Goodfellow Inc.
TSX : GDL

Goodfellow Inc.

December 21, 2006 09:39 ET

Goodfellow Reports its Results for Q1-2007

DELSON, QUEBEC--(CCNMatthews - Dec. 21, 2006) - Goodfellow Inc. (TSX:GDL) announced today its net income for the first three months ended November 30, 2006 of $5.5 million or $1.28 per share compared to $3.1 million or $0.74 per share for the same period a year ago. This result includes the final net settlement after tax of $3.5 million CAD related to the Softwood Lumber Agreement which entered into force on October 12, 2006. Net income without this non recurring item was $2.0 million or $0.46 per share. Consolidated sales for the first three months ended November 30, 2006 were $119.2 million compared to $120.5 million for the same period a year ago. Cash flows generated from operations for the first three months ended November 30, 2006 were $5.8 million or $1.36 per share ($2.3 million or $0.54 per share excluding CVD repayment) compared to $3.8 million or $0.89 per share last year. Gross profits slipped 4.6% during the first three months ended November 30, 2006 compared to last year's results. There is generally a surplus of supply of product currently on the market but conditions remained relatively strong for our value-added product mix.

"Business conditions since September have been more difficult in almost all markets except Alberta." said Richard Goodfellow, President and Chief Executive Officer of Goodfellow Inc. "Our core wood products businesses remain strong while the wood flooring business continues to adjust to the new market conditions and the revalued Canadian dollar." he added.

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)
(Unaudited)

Three Months
Ended November 30
2006 2005
$ $
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Sales 119,150 120,542
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Expenses
Cost of goods sold, selling,
administrative and general expenses 109,714 114,650
Depreciation and amortization 498 485
Financial 596 637
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110,808 115,772
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Income before income taxes 8,342 4,771
Income taxes 2,878 1,646
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Net income 5,464 3,125
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Earnings per share 1.28 0.74
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Earnings per share diluted 1.28 0.73
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GOODFELLOW INC.
CONDENSED BALANCE SHEET
(in thousands of dollars)
(Unaudited)

As at November 30
2006 2005
$ $
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Current assets 140,901 143,060
Total assets 169,910 171,411
Current liabilities 72,317 80,576
Total liabilities 74,124 82,756
Shareholder's equity 95,786 88,655
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GOODFELLOW INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of dollars)
(Unaudited)

Three Months
Ended
2006 2005
$ $
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Operating activities
Net income 5,464 3,125
Items not affecting cash
Depreciation and amortization 498 485
Excess of expense over pension plan funding
(pension plan funding over expense) (171) 155
Loss disposal of assets - 7
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5,791 3,771

Changes in non-cash operating
working capital balances
Decrease (increase) in accounts receivable 13,744 13,497
Decrease (increase) in inventories (21,677) (20,009)
Decrease (increase) in prepaid expenses 55 1,234
Increase (decrease) in accounts payable 1,244 1,430
Increase (decrease) in income taxes 232 (283)
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(612) (359)
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Financing activities
Dividends (3,417) (1,699)
Issuance of common shares - 33
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(3,417) (1,666)
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Investing activities
Acquisition of fixed assets (1 477) (903)
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(1,477) (903)
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Foreign currency translation adjustment 103 -
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Net cash inflow (outflow) (5,403) (2,928)
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Cash and cash equivalents,
beginning of period (34,859) (42,555)
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Cash and cash equivalents, end of period (40,262) (45,483)
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