Goodfellow Inc.
TSX : GDL

Goodfellow Inc.

December 21, 2007 08:55 ET

Goodfellow Reports its Results for Q1-2008

DELSON, QUEBEC--(Marketwire - Dec. 21, 2007) - Goodfellow Inc. (TSX:GDL) announced today its financial results for the first quarter ended November 30, 2007. Consolidated sales reached $118.0 million compared to $119.2 million a year ago. Net income decreased to $1.9 million or $0.22 per share compared to $2.0 million or $0.23 per share before the final reimbursement of $3.5 million CAD (net after tax or $5.4 million before tax) related to the Softwood Lumber Agreement in 2006. Last year's net income including this special refund was $5.5 million or $0.64 per share for the same period. The impact of the Canadian dollar trading below par for most of the first quarter had repercussions on our US sales and also on the domestic manufacturers. The foreign currency conversion effect on our US denominated sales resulted in a reduction of some $2.6 million in sales compared to last year. General expenses, selling and administrative costs for the first quarter ended November 30, 2007 increased from $18.1 million last year (excluding the non recurring item) to $19.2 million. The increase reflects higher repair and maintenance, higher energy costs and increased labor costs due to the added production capacity in Trois-Rivieres, Tremblant, and Calgary.

"We were able to hold our sales and gross profit levels to last years results despite what was a very challenging business climate" said Richard Goodfellow, President and Chief Executive Officer.

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.
STATEMENT OF INCOME
(in thousands of dollars except
earnings per share)
(Unaudited)
Three Months
Ended November 30
2007 2006
$ $
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Sales 118,045 119,150
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Expenses
Cost of goods sold, selling, administrative
and general expenses 114,158 109,714
Depreciation and amortization 552 498
Financial 534 596
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115,244 110,808
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Income before income taxes 2,801 8,342
Income taxes 938 2,878
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Net income 1,863 5,464
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Earnings per share 0.22 0.64
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Earnings per share diluted 0.22 0.64
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GOODFELLOW INC.
CONDENSED BALANCE SHEET
(in thousands of dollars)
(Unaudited)
As at November 30
2007 2006
$ $
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Current assets 134,902 140,901
Total assets 164,818 169,910
Current liabilities 63,546 72,317
Total liabilities 65,224 74,124
Shareholder's equity 99,594 95,786
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GOODFELLOW INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of dollars) Three Months
(unaudited) Ended November 30
2007 2006
$ $
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Operating activities
Net income 1,863 5,464
Items not affecting cash
Depreciation and amortization 552 498
Excess of expense over pension plan funding
(pension plan funding over expense) (215) (171)
Gain on disposal of assets - -
Deferred income taxes - -
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2,200 5,791
Changes in non-cash operating working
capital balances
Decrease (increase) in accounts receivable 24,435 13,744
Decrease (increase) in inventories (18,835) (21,677)
Decrease (increase) in prepaid expenses 1,261 55
Increase (decrease) in accounts payable (1,575) 1,244
Increase (decrease) in income taxes (743) 232
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6,744 (612)
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Financing activities
Dividends (3,005) (3,417)
Issuance of common shares - -
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(3,005) (3,417)
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Investing activities
Acquisition of fixed assets (588) (1,477)
Disposal of fixed assets - -
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(588) (1,477)
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Other comprehensive income (119) 103
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Net cash inflow (outflow) 3,032 (5,403)
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Cash and cash equivalents, beginning of
period (35,553) (34,859)
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Cash and cash equivalents, end of period (32,521) (40,262)
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GOODFELLOW INC.
CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
(in thousands of dollars)
(Unaudited)

Three months
Ended November 30
2007 2006
$ $
---------------------------------------------------------------------

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Net income 1,863 5,464
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Other comprehensive income
Net unrealized loss on available for sale
financial assets, net of tax - -
Net changes in cash flow hedges
Foreign exchange re-evaluation - -
Net gains on derivatives designated as
cash flow hedges - -
Reclassification to income - -
Income taxes - -

Cumulative translation adjustment:
Net investments in self-sustaining
foreign operations (119) 103
Net investments in fully integrated
foreign operations - -
Net gains (losses) on related hedging
items, net of tax - -
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Total Other comprehensive income (119) 103
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Total Comprehensive income 1,744 5,567
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