We do. There still is obviously a little bit higher on the supply side, OPEC Plus and their production cuts extending through Q2, obviously, signal that. And there is some difference of opinion on stockpiles right now if a conflict were to break out, is there enough. There’s a few opinions that there is, and there’s quite a few that there is not. So overall, you mentioned it. There still is a backlog of deferred maintenance of deferred upgrading that is driving the business for sure. We had our best year in 2023 in terms of retrofits, whether they were directly with Profire or through our variety of partners in each shale play that do burner maintenance, burner upgrades. We do not see E&P slowing down in upgrading their appliances to meet different regulatory requirements or internal net zero goals or just reduction goals, especially on the public company side.
We saw a ton of transactions last year, and we’re still seeing some this year, more not as many in the Permian Basin so far this year, but we’re seeing them out with EQT, for example, have gobbled up another couple of companies here. We see Chesapeake on that bandwagon as well. They will continue as they bring on these merger with these companies acquire these companies if they have legacy assets that need to be upgraded, we fully expect them to continue to push for those upgrades. So retrofit business continues to drive the business. Obviously, new drilling and production with Profire’s dominant market share. We believe, obviously, that helps us. We get more of the new production equipment. But the legacy business, which is still that looming massive opportunity of these legacy wells, if they’re worth being in production, we feel that there’s a good chance that they’re worth being automated as we progress forward with different ESG goals that our customers have.
Rob Brown: Okay, great. Thanks for all the info. I’ll turn it over.
Cameron Tidball: Thanks, Rob. Appreciate it.
Operator: The next question comes from John Bair with Ascend Wealth Advisors. Please go ahead.
John Bair: Good morning. Congrats on a nice year and a good quarter. Two quick questions. Number one, you didn’t indicate in your prepared remarks about inventories being up. Is that in anticipation of order flow or trying to get ahead of supply chain issues or pricing? And the second question is, can you talk anything about improvement or increase in activity that is more internationally oriented in other words, outside of the North America.
Cameron Tidball: You bet. Ryan, why don’t you tackle the first part, and I’ll jump in on the second.
Ryan Oviatt: Yes. Great question. Inventory is up year-over-year. It’s been up for most of 2023, kind of started to accumulate early in the year, and then we’ve continued to bring in product as we’ve also had a great year of sales. A lot of that continues to be somewhat supply chain related. A lot of our stuff is long lead time orders. So we have to get those orders placed well in advance and then they come in as they come in. So we’ve been able to bring in a bunch of the products that we had on order early from this year and even stuff that we were starting to order late in 2022. So it’s kind of just the timing of when all of that comes in and how we’re trying to place our orders and stay ahead of anticipated demand for our customers.
As I mentioned earlier, some of the supply chain stuff is easing, but they’re still pretty long lead times in some of this stuff as well. We’re also still in this transitionary period between the end of life of our 2100 system and the full rollout implementation of the 2200 system. So those — there’s still a mix there where we’re accumulating a lot of the 2200, getting those in hand, while we’re still kind of closing out the 2100 side of our ordering as well, making sure that we have enough to continue to satisfy the demand that we have right now, but also for warranty and ongoing support of that product down the road. So that transition will continue throughout 2024. for. But kind of towards the end of the year, we would anticipate that most of that transition will be completed, assuming that supply chain goes the way we think it will this year.
But that’s a big piece of it is just kind of working through those transitions, getting the right supply of that PF2200 product and being able to fully transition customers over to that at the right point when we can continue to supply for them. They certainly don’t like it. If they switch to the 2200 and then have to go back to the 2,100 for a period of time, they want to be able to make that transition and continue to get the new product and have that be reliable for them going forward. So that’s the process that we work through as we’re doing that, and it has had an increase on inventory over the last two years, for sure.
John Bair: So at what point do you say, okay, no more 2100 would be sold. And obviously, when you have an installed base and you’re trying to transition existing customers away from the 2100 to 22. So at what point — how do you kind of handle that situation?
