Notes
WFI Industries (WFILF.PK WFI.TO)Official blurb:
"With 25 years of geothermal experience, and more than 200,000 units installed, WaterFurnace International is the leading manufacturer of geothermal and water source heating and cooling systems. The Company pioneered the use of "closed loop" geothermal systems to heat, cool, and provide hot water for residential homes and commercial buildings. In fact, WaterFurnace products are recognized as the most efficient HVAC systems offered in today's market. WFI Industries Ltd. has residential, commercial, and global divisions.
"LoopMaster International is a leading geothermal loop contracting firm. LoopMaster began as an information and training resource for contractors learning to install geothermal loops in the field. Now LoopMaster is working with WaterFurnace dealers across the US and abroad to provide turn-key geothermal solutions for residential and commercial applications. LoopMaster offers design and installation expertise for large geothermal earth loops. Since each loop design is somewhat unique, the experts at LoopMaster work hand-in-hand with the project engineer to design the most cost effective loop to meet the performance requirements of the job. LoopMaster provides services for vertical, horizontal, and pond closed loop geothermal installations. For more information about LoopMaster services, visit www.loopmaster.net.
http://www.waterfurnace.com
Source: article at thestreet.com by Brett Arends
http://www.thestreet.com/_yahoo/funds/mutualfundinvesting/10334563.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA
This is a pick of the Winslow Green Growth Fund.
http://www.winslowgreen.com/products/index_wggfx.asp
Most sales are in the US, despite being headquartered in Canada; it also gets revenue from Canada, Europe and South Korea.
The stock is registered in Canada and trades on the Toronto exchange; it is available in the US in the Pink Sheets.
7JUN07 $22 (WFILF.PK)
From the conference call (10 May 07)+ The company recently increased prices, due to strong industry-wide demand. Next quarter's financial statements will reflect the increase.
+ Canada started a $3,500 CDN incentive in April for homeowner installation of geothermal products. CEO predicts it will take several months for that to make a difference to te company's numbers; poorly publicized.
+ Radiant flooring is a big growth area.
+ US 90% of sales (also sells in Korea and England), not much discussion of US housing slowdown.
+CEO defended increasing dividend, due to confidence in organic growth; the company has no need to have a lot of cash sitting around.
From the quarterly report:
Sales growth: +21% (from 2006 1st quarter)
Earnings per share: -20% (from .10 to .08) (from 2006 1st quarter)
Margins shrank: attributed to cost of materials, expenses to accomodate growth, and marketing.
Current ratio: 2.6
Quarterly dividend is $0.16/share, roughly 2.9%
"The Company is able to generate sufficient cash to fund expected growth and development
needs. .... The Company is aware of no legal
proceedings or other issues that would have a significant impact on the financial condition of
the Company."
"Share Capital
As of May 8, 2007, there were 12,082,432 common shares (authorized: unlimited without
par value) issued and outstanding and 10,000 unexercised stock options."
Thoughts: Good long-term buy! Perhaps not a good short-term play, since it is tied to the US housing market, which is slow right now (but, a significant portion of sales is for retrofitting). The growth is good, the financial strength is good, the story is good, the public appetite for the product is good. The quarterly reduction in earnings is less significant than the long-term yearly growth. Earnings per share increased 38% in 2006 compared to 2005.
19DEC07 - $26
A recent story, expressing long-term enthusiasm, and short-term concern because of the slumping housing market.http://www.theglobeandmail.com/servlet/story/LAC.20071213.REDGE13/TPStory/Business
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