Goodfellow Inc.
TSX : GDL

Goodfellow Inc.

June 22, 2011 15:12 ET

Goodfellow Reports Its Results for the Third Quarter Ended May 31, 2011

DELSON, QUEBEC--(Marketwire - June 22, 2011) - Goodfellow Inc. (TSX:GDL) today reported its financial results for the third quarter ended May 31, 2011. Net income from operations were $1.2 million or $0.15 per share compared to a net income of $3.8 million or $0.45 per share a year ago. Consolidated sales for the third quarter of fiscal 2011 were $127.5 million compared to $140.0 million for the same period a year ago. Cash flow from operations (excluding non-cash working capital) for the third quarter of fiscal 2011 decreased to $1.8 million from $3.2 million last year. Sales in Canada decreased 9% compared to the same period last year. This was mainly due to lower housing starts and slower demand from the retailers due to bad weather conditions throughout the third quarter. Consequently, flooring sales were affected by the reduced demand in the retail industry and commodity plywood sales decreased due to the slower new housing market. Sales in the US decreased 31% due to declining housing starts in the Northeast US combined with the economic uncertainty. Export sales increased 39% compared to last year due mainly to strong hardwood lumber sales in China and the Middle East. Selling, General and Administrative expenses for the third quarter of fiscal 2011 increased slightly at $21.1 million compared to $21.0 million for the corresponding period a year ago. The increase is due to higher direct labour due to the growth in value-added production items during the 3rd quarter and higher energy costs due to the fuel price increase effect of our distribution and production equipment.

For the nine months ended May 31, 2011, the Company reported net income from operations of $0.5 million or $0.06 per share compared to a net income of $7.8 million or $0.91 per share a year ago. Consolidated sales were $331.8 million compared to $357.1 million for the same period a year ago. Cash flow from operations (excluding non-cash working capital) decreased to $1.9 million from $8.2 million for the same period last year.

"The 3rd quarter results reflect the sluggish business conditions across the country not helped by the very poor weather and the election period." said Richard Goodfellow, President and Chief Executive Officer. "We remain positive about our 4th quarter prospects while keeping a close eye on our costs".

Goodfellow Inc. is one of 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 May 31
Nine Months
ended May 31
2011201020112010
$$$$
Sales127,535140,014331,767357,092
Expenses
Cost of goods sold, selling, administrative and
general expenses
124,895133,625328,376343,392
Amortization4013801,1511,106
Financial4093241,076816
Foreign currency loss53141447447
125,758134,470331,050345,761
Earnings before income taxes1,7775,54471711,331
Income taxes5511,7482223,573
Net earnings1,2263,7964957,758
Earnings per share
Basic and diluted0.150.450.060.91
GOODFELLOW INC.
Consolidated statements of retained earnings
(in thousands of dollars)
(unaudited)
Nine Months
ended May 31
20112010
$$
Balance, beginning of year106,880101,932
Net earnings4957,758
107,375109,690
Dividends(2,572)(5,143)
Balance, end of year104,804104,547
Consolidated statements of comprehensive income
(in thousands of dollars)
(unaudited)
Three Months
ended May 31
Nine Months
ended May 31
2011201020112010
$$$$
Net Income1,2263,7964957,758
Other comprehensive income
Foreign currency translation adjustment----
Total other comprehensive income----
Comprehensive income1,2263,7964957,758

GOODFELLOW INC.
Consolidated balance sheets
As at May 31, 2011 and 2010, August 31, 2010
(in thousands of dollars)
(unaudited)
May 31May 31August 31
201120102010
$$$
Assets
Current assets
Cash443302548
Accounts receivable77,81281,18681,184
Income taxes recoverable3,408--
Inventories82,42180,03863,367
Prepaid expenses2,9163,2981,647
167,000164,824146,746
Capital assets30,72430,48930,538
Deferred pension asset7,0136,1856,520
204,737201,498183,804
Liabilities
Current liabilities
Bank indebtedness52,15847,21427,132
Accounts payable and accrued liabilities35,53136,82335,964
Income taxes payable-1,0181,584
87,68985,05564,680
Future income taxes3,0222,6743,022
90,71187,72967,702
Shareholders' equity
Capital stock9,2229,2229,222
Retained earnings104,804104,547106,880
Accumulated other comprehensive income---
114,026113,769116,102
204,737201,498183,804


GOODFELLOW INC.
Consolidated statements of cash flows
(in thousands of dollars)
(unaudited)
Three Months
ended May 31
Nine Months
ended May 31
2011201020112010
$$$$
Cash flows from operating activities
Net earnings1,2263,7964957,758
Adjustments for :
Amortization4013801,1511,106
Amortization included in cost of good sold257265743775
Loss on disposal of capital assets30-306
Shortage of expense over pension plan funding(163)(1,247)(493)(1,484)
1,7513,1941,9268,161
Changes in non-cash working capital items(19,808)(23,438)(22,373)(43,076)
(18,057)(20,244)(20,447)(34,915)
Cash flows used by financing activities
(Decrease) increase in bank loan(4,000)1,000(5,000)10,000
(Decrease) increase in banker's acceptances26,00015,00026,00025,000
Dividends-(2,571)(2,572)(5,143)
22,00013,42918,42829,857
Cash flows used by investing activities
Acquisition of capital assets(367)(577)(2,112)(2,028)
Proceeds on disposal of capital assets---21
(367)(577)(2,112)(2,007)
Net cash (outflow) inflow3,576(7,392)(4,131)(7,065)
(Bank overdraft), beginning of year(11,291)(4,520)(3,584)(4,847)
Bank overdraft, end of year(7,715)(11,912)(7,715)(11,912)
Bank overdraft is comprised of :
Cash443302443302
Bank overdraft(8,158)(12,214)(8,158)(12,214)
(7,715)(11,912)(7,715)(11,912)

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