Goodfellow Inc.
TSX : GDL

Goodfellow Inc.

October 25, 2005 19:33 ET

Goodfellow Reports its Final Annual Results for Fiscal Year Ended August 31, 2005

DELSON, QUEBEC--(CCNMatthews - Oct. 25, 2005) - Goodfellow Inc. (TSX:GDL) announced today its sales and net income for the fiscal year ended August 31, 2005. Sales decreased to $517.8 million compared to $536.4 million a year ago. Net income decreased to $11.2 million or $2.66 per share compared to $14.6 million or $3.48 per share for the same period last year. The low mortgage rates and strong consumer confidence helped fuel the construction and renovation industry on both sides of the border during the first two quarters of fiscal 2005 resulting in solid housing start activity and a sustainable renovation market. On the other hand, sales activities were affected in the second half of fiscal 2005 due to slower than expected new home construction sector. We regard fiscal 2004 to have been an extraordinary year for construction prices and profitability and not a yardstick of normal activity.

"Fiscal 2005 turned out to be the second best year in terms of net income in our history. It was however a roller coaster ride along the way as business conditions changed rapidly" said Richard Goodfellow, Goodfellow's President and Chief Executive Officer. "Although our order file remains strong in most sectors we are being prudent in all our inventory and overall cash management decisions in the new fiscal year."

The Company declared a final dividend of $0.40 per share payable in November 2005 for a total of $0.90 for 2005. The Company also declared a special dividend from 2005 earnings of $0.50 per share payable in April 2006.

Goodfellow Inc. is eastern Canada's largest independent re-manufacturer and distributor of lumber products and Canada's largest distributor of 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)
(Audited)

Twelve Months Three Months
Ended August 31 Ended August 31
2005 2004 2005 2004
$ $ $ $
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Sales 517,797 536,352 141,829 159,970
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Expenses
Cost of goods sold,
selling,
administrative and
general expenses 495,844 509,014 134,247 151,235
Depreciation and
amortization 2,076 2,070 527 538
Financial 2,643 2,719 750 816
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500,563 513,803 135,524 152,589
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Income before income
taxes 17,234 22,549 6,305 7,381
Income taxes 6,000 7,908 2,120 2,372
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Net income 11,234 14,641 4,185 5,009
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Earnings per share 2.66 3.48 0.99 1.19
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Earnings per share
diluted 2.64 3.45 0.98 1.18
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GOODFELLOW INC.
CONDENSED BALANCE SHEET
(in thousands of dollars)
(Audited)

As at August 31
2005 2004
$ $
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Current assets 137,142 140,080
Total assets 165,236 168,094
Current liabilities 75,859 85,606
Total liabilities 78,039 87,970
Shareholder's equity 87,197 80,124
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GOODFELLOW INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of dollars)
(Audited) Twelve Months Three Months
Ended August 31 Ended August 31
2005 2004 2005 2004
$ $ $ $
Operating activities
Net income 11,234 14,641 4,185 5,009
Items not affecting
cash
Amortization 2,076 2,070 527 538
Excess of Pension
Plan Funding over
expense (expense
over pension plan
funding) 18 (142) (61) (142)
Gain on disposal of
assets 21 (47) 34 2
Future income taxes (184) (351) (185) (351)
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13,165 16,171 4,500 5,056
Changes in non-cash
operating working
capital balances
Decrease (increase)
in accounts
receivable 10,039 (11,489) 3,511 (9,861)
Decrease (increase)
in inventories (2,129) (5,444) 21,605 17,169
Decrease (increase)
in prepaid expenses (1,958) (651) (719) (590)
Increase (decrease)
in accounts payable 2,315 1,431 1,744 (629)
Increase (decrease)
in income taxes (5,977) 5,377 196 1,771
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15,455 5,395 30,837 12,916
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Financing activities
Dividends (4,442) (2,863) (2,122) (1,897)
Repayment of
long-term debt - (2,750) - -
Purchase of common
shares - - - -
Issuance of common
shares 281 170 11 50
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(4,161) (5,443) (2,111) (1,847)
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Investing activities
Acquisition of fixed
assets (2,231) (3,045) (265) (433)
Disposal of fixed
assets 36 53 9 4
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(2,195) (2,992) (256) (429)
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Net cash inflow
(outflow) 9,099 (3,040) 28,470 10,640
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Cash and cash
equivalents, beginning
of period (51,654) (48,614) (71,025) (62,294)
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Cash and cash
equivalents, end
of period (42,555) (51,654) (42,555) (51,654)
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