Goodfellow Inc.
TSX : GDL

Goodfellow Inc.

March 30, 2012 10:42 ET

Goodfellow Reports its Results for the Second Quarter Ended February 29, 2012

DELSON, QUEBEC--(Marketwire - March 30, 2012) - Goodfellow Inc. (TSX:GDL) announced today its financial results for the second quarter ended February 29, 2012. The Company recorded a net loss of $(0.6) million or $(0.07) per share compared to a net loss of $(1.7) million or $(0.20) per share a year ago. Consolidated sales for the three months ended February 29, 2012 were $101.1 million compared to $94.8 million in the previous year. Cash flow from operations (excluding non-cash working capital items) for the second quarter of Fiscal 2012 closed at $(0.4) million from $(1.8) million for the same period last year. The sales growth was due to favourable weather conditions during the winter months, increased demand from the retail flooring customer base and continued higher demand for our value-added products during the second quarter compared to last year. The Canadian housing market remained relatively active increasing 15.7% to 199,900 units on average (Source: CMHC) for the three months ended February 29, 2012 compared to 172,700 units in the second quarter a year ago. The sales increase reflects our commitment to maintain and grow our market share while focusing our attention on cost reductions in all areas of our business. As a result, operating costs during the second quarter decreased some 6% compared to the second quarter last year. The accompanying Interim Financial Statements for the second quarter ended February 29, 2012 have been prepared in accordance with IFRS.

On a year-to-date basis, the Company generated net earnings of $0.3 million or $0.03 per share compared to net loss of $(0.7) million or $(0.08) per share a year ago. Consolidated sales for the six months ended February 29, 2012 were $207.2 million compared to $204.2 million in the previous year. Cash flow from operations (excluding non-cash working capital items) for the first six months of Fiscal 2012 increased to $1.3 million from $0.4 million for the same period last year.

"These results reflect our efforts to control costs while not giving up market share. Business conditions however remain generally sluggish and uncertain despite the early spring." said Richard Goodfellow, President and Chief Executive Officer. "There is no doubt that the light winter in most areas helped us improve our results over last year."

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 Feb 29
Six Months
ended Feb 29
2012 2011 2012 2011
$ $ $ $
Sales 101,122 94,853 207,161 204,231
Expenses
Cost of goods sold 84,095 78,222 169,665 166,107
Selling, administrative and general expenses 17,595 18,750 36,441 38,455
Financial costs 351 324 685 722
102,041 97,296 206,791 205,284
Earnings before income taxes (919 ) (2,443 ) 370 (1,053 )
Income taxes (285 ) (758 ) 115 (327 )
Net earnings, being comprehensive income (634 ) (1,685 ) 255 (726 )
Earnings per share
Basic and diluted (0.07 ) (0.20 ) 0.03 (0.08 )

GOODFELLOW INC.
Condensed Interim Consolidated Statements of Financial Position
(in thousands of dollars)
(unaudited)
Feb 29 Feb 28 Aug 31 Sep 1
2012 2011 2011 2010
$ $ $ $
Assets
Current Assets
Cash and cash equivalents 267 527 210 548
Trade and other receivables 58,976 54,477 71,284 81,184
Income taxes recoverable 4,934 2,585 3,708 -
Inventories 72,679 74,777 58,722 63,367
Prepaid expenses 1,874 3,085 1,699 1,647
Total Current Assets 138,730 135,451 135,623 146,746
Non Current Assets
Property, plant and equipment 36,180 38,093 37,125 37,854
174,910 173,544 172,748 184,600
Liabilities
Current liabilities
Bank indebtedness 33,035 33,818 28,617 27,132
Trade and other payables 23,658 22,309 24,486 34,597
Income taxes payable - - - 1,584
Total Current Liabilities 56,693 56,127 53,103 63,313
Non-Current Liabilities
Provisions 1,513 1,454 1,498 1,400
Deferred income taxes 2,195 2,236 2,195 2,234
Defined benefit plan obligation 1,239 2,695 2,048 3,323
Total Non-Current Liabilities 4,947 6,385 5,741 6,957
61,640 62,512 58,844 70,270
Shareholders' equity
Share capital 9,218 9,222 9,222 9,222
Retained earnings 104,052 101,810 104,682 105,108
113,270 111,032 113,904 114,330
174,910 173,544 172,748 184,600


GOODFELLOW INC.
Condensed Consolidated Statements of Cash Flows
(in thousands of dollars)
(unaudited)
Three Months
ended Feb 29
Six Months
ended Feb 29
2012 2011 2012 2011
$ $ $ $
Cash Flows Used From Operating Activities
Net Earnings (634 ) (1,685 ) 255 (726 )
Adjustments for :
Depreciation 713 766 1,416 1,504
Accretion expense on Provisions 7 27 15 54
Income tax expenses (284 ) (758 ) 115 (327 )
Interest expenses 184 210 343 473
Funding in excess of pension plan of expenses (361 ) (346 ) (809 ) (628 )
(375 ) (1,786 ) 1,335 350
Changes in non-cash working capital items (3,335 ) (5,708 ) (2,592 ) 1,590
Interest paid (274 ) (157 ) (402 ) (488 )
Income taxes paid (432 ) (1,342 ) (1,341 ) (3,843 )
(4,041 ) (7,207 ) (4,335 ) (2,741 )
Cash Flows Used By Financing Activities
(Decrease) in bank loan 2,000 12,000 (4,000 ) (1,000 )
Increase in banker's acceptances 4,000 (10,000 ) 9,000 -
Redemption of shares (32 ) - (32 ) -
Dividends paid - - (857 ) (2,572 )
5,968 2,000 4,111 (3,572 )
Cash Flows Used By Investing Activities
Acquisition of property, plant and equipment (157 ) (802 ) (472 ) (1,744 )
(157 ) (802 ) (472 ) (1,744 )
Net cash (outflow) inflow 1,395 (7,795 ) 639 (7,707 )
Cash position, beginning of period (10,163 ) (3,496 ) (9,407 ) (3,584 )
Cash position, end of period (8,768 ) (11,291 ) (8,768 ) (11,291 )
Cash position is comprised of :
Cash and cash equivalents 267 527 267 527
Bank overdraft (9,035 ) (11,818 ) (9,035 ) (11,818 )
(8,768 ) (11,291 ) (8,768 ) (11,291 )

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 - 255 255
Transactions with owners, recorded directly in equity
Dividends - (857 ) (857 )
Share repurchased (4 ) (28 ) (32 )
Balance as at February 29, 2012 9,218 104,052 113,270
Share Capital Retained Earnings
Total
$ $ $
Balance as at September 1, 2010 9,222 105,108 114,330
Net earnings - (726 ) (726 )
Transactions with owners, recorded directly in equity
Dividends - (2,572 ) (2,572 )
Balance as at February 28, 2011 9,222 101,810 111,032

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