Third Quarter Sales Rise 3.8% Year Over Year, Named Once Again to Cleantech
10(TM), Dividend Approved at $0.22 U.S. Per Share
(U.S.$)
FORT WAYNE, IN, Nov. 10 /CNW/ - WaterFurnace Renewable Energy, Inc. (WFI:TSX) today released the Company's third quarter 2010 results. The Company's net sales rose 3.8% over the third quarter of 2009. While dealer direct sales were down slightly, the commercial representatives' sales channel was strong in a very depressed commercial market. U.S. Distributor sales rose nominally for the quarter while Canadian distributor sales fell amid Canadian federal governmental incentives being phased out this year.
Net income for the third quarter was $0.36 per share compared with $0.41 last year. Sales channel mix, warranty cost and the rising cost of metals, particularly copper, placed pressure on margins. Gross profit fell $342 thousand for the quarter while investment in business development, sales channel expansion and potential acquisitions increased operating expenses by $236 thousand versus last year's third quarter. As the Company enters the fourth quarter, bookings for the Canadian distributor channel remain soft, however bookings for U.S. commercial sales remain firm.
The Company's President and CEO, Tom Huntington stated, "While the economy continues to affect the Company's performance, I am encouraged by our market share gains along with the continued development and expansion of our sales channels. In addition, we have been focused on business development and expect good things from that in the future."
Tim Shields, WaterFurnace's Chairman, added, "The Board is pleased with management's strategic initiatives, cost containment and aggressive sales channel development. Taking advantage of the short-term economic reality by growing market share is a key part of the Company's long-term strategic focus."
On October 28, 2010, the Corporate Knights Magazine reported that WaterFurnace is again recognized on the Cleantech 10(TM) list which is part of the prestigious Cleantech Index(TM) (AMEX: CTIUS) to which WaterFurnace was selected in 2008. Tom Huntington, commented, "We are delighted to be honored once again as one of the ten outstanding clean technology companies listed in Canada."
The Board of Directors approved the quarterly dividend of $0.22 U.S. per share to be paid December 1, 2010, to shareholders of record at the market close of November 22, 2010. The complete quarterly report is posted on the Company's website: www.waterfurnace.com. Management will conduct a webcast covering the results of the quarter at 11:00 AM Eastern Standard Time on Thursday, November 11, 2010. Interested parties can listen live or to the recorded version at http://www.newswire.ca/en/webcast/viewEvent. cgi?eventID=3251380 or at the Company's website: www.waterfurnace.com.
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WaterFurnace Renewable Energy, Inc.
Consolidated Statements of Income
Prepared using Canadian Generally Accepted Accounting Principles
(Unaudited-Thousands of U.S.$ except per share data)
Three months ended Nine months ended
September 30, September 30,
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2010 2009 2010 2009
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Sales $ 37,581 $ 36,209 $ 97,759 $ 89,655
Cost of sales 24,664 22,950 66,543 58,339
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Gross profit 12,917 13,259 31,216 31,316
Operating expenses 5,113 4,877 16,420 15,192
Research and
development expenses 789 507 1,979 1,722
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Income before interest
and income taxes 7,015 7,875 12,817 14,402
Interest income 33 29 54 37
Interest expense (19) (7) (47) (15)
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Income before income
taxes 7,029 7,897 12,824 14,424
Income taxes 2,657 2,950 4,690 4,999
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Net income $ 4,372 $ 4,947 $ 8,134 $ 9,425
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Basic and diluted
earnings per share
U.S.$ $ 0.36 $ 0.41 $ 0.67 $ 0.78
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WaterFurnace Renewable Energy, Inc.
Consolidated Balance Sheets
Prepared using Canadian Generally Accepted Accounting Principles
(Unaudited-Thousands of U.S.$)
September 30, December 31,
Assets 2010 2009
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Current assets
Cash and cash equivalents $ 5,370 $ 4,785
Short-term investments 10,056 13,368
Receivables 19,330 16,794
Inventory 8,200 5,653
Other current assets 2,995 2,859
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Total current assets 45,951 43,459
Capital assets 5,557 5,345
Other assets 3,854 3,015
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Total Assets $ 55,362 $ 51,819
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Liabilities
Current liabilities
Payables and accruals $ 7,651 $ 7,398
Income taxes payable 968 880
Provision for warranty claims - current portion 2,592 2,215
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Total current liabilities 11,211 10,493
Capital leases 120 146
Deferred compensation 267 264
Provision for warranty claims 10,894 8,280
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Total Liabilities 22,492 19,183
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Shareholders' Equity
Share capital 14,948 14,865
Retained earnings 17,922 17,771
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Total Shareholders' Equity 32,870 32,636
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Total Liabilities & Shareholders' Equity $ 55,362 $ 51,819
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More Information: WaterFurnace designs, manufactures and distributes geothermal heat pumps. The geothermal units use the renewable solar energy stored just below the surface to dramatically reduce the energy consumed by buildings for heating, cooling and hot water. The Environmental Protection Agency and the Department of Energy have concluded that geothermal systems are the most environmentally friendly way to heat and cool our buildings.
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.
Risk and Uncertainties: This news release contains certain forward-looking statements that may or may not be realized. Investors should not rely solely on this information to make investment decisions. The Company'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. The Company is subject to standard risks associated with most companies, such as normal competitive pressures.
For further information: Additional information is available on the Company's website: www.waterfurnace.com
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