Goodfellow Reports Its Results for the Fifteen Months Ended November 30, 2014

DELSON, QUEBEC--(Marketwired - Feb. 11, 2015) - Goodfellow Inc. (TSX:GDL) announced today its financial results for the fifth quarter ended November 30, 2014. The Company reported net earnings of $1.5 million or $0.18 per share compared to net earnings of $1.2 million or $0.14 per share a year ago. Consolidated sales for the fifth quarter were $124.5 million compared to $110.4 million last year. Sales in the Canada and the US were particularly active throughout the fifth quarter due to strong demand from the retailer's customer group and strong US housing starts. Export sales increased due to increasing demand for value added products in Asia and Europe. On the operating side, variable costs increased slightly due to increased labor expenses resulting from ramping up of value-added product inventory and non-recurring corporate expenses. As a result, direct, selling, and administrative expenses increased to $20.5 million ($19.2 million last year).

For the fifteen months ended November 30, 2014, the Company generated net earnings of $8.1 million or $0.96 per share compared to net earnings of $5.3 million or $0.62 per share for the twelve months ended August 31, 2013. Consolidated sales for the fifteen months of fiscal 2014 were $610.6 million compared to $483.5 million for the twelve months ended August 31, 2013.

"Although our profitability level remains unsatisfactory, we posted an EBT improvement of 20% over the last twelve months. Gross margin remained essentially at the same level; gains on value added products were offset by continued softness on commodity products. The construction industry continues to post little to no growth across the country and deflationary pressures on many of our products are a reality we must overcome." said Denis Fraser, President and Chief Executive Officer. ''Modernization, growth and excellence are the 3 themes which best capture the essence of our priorities in 2015. We are now embarking on a journey that will result in large improvements of productivity leading to a leaner cost structure".

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 Comprehensive Income For the fifteen months ended November 30, 2014 and twelve months ended August 31, 2013 (in thousands of dollars, except per share amounts)
		November 30, 2014 (15 months)	August 31, 2013 (12 months) Restated
		$	$
Sales		610,587	483,485
Expenses
	Cost of goods sold	495,886	393,560
	Selling, administrative and general expenses	100,749	80,675
	Net financial costs	2,824	1,943
		599,459	476,178
Earnings before income taxes		11,128	7,307
Income taxes		3,003	2,028
Net earnings, being comprehensive income		8,125	5,279
Earnings per share
Basic and diluted		0.96	0.62

GOODFELLOW INC. Consolidated Statements of Financial Position As at November 30, 2014 and August 31, 2013 (in thousands of dollars)
		November 30, 2014	August 31, 2013 (Restated)
		$	$
Assets
Current Assets
	Cash and cash equivalents	860	197
	Trade and other receivables	60,591	72,838
	Inventories	92,257	74,255
	Prepaid expenses	3,271	3,433
Total Current Assets		156,979	150,723
Non-Current Assets
	Property, plant and equipment	37,020	35,422
	Defined benefit plan asset	1,848	1,041
Total Non-Current Assets		38,868	36,463
Total Assets		195,847	187,186
Liabilities
Current liabilities
	Bank indebtedness	43,099	34,169
	Trade and other payable	25,779	29,457
	Income taxes payable	997	742
	Provision	979	-
	Current portion of long term debt	229	38
Total Current Liabilities		71,083	64,406
Non-Current Liabilities
	Provision	473	1,471
	Long term debt	692	112
	Deferred income taxes	2,535	2,393
	Defined benefit plan obligation	1,578	1,666
Total Non-Current Liabilities		5,278	5,642
Total Liabilities		76,361	70,048
Shareholders' equity
	Share capital	9,152	9,152
	Retained earnings	110,334	107,986
		119,486	117,138
Total Liabilities and Shareholders' Equity		195,847	187,186

GOODFELLOW INC. Consolidated Statements of Cash Flows For the fifteen months ended November 30, 2014 and twelve months ended August 31, 2013 (in thousands of dollars)
			November 30, 2014 (15 months)		August 31, 2013 (12 months) Restated
			$		$
Operating Activities
	Net Earnings		8,125		5,279
	Adjustments for :
		Depreciation	3,611		2,758
		Accretion expense on environmental provision	57		45
		Decrease in environmental provision	(76	)	(16	)
		Deferred income taxes	243		320
		Income tax expense	2,760		1,708
		Gain on disposal of property, plant and equipment	(14	)	(65	)
		Interest expense	1,766		1,165
		Funding in excess of pension plan expense	(1,244	)	(1,513	)
			15,228		9,681
	Changes in non-cash working capital items		(9,260	)	265
	Interest paid		(1,785	)	(1,135	)
	Income taxes paid		(2,506	)	(989	)
			(13,551	)	(1,859	)
Net Cash Flows from Operating Activities			1,677		7,822
Financing Activities
	(Decrease) Increase in bank loans		(7,500	)	2,000
	Increase (Decrease) in banker's acceptances		17,000		(1,000	)
	Long term debt		771		150
	Redemption of shares		-		(14	)
	Dividends paid		(5,529	)	(2,977	)
			4,742		(1,841	)
Investing Activities
	Acquisition of property, plant and equipment		(5,240	)	(2,571	)
	Proceeds on disposal of property, plant and equipment		54		68
			(5,186	)	(2,503	)
Net cash inflow			1,233		3,478
Cash position, beginning of year			(4,972	)	(8,450	)
Cash position, end of year			(3,739	)	(4,972	)
Cash position is comprised of :
	Cash and cash equivalents		860		197
	Bank overdraft		(4,599	)	(5,169	)
			(3,739	)	(4,972	)

GOODFELLOW INC. Consolidated Statements of Change in Shareholders' Equity For the fifteen months ended November 30, 2014 and twelve months ended August 31, 2013 (in thousands of dollars)
		Share Capital		Retained Earnings		Total
		$		$		$
Balance as at August 31, 2012		9,154		99,521		108,675
	Net earnings	-		5,279		5,279
	Other Comprehensive loss (net of taxes)			6,175		6,175
Total Comprehensive income				11,454		11,454
Transactions with owners, recorded directly in shareholders' equity
	Dividends	-		(2,977	)	(2,977	)
	Redemption of Shares	(2	)	(12	)	(14	)
Balance as at August 31, 2013		9,152		107,986		117,138
	Net earnings	-		8,125		8,125
	Other Comprehensive loss (net of taxes)	-		(248	)	(248	)
Total Comprehensive income				7,877		7,877
Transactions with owners, recorded directly in shareholders' equity
	Dividends	-		(5,529	)	(5,529	)
Balance as at November 30, 2014		9,152		110,334		119,486