Goodfellow Inc.
TSX : GDL

Goodfellow Inc.

March 24, 2010 09:30 ET

Goodfellow Reports Improved Results for the Second Quarter Ended February 28, 2010

DELSON, QUEBEC--(Marketwire - March 24, 2010) - Goodfellow Inc. (TSX:GDL) announced today its financial results for the second quarter ended February 28, 2010. Net income from operations stood at $1.9 million or $0.22 per share compared to a net operating loss (before extraordinary gain) of $0.8 million or $0.09 per share a year ago. The results from operations for the second quarter of fiscal 2009 includes a non recurring gain of $3.2 million or $0.37 per share which represents the revaluation at fair value of fixed assets exchanged resulting from the expropriation of part of our Delson facility. Consequently, net results including extraordinary gain at February 28, 2009 were $2.4 million or $0.28 per share. Consolidated sales for the second quarter of fiscal 2010 were $107.8 million compared to $91.5 million for the same period a year ago. Finally, cash flow from operations (excluding non-cash working capital) for the second quarter of fiscal 2010 increased to $2.5 million from $41,000 for the same period last year. Sales in Canada grew 25% partly due to strong distribution sales into our retail customers due to the increase in demand relating to the Home Renovation Tax Credit. Sales in US decreased 36% due to our reduced presence in the Western US and continued low housing starts. Export sales increased 38% compared to last year due mainly to a strong performance in the UK and an important industrial order shipped to the Middle East. General expenses, selling and administrative costs for the second quarter ended February 28, 2010 increased from $16.5 million (excluding extraordinary gain) last year to $18.4 million. The increase reflects the variable portion of our operating and selling costs to address the added volume of business processed during the second quarter. 

"The strong second quarter was a result of the effect of the renovation tax credit, the lack of any substantive winter across the country and the decline in the U.S. dollar which favoured our imported U.S. building materials." said Richard Goodfellow, President and Chief Executive Officer. "We are making every effort now to carry this benefit through to year-end."

For the 6 months ended February 28, 2010, Consolidated Sales reached $217.1 million compared to $202.4 million for the same period last year. Net results from operations for the 6 months ended February 28, 2010 was $4.0 million or $0.46 per share compared to $0.3 million or $0.03 per share. Including the extraordinary gain of $3.2 million or $0.37 per share related to the revaluation at fair value, net income for the 6 months of fiscal 2009 reached $3.4 million or $0.40 per share.

Goodfellow Inc. is one of eastern Canada's largest independent re-manufacturers and distributors of lumber and hardwood flooring products. Goodfellow shares trade on the Toronto Stock Exchange under the symbol GDL.

GOODFELLOW INC.
Consolidated statements of earnings
(in thousands of dollars, except per share amounts)
(unaudited)
  Three Months ended February 28   Six Months ended February 28
2010 2009   2010 2009
  $ $   $ $
           
Sales 107,832 91,515   217,078 202,435
           
Expenses          
  Cost of goods sold, selling, administrative and      general expenses 104,217 91,674   209,767 200,202
  Amortization 370 337   726 654
  Financial 261 298   492 661
  Foreign currency loss 159 326   306 539
  105,007 92,635   211,291 202,056
           
           
Earnings before income taxes and extraordinary item 2,825 (1,120 ) 5,787 379
           
Income taxes 891 362   1,825 122
           
Net earnings before extraordinary item 1,934 (757 ) 3,962 257
           
Extraordinary gain, net of income taxes of $1,143 - 3,191   - 3,191
           
Net earnings 1,934 2,434   3,962 3,448
           
Earnings per share          
           
  Net earnings before extraordinary item 0.22 (0.09 ) 0.46 0.03
  Extraordinary item -- 0.37   -- 0.37
  Basic and diluted 0.22 0.28   0.46 0.40
           
           
           
   
GOODFELLOW INC.  
Consolidated statements of retained earnings  
(in thousands of dollars)  
(unaudited)  
  Six Months ended February 28  
  2010   2009  
  $   $  
         
Balance, beginning of year 101,932   94,559  
         
Net earnings 3,962   3,448  
  105,894   98,007  
         
Dividends (2,572 ) (2,144 )
Redemption of shares -   (30 )
Balance, end of year 103,322   95,833  
         
         
         

 

Consolidated statements of comprehensive income            
(in thousands of dollars)  
(unaudited)  
  Three Months ended February 28 Six Months ended February 28  
  2010 2009 2010   2009  
  $ $ $   $  
             
Net Income 1,934 2,434 3,962   3,448  
             
Other comprehensive income            
             
  Foreign currency translation adjustment - 303 -   303  
             
Total other comprehensive income - 303 -   303  
             
Comprehensive income 1,934 2,737 3,962   3,751  
             
             
 
GOODFELLOW INC.    
Consolidated balance sheets    
As at February 28, 2010 and 2009    
(in thousands of dollars)    
(unaudited)    
  2010 2009
  $ $
     
Assets    
Current assets    
  Cash 560 629
  Accounts receivable 61,805 51,265
  Income taxes recoverable - 2,495
  Inventories 72,714 63,051
  Prepaid expenses 2,230 2,969
  137,309 120,409
     
Capital assets 30,558 30,682
Deferred pension asset 4,938 4,301
  172,805 155,392
     
Liabilities    
Current liabilities    
  Bank indebtedness 24,078 23,850
  Accounts payable and accrued liabilities 33,197 23,796
  Income taxes payable 311 -
  57,586 47,646
     
Future income taxes 2,674 2,690
  60,260 50,336
     
     
Shareholders' equity    
  Capital stock 9,222 9,223
  Retained earnings 103,322 95,833
  Accumulated other comprehensive income - -
  112,545 105,056
  172,805 155,392
   
   
GOODFELLOW INC.  
Consolidate statements of cash flows  
(in thousands of dollars)  
(unaudited)  
  Three Months ended February 28   Six Months ended February 28  
  2010   2009   2010   2009  
  $   $   $   $  
                 
Cash flows from operating activities                
  Net earnings 1,934   2,434   3,962   3,448  
  Adjustments for :                
    Extraordinary item -   (4,334 ) -   (4,334 )
    Amortization 370   337   726   654  
    Amortization included in cost of good sold 258   225   510   426  
    Gain on disposal of capital assets 14   132   6   36  
    Future Income Taxes -   1,192   -   1,192  
    Impact of foreign exchange on cash -   303   -   303  
    Shortage of expense over pension plan funding (126 ) (248 ) (237 ) (472 )
  2,450   41   4,967   1,253  
                 
  Changes in non-cash working capital items (9,695 ) 5,861   (19,636 ) 376  
  (7,245 ) 5,902   (14,669 ) 1,629  
                 
Cash flows used by financing activities                
  (Decrease) increase in bank loan 4,000   2,105   9,000   (3,369 )
  Increase in banker's acceptances 5,000   (7,000 ) 10,000   2,000  
  Redemption of common shares -   (18 ) -   (30 )
  Dividends -   -   (2,572 ) (2,144 )
  9,000   (4,913 ) 16,428   (3,543 )
                 
Cash flows used by investing activities                
  Acquisition of capital assets (470 ) (1,212 ) (1,452 ) (1,778 )
  Proceeds on disposal of capital assets 12   30   21   181  
  (458 ) (1,182 ) (1,432 ) (1,597 )
                 
Net cash (outflow) inflow 1,297   (193 ) 327   (3,511 )
(Bank overdraft), beginning of year (5,817 ) (6,212 ) (4,847 ) (2,894 )
Bank overdraft, end of year (4,520 ) (6,405 ) (4,520 ) (6,405 )
                 
Bank overdraft is comprised of :                
  Cash 560   629   560   629  
  Bank overdraft (5,080 ) (7,034 ) (5,080 ) (7,034 )
  (4,520 ) (6,405 ) (4,520 ) (6,405 )

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