Press release from CNW Group
WaterFurnace Renewable Energy, Inc. 4th Quarter Results: Sales Up 2.8%
Thursday, March 10, 2011
WaterFurnace Renewable Energy, Inc. 4th Quarter Results: Sales Up 2.8%18:07 EST Thursday, March 10, 2011FORT WAYNE, IN, March 10 /CNW/ - WaterFurnace Renewable Energy, Inc. (TSX: WFI) today released the Company's fourth quarter 2010 results. Sales for the quarter increased 2.8% versus the same quarter last year. Sales in the U.S. increased 12.2%, but sales to Canada were down 32.6%. Net income was down 4.2%. Earnings per share was $0.48 versus $0.50 in 2009. Slower Canadian sales and rising component cost, driven by fast rising metals cost, had a significant impact on margins for the quarter.The fourth quarter of 2010 was a microcosm of the year. In 2010 the Company saw a modest increase in its market share and sales were up 7.1% over 2009. However, net income for 2010 was down 10.0% while earnings per share dropped to $1.15 in 2010 from $1.28 in 2009. A stronger mix of commercial sales and increased component costs resulted in lower profit margins. Operating expenses were up 13.3% as the Company added sales staff, expanded product channels to position itself for future growth and laid the groundwork for an acquisition in Australia. Warranty costs also increased during the year primarily due to an increase in the number of units sold with longer warranties and higher claim costs.Tom Huntington, President and CEO, said, "The Company has worked hard and made a lot of progress this year towards our strategic goals. We have strengthened and expanded our core direct to dealer network. We have put a new focus on commercial products. We have expanded our commercial representatives' sales footprint and signed OEM agreements to sell commercial products with two new partners."Tim Shields, Chairman of the Board, added, "The Board is pleased with the current results of the Company given the down economy. The Board is very happy to see the gains in market share and the investments that are necessary for future prosperity and returning value to the shareholders."The annual report to shareholders is available at www.waterfurnace.com and filed on SEDAR at www.sedar.com. Management will conduct a webcast covering the results of the quarter and year at 11:00 AM Eastern Standard Time on Tuesday, March 15, 2011. Interested parties can listen live or to the recorded version at http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=3403400 or at the Company's website: www.waterfurnace.com.WaterFurnace Renewable Energy, Inc.Consolidated Statements of IncomePrepared using Canadian Generally Accepted Accounting Principles(Thousands of U.S.$ except per share data) UnauditedAudited Three months ended December 31, Year ended December 31, 2010 2009 2010 2009Sales$ 40,526 $ 39,410 $ 138,285 $ 129,065 Cost of sales25,390 23,989 91,933 82,328Gross profit15,136 15,421 46,352 46,737 Operating expenses6,475 5,024 22,895 20,216 Research and development expenses234 590 2,213 2,312Income before interest and income taxes8,427 9,807 21,244 24,209 Interest income25 21 79 58 Interest expense(3) (2) (50) (17)Income before income taxes8,449 9,826 21,273 24,250 Income taxes2,651 3,775 7,341 8,774Net income$ 5,798 $ 6,051 $ 13,932 $ 15,476 Basic and diluted earnings per share U.S.$$ 0.48 $ 0.50 $ 1.15 $ 1.28 WaterFurnace Renewable Energy, Inc.Consolidated Balance SheetsPrepared using Canadian Generally Accepted Accounting Principles(Audited—Thousands of U.S.$) AssetsDecember 31,2010 December 31,2009Current assets Cash and cash equivalents$ 7,222 $ 4,785 Short-term investments10,078 13,368 Receivables21,255 16,794 Inventory8,570 5,653Other current assets3,544 2,859Total current assets50,669 43,459 Capital assets5,746 5,345Other assets3,772 3,015 Total Assets$ 60,187 $ 51,819 Liabilities Current liabilities Payables and accruals$ 8,061 $ 7,398 Income taxes payable1,124 880 Provision for warranty claims - current portion2,724 2,215Total current liabilities11,909 10,493 Capital leases111 146Deferred compensation540 264Provision for warranty claims11,760 8,280Total Liabilities24,320 19,183 Shareholders' Equity Share capital14,948 14,865 Retained earnings20,919 17,771Total Shareholders' Equity35,867 32,636 Total Liabilities & Shareholders' Equity$ 60,187 $ 51,819Forward-Looking Information Cautionary NoticeCertain statements in this release constitute forward-looking statements within the meaning of applicable Canadian securities laws. Readers are cautioned not to place undue reliance on such statements. Investors should not rely solely on this information to make investment decisions. These statements are subject to certain assumptions, risks and uncertainties. In addition, WaterFurnace's sales are related to the cost and stability of electricity, fuel oil, propane and natural gas. Federal, state and provincial building codes and energy incentives can also impact sales. WaterFurnace is subject to standard risks associated with most companies, such as normal competitive pressures. These and other risks could cause WaterFurnace's actual results, performance, achievements and developments to differ materially from the results, performance, achievements or developments expressed or implied by such forward-looking statements. Other risk factors can be found in WaterFurnace's Annual Information Form dated March 11, 2010 and other public documents filed by WaterFurnace with Canadian securities regulatory authorities. WaterFurnace assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by law.More InformationWaterFurnace Renewable Energy, Inc. is traded in both Canadian dollars and U.S. dollars on the Toronto Stock Exchange under the symbol WFI for Canadian dollars and WFI.U for U.S. dollars.WaterFurnace designs, manufactures and distributes geothermal heat pumps. The geothermal units use the renewable solar energy stored just below the surface of the earth to dramatically reduce the energy consumed by buildings for heating, cooling and hot water.For further information: Additional information about the Company and its products is available on the Company's website: www.waterfurnace.com. Or call (260) 478-5667 and ask for investor relations.