix they large that. to quantitative for we our didn’t look if that like margin there. all down but or unfortunately, But And therefore, at or reduction it your When then if to significant inventory of going inventory, And we EBITDA, on in question were or at portion nothing flat, to comes margin, significant. write-off a run guidance. forecasts you predictions, sure. standard

Samir Patel

the like like have what like how next I results business Okay. kind curious, you going And know point, have but a actual it selling? the you sense good international. environment do are over do Again, progress sense to breaking are could making you of start depends some couple oil that a I the And and that – are you out sounded on progress on price you a of whatnot, actually of then am years? some of lot at

Cameron Tidball

comment Ryan, then it in do want to and progress. on can how you could on breakout I part the jump

Ryan Oviatt

are out it’s and be requirements what of to X% definitely as accounting portions than the number. are the Yes, certainly. total There as levels. concerned things that become and what greater rules Typically, to financial far broken as need at statements

point, meaningful. and statements, hope large it some that financial are we that it becomes to international break on enough at So becomes we that out able certainly the

that it start So the you out. level progress what am to may Cam is about it can speaking, to seeing. I sense is progress, comment that that at good Obviously, around specifically But to point. when and it makes reached quite be and from that we has happening can break that threshold most we this it are are that get not as making what where

Cameron Tidball

Yes, definitely.

We have our got we heaters, this probably force believed mentioned, draft which more user product something to beginning friendly. adoption several XXXX the in year was Latin America far that markets We have international our would the so PFXXXX draft international over that from less really be that dependent, even natural language is – technology. for as into the – the experience we and of

is great And that that cow grounds in gained we which – some Argentina. I of place. that that, is seen the which play, love the great it back in you But a learned thing. speak, dead the Muerta the language is have We as means

now, busier of our just Saudi have Latin that does us. distributors technology. Our applications they Unfortunately, love for Aramco other Right Aramco, throughout learned Saudi a ton we not have in currently areas. than America are

did will continue process. we year. We So progress throughout our the deep down into a dive the

distributors to working new world we Our to to Peru have of via are do in can and don’t progress. Zoom past. had be technology. accountable We distributors in want see Bolivia. behaviors that whatever We or MS to don’t our in exhibiting we in and than see Teams Zoom have the more we hold or We we meetings, want be things this Chile, and the to they’re

promise. year we look of stronger to and some a the XXXX last for so And shown be XXXX has nice half

will we So continue.

to But and break progress. mentioned, it year that upcoming as more far distributors add to show we with if perhaps out be the the the Ryan performing. again, couple But able switch would planning share progress. happy love would are out they’re are a we and it We because in to so not

Samir Patel

Thanks. it. That’s

Operator

[Operator of proceed is investor. from with Instructions] Please [indiscernible], The your line Private question. question the next

Unidentified Analyst

Hey, Ryan. Cameron. Hey,

a Profire So two it’s quarters wanted down very tough. I think guys. revenue recognize recognition And the really really, first, It’s to and want you to I – significant make that I hits. these are

in you lot environment employees have, compliment did keeping You and want am its cutting. cost. And no down well. on of guys cost your But your as sure, is customer cost hurting are customers to control I know I fun Also a family-like ability with out relationships I a good. to – are there

is low Low leverage, very preserving you great. have and fantastic which operating financial is downturn. You leverage cash, which in are actually this

a I you commend of had And it’s a moat, the I sheet. of to have So did customer Microsoft, me they task, ability want share. gas it, you the about, oilfield done it’s phenomenal the give high I a Because to like of giving to easy are they services I that in ability to they the which job others given companies but when modeling business. balance when natural yes, moat guys. to preserving – exciting, had this drilling didn’t question right? did It’s wanted even revenue to and the core model, no no talked of where as look you that related I And continue you’ve at you just Microsoft computer a option. – have strategic And the with you’ve sector, There a but they their stops a experience lot options some service have alternative, revenues and business even model. though competitive market Suite, like because basically that reoccurring their have Office buy a are

model talking intelligence customers burner getting my where conjunction most kind thought do of could sure about routine that burner with model collective you also technology preventative out and new potentially. and question partner are and is, for new a you of responsible had ever So transitioning through that variables maintenance into be nonrecurring analytics the revenue you availability, monitoring in a updates, with are the of making some a maintenance technology the

would that sheet do balance you a have enable that. You to

I you if go then restructure ever this If don’t stops. see reoccurring wondering when drilling model guys truly your thought these the could that mentioned, down was Because the companies I probably had you I you and had their have about a X moat, other that. revenues, revenues like and

and about of So or international potentially into a market technology older I for hybrid? new technology as selling kind selling the technology thought was reoccurring a wondering you the model if had

Cameron Tidball

biggest keeps at what is Well, up team the of going working to up. and have is pay our legacy a and future Ron, One probably by to hours people the do next which the with in are business. – pivot well you be them. we that on more us what our you as this cost to and could keep things can we had as we’ve of and hit control drops if the less to you ups But read of where one without couple night, businesses from going know business members, how downs less of obviously minds space lessen add our

really the So of we mentioned an BMS top And technologies at with the And trying perhaps and learning hoping wasn’t with at with Are – that we some we artificial with it and that offerings in looked Absolutely. we is that be have our is It with absolutely of the out. investigation to machine kind for as it before and we fuel research the their our about our would trains. example, are some way figure really that did at customer of some it time to the we’ve well call looking big there thought on future it? – to discovery integrate intelligence received. controls, opportunity meetings list of customers. in lease

– you switch you have them give just up, to will where and if we Now the that have and continue well, opportunity, analyze the if share, future, Ryan, needs as has like forth. to any strategy, that that build is consideration. consideration. But at be our and would our investigate you – it a there? to we not you maybe can goes a the anything to in bring add have thoughts something to we plan look that you have flip moat, we see that potentially. But is it Anything to

Ryan Oviatt

No.

will of go types a these that and things. path it’s have do we we’ve believe that revenue and very And be PFXXXX learning in to bringing to It’s transition we want direction. a down recurring we’ve it’s gas to of years, next certainly capabilities going market several and think I that and for to there’s a products it in they the big as move you’ve a about market over thinking down covered and can that we this lead player firmly obviously newer time. that the And and part direction well. for and long opportunities But additional down necessary to need believe machine oil and others brought that, even the be something as been of we path. in that for move

So, great question. Thanks, Ron.

Unidentified Analyst

you. Thank

Operator

with Please of from is proceed question. Advisors. the question John Bair with Ascend next Our your line Wealth

Cameron Tidball

John. Hey,

John Bair

acquisition I more me – of bias right would off guess, be Cameron, more if putting entities imagine Okay. as speaker. areas one. getting would towards will, to acquisitions. on perhaps. now, at straits, at are would The I – could not geared And where know as if that’s basins you me of perhaps different the improve end given it if partnerships candidates in in I here looking long share. of quality the the acquisition don’t comments, a squeezing appreciate I or imagine pretty a market the I into And may industry you your expanding way fair you front you you. to potential enticing be sounds with as dire opposed I the you a acquisition your it. Thank to of prepared that am have you any

Am more the that So idea that I hearing that’s acquisitions? question. partnerships than front burner outright one on kind are of perhaps

Cameron Tidball

Well, no. yes and

can upstream, might the be believe as were. we it current that, business won’t such market. we’re drills and of business, Your right. is We comments traditional lines part, That oil because live. dependent transmission, talk you’re that bolt-ons absolutely completely, technology for And not might now, Where be, most available is right? but burner always peripheral there What’s Profire believe, probably at We look doesn’t along want to midstream, – Profire strategic the right won’t is great outside you core besides partnerships it there, that it. management, the which we it some we dismiss the in, downstream know, consider industry. just strong gas else abandon more where and we completions, never the a of some

or, remediation, if you for I power food However, we pharma, to look soil look, example, mining infrastructure mentioned, – were and or as beverage. and

but have organically find to ability task And the that. would base contacts, that have it a Profire Profire is we in can us the just someone – need we will the partners there. be in we’ll the believe, overall believe grow use move to space to be those are Profire. we that businesses comparable the operating For monumental doesn’t costs believe, we is I products cost – insurmountable. and a, that take would to help higher-margin into that us those What an that, of spaces knowledge less dance, we for can at And do

that is something that consider. answer, So we Did John?

John Bair

that – some the you can your see to do actually, said, something little you before add-on, benefit of or how outside Yes, that that it or And would these that bit was to words, something the other the be – oil that partners on that follow-up And it markets to of is gas. kind with into, it working does. into dance are add think you they already that is you and then of sort expertise say, playing to? sort projects that attempts it’ll are with come you something and traditional think profitability-wise, addresses you do monetary so have tap said, to might game out of quickly or get basically there you In see more yes, plan a touch partnerships? – from you how toe a something a that I being revenue-wise to an has partnership new and

Cameron Tidball

large where, in oil that’s that can not I is dependent. market of gas, dabble, geographic If kind something sales something fact, already think is a it’s and just lots also chasing I an in that outside but burner in something refining. are If in industry there’s stacks. this burner. it. chase is there’s believe that burner, don’t we contacts of that a I use also are want to are enter. we forces and know they and starting but This there’s upgrading. We oil have That’s a there’s stack, word, have a of They the also dependent term over don’t are system. gas They all We dabble, not where place. stacks management

advantage technology PLC it Profire or built sometimes versus is antiquated used build, out a to a some off-the-shelf create these or or maintain, jump And with take – of which add and a industries, of And could are our based, so could can be it partners of areas, or an We in think systems, you and strategy lot already offering turn said, choice is it’s to garage how whoever some a like has from and ways, in. more. into older products of believe revenue. – expensive can intellectual could in what technology these some of more being capital existing a some this very we In quickly partner whereas right perhaps going in give technology we to to our expensive year of industries. idea, strategic we with goal a old a that lot into areas, sometimes take fit

John Bair

Thanks Okay, for count luck. Appreciate a the pick rig questions. very will good. continue. in Good that the lot. little hopefully taking up my you and Thanks

Cameron Tidball

Thank you.

Operator

at for further hand questions are queue no remarks. this And I time. in There back management the Thank like would to to closing the call you.

Cameron Tidball

Thanks, want everyone, to XXXX third continued support. discuss We for results. you your all to joining thank our our call for today quarter

As discussion always, might questions or you for any we available have. are

you, this Conference IDEAS to participating be many the Advisors with Southwest and of look event. day. We have will Virtual in great forward Part speaking at month later that you Three a Thank and we

Operator

concludes This Thank today’s you. conference.

disconnect you this You your may at now time lines for participation. thank and your

Profire Energy (PFIE) 11 Nov 202020 Q3 Earnings call transcript