The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

News Sources

Take control of your investments with the latest investing news and analysis

Press release from CNW Group

WaterFurnace Renewable Energy, Inc. 2nd Quarter Results: Comprehensive Income up 6.1%

Friday, August 12, 2011

WaterFurnace Renewable Energy, Inc. 2nd Quarter Results: Comprehensive Income up 6.1%18:18 EDT Friday, August 12, 2011(U.S.$)FORT WAYNE, IN, Aug. 12, 2011 /CNW/ - WaterFurnace Renewable Energy, Inc. [WFI:TSX] today released the Company's second quarter 2011 results. In the second quarter of 2011, total comprehensive income increased by 6.1% over the second quarter of 2010. Sales for the quarter were down 1.8% from the same period in 2010. Soft residential sales accounted for most of the sales decline lead by a 41.8% decline in Canadian residential sales. The Company's year to date sales revenue is 3.7% above last year's six months ended June 30, 2010.Commercial sales continued to lead the Company's growth posting the second straight quarterly increase of more than 50%. Second quarter commercial sales increased by 50.8% on a year over year basis and this followed the first quarter's year over year increase of 56.4%.Federal tax credits of 30% of the installed cost of a residential Energy Star rated geothermal system along with state incentives and utility rebates continued to help support residential sales. The broader HVAC market is constrained by the slow economic recovery, unemployment and tight credit markets. The current historically low housing starts have tended to offset sales gains associated with the tax credits.The Company continued development of its sales channels and new markets. Operating expenses rose 5.9% in the second quarter of 2011 over the second quarter of 2010. Operating expense as a percent to sales for the quarter rose from 18.6% in 2010 to 18.8% in 2011. Warranty costs during the quarter were lower than expected.Today the Board of Directors approved a quarterly dividend of $0.22 U.S. per share for shareholders of record on August 23, 2011, with payment on September 1, 2011.Tom Huntington, President and CEO, said, "We are pleased that our strategic focus on commercial geothermal products is well timed, relative to the commercial market recovery, however, we do remain concerned about the elusive U.S. residential new construction market recovery. Our acquisition of Hyper Engineering in January continues to reveal new opportunities for major growth due to innovative design solutions that are aimed at solving real world electric grid supply challenges."Tim Shields, Chairman of the Board, added, "Given the adverse economic conditions we are facing, the Company is doing well as it works hard to position itself for future demand. The Board is encouraged with the commercial sales momentum. While there is general concern about the economic outlook for the balance of the year, the Board continues to support the Company's strategic plan and its ability to manage through the economic adversity we face."The second quarter report to shareholders is available at www.waterfurnace.com and filed on SEDAR at www.sedar.com. Management will conduct a webcast covering the results of the quarter at 11:00 AM Eastern Standard Time on Tuesday, August 16, 2011. Interested parties can listen live or to the recorded version at http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=3593260 or at the Company's website: www.waterfurnace.com.WaterFurnace Renewable Energy, Inc.Consolidated Statements of Comprehensive IncomePrepared using International Financial Reporting Standards(Unaudited—Thousands of U.S.$ except per share data) Three months ended June 30, Six months ended June 30, 2011 2010 2011 2010        Sales $ 33,755 $ 34,384 $ 62,492 $ 60,178 Cost of sales 22,328 23,090 43,574 41,894        Gross profit 11,427 11,294 18,918 18,284 Operating expenses 5,909 5,582 11,748 11,204 Research and development expenses 468 590 985 1,190        Income before interest and income taxes 5,050 5,122 6,185 5,890 Finance income 40 21 59 21 Finance expense (7) (20) (10) (28)        Income before income taxes 5,083 5,123 6,234 5,883 Income tax expense 1,692 1,928 2,356 2,142        Net income and total comprehensive income $   3,391 $   3,195 $   3,878 $  3,741        Earnings per share U.S.$ $    0.28 $    0.26 $    0.32 $    0.31        WaterFurnace Renewable Energy, Inc.Consolidated Statements of Financial PositionPrepared using International Financial Reporting Standards(Unaudited—Thousands of U.S.$) June 30, December 31, January 1, 2011 2010 2010      Assets     Current assets          Cash and cash equivalents $   6,056 $   7,222 $   4,785 Short-term investments 10,123 10,078 13,368 Receivables 18,484 21,255 16,794 Inventory 11,317 8,570 5,653 Prepaids and deposits 617 492 369Total current assets 46,597 47,617 40,969       Property, plant and equipment 7,142 7,309 6,962Deferred tax assets 7,367 6,212 4,852Intangible assets 1,765 -- --      Total Assets $ 62,871 $ 61,138 $ 52,783      Liabilities     Current liabilities          Payables and accruals $   7,736 $   8,061 $   7,398 Income taxes payable -- 1,124 880 Provision for warranty claims      - current portion 3,072 2,724 2,215Total current liabilities 10,808 11,909 10,493       Finance leases 93 111 146Deferred compensation 266 540 264Provision for warranty claims 14,098 11,760 8,280Total Liabilities 25,265 24,320 19,183      Shareholders' Equity      Share capital 17,505  14,948  14,865 Retained earnings 20,101  21,870  18,735      Total Shareholders' Equity 37,606  36,818  33,600      Total Liabilities and Shareholders' Equity $ 62,871  $ 61,138  $ 52,783      Forward-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 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. WaterFurnace Renewable Energy, Inc. 9000 Conservation Way Fort Wayne, Indiana  46809-9794 (260) 478-5667