Goodfellow Reports its Results for the First Quarter Ended November 30, 2011

DELSON, QUEBEC--(Marketwire - Feb. 10, 2012) - Goodfellow Inc. (TSX:GDL) announced today its financial results for the first quarter ended November 30, 2011. The accompanying Interim Financial Statements for the first three months ended November 30, 2011 have been prepared in accordance with IFRS. The Company generated net earnings of $0.9 million or $0.10 per share compared to net earnings of $1.0 million or $0.11 per share a year ago. Consolidated sales for the first three months ended November 30, 2011 were $106.0 million compared to $109.4 million in the previous year. Cash flow from operations (excluding non-cash working capital items) for the first quarter of Fiscal 2012 decreased to $1.7 million from $2.1 million for the same period last year. The sales decline was mainly due to the decline from retail customer sales and a reduction of Industrial and Governmental project deliveries in the first quarter of Fiscal 2012. The Canadian housing market remained relatively active increasing 8.4% to 199,500 units on average (Source: CMHC) for the three months ended November 30, 2011 compared to 184,100 units in the first quarter a year ago. The sales decline was mitigated by our focused attention on cost reduction in all areas of our business in order to align our cost structure with expected lower business ahead.

"This result is a continuation of the last 5 quarters - sales declines with sluggish markets and efforts to reduce costs " said Richard Goodfellow, President and Chief Executive Officer. "Many parts of our business continue to show growth and profit while others struggle and are the focus of our efforts. Our clear objective is to maintain and improve overall profitability while growing market share in these most turbulent times."

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. Condensed Interim Consolidated Statements of Comprehensive Income (in thousands of dollars, except per share amounts) (unaudited)
		Three Months ended Nov 30
		2011	2010
		$	$
Sales		106,039	109,378
Expenses
	Cost of goods sold	85,571	87,885
	Selling, administrative and general expenses	18,846	19,705
	Financial costs	334	398
		104,751	107,988
Earnings before income taxes		1,288	1,390
Income taxes		399	431
Net earnings, being comprehensive income		889	959
Earnings per share
	Basic and diluted	0.10	0.11

GOODFELLOW INC. Condensed Interim Consolidated Statement of Financial Position (in thousands of dollars) (unaudited)
		Nov 30	Nov 30	Aug 31	Sep 1
		2011	2010	2011	2010
		$	$	$	$
Assets
Current Assets
	Cash and cash equivalents	328	562	210	548
	Trade and other receivables	55,689	58,418	71,284	81,184
	Income taxes recoverable	4,217	486	3,708	-
	Inventories	72,339	71,819	58,722	63,367
	Prepaid expenses	3,314	2,171	1,699	1,647
Total Current Assets		135,887	133,456	135,623	146,746
Non Current Assets
	Property, plant and equipment	36,737	38,057	37,125	37,854
		172,624	171,513	172,748	184,600
Liabilities
Current liabilities
	Bank indebtedness	28,491	24,058	28,617	27,132
	Trade and other payables	24,896	28,034	24,486	34,597
	Income taxes payable	-	-	-	1,584
Total Current Liabilities		53,387	52,092	53,103	63,313
Non-Current Liabilities
	Provisions	1,506	1,427	1,498	1,400
	Deferred income taxes	2,195	2,236	2,195	2,234
	Defined benefit plan obligation	1,600	3,041	2,048	3,323
Total Non-Current Liabilities		5,301	6,704	5,741	6,957
		58,688	58,796	58,844	70,270
Shareholders' equity
	Share capital	9,222	9,222	9,222	9,222
	Retained earnings	104,714	103,495	104,682	105,108
		113,936	112,717	113,904	114,330
		172,624	171,513	172,748	184,600

GOODFELLOW INC. Condensed Consolidated Statements of Cash Flows (in thousands of dollars) (unaudited)
			Three Months ended Nov 30
			2011		2010
			$		$
Cash Flows Used From Operating Activities
	Net Earnings		889		959
	Adjustments for :
		Depreciation	703		738
		Accretion expense on Provisions	8		27
		Income tax expenses	399		431
		Interest expenses	159		263
		Funding in excess of pension plan of expenses	(448	)	(282	)
			1,710		2,136
	Changes in non-cash working capital items		743		7,298
	Interest paid		(129	)	(332	)
	Income taxes paid		(908	)	(2,501	)
			(294	)	4,465
Cash Flows Used By Financing Activities
	(Decrease) in bank loan		(6,000	)	(13,000	)
	Increase in banker's acceptances		5,000		10,000
	Dividends paid		(857	)	(2,572	)
			(1,857	)	(5,572	)
Cash Flows Used By Investing Activities
	Acquisition of property, plant and equipment		(315	)	(941	)
			(315	)	(941	)
Net cash (outflow) inflow			(756	)	88
Cash position, beginning of period			(9,407	)	(3,584	)
Cash position, end of period			(10,163	)	(3,496	)
Cash position is comprised of :
	Cash and cash equivalents		328		562
	Bank overdraft		(10,491	)	(4,058	)
			(10,163	)	(3,496	)

GOODFELLOW INC. Condensed Consolidated Statements of Change in Shareholder's Equity (in thousands of dollars, except per share amounts) (unaudited)
		Share Capital	Retained Earnings		Total
		$	$		$
Balance as at September 1, 2011		9,222	104,682		113,904
Net earnings		-	889		889
Transactions with owners, recorded directly in equity
	Dividends	-	(857	)	(857	)
Balance as at November 30, 2011		9,222	104,714		113,936
		Share Capital	Retained Earnings		Total
		$	$		$
Balance as at September 1, 2010		9,222	105,108		114,330
Net earnings		-	959		959
Transactions with owners, recorded directly in equity
	Dividends	-	(2,572	)	(2,572	)
Balance as at November 30, 2010		9,222	103,495		112,717