Goodfellow Inc.
TSX : GDL

Goodfellow Inc.

February 11, 2015 16:30 ET

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

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