Goodfellow Inc.
TSX : GDL

Goodfellow Inc.

November 10, 2009 12:01 ET

Goodfellow Reports Its Results for the 4th Quarter and Fiscal Year Ended August 31, 2009

DELSON, QUEBEC--(Marketwire - Nov. 10, 2009) - Goodfellow Inc. (TSE:GDL) announced today its financial results for the fiscal year ended August 31, 2009. Net income from operations stood at $7.5 million or $0.87 per share. The results from operations excludes an extraordinary item of $3.4 million or $0.39 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 income for fiscal 2009 reached $10.8 million or $1.26 per share compared to $7.1 million or $0.83 per share a year ago. Consolidated sales for fiscal 2009 were $437.9 million compared to $480.8 million for the same period a year ago. Finally, cash flow from operations (excluding non-cash working capital) for fiscal 2009 increased to $9.5 million from $8.3 million for the same period last year. The Canadian housing market decline impacted our sales volume mainly in Ontario and Western Canada. The volatility of the CAD against USD on the purchasing of US denominated products remained a major challenge during fiscal 2009. As such, the Canadian dollar weakened rapidly in October 2008 affected by the world financial crisis then strengthened back in the second half of fiscal 2009. The recession on both sides of the border affected business negatively during the first three quarters of fiscal 2009 and especially in the US and Ontario where economic conditions suffered most.

The Company generated a net income for the fourth quarter of fiscal 2009 of $5.3 million or $0.62 per share compared to a net income of $3.5 million or $0.41 per share a year ago. Consolidated sales for the fourth quarter of fiscal 2009 were $125.3 million compared to $132.0 million for the same period a year ago. Cash flow from operations (excluding non-cash working capital) for the fourth quarter ended August 31, 2009 increased to $5.8 million from $3.6 million for the same period last year. Sales for the fourth quarter of fiscal 2009 were impacted by the continued depressed housing market in the US and slower Export sales activities but were counterbalanced by the strong performance of our Canadian regional markets.

"As usual the 4th Quarter held the key to our year's results and it did not disappoint us - Even though recessionary conditions exist in most areas we were able to generate a surprisingly good result in the 4th Quarter" said Richard Goodfellow, President and Chief Executive Officer. "We may be nearer a tipping point in the recessionary cycle. Inventories at all levels are tighter, some prices are beginning to firm up, and there appears to be more optimism from customers and suppliers."

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
Years ended August 31, 2009 and 2008
(in thousands of dollars, except per share amounts)
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2009 2008
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$ $

Sales 437,946 480,781
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Expenses
Cost of goods sold, selling, administrative,
and general expenses 423,911 466,308
Amortization 1,433 1,322
Financial 1,182 2,192
Foreign currency loss 433 707
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426,959 470,529
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Earnings before income taxes and
extraordinary item 10,987 10,252

Income taxes 3,524 3,135

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Net earnings before extraordinary item 7,463 7,117
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Extraordinary gain, net of income
taxes of $961 3,373 -

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Net earnings 10,836 7,117
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Earnings per share
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Net earnings before extraordinary item 0.87 0.83
Extraordinary item 0.39 -
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Basic and diluted 1.26 0.83
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GOODFELLOW INC.
Consolidated statements of retained earnings
Years ended August 31, 2009 and 2008
(in thousands of dollars)
----------------------------------------------------------------
2009 2008
----------------------------------------------------------------
$ $

Balance, beginning of year 94,559 91,801

Net earnings 10,836 7,117
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105,395 98,918

Dividends (3,430) (4,292)
Redemption of shares (33) (67)
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Balance, end of year 101,932 94,559
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Consolidated statements of comprehensive income
Years ended August 31, 2009 and 2008
(in thousands of dollars)
----------------------------------------------------------------
2009 2008
----------------------------------------------------------------
$ $

Net Income 10,836 7,117

Other comprehensive income

Foreign currency translation adjustment 303 (119)

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Total other comprehensive income 303 (119)
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Comprehensive income 11,139 6,998
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GOODFELLOW INC.
Consolidated balance sheets
as at August 31, 2009 and 2008
(in thousands of dollars)
----------------------------------------------------------------
2009 2008
$ $

Assets
Current assets
Cash 580 860
Accounts receivable 65,330 72,843
Income taxes recoverable - 2,045
Inventories 46,163 47,135
Prepaid expenses 1,768 3,810
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113,841 126,693

Capital assets 30,369 25,873
Deferred pension asset 4,701 3,828
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148,911 156,394
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Liabilities

Current liabilities
Bank indebtedness 5,427 21,940
Accounts payable and accrued liabilities 29,417 29,471
Income taxes payable 239 -
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35,083 51,411

Future income taxes 2,674 1,498
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37,757 52,909
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Shareholders' equity
Capital stock 9,222 9,229
Retained earnings 101,932 94,559
Accumulated other comprehensive income - (303)
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111,154 103,485
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148,911 156,394
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GOODFELLOW INC.
Consolidated statements of cash flows
Years ended August 31, 2009 and 2008
(in thousands of dollars)
----------------------------------------------------------------
2009 2008
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$ $
Cash flows from operating activities
Net earnings 10,836 7,117
Adjustments for:
Extraordinary item (4,334) -
Amortization 1,433 1,322
Amortization included in cost of good sold 970 950
Future income taxes 1,176 (180)
Loss on disposal of capital assets 37 14
Shortage of expense over pension plan funding (873) (774)
Impact of foreign exchange on cash 303 (119)
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9,548 8,330
Changes in non-cash working capital items 12,815 12,062
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22,363 20,392
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Cash flows used by financing activities
(Decrease) increase in bank loan (13,186) 7,905
Decrease in banker's acceptances (5,000) (21,000)
Redemption of common shares (40) (76)
Dividends (3,430) (4,292)
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(21,656) (17,463)
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Cash flows used by investing activities
Acquisition of capital assets (2,841) (1,720)
Proceeds on disposal of capital assets 181 168
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(2,660) (1,552)
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Net cash (outflow) inflow (1,953) 1,377
(Bank overdraft), beginning of year (2,894) (4,271)
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Bank overdraft, end of year (4,847) (2,894)
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Bank overdraft is comprised of:
Cash 580 860
Bank overdraft (5,427) (3,754)
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(4,847) (2,894)

Additional cash flow information
Interest paid 725 1,711
Income taxes paid 1,025 5,552
Unpaid fixed assets 29 87


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