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.

For further information:

Additional information about the Company and its products is available on the Company's website: www.waterfurnace.com. Or call (260) 478-5667 and ask for investor relations.

WaterFurnace Renewable Energy, Inc.
9000 Conservation Way
Fort Wayne, Indiana  46809-9794
(260) 478-5667

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WaterFurnace Renewable Energy, Inc.

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