WaterFurnace Renewable Energy, Inc. - Second Quarter Net Sales Rise 15.5% -
Dividend Approved at $0.22 U.S. Per Share
(U.S.$)
FORT WAYNE, IN, Aug. 5 /CNW/ - WaterFurnace Renewable Energy, Inc. (WFI:TSX) today released the Company's second quarter 2010 results. The Company's net sales rose 15.5% in the second quarter of 2010 versus the same period last year. Sales gains were driven by residential dealer sales, commercial sales and U.S. distributor sales following the trend of the first quarter of the year. International and Canadian sales continue to lag last year. Earnings per share were $0.27 for the quarter versus $0.30 for prior year. The higher mix of commercial products that inherently carry lower margins, along with higher material costs across nearly all product categories, negatively impacted gross profit. The Company continued its investment in business development and in the expansion of dealer direct sales and commercial sales channels, leading to higher operating expenses for the quarter. Bookings in the second quarter were significantly above last year and are currently running ahead of 2008 record levels entering the third quarter.
The economy continues to struggle and housing starts have not shown signs of recovery. Tight lending practices by banks and changes in Canadian geothermal subsidies will continue to hamper growth efforts for the balance of the year. "We recognize that we have an opportunity in this down economy to leverage our financial strength and expertise in dealer direct and commercial sales. We will continue to make strategic investments in these lucrative areas," stated Tom Huntington, President and CEO.
Tim Shields, WaterFurnace's Chairman, added, "The Board continues its support of the strategic direction the Company is pursuing and tactical investment to ensure growth for the future. We have seen very positive increases in market share over the past year and that is very encouraging for the future. Our management team is keenly focused on our long-term initiatives. While continued growth in earnings per share is very important, we cannot lose sight of longer term strategic goals." Mr. Huntington concluded, "This is a very busy and energizing time for the Company as we continue to expand the foundation of the business."
The Board of Directors approved the quarterly dividend of $0.22 U.S. per share to be paid September 1, 2010, to shareholders of record at the market close of August 20, 2010. The complete quarterly report is posted on the Company's website: www.waterfurnace.com. Management will conduct a webcast covering the results of the quarter at 11:00 am Eastern Daylight Time on Friday, August 6th. Interested parties can listen live or to the recorded version at http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=3157220 or at the Company's website: www.waterfurnace.com.
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WaterFurnace Renewable Energy, Inc.
Consolidated Statements of Income
Prepared using Canadian Generally Accepted Accounting Principles
(Unaudited - Thousands of U.S.$ except per share data)
Three months ended Six months ended
June 30, June 30,
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2010 2009 2010 2009
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Sales $ 34,384 $ 29,772 $ 60,178 $ 53,446
Cost of sales 23,083 18,776 41,879 35,389
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Gross profit 11,301 10,996 18,299 18,057
Operating expenses 5,633 4,902 11,307 10,315
Research and
development
expenses 590 552 1,190 1,215
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Income before interest
and income taxes 5,078 5,542 5,802 6,527
Interest income 21 2 21 8
Interest expense (20) (5) (28) (8)
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Income before income
taxes 5,079 5,539 5,795 6,527
Income taxes 1,874 1,891 2,033 2,049
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Net income $ 3,205 $ 3,648 $ 3,762 $ 4,478
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Basic and diluted
earnings per
share U.S.$ $ 0.27 $ 0.30 $ 0.31 $ 0.37
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WaterFurnace Renewable Energy, Inc.
Consolidated Balance Sheets
Prepared using Canadian Generally Accepted Accounting Principles
(Unaudited - Thousands of U.S.$)
June 30, December 31,
Assets 2010 2009
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Current assets
Cash and cash equivalents $ 5,647 $ 4,785
Short-term investments 10,026 13,368
Receivables 16,935 16,794
Inventory 7,599 5,653
Other current assets 3,204 2,859
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Total current assets 43,411 43,459
Capital assets 5,705 5,345
Other assets 3,552 3,015
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Total Assets $ 52,668 $ 51,819
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Liabilities
Current liabilities
Payables and accruals $ 8,432 $ 7,398
Income taxes payable 142 880
Provision for warranty claims - current portion 2,465 2,215
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Total current liabilities 11,039 10,493
Capital leases 129 146
Deferred compensation 125 264
Provision for warranty claims 10,076 8,280
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Total Liabilities 21,369 19,183
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Shareholders' Equity
Share capital 14,948 14,865
Retained earnings 16,351 17,771
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Total Shareholders' Equity 31,299 32,636
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Total Liabilities & Shareholders' Equity $ 52,668 $ 51,819
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More Information: Additional information is available on the Company's website: www.waterfurnace.com. 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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