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