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Press release from CNW Group

WaterFurnace Renewable Energy, Inc. 3rd Quarter Results: Raises Dividends on Increased Profits

Tuesday, November 08, 2011

WaterFurnace Renewable Energy, Inc. 3rd Quarter Results: Raises Dividends on Increased Profits19:57 EST Tuesday, November 08, 2011(U.S.$)FORT WAYNE, IN, Nov. 8, 2011 /CNW/ - WaterFurnace Renewable Energy, Inc. [WFI:TSX] today released the Company's third quarter 2011 results. In the third quarter of 2011, total comprehensive income increased by 6.0% over the third quarter of 2010. This follows a 6.1% year over year increase in comprehensive income for the second quarter of 2011. Sales for the quarter were down 4.3% from the same period in 2010. Direct to dealer residential sales were up slightly for the quarter versus last year. While Canadian sales remain below last year, the Company saw its Canadian sales improve in the third quarter versus the first six months of 2011. The Company's year to date sales revenue is 0.7% above last year's nine months ended September 30, 2010.Today the Board of Directors approved a quarterly dividend of $0.24 U.S. per share for shareholders of record on November 22, 2011, with payment on December 1, 2011, a 9% increase in the current dividend.Commercial sales growth remained strong for the quarter while international sales, other than Canadian, almost tripled albeit on a small but increasing base of business. The Company expects Commercial sales to continue to help drive market share growth as it enters 2012.The Company continued development of its sales channels and new markets. Operating expenses rose 10.6% in the third quarter of 2011 over the third quarter of 2010. Continued investment in sales channel development, new product development and marketing programs drove the increase in year over year expense. The Company continues to expand both its geographic footprint and its market share.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 met its expectations for inventory turns, accounts receivable collections, day's sales outstanding and accounts payable for the period.Tom Huntington, President and CEO, said, "Channel expansion and new marketing programs played a critical role in our performance. We do, however, remain concerned about the elusive U.S. residential new construction market recovery. We are excited about better than forecasted Canadian sales and the growth in our international commercial channel."Tim Shields, Chairman of the Board, added, "We believe that management has a firm grasp on the general economic climate and its effects on our industry. As such, the Company's third quarter results show the Company's ability to outperform the industry in poor economic times. The Board recently reviewed the Company's five year strategic plan and while we face significant uncertainty, we are seeing the fruits of our strategic efforts paying off in the short-term."The third 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 Thursday, November 10, 2011. Interested parties can listen live or to the recorded version at http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=3713380 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 September 30,  Nine months ended September 30, 2011 2010 2011  2010        Sales$ 35,957 $ 37,581 $ 98,449  $ 97,759 Cost of sales22,406 24,671 65,980 66,565        Gross profit13,551 12,910 32,469  31,194 Operating expenses5,789 5,236 17,537  16,440 Research and development expenses514 789 1,499 1,979        Income before interest and income taxes7,248 6,885 13,433  12,775 Finance income50 33 109  54 Finance expense(3) (19) (13) (47)        Income before income taxes7,295 6,899 13,529  12,782 Income tax expense2,665 2,530 5,021  4,672        Net income and total comprehensive income$ 4,630 $   4,369 $   8,508  $  8,110        Earnings per share U.S.$$   0.38 $    0.36  $    0.70  $    0.67WaterFurnace Renewable Energy, Inc.Consolidated Statements of Financial PositionPrepared using International Financial Reporting Standards(Unaudited—Thousands of U.S.$) September 30,  December 31,  January 1, 2011  2010  2010      Assets     Current assets      Cash and cash equivalents $ 10,264 $   7,222 $   4,785 Short-term investments 10,156 10,078 13,368 Receivables 18,815 21,255 16,794 Inventory 10,036 8,570 5,653 Prepaids and deposits 462 492 369Total current assets 49,733 47,617 40,969      Property, plant and equipment 7,061 7,309  6,962Deferred tax assets 7,290 6,212  4,852Intangible assets 1,739 -- --Total Assets $ 65,823 $ 61,138 $ 52,783      Liabilities     Current liabilities          Payables and accruals$   7,606  $   8,061 $   7,398 Income taxes payable 435 1,124 880 Provision for warranty claims - current portion 3,173 2,724 2,215Total current liabilities 11,214 11,909 10,493      Finance leases 84 111 146Deferred compensation 493 540 264Provision for warranty claims 14,631 11,760 8,280Total Liabilities 26,422 24,320 19,183      Shareholders' Equity      Share capital 17,505 14,948 14,865 Foreign exchange translation adjustment (9) --  -- Retained earnings 21,905 21,870 18,735      Total Shareholders' Equity 39,401 36,818 33,600      Total Liabilities and Shareholders' Equity $65,823 $ 61,138  $ 52,783Forward-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.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. For further information: WaterFurnace Renewable Energy, Inc. 9000 Conservation Way Fort Wayne, Indiana  46809-9794 (260) 478-5667