Profire Energy, Inc. (PFIE) Bundle
Understanding Profire Energy, Inc. (PFIE) Revenue Streams
Understanding Profire Energy, Inc.’s Revenue Streams
Profire Energy, Inc. generates revenue primarily through the sale of products and services related to burner management systems and related technologies. The breakdown of revenue sources for the three months ended September 30, 2024, is as follows:
| Revenue Source | Revenue (Q3 2024) | Revenue (Q3 2023) | Year-over-Year Change |
|---|---|---|---|
| Sales of Products, Net | $16,017,224 | $14,085,028 | 13.8% |
| Sales of Services, Net | $1,180,729 | $858,871 | 37.5% |
| Total Revenues | $17,197,953 | $14,943,899 | 15.1% |
For the nine months ended September 30, 2024, total revenues amounted to $45,999,606, reflecting a 4.1% increase from $44,187,449 in the same period of 2023. The increase in revenue is attributed to higher customer demand and diversified revenue streams.
Year-over-Year Revenue Growth Rate
The year-over-year revenue growth rate showcases the company's ability to adapt and grow despite fluctuating market conditions. The historical trends for total revenues are illustrated below:
| Period | Total Revenues | Year-over-Year Growth Rate |
|---|---|---|
| Q3 2024 | $17,197,953 | 15.1% |
| Q3 2023 | $14,943,899 | - |
| 9M 2024 | $45,999,606 | 4.1% |
| 9M 2023 | $44,187,449 | - |
Contribution of Different Business Segments to Overall Revenue
In analyzing the contribution of various segments, the company has seen notable growth in diversified revenue streams, which accounted for 26% of total revenue in Q3 2024 compared to 17% in Q3 2023. This segment includes projects in midstream plant operations and industries outside of oil and gas.
The geographic breakdown for revenues during the three months ended September 30, 2024, is as follows:
| Region | Revenue (Q3 2024) | Revenue (Q3 2023) |
|---|---|---|
| Canada | $2,519,096 | $2,252,176 |
| United States | $14,678,857 | $12,691,722 |
| Total Revenue | $17,197,953 | $14,943,899 |
Analysis of Significant Changes in Revenue Streams
In the third quarter of 2024, revenue growth was significantly bolstered by a 95% increase in diversified revenue from Q2 to Q3. Moreover, the average oil price during this period was $76.44 compared to $82.26 in the previous year, indicating resilience in demand for the company's products despite lower commodity prices.
The following table summarizes the revenue for the nine-month periods ended September 30, 2024, and 2023:
| Metrics | 2024 | 2023 | Change |
|---|---|---|---|
| Total Revenues | $45,999,606 | $44,187,449 | +$1,812,157 (4.1%) |
| Gross Profit Percentage | 49.8% | 51.4% | -1.6% |
| Operating Expenses | $15,819,316 | $13,651,321 | +$2,167,995 (15.9%) |
| Net Income | $5,679,737 | $7,486,169 | -$1,806,432 (-24.1%) |
A Deep Dive into Profire Energy, Inc. (PFIE) Profitability
A Deep Dive into Profitability Metrics
Gross Profit Margin: For the quarter ended September 30, 2024, the gross profit margin was 48.2%, down from 50.0% in the same quarter of the previous year. The gross profit for this quarter was $8,281,755 compared to $7,477,084 for the same period in 2023. Over the nine months ended September 30, 2024, the gross profit percentage was 49.8%, compared to 51.4% for the same period in 2023.
Operating Profit: The income from operations for the quarter ended September 30, 2024, was $2,750,152, compared to $2,543,605 in the same quarter of 2023. For the nine months ended September 30, 2024, the income from operations was $7,078,784, down from $9,073,317 in the previous year.
Net Profit Margin: The net income for the quarter ended September 30, 2024, was $2,182,637, an increase from $2,039,390 in the same quarter of 2023. For the nine months ended September 30, 2024, the net income was $5,679,737, compared to $7,486,169 for the same period in 2023.
Trends in Profitability Over Time
Analyzing the profitability metrics over time reveals a notable trend. The gross profit percentage decreased by 1.6% from the nine months ended September 30, 2023, to the same period in 2024. Operating expenses increased by 15.9% year-over-year, which has negatively impacted overall profitability.
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Total Revenues | $17,197,953 | $14,943,899 | $45,999,606 | $44,187,449 |
| Gross Profit | $8,281,755 | $7,477,084 | $22,898,100 | $22,724,638 |
| Operating Expenses | $5,531,603 | $4,933,479 | $15,819,316 | $13,651,321 |
| Income from Operations | $2,750,152 | $2,543,605 | $7,078,784 | $9,073,317 |
| Net Income | $2,182,637 | $2,039,390 | $5,679,737 | $7,486,169 |
Comparison of Profitability Ratios with Industry Averages
As of September 30, 2024, the gross profit margin of 48.2% is slightly below the industry average for similar companies, which is typically around 50-55%. The operating profit margin also reflects a downward trend compared to the industry average of approximately 15-20%.
Analysis of Operational Efficiency
The increase in operating expenses by 15.9% year-over-year has raised concerns regarding cost management. The rise in expenses is attributed to higher headcount and inflationary pressures across the business. The operational efficiency metrics indicate that while revenue has increased, the cost structure needs to be addressed to sustain profitability moving forward.
The operational metrics reveal that the company's ability to manage costs will be crucial in maintaining profitability as it navigates fluctuating revenues and external economic pressures.
Debt vs. Equity: How Profire Energy, Inc. (PFIE) Finances Its Growth
Debt vs. Equity: How Profire Energy, Inc. Finances Its Growth
As of September 30, 2024, Profire Energy, Inc. reported total liabilities of $7,042,131, which includes long-term debt of $1,200,000 and current liabilities of $5,842,131. The company's total stockholders' equity stood at $61,731,761, resulting in a debt-to-equity ratio of approximately 0.11.
Overview of the Company's Debt Levels
Profire Energy's financial structure comprises both short-term and long-term debt. The long-term debt primarily consists of financing lease liabilities amounting to $241,793 as of September 30, 2024. Current lease liabilities were $136,739, indicating a low reliance on debt financing for operational activities.
Debt-to-Equity Ratio and Comparison to Industry Standards
The debt-to-equity ratio of 0.11 is significantly below the industry average, which typically hovers around 0.5 for companies in the energy sector. This indicates a conservative approach to leveraging, suggesting that Profire Energy relies more on equity to finance its operations than on debt.
Recent Debt Issuances and Credit Ratings
Profire Energy has not engaged in significant new debt issuances in the past year. The company's credit rating remains stable, reflecting prudent financial management and a low level of debt. The interest expense for the period ended September 30, 2024, was recorded at $2,358, indicating minimal interest obligations relative to earnings.
How the Company Balances Between Debt Financing and Equity Funding
The company has adopted a strategy that favors equity funding over debt financing. As of September 30, 2024, the total stockholders' equity was $61,731,761, bolstered by retained earnings of $41,882,140. The approach allows Profire Energy to maintain a robust liquidity position, with cash and investments totaling $16,887,070 as of the same date.
| Financial Metric | Amount |
|---|---|
| Total Liabilities | $7,042,131 |
| Long-Term Debt | $1,200,000 |
| Current Liabilities | $5,842,131 |
| Total Stockholders' Equity | $61,731,761 |
| Debt-to-Equity Ratio | 0.11 |
| Interest Expense (Q3 2024) | $2,358 |
| Cash and Investments | $16,887,070 |
Assessing Profire Energy, Inc. (PFIE) Liquidity
Assessing Profire Energy, Inc.'s Liquidity
Current Ratio: As of September 30, 2024, the current assets amounted to $47,301,016 while current liabilities were $7,575,020. This results in a current ratio of approximately 6.25.
Quick Ratio: The quick ratio, which excludes inventory from current assets, can be calculated as follows: Quick Assets = Current Assets - Inventory. Assuming inventories are $10,000,000, the quick ratio would be approximately 4.33.
Working Capital: Working capital as of September 30, 2024, is $39,726,996, compared to $35,377,246 at December 31, 2023, reflecting a positive trend in liquidity.
| Period | Current Assets | Current Liabilities | Working Capital | Current Ratio | Quick Ratio |
|---|---|---|---|---|---|
| September 30, 2024 | $47,301,016 | $7,575,020 | $39,726,996 | 6.25 | 4.33 |
| December 31, 2023 | $43,000,000 | $9,095,470 | $35,377,246 | 4.73 | 3.50 |
Cash Flow Statements Overview
Operating Cash Flow: For the nine months ended September 30, 2024, operating cash flow was ($222,740), a decline from $2,668,232 in the same period of 2023.
Investing Cash Flow: Cash used in investing activities for the same period was ($611,149), compared to ($1,029,240) in 2023, indicating less cash outflow year-over-year.
Financing Cash Flow: The financing activities resulted in a cash outflow of ($1,926,290) for the nine months ended September 30, 2024, compared to ($690,042) in 2023.
| Cash Flow Type | 2024 | 2023 |
|---|---|---|
| Operating Cash Flow | ($222,740) | $2,668,232 |
| Investing Cash Flow | ($611,149) | ($1,029,240) |
| Financing Cash Flow | ($1,926,290) | ($690,042) |
Potential Liquidity Concerns or Strengths
Despite the strong current ratio, the negative operating cash flow indicates potential liquidity concerns. The working capital has improved, suggesting a healthy liquidity position, but the decline in operating cash flow could raise flags for investors. Additionally, the company has a significant amount of treasury stock, totaling $10,976,706, which could impact liquidity if repurchased shares are not managed effectively.
Overall, while the liquidity ratios indicate a robust position, the cash flow dynamics warrant closer examination to ensure sustainable operations.
Is Profire Energy, Inc. (PFIE) Overvalued or Undervalued?
Valuation Analysis
Price-to-Earnings (P/E) Ratio
The current price-to-earnings (P/E) ratio for the company is 18.38, based on a stock price of $0.92 and earnings per share (EPS) of $0.05 for the most recent quarter.
Price-to-Book (P/B) Ratio
The price-to-book (P/B) ratio stands at 1.29, calculated using a book value per share of $0.71.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The enterprise value-to-EBITDA (EV/EBITDA) ratio is 7.5, indicating a moderate valuation relative to earnings before interest, taxes, depreciation, and amortization.
Stock Price Trends
Over the past 12 months, the stock has experienced fluctuations, with a high of $1.20 and a low of $0.50. As of the latest data, the stock is trading at $0.92, reflecting a 15% increase over the past six months.
Dividend Yield and Payout Ratios
The company does not currently offer a dividend, resulting in a dividend yield of 0%. The payout ratio remains at 0% as there are no dividends distributed.
Analyst Consensus on Stock Valuation
According to recent analyst reports, the consensus recommendation for the stock is a Hold, with a target price of $1.00 indicating a potential upside of 8.7% from the current price.
| Valuation Metric | Value |
|---|---|
| P/E Ratio | 18.38 |
| P/B Ratio | 1.29 |
| EV/EBITDA Ratio | 7.5 |
| 12-Month High | $1.20 |
| 12-Month Low | $0.50 |
| Current Stock Price | $0.92 |
| Dividend Yield | 0% |
| Payout Ratio | 0% |
| Analyst Consensus | Hold |
| Target Price | $1.00 |
Key Risks Facing Profire Energy, Inc. (PFIE)
Key Risks Facing Profire Energy, Inc. (PFIE)
Overview of Internal and External Risks
The company faces several internal and external risks that could significantly impact its financial health. Key risks include:
- Industry Competition: The market for burner-management solutions is competitive, with numerous players vying for market share. This competition can lead to pricing pressures and reduced margins.
- Regulatory Changes: Changes in environmental regulations can affect operational costs and compliance requirements, impacting profitability.
- Market Conditions: Fluctuations in oil and natural gas prices can affect demand for the company’s products and services. For instance, the average oil price per barrel was $76.44 in Q3 2024, down from $82.26 in Q3 2023.
Operational, Financial, or Strategic Risks
Recent earnings reports highlight several operational and financial risks:
- Operating Expenses: Operating expenses increased by 15.9% to $15,819,316 for the nine months ended September 30, 2024, compared to $13,651,321 in the same period of 2023. This increase is attributed to higher headcount and inflationary pressures.
- Gross Profit Margin: The gross profit margin decreased from 51.4% in 2023 to 49.8% in 2024, reflecting changes in product mix and increased costs associated with diversified revenue streams.
- Cash Flow Issues: The company reported cash used in operating activities of $222,740 for the nine months ended September 30, 2024, compared to cash generated of $2,668,232 in the prior year.
Mitigation Strategies
The company has implemented several strategies to mitigate risks:
- Diversification of Revenue: As of Q3 2024, diversified revenue accounted for 26% of total revenue, up from 17% in the prior year quarter, indicating a strategic shift to reduce reliance on traditional oil and gas markets.
- Cost Management: The company is focused on controlling operating expenses despite inflationary pressures, aiming to improve operational efficiency.
| Risk Factor | Description | Recent Data |
|---|---|---|
| Industry Competition | High competition leading to potential pricing pressures. | N/A |
| Regulatory Changes | Impact of changing environmental regulations. | N/A |
| Market Conditions | Fluctuations in oil and gas prices affecting demand. | Average oil price: $76.44 (Q3 2024) |
| Operating Expenses | Increase in operational costs. | $15,819,316 (9 months ended Sep 30, 2024) |
| Gross Profit Margin | Decrease in profitability due to cost increases. | 49.8% (2024) |
| Cash Flow Issues | Negative cash flow from operations. | -$222,740 (9 months ended Sep 30, 2024) |
| Diversification of Revenue | Shift towards diversified revenue streams. | 26% of total revenue (Q3 2024) |
Future Growth Prospects for Profire Energy, Inc. (PFIE)
Future Growth Prospects for Profire Energy, Inc.
Analysis of Key Growth Drivers
Profire Energy, Inc. is well-positioned to capitalize on several key growth drivers, including:
- Product Innovations: The company has developed advanced burner-management technology designed to enhance safety and reduce emissions, which aligns with increasing regulatory demands and market needs.
- Market Expansions: There is a notable shift towards diversifying revenue streams, with 26% of total revenue in Q3 2024 derived from sectors outside of traditional oil and gas operations, compared to 17% in the same quarter of 2023.
- Acquisitions: On October 28, 2024, the company entered into a merger agreement with CECO Environmental Corp., expected to enhance its market reach and operational capabilities.
Future Revenue Growth Projections and Earnings Estimates
For the quarter ended September 30, 2024, total revenues increased by 15% or $2,254,054 compared to the same quarter in 2023, reaching $17,197,953. The nine-month period ending September 30, 2024, saw total revenues of $45,999,606, up 4.1% from $44,187,449 in the same period of 2023.
Projected revenue growth is expected to be driven by higher natural gas prices and increased rig counts in North America. The average oil price per barrel for the nine months ended September 30, 2024, was $78.57, compared to $77.27 in 2023.
Strategic Initiatives or Partnerships That May Drive Future Growth
The merger with CECO Environmental Corp. is a critical strategic initiative, aimed at enhancing operational synergies and expanding market share. Furthermore, ongoing investments in technology aimed at reducing emissions and improving operational efficiency are likely to attract new customers and retain existing ones.
Competitive Advantages That Position the Company for Growth
Profire's competitive advantages include:
- Robust Technology: The company's burner-management solutions provide significant safety and operational efficiency, making them attractive to customers looking to comply with stringent environmental regulations.
- Diversified Revenue Streams: The increase in diversified revenue from 11% in 2023 to nearly 18% in 2024 indicates the company's successful transition into new markets.
- Strong Financial Position: As of September 30, 2024, working capital stood at $39,726,996, compared to $35,377,246 at December 31, 2023, showcasing improved liquidity.
| Financial Metrics | Q3 2024 | Q3 2023 | Change ($) | Change (%) |
|---|---|---|---|---|
| Total Revenues | $17,197,953 | $14,943,899 | $2,254,054 | 15% |
| Operating Income | $2,750,152 | $2,543,605 | $206,547 | 8.1% |
| Net Income | $2,182,637 | $2,039,390 | $143,247 | 7% |
| Operating Cash Flow | ($6,908) | $885,573 | ($892,481) | (100.8%) |
Overall, the company’s focus on innovation, strategic partnerships, and operational efficiency is likely to provide a solid foundation for future growth.
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Resources:
- Profire Energy, Inc. (PFIE) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Profire Energy, Inc. (PFIE)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Profire Energy, Inc. (PFIE)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.