WaterFurnace Renewable Energy, Inc. Fiscal Year & 4th Quarter Results

Increased margins, strong cash position and renewed optimism for residential new construction.

(U.S. $)

FORT WAYNE, IN, March 13, 2013 /CNW/ - WaterFurnace Renewable Energy, Inc. [WFI:TSX] today released the Company's fiscal year 2012 and fourth quarter results. Net income and total comprehensive income for 2012 was $10.1 million versus $13.9 million in 2011.  Sales for 2012 were lower by 13%, nevertheless, gross margin percent rose from 34.8% in 2011 to 35.7% in 2012.  Earnings per share for 2012 were $ .82 versus $1.14 in 2011.  While the geothermal HVAC industry continued to see slow sales in 2012, the Company increased its market share in the residential sector. Cash and short-term investments increased $3.6 million excluding the Company's capital investment in its Chinese joint venture of $2.9 million and start up costs of $422 thousand.

Net income and total comprehensive income for the fourth quarter were down 23.7% from the same period in 2011.  Sales for the fourth quarter were lower by 12.2% than in 2011.  Gross margin percent for the fourth quarter was down from 39.0% in 2011 to 38.7% in 2012. Earnings per share in the fourth quarter were $.33 versus $.44 in 2011.

The Company's Chairman of the Board, Tim Shields stated, "While sales and earnings per share were severely impacted by a continued slow economy and low natural gas prices, the Board of Directors is pleased with strategic achievements that were accomplished in 2012 that will diversify and increase our revenues in the future.  Management did an outstanding job of increasing gross margin percent and residential market share in a soft geothermal market."

Tom Huntington, President and CEO, said, "The Company faced some tough challenges in 2012.  I am very pleased with the personal commitment that our employees and customers displayed in a difficult business environment.  The expansion of our business foundation in 2012, that included new products, re-designed products, a joint venture in China and other developmental efforts have the Company positioned for success as the residential housing market improves and commercial project activity increases.  We enter 2013 with a strong business foundation and renewed optimism for residential new construction."

The annual 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 year and quarter at 11:00 AM Eastern Standard Time on Thursday, March 14, 2013. Those interested can listen live or to the recorded version at http://www.newswire.ca/en/webcast/detail/1098641/1197065 or at the Company's website: www.waterfurnace.com.

WaterFurnace Renewable Energy, Inc.
Consolidated Statements of Comprehensive Income
Prepared using International Financial Reporting Standards
(Thousands of U.S. $ except per share data)
		Unaudited						Audited
		Three months ended December 31,						Year ended December 31,
		2012			2011			2012			2011
Sales		$	34,375		$	39,141		$	119,697		$	137,590
	Cost of sales		21,075			23,881			76,967			89,719
Gross profit			13,300			15,260			42,730			47,871
	Operating expenses		6,104			6,500			24,164			24,037
	Research and development         expenses		391			564			2,070			2,063
Income before interest and    income taxes			6,805			8,196			16,496			21,771
	Joint venture (loss)		(28)			--			(28)			--
	Finance income		21			49			132			158
	Finance expense		(244)			(55)			(1,025)			(210)
Income before income taxes			6,554			8,190			15,575			21,719
	Income tax expense		2,435			2,794			5,515			7,815
Net income			4,119			5,396			10,060			13,904
	Unrealized gain on translation of foreign operations (net of tax)		11			15			31			6
Other comprehensive income			11			15			31			6
Net income and total     comprehensive income		$	4,130		$	5,411		$	10,091		$	13,910
Earnings per share U.S.		$	0.33		$	0.44		$	.82		$	1.14

WaterFurnace Renewable Energy, Inc.
Consolidated Statements of Financial Position
Prepared using International Financial Reporting Standards
(Audited—Thousands of U.S. $)
			December 31,			December 31,
			2012			2011
Assets
Current assets
	Cash and cash equivalents		$	11,928		$	11,646
	Short-term investments			10,232			10,181
	Receivables			16,045			20,126
	Inventory			10,539			9,188
	Prepaids and deposits			513			1,264
Total current assets				49,257			52,405
Property, plant and equipment				6,536			6,762
Deferred tax assets				9,845			7,686
Intangible assets				1,519			1,713
Long-term investments				285			--
Investment in joint venture				2,923			--
Total Assets			$	70,365		$	68,566
Liabilities
Current liabilities
	Payables and accruals		$	6,053		$	7,041
	Income taxes payable			377			652
	Provision for warranty claims - current portion			3,884			3,274
Total current liabilities				10,314			10,967
Finance leases				38			76
Deferred compensation				280			749
Provision for warranty claims				18,938			15,104
Total Liabilities				29,570			26,896
Shareholders' Equity
	Share capital			18,999			17,505
	Foreign exchange translation adjustment			37			6
	Retained earnings			21,759			24,159
Total Shareholders' Equity				40,795			41,670
Total Liabilities and
	Shareholders' Equity		$	70,365		$	68,566

Forward-Looking Information Cautionary Notice

Certain 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 Information

WaterFurnace 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.

 

 

SOURCE: WaterFurnace Renewable Energy, Inc.

Additional information about the Company and its products is available on the Company's website: www.waterfurnace.com. Or call [phone] and ask for investor relations.

WaterFurnace Renewable Energy, Inc.
9000 Conservation Way
Fort Wayne, Indiana  46809-9794
[phone]