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

(U.S.$)

FORT WAYNE, IN, March 8, 2012 /CNW/ - WaterFurnace Renewable Energy, Inc. (TSX: WFI) today released the Company's fiscal year 2011 and fourth quarter results. Net income for 2011 was flat with 2010. Sales for 2011 were lower by 0.5%, $695 thousand, than in 2010. Gross margin dollars increased year over year by $1,346 thousand. Gross profit percent rose from 33.5% in 2010 to 34.7% in 2011 despite a high mix of commercial products that carry lower margins. Earnings per share for 2011 was $1.14 versus $1.15 in 2010. Issuance of additional shares for the acquisition of Hyper Engineering and to satisfy deferred compensation liabilities had the effect of reducing earnings per share by $0.01 year over year.

Net income for the fourth quarter was down 7.1% from the same period in 2010. Sales for the fourth quarter were lower by 3.4% than in 2010. Gross profit dollars increased year over year by $71 thousand. Gross profit percent for the fourth quarter rose from 37.3% in 2010 to 38.8% in 2011 despite a continued high mix of commercial products that carry lower margins. The quarter was also impacted year over year by the price increase effective December 6, 2010 that resulted in customers buying product ahead in the fourth quarter of 2010 that resulted in higher than normal sales in the fourth quarter of 2010. Earnings per share in the fourth quarter were $0.44 versus $0.48 in 2010.

The Company's Chairman of the Board, Tim Shields stated, "We're very pleased with management's continuing ability to add to shareholder value during this slow economic recovery period. Their ability to grow sales channels, increase market share and reduce costs bodes well for our future."

Throughout 2011, but especially in the fourth quarter, the Company was able to offset increased metal and energy prices with successful cost reduction initiatives and product redesign. This allowed the Company to avoid a late year price increase and expand its margin, while the Company's main competitor announced a significant price increase in the fourth quarter. The cost reductions will help the Company's competitive position and aid in increasing market share.

Tom Huntington, President and CEO, said, "While we maneuver through the continuing sluggish economy, it is very gratifying to see my team reduce costs, develop existing sales channels, open new sales channels and develop new products to ensure WaterFurnace is positioned well to take advantage of an upturn in the economy. We also continue to work on business development efforts that will increase our core competency footprint and ensure future growth from outside our current operating environment."

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 Monday, March 12, 2012. Those interested can listen live or to the recorded version at http://www.newswire.ca/en/webcast/detail/910959/972131 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,
		2011		2010		2011		2010
Sales		$ 39,141		$ 40,526		$ 137,590		$ 138,285
	Cost of sales	23,935		25,391		89,915		91,956
Gross profit		15,206		15,135		47,675		46,329
	Operating expenses	6,500		6,160		24,037		22,600
	Research and development expenses	564		234		2,063		2,213
Income before interest and
	income taxes	8,142		8,741		21,575		21,516
	Finance income	49		25		158		79
	Finance expense	(1)		(3)		(14)		(50)
Income before income taxes		8,190		8,763		21,719		21,545
	Income tax expense	2,794		2,954		7,815		7,626
Net income and total comprehensive income		$   5,396		$   5,809		$   13,904		$  13,919
Earnings per share U.S.$		$    0.44		$    0.48		$      1.14		$      1.15

WaterFurnace Renewable Energy, Inc.
Consolidated Statements of Financial Position
Prepared using International Financial Reporting Standards
(Audited—Thousands of U.S.$)

			December 31,		December 31,		January 1,
			2011		2010		2010
Assets
Current assets
	Cash and cash equivalents		$ 11,646		$   7,222		$   4,785
	Short-term investments		10,181		10,078		13,368
	Receivables		20,126		21,255		16,794
	Inventory		9,188		8,570		5,653
	Prepaids and deposits		1,264		492		369
Total current assets			52,405		47,617		40,969
Property, plant and equipment			6,762		7,309		6,962
Deferred tax assets			7,686		6,212		4,852
Intangible assets			1,713		--		--
Total Assets			$ 68,566		$ 61,138		$ 52,783
Liabilities
Current liabilities
	Payables and accruals		$   7,041		$   8,061		$   7,398
	Income taxes payable		652		1,124		880
	Provision for warranty claims
		- current portion	3,274		2,724		2,215
Total current liabilities			10,967		11,909		10,493
Finance leases			76		111		146
Deferred compensation			749		540		264
Provision for warranty claims			15,104		11,760		8,280
Total Liabilities			26,896		24,320		19,183
Shareholders' Equity
	Share capital		17,505		14,948		14,865
	Foreign exchange translation adjustment		6		--		--
	Retained earnings		24,159		21,870		18,735
Total Shareholders' Equity			41,670		36,818		33,600
Total Liabilities and Shareholders' Equity			$ 68,566		$ 61,138		$ 52,783

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]