Profire Energy, Inc.

Energy's first quarter 2021 ended March 31st, 2021. 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. This call contains forward-looking statements including, but not limited to, statements regarding the company's expected growth, success of new partnerships, expansion outside of the company's traditional markets, and impacts on supply chains. All such forward-looking statements are subject to uncertainty and changes in circumstances. Forward-looking statements are not guarantees of future results or performance and involve risk uncertainties, and assumptions that could cause actual events or results to differ materially from the events or results described in or anticipated by the forward-looking statements. Factors that could materially affect such forward-looking statements include certain economic, business, public market, and regulatory factors identified in the company's periodic reports filed with the Securities and Exchange Commission. All forward-looking statements are made pursuant to the safe hybrid provisions of the Private Securities Litigation Reform Act of 1995. All forward-looking statements are made also 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 such as required by law. Readers should not place undue reliance on these forward-looking statements. I would like to remind everyone that this call is being recorded and will be available for replay through May 20, 2021, starting later this evening. It will be accessible via the link provided in yesterday's press release, as well as the company's website at www.profireenergy.com. Following the remarks of Mr. Oviatt and Tidball, we will open the call to your questions as part of the question and answer session. Mr. Oviatt and Tidball will be joined by ProFire Energy's Vice President of Operations, Jay Fugle, and Vice President of Product Development, Patrick Fisher. Now I would like to turn the conference over to co-CEO of ProFire Energy, Mr. Cameron Tidball. Please go ahead.

Thank you, Operator, and we welcome all of you who are joining us on the call today. I will start the call by providing some updates on the industry and our business. Then I will turn the call over to Ryan to provide a review of the financials and outlook. Following Ryan's remarks, I will share an update on our strategic direction and recent business development initiatives. After the unprecedented challenges of 2020, the current year has shown signs of improvement in the oil and gas markets. However, overall demand continues to trail pre-pandemic levels. Since turning negative for the first time in history, WTI prices stabilized and over the past few months have rebounded to the mid-$60 range, thanks to increasing optimism for future demand as COVID-19 restrictions continue to loosen and the northern hemisphere enters late spring and summer. However, some regions, such as India, continue to be severely affected by the virus, limiting the recovery of global economic activity. Despite the strong price appreciation for crude oil in the first quarter, major EMPs are still not expected to ramp production activity in 2021, given their ongoing commitment to capital discipline. Rather than investment in expanded drilling programs, we expect operators to utilize excess cash flows towards debt reduction, reinstatement of dividend programs, and the maintenance of existing infrastructure. Given the realities we have and continue to face, we believe that drilling and completion activity will continue to see improvement through the remainder of the year. This should result in increased opportunities for Profire's products and services. We also remain encouraged by the sustained increase in focus from the industry to improve operational and environmental efficiencies of which Profire solutions pertain. These actions represent opportunities for Profire to support the upgrade and retrofit market, as well as to provide valuable preventative maintenance services. I will now turn the call over to Ryan to discuss our financial results and outlook. Ryan.

Thanks, Cam. As discussed, 2021 has started off with improved optimism for the oil and gas industry. With the uptick in our business and improved outlook for the year, and we hope the worst of the pandemic behind us, during Q1, we started to reinvest in our business to ensure we are well positioned to take advantage of the pending recovery. The first major reinvestment was to remove the furlough program that impacted all of our employees for the majority of 2020. Second, we've begun hiring critical support roles that were eliminated in 2020 within our operations and back office support functions. This will ensure we continue to deliver the exceptional customer service that Profire customers have been accustomed to. These roles will be paramount as we continue to grow our business through entry into new markets, as well as our partnerships with Spartan Controls and ECI, which Cam will talk more about in a moment. With that, let me turn to our financial results for the first quarter 2021. Yesterday, after the market closed, we filed our 10Q with the SEC and discussed the quarter's highlights in a press release. As always, both of those documents are available on the investor section of our website. The transcript of this call will be posted in the coming days. In the first quarter, we recognized 5.1 million in revenue, which represents a 10% decrease from Q4. As we indicated on our year-end call in March, we experienced an increased amount of year-end spending in Q4 which was driven by the combination of the end of the presidential election cycle and the optimism associated with the COVID-19 vaccine. Revenue decreased 32% compared to the first quarter of 2020. The prior year quarter was mostly unaffected by the pandemic and the price war between Russia and Saudi Arabia which ultimately caused crude oil prices to turn negative in April 2020 and significantly impacted the subsequent 2020 quarterly results. Gross profit for the quarter was 2.2 million as compared to 2.8 million in the fourth quarter of 2020 and 3.2 million in the year ago quarter. Gross margin was 42.7% of revenues, a 20 basis point improvement from the prior year quarter, but still below our historical range due to the decreased revenues caused by the pandemic. Gross margin in the fourth quarter of 2020 was 48.7%, which benefited from higher revenues during the period as previously noted. Total operating expenses for the first quarter were approximately 3 million, This represents a $216,000 increase sequentially as we began to unwind COVID related furloughs that were implemented last year. On a year over year basis, operating expenses decreased 850,000 reflecting the actions taken throughout 2020 to modify our cost structure for the unusual operating environment. Specifically, G&A expenses for the first quarter decreased 22%, R&D expense decreased 37%, and depreciation and amortization expense increased 14% from the first quarter of 2020. Net loss for the first quarter was approximately 602,000 or one cent per share. This compares to net income of approximately 56,000 or zero cents per diluted share in the fourth quarter of 2020. and a net loss of 365,000 or one cent per share in the first quarter of last year. Cash flow from operations in the first quarter was approximately 1.8 million compared to 271,000 in the prior year quarter. The quarter's cash flow was achieved through strong cash collections on accounts receivable, good working capital management, and the sale of our old building in Canada. Our inventory balance at the end of the quarter was 8.1 million, down from 8.4 million at the end of 2020. We believe our current inventory levels, which are mostly finished goods, remain sufficient to address our customers' orders in the near term. However, we are closely monitoring inventory lead times and supply chain challenges in order to ensure we are able to remain a supplier of choice for our customers. Cash and liquid investments totaled $19.4 million at March 31st, 2021, compared to $17.6 million at the end of 2020. And the company continues to operate debt-free. I will now turn the call over to Cam to provide a strategic overview of our business. Cam.