WaterFurnace Renewable Energy, Inc. 1st Quarter Results: EPS up 75% from $0.04 to $0.07 - Announces Quarterly Dividend

(U.S.$)

FORT WAYNE, IN, May 9, 2012 /CNW/ - WaterFurnace Renewable Energy, Inc. [WFI:TSX] today released the Company's first quarter results. Net income for Q1 2012 was $857 thousand up from $487 thousand in Q1 2011. Earnings per share increased year over year by $0.03 per share from $0.04 in Q1 2011 to $0.07 in Q1 2012. When adjusting for LoopMaster's discontinued operations, sales compared to last year were equivalent. Q1 gross profit dollars increased year over year by $260 thousand or 3.5%. Gross profit percent rose from 26.2% of net sales in Q1 2011 to 28.2% in Q1 2012 despite a continued higher mix of commercial products that carry lower margins.

The Company experienced another increase in market share despite a continued shrinking of the geothermal HVAC market. Residential replacement sales remained depressed due primarily to reduced consumer spending in an uncertain economy, which was also a limiting factor on overall system sales.

First quarter highlights included the Company's introduction of the 5 Series product line. This new generation of products was launched with a number of improvements for installing contractors and homeowners, yet was introduced at a lower price point than the previous generation of product. This move was especially notable as the Company's major competitors executed price increases during the same period.

The Company's Chairman of the Board, Tim Shields stated, "The positive results of the first quarter are a culmination of relationships the Company has forged with customers and vendors, and an employee culture we've worked hard to develop. Price reduction efforts, innovative new products, sales channel development and new business ventures are the driving force behind our first quarter success. The Board is pleased with the way the Company has positioned itself to expand its role as the industry leader as the economy recovers."

Tom Huntington, President & CEO, agreed that new product introductions combined with continued sales channel development and new business ventures will be a focus of the Company for the balance of 2012.

"While we work diligently on business development efforts that are of critical strategic importance, the first quarter results clearly show our keen focus growing margins and market share," Huntington said, "This speaks well of all our employees and their ability to manage tough times while sowing seeds for future growth."

In addition, the Board of Directors approved a quarterly dividend of $0.24 U.S. per share for shareholders of record on May 18, 2012, with payment on June 1, 2012.

The first 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 4:00 PM Eastern Daylight Time on Thursday, May 10, 2012. Those interested can listen live or to the recorded version at http://www.newswire.ca/en/webcast/detail/945865/1012461 or at the Company's website: www.waterfurnace.com.

WaterFurnace Renewable Energy, Inc. Consolidated Statements of Comprehensive Income Prepared using International Financial Reporting Standards (Unaudited-Thousands of U.S.$ except per share data)
Three months ended March 31,
		2012	2011
Sales		$ 27,641	$ 28,737
	Cost of sales	19,856	21,212
Gross profit		7,785	7,525
	Operating expenses	5,878	5,839
	Research and development expenses	510	517
Income before interest and income taxes		1,397	1,169
	Finance income	43	19
	Finance expense	(325)	(37)
Income before income taxes		1,115	1,151
	Income tax expense	258	664
Net income		857	487
	Unrealized gain on translation of foreign operations (net of tax)	46	--
Other comprehensive income		46	--
Total comprehensive income		$     903	$     487
Earnings per share U.S.$ on net income		$    0.07	$    0.04

WaterFurnace Renewable Energy, Inc. Consolidated Statements of Financial Position Prepared using International Financial Reporting Standards (Unaudited—Thousands of U.S.$)
		March 31,	December 31,
		2012	2011
Assets
Current assets
	Cash and cash equivalents	$   11,352	$ 11,646
	Short-term investments	10,202	10,181
	Receivables	16,306	20,126
	Income taxes receivable	32	--
	Inventory	11,818	9,188
	Prepaids and deposits	797	1,264
Total current assets		50,507	52,405
Property, plant and equipment		6,652	6,762
Deferred tax assets		8,741	7,686
Intangible assets		1,665	1,713
Total Assets		$ 67,565	$ 68,566
Liabilities
Current liabilities
	Payables and accruals	$   6,266	$   7,041
	Income taxes payable	--	652
	Provision for warranty claims - current portion	3,547	3,274
Total current liabilities		9,813	10,967
Finance leases		66	76
Deferred compensation		379	749
Provision for warranty claims		17,328	15,104
Total Liabilities		27,586	26,896
Shareholders' Equity
	Share capital	18,000	17,505
	Foreign exchange translation adjustment	52	6
	Retained earnings	21,927	24,159
Total Shareholders' Equity		39,979	41,670
Total Liabilities and Shareholders' Equity		$ 67,565	$ 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.

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]