Brenton Hatch - CEO Andrew Limpert - CFO.

William Bremer - The Maxim Group Rob Brown - Lake Street Capital Markets Jim McIlree - Chardan Capital Steve McManus - Sidoti & Company Walter Ramsley - Walrus Partners.

Good afternoon, everyone and thank you for participating in today’s conference call to discuss Profire Energy’s Fiscal Second Quarter ended September 30th, 2014. Joining us today is the President and CEO of Profire Energy, Brenton Hatch and the CFO, Andrew Limpert.

Before we begin today’s call, I would like to take a moment to read the Company’s Safe Harbor statement. Cautionary note regarding forward-looking statements; 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 Profire Energy creating a growing awareness of burner management products throughout North America; the Company aggressively deploying capital to further develop their share in the oil and gas market; current investments made by the Company in people, products, and offices leading future revenues, income, or strategic advantage, layering channel managers in the sales department which will improve traction in the key acquisition areas; Profire planning on expanding the marketing, sales, and services team; Profire continuing to lead the industry in burner management products and services; the Company’s primary focus on North America oil and gas industry; the current market opportunity and not having a shortage of wells to outfit the Company’s Burner Management Systems; our sales trends not following the trends of oil and gas prices; changes in industry regulations providing Profire with additional tailwind; the Company’s lack of reliance on regulation to grow the business; the R&D team continuing to develop innovative products for the industry; the Profire’s service program offering a compelling value to oil and gas industry; or the Company’s future performance relative to guidance discussed on this call.

All such forward-looking statements are subject to uncertainty and changes in circumstances.

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

Factors that could materially affect such forward-looking statements include certain economic, business, public market, and regulatory risks and 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 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.

I would like to remind everyone that this call is being recorded and that it will be available for replay through November 18th, 2014, starting later this evening. It will be accessible via the link provided in today’s press release, as well as on the Company’s website at www.profireenergy.com. Following Mr. Hatch and Mr.

Limpert’s remarks, we will open the call to your questions. Now, I would like to turn the conference over to the President and Chief Executive Officer of Profire Energy, Mr. Brenton Hatch. Please go ahead..

Thank you very much. Good afternoon, everyone. Thank you for joining us today. In the second fiscal quarter, we reported record revenues and significant net income, which were generated by our growing sales and service teams and territories.

These teams have been taking advantage of the energy revolution that is underway in North America in creating a greater awareness of our burner management products.

Now, I want to also note that we take the opportunity to develop this market very seriously, so we are in an aggressive growth investment phase and are deploying capital to expand quickly throughout North America.

While we will need to allow time for this deployment of capital to become productive, we are hopeful that these investments will help us more effectively and quickly achieve our strategic objectives and help us maintain our future industry leadership.

But we are very much looking forward to the months and years ahead of us as we execute on our strategic plans and address numerous market opportunities. Now, before I delve further into this discussion, I would like to turn the call over to our CFO, Andrew Limpert to take us briefly through the financial details of the quarter.

Andrew?.

first, the hiring of additional personnel in sales, service, marketing, and R&D, particularly in Alberta, Texas, Pennsylvania, and Utah to support long-term sales growth, especially for key industry areas such as the Permian Basin and Colorado; second, research and development expense to support the introduction of our next generation Burner Management Systems and other products which totalled $0.5 million.

These operations, investments in key areas such as sales and R&D accounted for a significant amount of operating expenses.

The increase in total operating expenses was also partly driven by increased non-cash stock option expense of about $0.5 million; increased insurance expenses, about $0.8 million, and increased professional fees, about 0.2 million.

Our net income was $2.1 million or $0.04 per diluted share, compared to net income of $2 million or $0.04 per diluted share in the same year ago quarter. Cash and cash equivalents totalled $18.7 million at September 30th, 2014, as compared to $4.6 million at June 30th, 2014.

The increase being largely attributable to the equity raise completed during the quarter of $16.4 million net to the Company. Now, looking at our results for the first half of fiscal 2015, our total revenues increased 75% to a record $28.9 million compared to the same period last year.

Our gross profit increased to a record $16.0 million or 55.4% of total revenues, compared to $9.7 million or 59% of total revenues in the same year ago period. Our total operating expenses increased to $9.4 million or 32% of total revenues from $4.2 million or 26% of total revenues in the first half of fiscal 2014.

Our net income was $4.3 million or $0.08 per diluted share, up 17% from net income of $3.7 million or $0.08 per diluted share in the first half of fiscal 2014.

Overall revenues grew considerably as we realized returns from previous operational investments and we saw some margin pressure as we’ve invested significantly for the coming months and years during this important investment phase. We believe we’ve got a great market opportunity ahead of us and we’re investing accordingly.

So, although it will take some time to make these investments in people, products, and offices productive, we’re optimistic that they will allow us to do increasingly more exciting things in the coming months and years. So, thanks, Brent and I’ll send it back to you..

Thanks, Andrew. As Andrew mentioned, these record results reflect the increasing capability of our U.S. service and sales teams to further penetrate regional markets. This year we’ve expanded our footprint to several new sales and service territories, including; Michigan, Ohio, Iowa, North Dakota, West Virginia, and West Texas.

We also made progress in Australia. Now, while we’ve been expanding geographically, there have been certain industry groups and sales channels with long-term sales cycles that we have not adequately addressed.

So, we have brought on new channel managers to manage and develop a number of key channels, which include OEMs, government entities, and large corporations.

Although these are often longer-term sales, we believe that layering on these channel managers will enhance our traction in key areas and ultimately generate very valuable, leverageable relationships in the long run. During the quarter, our sales team expanded from about 18 to 26 employees and our service team expanded from about 20 to 28 employees.

In total there are now 54 sales and service team members. We also grew our marketing team and are already seeing productive activity with them.

So, to put the size of our sales and service team into perspective, it now accounts for nearly half of our employee base and we plan to continue expanding our marketing, sales, and service teams to address the strong market opportunities we’ve identified.

As we look at these industry opportunities that lie ahead, we are optimistic that we will continue to lead the industry in oil fields burner management products and services. Our primary focus will remain on North America oil and gas industry.

We estimate that there are more than 1.3 million oil and gas wells in North America, with 45,000 to 50,000 new wells added annually and we estimate our current market penetration is still well below 5%.

We recognize that with oil prices declining over recent months, some shareholders and investors have questions as to how this will affect our revenues.

While some capital expenditures may decrease for drilling of new wells, the market opportunity is such that we believe that we will no --we will have no shortage of wells to outfit with our Burner Management System.

Additionally, bear in mind that there are numerous reasons why someone may purchase a Burner Management System, one of which is efficiency, so even when oil and gas prices are down, we can remain relevant for producers by improving their operations’ efficiency, safety, and compliance.

So, although we are sometimes lumped in with oil and gas companies and their trends, our revenues have not historically been correlated with oil and gas prices. We feel optimistic that our revenue growth will continue to be fairly impervious to the changes in asset prices.

With the Colorado mandate that went into effect this year, we are experiencing strong growth and expansion in that area with a number of key producers.

We see other changes in industry regulations that could potentially provide significant tailwinds in the long-term, such as early stage federal regulations affecting oil field emissions that are set to take effect in 2015. These regulations have already been outlined in our corporate presentation and are available on our website.

I want to emphasize, however, that while we do, of course, keep an eye on industry regulations; we are not reliant on them to grow our business. Our historical growth in the U.S. is a testament to that. Until this year there really were no regulatory drivers in the U.S., but we saw significant growth anyway.

So, we encourage you to keep that in mind as you think about our reliance or lack thereof on regulation to grow the business.

Now, on the subject of growth strategy, one of the key product developments during the quarter was the release of a new Flare Stack Igniter or FSI, which is a sophisticated and rugged product that complements our product portfolio nicely.

We have seen the product serve as a beachhead for sales of our flagship products and are finding that the majority of FSI sales are paired with a Burner Management System. This approach has opened new doors for our sales team and our R&D team will continue to develop innovative products for the industry.

Once the sale is made, however, it is critical to ensure that our customers realize the full benefit of our systems. Currently, in an initial test phase, our new service program is designed to offer a compelling value to the oil and gas service industry.

The program involves regularly deploying our service teams throughout the year to help ensure our customers’ burners are operating optimally while using our Burner Management technology.

The program includes calculating customer specific savings derived from the use of Profire’s products and services and help illustrate Profire’s value to the customer. The preliminary results of this program are very encouraging and the program represents one potential model for a recurring revenue stream.

The purpose of our service personnel is first, to support successful product sales by ensuring successful installation and ongoing support of our products. Customer satisfaction is a core value at Profire and is largely facilitated by our expert service team.

The team’s second purpose is to generate service revenues, potentially through a recurring model.

Now, the accelerated growth of our service team, which is intended to more capably reach our growing network of customers, has had a slight impact on margin, but we consider this to be a short-term impact from growing our service team to reach our larger customer base, rather than a long-term trend.

Now, based on our strong second quarter performance, we have increased our previously announced fiscal 2015 total revenues guidance which was $46 million to $48 million. It is now $57 million to $59 million, which would represent a revenue increase of 61% to 67% over the previous year.

We also expect our net income to increase to $8 million to $9.5 million, which would represent an increase of 43% to 69% over the previous year. Now, with that, I would like to open the call up to questions. Operator, would you please provide the appropriate instructions so that we can get the Q&A started..

Thank you. (Operator Instructions) We will pause for a moment as callers join the queue. The first question today comes from William Bremer of the Maxim Group. Please go ahead..

Good evening, gentlemen..

Hi, Bill..

Hi, Bill..

So, I want to first start out, a very nice top line growth absolutely.

Can you give us a sense of how many flare stacks or what the contribution of the flare stacks were this quarter?.

Bill, it’s hard to put a number on it. We’ve got initial sales. Some of those are being demoed in the field now, but we’re sitting at about 200 units that have been sold. Those are primarily in Wyoming and Texas..

If I might add something there. This is Brent. I just came back from a trip to actually get out to the field and talk to the various customers out in the Wyoming area, and it was incredible the interest in this product.

They showed us any number of different flares out there that where they have need of this and the exciting part of that is they don’t just need this new product, but in about 90% of the cases, it comes attached with a Profire 2100, so we’re actually making two sales every time we make one.

But, there’s really phenomenal interest on the parts of the oil companies that I saw at least in Wyoming area..

No agreed, absolutely.

Can you give us a sense of what the largest order you had during the quarter was?.

Bill, we typically don’t break those numbers out specifically. We’ve just elected not to do that in prior Qs and so, as we’ve recorded in prior 10-Ks, we’ve illustrated some of our major clients; but we don’t do that on a quarterly basis..

Okay, not a problem.

Maybe we could go to the shales, which shales in particular, are you having a tremendous demand in and what are some of the ones that are a little lighter that you’re currently seeing in this environment that we’ve having?.

The obvious ones that we’ve had very strong revenue expansion would be the Marcellus, Permian, Eagle Ford. The BJ Basin in Eastern Colorado has been very strong for us. The Bakken’s a little bit late.

I mean, we’re just getting to that and we feel that so many of the operators in that space are so busy with their own exploration, with their own investment, with their own operational acceleration, it is very, very difficult for them to sit down and think about safety and efficiency when they are simply just trying to put bodies and trucks and move their product.

So, we believe the Bakken is a bit of a sleeping giant, but that’s the one if I had to categorize the different shale plays, that’s the one that would be lagging and -- but it’s not a function of opportunity or potential.

It’s a function of us number one, getting to it and frankly, that speaks to the overall premise of the release that we just put out was that we’re in a very heavy investment phase and part of that is getting the people in the right area, and the Bakken is an area that we’re focusing on heavily for future investment..

Okay. I’ll turn it over. Thank you..

Thanks, Bill..

The next question comes from Rob Brown of Lake Street Capital Markets. Please go ahead..

Hi, Rob..

Good afternoon, hi. On the -- you mentioned Colorado being a driver.

Could you give us just some color on the impact of the new regulations, what you’ve seen in terms of new customer adoption, and just the regulatory environment there?.

Well, thanks for that question, Rob. The biggest driver, obviously in Colorado is safety with the auto ignition legislation that’s there. Again, back to the same comment we made with Bill’s comment; we don’t necessarily identify individual companies there.

But, there are --we’ve identified about eight top tier players and they are names that we’ve worked with before, and we’re in with two of those in a significant way right now, and we are working on the balance of those top tier players.

Now beyond that, let’s remember that there are 30,000 current wells in Colorado with about 1,800 new wells coming on every year and so the opportunity for us -- the sales opportunity increases by that much every year. We are --there are about 30 lower tier players that we’re working with, as well.

So, what it does for us is it creates a conversation piece wherein we can go into those corporations and a couple of things have been happening. One, is they’ve heard about the regulation and they’re not sure what it means.

They’re trying to get clarity and remove the noise from what the auto ignition legislation is stating and how they comply with that, or perhaps they’re so busy drilling that they have not heard of it and so, we create that opportunity to have a conversation with them.

As you know, the registration states that by May 1st of 2016 any combustion device in Colorado needs to have an auto ignition system. So, there’s a bit of a lag there, but there’s a fairly hard stop. Now, as you know in the oil and gas space there will be those producers that will fight that or will try to interpret what auto ignition means.

They will see if the regulatory bodies actually have any teeth in penalties if people aren’t complying with this but, from what we’ve heard is that if people aren’t complying with the regulation and the best practices of having safe technology if it’s available, that it will likely damage their permitting applications in future submissions that they would have in the state.

So there’s a bit of noise, but it creates a buzz for our sales people and Brent had mentioned earlier in the call that we have an OEM focused sales person now. We also have a corporate sales person and so they --they’re taking more of a top down approach and Colorado’s a fantastic example of that strategy..

Okay, great.

That’s good color and then, you talked about oil price impact and to be -- should be low, but have you seen any fall offs sort of in the sort of daily order pattern yet at all and I guess, how do you -- you know, what’s sort of the feedback you’ve gotten in the field from that question?.

Well Rob, one of the things we’ve tracked this from the beginning of time as it were, in the 12 or 13 years we’ve been in existence and when we first felt the fluctuations years ago we were really quite concerned.

But one of the things that we found was that not only is there a huge market out here and we have many, many wells yet to cover, but we found that when there’s lots of money that is, high oil prices, companies are quite willing to spend their money.

But when things are a little bit tight they start to focus more on efficiencies and as such, they become very interested in what these products can do for them and so typically we’ve -- we, at least in years past, seen little to no -- in fact, no significant change in our growth patterns as prices have gone up and down, and some of those have been a lot more significant than what we’re presently experiencing..

Rob, just to follow-up on that point and to reiterate what Brent said, on our revenue mix right now, it’s about 60% legacy or retrofit and 40% new drill and so, if you look at the size of the market what the retrofit market represents, it’s a big number.

We’ve seen estimates in the 1.3 million range for wells and so even if you discount that back, we still have a lot of people to talk to. The second factor to think about too is that our products will also work on natural gas and, as natural gas has been increasing lately.

I think it was about 4.3 as of today and so we’re diversified against different energy sources and energy types and so, as you recall, the heating process of dehydration is something that Profire generates revenue from, as well, so we’re somewhat diversified there.

But, we feel that, if you look at the oil deficit that the country’s running, you’re still looking at eight, nine, 10 barrels million barrels a day that we have to import and so the demand domestically is very strong and robust and so we’re pretty excited about the prospects with those factors..

Okay, great and then in your service position you said your tests and trials are sort of through.

How do you see that business upticking and ramping and rolling out into more of a formal business; sort of timelines or the steps that that would follow?.

We should have in coming weeks or at the most, a month or two, the definitive results from some of the specific testing that we’re doing, but the initial test results are very, very significant as to what this preventative maintenance program can do for producers.

What we have sensed is that there is a great need and desire out there to have someone take this off the backs of the producers, from the producers. It’s cost them a great deal to set up their own programs for this and the people who are experienced at it and efficient in handling this, who are really the experts in the arena, can do that.

It’s very helpful to them and it improves their efficiencies tremendously as we tweak the equipment that they have.

The other factor in all of this for us that we found is that, as we have the service people out doing these calls, they find equipment that could and should be replaced and it leads to potentially at least it has in Canada as we’ve done this in previous years, to significant sales increases as we get out there to do that; similar to what your local service station will do with your car offering you a 50 point check on the car, but they always manage to find about 16 things that need to be fixed supposedly.

But, we -- we’re a little more we try to be pretty honest about this thing, but there’s always equipment that needs to be replaced. So, we see this as a real bonus, not just in terms of the revenues that can come in from service, but from the increased sales attached to it..

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

The next question comes from Jim McIlree of Chardan Capital. Please go ahead..

Hi, guys. Thank you and good afternoon. Well, first of all, very impressive results again and….

Thank you..

Can you talk a little bit about potential seasonality, if this quarter benefitted from seasonality or the next couple of quarters might get hurt by seasonality?.

We -- that’s a hard one to deal with. We have seen different things on different years in the past, Jim. Typically half of the month of December is a write-off, the last half with Christmas, with vacations, and so on, depending on the companies we’re working with and their budget timing.

What we do find, though, as they get close to that year-end -- calendar year-end, in some cases they have spent their budgets and so things drop off a little bit and January 1 they pick up again for us or, in other cases, they’re trying to spend budgets that -- to make sure they have sufficient in their budget next year again; so we find those increase.

We will not know for sure until that time happens.

In terms of the weather and such that we had previously experienced when we were a smaller service company in Canada there is what’s called spring break-up in Canada where there’s about a month where the oil field essentially shuts down to service their equipment, but they can’t use the roads and that sort of thing because of the thaws that are going on.

But, as we have spread across North America, that has ceased to be a factor for us as we’ve averaged out and so, in terms of seasonality, we might see some things towards the end of the year, depending again on the budgets, but certainly the holidays do affect it a little bit..

Great. Thank you and the guidance implies that the next couple of quarters are going to be about 15 million per quarter. Can you give us some feel for what make that -- what might make that better and what might make that worse? You seem to have eliminated the oil prices as a potential source of concern.

But, what’s out there that might make, the results better or worse than what the guidance is?.

Jim, its Andrew. What will make it better? I think if you have an increase in rhetoric [ph] as far as the regulatory tone and that could be a federal issue or it could be a state issue, I think that could accelerate things. But, if you look at our past, though, let’s just look historically.

Our revenues have had a plateau effect and those plateaus have been broken through based on the lag of an investment. So for an example, we flattened out a couple of years ago in that $15 million to $16 million range and then we broke out from that. The same thing is happening here.

We’re just making a significant investment based on the capital that we raised this last summer, which now gives us the leeway to get out into those other shale plays in a significant way that Bill asked about earlier in the call.

So, the way I prefer to think about that is that we’re making investments now and it’s really a function of our execution, and then we’ll see those numbers show up in two or three quarters, and so we’ll see that investment occur.

So, what we’re doing is we’re looking at our own revenue model and then looking at historically how we’ve grown revenue and it’s a bit lumpy with that two or three quarter lag and so, what can go bad? I guess regulation can go away and it could be a free for all, for example, in Colorado they could if they were to resend [ph] that regulation.

The same thing in Canada, but those are, things that have been in place and it takes a bit of time for them to move the dial on getting regulations in place.

I think, if anything, you’re going to see a tailwind to start fighting the battle of methane release and CO2 -- the war on CO2 and the safety around anything with combustion and that’s where we believe that this is headed longer-term and what I mean by that is in three to five years our biggest drivers will be largely environmental and regulatory.

So but if those were to go away -- and I’m just kind of painting a doomsday scenario, then I think obviously that would hurt us in the short run. But then, as Brad mentioned before, the U.S.

market has largely been established on the economics and the payback period of the technology and that’s been further enlightened by the preventative maintenance model that Brent just touched on, is that we’re starting to see those real numbers come back so that the producers are able to calculate their rate of return on the technology and the efficiency.

So although the regulatory environment is a driver, we believe it’s a looming gorilla [ph] if you will, that’s hanging out there, again on the war with CO2..

What would make revenues increase? What could bring it off this plateau? One of the things that is noteworthy is that 75% of our current sales and service people have been with us fewer than six months and that typically it’s usually in the six to nine months, even to one-year timeframe that we see them start to produce significantly.

So, by the end of fiscal quarter four, we will certainly have any number of those people who are moving into that more productive range and that could bump those things out. But we -- in the conservative mode we tend to be in here at Profire, we don’t want to start to bank on that..

Great and that -- thanks, and Brent, that leads into my last question. Could you just talk a little bit about the sales persons’ productivity and I’m thinking of it in two buckets.

One, would be the new guys being brought onboard, I would assume, are going to be less productive than the mature sales people, but can you just characterize whether or not they’ve been more or less productive than you had initially expected and then, secondly, have you seen any diminution in the productivity of your existing sales force as they help train and familiarize the new sales force with the products and the territories? And that’ll be it for me, thanks..

Good questions, Jim. No, we haven’t seen anything diminish in the -- as to those ones who are experienced. They keep producing and producing well as they’re helping the new ones learn.

We also have a level of management -- sales management now that we haven’t traditionally had to help train these people, so it isn’t on the backs of the producing salesmen; so that’s significant. We don’t see that -- let me back up.

We do see that our inexperienced men are not producing the same as our experienced ones and since so many of them are in that three to six months category; the numbers are down a bit.

We expect the fully trained and productive salesmen to sell in that 2 million to 3 million per year and so, if you run those numbers out given that we are a year down the road, say, with the numbers of people that we have hired to-date, it’ll give you a bit of a sense of where we’re at.

We have decreased the territories of these people and so there is possibly going to be a slight drop per salesman but what we find is that and the reason that we’ve decreased the size of the territory geographically is so that they can more adequately cover the all of the companies in the territory, whereas now they’re just grabbing the few that they can get to and really not covering all the companies that are there.

So, we’re quite optimistic that the numbers will stay the same per sales guy and even improve significantly as we get along, as we get the support of what Andrew mentioned, the sales people that are going to work at the boardroom level, at the government level, and start to affect the top down selling as well. We will see the numbers go up, I think.

Thanks, Jim..

Great. Thank you..

The next question comes from Steve McManus of Sidoti & Company. Please go ahead..

Hey, everyone. Thanks for taking my questions..

Hi, Steve..

Hi, Steve..

So, my first question is regarding the progress with international distribution. You know, recently you announced the deal with UPC Global. Is this going to be a major focus or just an add-on and you guys are going to mainly continue to focus on the growth in the U.S.

as now?.

Steve, thanks for the question. It’s Andrew. I don’t want you to discount the international possibilities because they are very significant. However, we have so much to do here domestically that we will look for opportunities that come to us.

So we’re sort of in the metaphor of sports, we’re letting the game come to us a little bit and looking for those fat pitch opportunities -- that we have a company, for example, that are representative in Australia. They’re already in the oil and gas space. They have a nice distribution footprint.

Obviously we have to train them and bring them up to speed, but it’s not like starting from scratch. It’s not like we’re investing a tremendous amount of capital there, bricks and mortar, and having a facility there.

Now, in the future somewhere, I don’t want to exclude that possibility, but right now we’re looking for opportunities, again, as they’re teed [ph] up high for us rather than going and forcing too much into that market because we have so much to do here in the United States and, our challenge isn’t necessarily looking for growth opportunities.

It’s focusing on the ones that are the most meaningful right now and so and as we’ve stated before, we are in such a growth and expansion phase with heavy investment that we tend to want to focus on what’s happening here. If you see what’s happening with natural gas and I know you watch this very closely, is just the production in the United States.

We have ample opportunities here. The Canadian market, Saskatchewan it’s an area that we haven’t done a lot of work in yet and let’s not forget the Alberta market. We’ve continued to grow there too. We are now hiring, expanding in our home territory, so to speak, in the Alberta market.

So, although that’s in North America, you know, we have so many opportunities here. Now, you will probably see updates as we start to invest in talent and opportunities that could capture international markets and so, we haven’t broken that out yet because it’s fairly -- as far as the contribution, it’s not a big number yet.

You’ll see us work on it, but it won’t be the main focus..

Okay, great. Thanks, that helps a lot and kind of leads into my next question. So, with respect to the expansion initiatives, obviously there’s been a ramp up in personnel hiring, as well as R&D.

Is this expected to continue in the next few quarters or more of a focus on, training the recently hired, and building upon that?.

This is Andrew again and thanks for that. Our focus will be as long as there is a lot of Greenfield to capture as far as revenue opportunities, we will invest aggressively -- sorry, but we need to do that prudently. Remember where we came from.

We were an organically focused financed business up until this last year, when we took the first external capital to grow this business and so we still have that disciplined mindset.

But, I don’t want to pigeonhole us into a quarter numbers, so forgive me for that, but we will seize opportunities and grow and invest in people and talent until we have the footprint that we’re comfortable with, with our current product mix..

All right, great. Thanks a lot, guys. I appreciate it..

Thanks, Steve..

The next question comes from Walter Ramsley of Walrus Partners. Please go ahead..

Hi, Walter..

Hi Brent, Andrew. It’s a spectacular quarter and things are looking good. Got a couple of questions about more the general market. You mentioned natural gas a couple of times.

What share of the potential market would you say natural gas represents compared to oil, at least in America?.

Well, again, it’s going to be somewhat anecdotal because there aren’t good numbers as the number of wells are changing everyday and we don’t specifically break out the difference between oil and natural gas.

But, if we had to just handicap the opportunity, you’re probably going to be looking at close to a 60/40, 60 for oil and 40 for natural gas as it currently sits today. Now, I think that you’ll see with the new drilling technologies, i.e.

horizontal drilling and fracking that associated gas, meaning natural gas being a by-product of searching for oil is about a 70/30 split.

When you find oil, 30% of what comes up out of the ground as far as an energy source is natural gas and so we -- even though they’re drilling for one particular energy source, you’re going to get that by-product and so it’s hard to break it out, but I would say somewhere in that 70/30 range..

Okay, that’s great and as far as your current sales go, do you think that’s pretty much the split, 60/40, or 70/30, or are you like still kind of moving in that direction?.

Yes, it’s probably more towards the 60/40 but that tends to ebb and flow a little bit about where we focus regionally and again, we’re coming off some small numbers and so we’re focusing on all the shale plays without any particular preference because the technology works in each area.

Some of those are more gas heavy and some are more oil heavy and so it will ebb and flow a little bit, but it’s hard to really put a forecast on that number..

And as far as the – sorry….

Sorry, Walter. One of the things we find is that as companies start to use our product and really like our product, then they tend to use it universally across the board wherever they have.

So, you get a number of producers who are into both oil and gas and so it tends to be more about the company than it is about whether it is oil or whether it is gas. They just use us across the board in many cases..

Okay.

So, as far as the margins , can you guys go, is it pretty much the same, whether it’s oil or gas or is there a tougher sell to do the gas, or higher cost, or what do you think about that?.

Well, the resulting margins to us, Walter are the same. They’re really the same and so it’s hard to say as far as the impact, getting back to the commodity price issue.

But, we’ve ridden natural gas from as high as $9 down to 2, and now we’re back to 4.5 and really the limiting factor is more about our execution and getting trained, talented technicians and sales people in the field to demonstrate this value proposition.

So, it’s more of an awareness issue really than anything to do with the particular commodity, whether it be natural gas or oil..

Okay and I don’t know if you have a guess, but what would you say your total market share is in America now? Still -- I don’t even know what words to put in your mouth..

Well, there’s two questions in your statement. One, would be, I would say, market penetration for the entire niche and, as we stated on the call, we believe the entire niche as far as Burner Management technologies is well under 5%. So, it could be 3% if you really were to lump in the entire niche together.

Of that niche, we believe we’re about 80% of the market share of what’s been sold and again, those are somewhat estimated based on the reconnaissance we have from our sales people and just conversations that we’ve had going forward. However, we feel that it’s a tremendous opportunity and it’s a big Greenfield out there to get after..

Sure. I don’t know.

Do you mind if I ask a few more questions? But, as far as your new products are concerned, is there any discussion that you can give us there as to how big of a leap forward that might be and what the potential impacts could turn into?.

Well, those are great questions. They’re a tad leading for our preference.

However, I think what you want to look at, Walter, is our commitment to the R&D process and so we’re making significant investments financially in new product development and if you sort of read between the lines with what Brent said, that smaller sales territories would imply that at some point in the future there would be additional products to be sold across a smaller geographical area.

So, you know, keep that in mind. The second thing too is that we get all of our inputs from the market.

That’s from the 28 sales people and the 26 service people that we have out in the field that are meeting with clients all the time and so they’re getting feedback as far as what are the needs of the clients, what are their pain points, etcetera and the Flare Stack Ignition System is a perfect example of that process playing out..

Okay and I guess just one last thing, the new channels that you’re beginning to cultivate; the OEMs, the government, the large companies.

Has there been any indication among those potential customers that they’re the least bit interested in anybody other than Profire?.

Yes, again it sounds a little bit like that’s a question about competitive forces or….

Yes, I mean, is there a significant competitor that you’re starting to have to deal with or not?.

No. The biggest competitor we have is awareness and so much of the time that we spend is creating a top down awareness as to the value proposition of our technology.

For example, again, as Brent had mentioned, we now have someone focusing just clearly on the government channel and just again, we were meeting with the Utah Energy Development Administrator about six weeks ago and they didn’t have much information about Profire, and that’s right down the street.

So, you start to think about the top dozen oil and gas producing states in the country that they perhaps don’t understand because there’s not a legislative hammer yet to push this along. So, we’re looking at creating that awareness, creating education, and moving it forward on more of a top down.

Again, remember we didn’t have a marketing person either and so we’re now getting these things in place to where we are creating awareness and education as to the benefits of this so that when it does become mandated or if there is a safety issue that these corporations and these local governments know who to go to for that expertise..

Okay, well anyway, congratulations again. You guys are like a blast from the past with high growth and high profits all in the same package, so it’s great. Thank you..

Thanks, Walter..

Thanks so much, Walter and thank you, everyone for joining us on this inaugural conference call.

We would really like to express appreciation to all of our customers, to our employees, to our shareholders, in particular, for their support and encouragement as we’ve approached this marketplace, as we continue to make our sales and industry leader here. So, thank you very much for joining us today..

Again, I would like to remind everyone that this call will be available for replay through November 18th, starting later this evening, via the link provided in today’s press release, as well as available in the Investor section of the Company’s website. Thank you, ladies and gentlemen, for joining us today for our presentation.

You may now disconnect..