(U.S. $)
FORT WAYNE, IN, May 7, 2014 /CNW/ - Water Furnace Renewable Energy, Inc. [WFI:TSX) the leading manufacturer of energy efficient heating and cooling
solutions, today reported first quarter financial results. In the first
quarter of 2014, sales revenue declined 8.3% over the record-setting
first quarter of 2013 from $29.2 million to $26.7 million.
Deep snows and subzero temperatures halted residential loop
installations as well as muted the completion of new homes in the first
quarter, with recovery expected throughout the remainder of 2014.
Commercial geothermal heat pump industry shipments fared much better
during these harsh weather conditions due to industrial sized equipment
capable of drilling through frozen ground conditions. This resulted in
a Q1 improvement of 8%, with WaterFurnace unit shipments increasing
40%. The water source industry (boiler/tower) systems, which do not
require a ground loop, enjoyed a shipment increase of 7% with
WaterFurnace unit shipments in this product category increasing 59% on
a year over year basis.
Gross profit as a percent of sales increased from 32.7% in Q1 2013 to
33.9% in Q1 2014 primarily due to the productivity improvements
completed in 2013.
Propane prices spiked dramatically, providing an opportunity for the
Company to launch the most aggressive advertising campaign in Company
history. This campaign quadrupled lead generation and doubled website
traffic. Additionally, the campaign created a spike in online searches
for WaterFurnace and even the term "geothermal heat pump", which bodes
well for the remainder of the year. Operating expenses in Q1 2014 were
up 12.8% versus the same period in 2013 which was mostly attributed to
a $600 thousand national advertising campaign launched during the
quarter.
"With the unusual cold and persistent snow of the first quarter behind
us, we can now look forward to the rest of the year. We're extremely
optimistic," said Tom Huntington, WaterFurnace President and CEO. "New
housing starts are occurring, and residential loops are now being
installed at a typical pace. Our dealers are very upbeat about this
selling season, and we're all looking forward to a more traditional
progression for the year."
The Company's Chairman of the Board, Tim Shields, stated, "The first
quarter saw a pause in residential installations until the return of
good weather. We're looking forward to the rest of 2014 and are
confident we'll see significant growth."
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
quarter at 4:00 PM Eastern Standard Time on Thursday, May 8, 2014.
Those interested can listen live or to the recorded version at http://www.newswire.ca/en/webcast/detail/1335797/1476491 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)
|
|
|
|
|
Three months ended March 31,
|
|
2014
|
2013
|
----------------------------------------------------------------------------------------------
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--------------
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--------------
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Sales
|
$26,719
|
$29,152
|
|
Cost of sales
|
17,660
|
19,621
|
|
--------------
|
--------------
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Gross profit
|
9,059
|
9,531
|
|
Operating expenses
|
6,188
|
5,484
|
|
Research and development expenses
|
509
|
558
|
|
--------------
|
--------------
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Income before interest and income taxes
|
2,362
|
3,489
|
|
Share of loss from joint venture
|
(147)
|
(76)
|
|
Finance income (expense)
|
230
|
(73)
|
|
--------------
|
--------------
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Income before income taxes
|
2,445
|
3,340
|
|
Income tax expense
|
920
|
1,007
|
|
--------------
|
--------------
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Net income
|
1,525
|
2,333
|
|
--------------
|
--------------
|
|
|
|
|
Unrealized loss on translation of foreign operations (net of tax)
|
(56)
|
(18)
|
|
--------------
|
--------------
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Other comprehensive loss
|
(56)
|
(18)
|
|
--------------
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--------------
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|
|
|
Total comprehensive income
|
$1,469
|
$2,315
|
|
========
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========
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|
|
|
Earnings per share U.S.$ on net income
|
$0.12
|
$0.19
|
|
--------------
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--------------
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WaterFurnace Renewable Energy, Inc.
Consolidated Statements of Financial Position
Prepared using International Financial Reporting Standards
(Audited—Thousands of U.S. $)
|
|
|
March 31,
|
December 31,
|
|
|
2014
|
2013
|
----------------------------------------------------------------
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|
--------------
|
--------------
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Assets
|
|
|
|
Current assets
|
|
|
|
|
Cash and cash equivalents
|
|
$15,484
|
$17,451
|
|
Short-term investments
|
|
10,255
|
10,250
|
|
Receivables
|
|
16,284
|
17,112
|
|
Inventory
|
|
10,852
|
9,541
|
|
Prepaids and deposits
|
|
778
|
575
|
|
|
--------------
|
--------------
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Total current assets
|
|
53,653
|
54,929
|
|
|
|
|
Property, plant and equipment
|
|
6,209
|
6,317
|
Intangible assets
|
|
1,278
|
1,325
|
Long-term investments
|
|
433
|
433
|
Investment in joint venture
|
|
2,902
|
3,049
|
Deferred tax assets
|
|
11,978
|
11,890
|
|
|
--------------
|
--------------
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Total Assets
|
|
$76,453
|
$77,943
|
|
|
========
|
========
|
Liabilities
|
|
|
|
Current liabilities
|
|
|
|
|
Payables and accruals
|
|
$7,431
|
$8,266
|
|
Income taxes payable
|
|
620
|
671
|
|
Provision for warranty claims - current portion
|
|
4,627
|
4,534
|
|
|
--------------
|
--------------
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Total current liabilities
|
|
12,678
|
13,471
|
|
|
|
|
Deferred compensation
|
|
216
|
472
|
Provision for warranty claims
|
|
22,209
|
21,456
|
|
|
--------------
|
--------------
|
Total Liabilities
|
|
35,103
|
35,399
|
|
|
--------------
|
--------------
|
Shareholders' Equity
|
|
|
|
|
Share capital
|
|
20,235
|
19,763
|
|
Foreign exchange translation adjustment
|
|
(126)
|
(70)
|
|
Retained earnings
|
|
21,241
|
22,851
|
|
|
--------------
|
--------------
|
Total Shareholders' Equity
|
|
41,350
|
42,544
|
|
|
--------------
|
--------------
|
Total Liabilities and
|
|
|
|
|
Shareholders' Equity
|
|
$76,453
|
$77,943
|
|
|
|
========
|
========
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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.
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