Goodfellow Inc.
TSX : GDL

Goodfellow Inc.

December 20, 2010 12:24 ET

Goodfellow Reports Its Results for the First Quarter Ended November 30, 2010

DELSON, QUEBEC--(Marketwire - Dec. 20, 2010) - Goodfellow Inc. (TSX:GDL) today reported its financial results for the first quarter ended November 30, 2010. Net income from operations was $1.0 million or $0.11 per share compared to a net income of $2.0 million or $0.24 per share a year ago. Consolidated sales for the first quarter of fiscal 2011 were $109.4 million compared to $109.2 million for the same period a year ago. Cash flow from operations (excluding non-cash working capital) for the first quarter of fiscal 2011 decreased to $1.4 million from $2.5 million for the same period last year. Sales in Canada remained stable compared to last year despite the absence of the Home Renovation Tax Credit. Nevertheless, our industrial and manufacturing sales group posted a strong performance while flooring sales in the retail industry slowed down throughout the fall. Sales in the US increased 7% due to some recovery in the Northeast US retail lumber market. Export sales increased 10% compared to last year due mainly to strong flooring sales in the UK and increasing sales to China and the Middle East. General expenses, selling and administrative costs for the first quarter ended November 30, 2010 increased from $17.4 million last year to $19.2 million. The increase reflects labour and energy costs to respond to the growth in industrial and value added production across our plants in the first quarter, an increase in warehousing lease costs and logistics requirements to reduce our inventory levels throughout the quarter. On the other hand, selling costs remained level with last year due to reduced commissions and lower bad debt provisions. Administrative costs increased 6% due to salary increase and training activities.

"It is clear our results reflect the tightening retail market across Canada along with the absence of the Home Renovation Tax Credit." said Richard Goodfellow, President and Chief Executive Officer. "All efforts are being made to adjust our cost base to the new reality.".

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 Earnings
(in thousands of dollars, except per share amounts)
(unaudited)
  Three Months
ended Nov 30
2010 2009
  $ $
     
Sales 109,378 109,246
     
Expenses    
  Cost of goods sold, selling, administrative and general expenses 107,056 105,550
  Amortization 366 356
  Financial 371 231
  Foreign currency loss 198 147
  107,991 106,284
     
     
Earnings Before Income Taxes 1,387 2,962
     
Income Taxes 430 934
     
Net Earnings 957 2,028
     
Earnings per share    
     
  Basic and Diluted 0.11 0.24
   
   
   
GOODFELLOW INC.  
Consolidated Statements of Retained Earnings  
(in thousands of dollars)  
(unaudited)  
  Three Months
ended Nov 30
 
  2010   2009  
  $   $  
         
Balance, beginning of year 106,881   101,932  
         
Net earnings 957   2,028  
  107,838   103,960  
         
Dividends (2,572 ) (2,572 )
         
Balance, end of year 105,266   101,388  
     
     
     
Consolidated Statements of Comprehensive Income    
(in thousands of dollars)    
(unaudited)
  Three Months
ended Nov 30
  2010 2009
  $ $
     
Net Income 957 2,028
     
Other comprehensive income    
     
  Foreign currency translation adjustment - -
     
Total other comprehensive income - -
     
Comprehensive Income 957 2,028
 
 
 
GOODFELLOW INC.
Consolidated Balance Sheets
(in thousands of dollars)
(unaudited)
  Nov 30 Nov 30 Aug 31
  2010 2009 2010
  $ $ $
Assets      
Current Assets      
Cash 562 924 548
Accounts receivable 58,418 56,548 81,184
Income tax receivable 486 - -
Inventories 71,819 65,635 63,367
Prepaid expenses 2,171 2,851 1,647
  133,456 125,958 146,746
       
Capital assets 30,875 30,742 30,538
Deferred pension asset 6,653 4,812 6,520
  170,984 161,512 183,804
       
Liabilities      
Current liabilities      
Bank indebtedness 24,058 16,741 27,132
Accounts payable and accrued liabilities 29,416 31,295 35,964
Income taxes payable - 192 1,584
  53,474 48,228 64,680
       
Future income taxes 3,022 2,674 3,022
  56,496 50,902 67,702
       
       
Shareholders' Equity      
Capital stock 9,222 9,222 9,222
Retained earnings 105,266 101,388 106,880
  114,488 110,610 116,102
  170,984 161,512 183,804
   
   
   
GOODFELLOW INC.  
Consolidate Statements of Cash Flows  
(in thousands of dollars)  
(unaudited)  
  Three Months
ended Nov 30
 
  2010   2009  
  $   $  
         
Cash Flows From Operating Activities        
  Net earnings 957   2,028  
  Adjustments for :        
    Amortization 366   356  
    Amortization included in cost of good sold 238   252  
    Gain on disposal of capital assets -   (8 )
    Shortage of expense over pension plan Funding (133 ) (111 )
  1,428   2,517  
         
Changes in non-cash working capital items 5,174   (9,941 )
  6,602   (7,424 )
         
Cash Flows Used By Financing Activities        
  (Decrease) increase in bank loan (13,000 ) 5,000  
  Increase in banker's acceptances 10,000   5,000  
  Dividends (2,572 ) (2,572 )
  (5 572 ) 7,428  
         
Cash Flows Used By Investing Activities        
  Acquisition of capital assets (942 ) (983 )
  Proceeds on disposal of capital assets -   9  
  (942 ) (974 )
         
Net cash (outflow) inflow 88   (970 )
(Bank overdraft), beginning of year (26,584 ) (4,847 )
Bank Overdraft, end of period (26,496 ) (5,817 )
         
Bank overdraft is comprised of :        
  Cash 562   924  
  Bank overdraft (27,058 ) (6,741 )
  (26,496 ) (5,817 )

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