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Press release from CNW Group

WaterFurnace Renewable Energy, Inc. 3rd Quarter Results: Announces Quarterly Dividend

Friday, November 09, 2012

WaterFurnace Renewable Energy, Inc. 3rd Quarter Results: Announces Quarterly Dividend18:36 EST Friday, November 09, 2012(U.S.$)FORT WAYNE, IN, Nov. 9, 2012 /CNW/ - WaterFurnace Renewable Energy, Inc. [WFI:TSX], the leading manufacturer of energy efficient heating and cooling solutions, today reported third quarter financial results. The Company announced lower-than-projected sales and profits due to sustained pressures from a struggling economy, weak consumer confidence among affluent homeowners, and low natural gas and propane prices. The industry segments of residential and commercial geothermal heat pumps along with boiler/tower products witnessed contraction. The Company, however, increased its market share in both residential and commercial sectors while in a very competitive environment.Gross profit as a percentage of sales increased from 37.9% in Q3 2011 to 38.0% in Q3 2012. Continued releases of new products along with effective supply chain initiatives provided this enhancement in margins despite lower manufacturing absorption.On July 27, 2012, the Company signed a joint venture agreement with Chinese company Ningbo Shenglong Group Co., Ltd. (Shenglong) to form WaterFurnace Shenglong HVACR Climate Solutions, Ltd. (WFSL), also a Chinese company. Management believes that the increased global footprint and ability to bring focus to the Chinese market bodes well for the Company. Not only does this venture provide new sourcing and distribution opportunities, it also brings the enormous growth potential of the Chinese market to the Company and its shareholders. Operations of the joint venture began on November 5, 2012.Cash and cash equivalents increased for the first nine months of 2012 by $175 thousand after paying $9.4 million in dividends versus an increase of $3.0 million for the first nine months of 2011 after paying $8.5 million in dividends. Cash disbursements for the first nine months of 2012 included $397 thousand paid in startup costs for the Company's new joint venture in China."While the industry continued to weather short-term challenges, WaterFurnace maintained its focus on business investments, market share and product innovation," said Tom Huntington, President and CEO of WaterFurnace. "The successful launch of the 7 Series—the first variable capacity geothermal heat pump available to homeowners—marked a milestone for the entire industry and will have an increasingly positive impact on our sales and brand image as the market recovers."The Board of Directors approved a quarterly dividend of $0.24 U.S. per share for shareholders of record on November 21, 2012, with payment on December 3, 2012. Chairman of the Board Tim Shields added, "WaterFurnace is committed to a long-term strategy and the Board of Directors remains optimistic about the Company's ability to weather challenging business conditions thanks to the steps management has taken to strengthen and diversify the overall business."The third quarter report to shareholders is available at www.waterfurnace.com and filed on SEDAR at www.sedar.com. The CEO and CFO will conduct a webcast covering the results of the quarter at 11:00 AM Eastern Daylight Time on Monday, November 12, 2012. Those interested can listen live or to the recorded version at http://www.newswire.ca/en/webcast/detail/1053867/1145469 or at the Company's website: www.waterfurnace.com.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. 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,    2012 2011 2012 2011                Sales   $29,483 $35,957 $85,322 $98,449 Cost of sales    18,284  22,333  55,892  65,838Gross profit    11,199  13,624  29,430  32,611 Operating expenses    5,970  5,789  18,060  17,537 Research and development expenses    622  514  1,679  1,499Income before interest & income taxes    4,607  7,321  9,691  13,575 Finance income    24  50  111  109 Finance expense    (224)  (76)  (781)  (155)Income before income taxes    4,407  7,295  9,021  13,529 Income tax expense    1,529  2,665  3,080  5,021Net income    2,878  4,630  5,941  8,508                Unrealized loss on translation of foreign   operations (net of tax)    23  (9)  20  (9)Other comprehensive income    23  (9)  20  (9)               Total comprehensive income    $ 2,901 $4,621 $5,961 $8,499               Earnings per share (U.S.$) on net income    $ 0.24 $0.38 $0.49 $0.70 WaterFurnace Renewable Energy, Inc.Consolidated Statements of Financial Position Prepared using International Financial Reporting Standards(Unaudited-Thousands of U.S.$)   September 30, 2012 December 31, 2011Assets        Current Assets         Cash and cash equivalents  $11,821 $11,646  Short-term investments   10,226  10,181  Receivables   15,058  20,126  Income taxes receivable   768  -  Inventory   11,395  9,188  Prepaids and deposits   559  1,264 Total current assets   49,827  52,405         Property, plant and equipment   6,758  6,762 Deferred tax assets   9,404  7,686 Intangible assets   1,568  1,713 Long-term investments   285  -Total Assets  $67,842 $68,566        Liabilities        Current Liabilities         Payables and accruals  $5,775 $7,041  Income taxes payable   -  652  Provision for warranty claims - current portion    3,754  3,274 Total current liabilities   9,529  10,967         Finance leases   47  76 Deferred compensation   866  749 Provision for warranty claims   18,395  15,104Total Liabilities   28,837  26,896        Shareholders' Equity        Share capital   18,236  17,505 Foreign exchange translation adjustment   26  6 Retained earnings   20,743  24,159Total Shareholders' Equity   39,005  41,670        Total Liabilities & Shareholders' Equity  $67,842 $68,566 SOURCE: WaterFurnace Renewable Energy, Inc.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