WaterFurnace Renewable Energy, Inc. - First Quarter Net Sales Rise 9.0% -
Dividends Increased by 16% to $0.22 Per Share (U.S.$)
FORT WAYNE, IN, May 11 /CNW/ - WaterFurnace Renewable Energy, Inc. (WFI:TSX) today released the Company's first quarter 2010 results. The Company's net sales rose 9.0% in the first quarter of 2010. Sales gains were driven by residential dealer sales, commercial sales and U.S. distributor sales. International sales, including Canada, declined year over year. Earnings per share were $0.05 for the quarter versus $0.07 for prior year. Timing of marketing expenses, adjustments to market fluctuations relating to the Company's deferred compensation liability in Q1 2009 and a promotional program to stimulate geothermal unit replacement sales accounted for the majority of the year over year reduction in earnings per share. Bookings in the first quarter were above last year and in line with sales growth during the quarter. "While the Company saw a slight earnings decline for the first quarter, we were slightly above internal estimates for profitability for the quarter. We are very encouraged by the increase in sales over last year's first quarter and subsequent market share increases. It shows our investment in sales development over the past year is paying off. We are especially pleased with the growth in commercial sales relative to the severely depressed commercial construction industry. The results show the continued focus and commitment our employees have to growing the business and making the best of tough economic times," stated CEO Tom Huntington.
The continued weak economy and recent changes in Canadian subsidies for geothermal installations will present challenges over the next 12 months. Housing starts and unemployment still stifle the Company's ability to fully leverage the opportunities for geothermal. The Company is continuing its efforts at sales expansion, new product development and leveraging technology. These efforts are expected to help mitigate the current weak economic environment and position the Company to take full advantage of economic recovery and the current federal and state tax incentives for geothermal installations.
Tim Shields, WaterFurnace's Chairman, added, "The Board is very pleased with the strategic direction the Company is pursuing. Recent OEM agreements and continued expansion of our existing sales dealer and distribution channels, along with new commercial sales strategies bodes well for our future. Tom and his team continue to identify and pursue business development opportunities that will make the Company stronger and we believe more profitable. It is exciting for the Board to watch an engaged and cohesive management team expand our foundation for future growth and success for our shareholders."
The Board of Directors approved an increase of $0.03 per share in the quarterly dividend to $0.22 per share to be paid June 1, 2010, to shareholders of record at the market close of May 21, 2010. The complete quarterly report is posted on the Company's website: www.waterfurnace.com. Management will conduct a webcast covering the results of the quarter at 4:00 pm Eastern Daylight Time on Wednesday, May 12th. Interested parties can listen live or to the recorded version at http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=3067240 or at the Company's website: www.waterfurnace.com.
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WaterFurnace Renewable Energy, Inc.
Consolidated Statements of Income
Prepared using Canadian Generally Accepted Accounting Principles
(Unaudited - Thousands of U.S.$ except per share data)
Three months
ended March 31,
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2010 2009
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Sales $ 25,794 $ 23,674
Cost of sales 18,855 16,661
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Gross profit 6,939 7,013
Operating expenses 5,615 5,365
Research and development expenses 600 663
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Income before interest and income taxes 724 985
Interest income - 6
Interest expense (8) (3)
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Income before income taxes 716 988
Income taxes 159 158
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Net income $ 557 $ 830
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Basic and diluted earnings per share U.S.$ $ 0.05 $ 0.07
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WaterFurnace Renewable Energy, Inc.
Consolidated Balance Sheets
Prepared using Canadian Generally Accepted Accounting Principles
(Unaudited - Thousands of U.S.$)
March 31, December 31,
Assets 2010 2009
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Current assets
Cash and cash equivalents $ 3,976 $ 4,785
Short-term investments 12,868 13,368
Receivables 14,347 16,794
Inventory 6,917 5,653
Other current assets 3,808 2,859
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Total current assets 41,916 43,459
Capital assets 5,663 5,345
Other assets 3,472 3,015
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Total Assets $ 51,051 $ 51,819
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Liabilities
Current liabilities
Payables and accruals $ 8,018 $ 7,398
Income taxes payable 228 880
Provision for warranty claims - current
portion 2,387 2,215
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Total current liabilities 10,633 10,493
Capital leases 137 146
Deferred compensation 45 264
Provision for warranty claims 9,461 8,280
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Total Liabilities 20,276 19,183
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Shareholders' Equity
Share capital 14,865 14,865
Retained earnings 15,910 17,771
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Total Shareholders' Equity 30,775 32,636
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Total Liabilities & Shareholders' Equity $ 51,051 $ 51,819
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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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