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 | ||||
| 2011 | 2010 | 2011 | 2010 | ||
| $ | $ | $ | $ | ||
| Sales | 127,535 | 140,014 | 331,767 | 357,092 | |
| Expenses | |||||
| Cost of goods sold, selling, administrative and general expenses | 124,895 | 133,625 | 328,376 | 343,392 | |
| Amortization | 401 | 380 | 1,151 | 1,106 | |
| Financial | 409 | 324 | 1,076 | 816 | |
| Foreign currency loss | 53 | 141 | 447 | 447 | |
| 125,758 | 134,470 | 331,050 | 345,761 | ||
| Earnings before income taxes | 1,777 | 5,544 | 717 | 11,331 | |
| Income taxes | 551 | 1,748 | 222 | 3,573 | |
| Net earnings | 1,226 | 3,796 | 495 | 7,758 | |
| Earnings per share | |||||
| Basic and diluted | 0.15 | 0.45 | 0.06 | 0.91 | |
| GOODFELLOW INC. Consolidated statements of retained earnings (in thousands of dollars) (unaudited) | |||||||
| Nine Months ended May 31 | |||||||
| 2011 | 2010 | ||||||
| $ | $ | ||||||
| Balance, beginning of year | 106,880 | 101,932 | |||||
| Net earnings | 495 | 7,758 | |||||
| 107,375 | 109,690 | ||||||
| Dividends | (2,572 | ) | (5,143 | ) | |||
| Balance, end of year | 104,804 | 104,547 | |||||
| Consolidated statements of comprehensive income (in thousands of dollars) (unaudited) | |||||||
| Three Months ended May 31 | Nine Months ended May 31 | ||||||
| 2011 | 2010 | 2011 | 2010 | ||||
| $ | $ | $ | $ | ||||
| Net Income | 1,226 | 3,796 | 495 | 7,758 | |||
| Other comprehensive income | |||||||
| Foreign currency translation adjustment | - | - | - | - | |||
| Total other comprehensive income | - | - | - | - | |||
| Comprehensive income | 1,226 | 3,796 | 495 | 7,758 | |||
GOODFELLOW INC. Consolidated balance sheets As at May 31, 2011 and 2010, August 31, 2010 (in thousands of dollars) (unaudited) | ||||
| May 31 | May 31 | August 31 | ||
| 2011 | 2010 | 2010 | ||
| $ | $ | $ | ||
| Assets | ||||
| Current assets | ||||
| Cash | 443 | 302 | 548 | |
| Accounts receivable | 77,812 | 81,186 | 81,184 | |
| Income taxes recoverable | 3,408 | - | - | |
| Inventories | 82,421 | 80,038 | 63,367 | |
| Prepaid expenses | 2,916 | 3,298 | 1,647 | |
| 167,000 | 164,824 | 146,746 | ||
| Capital assets | 30,724 | 30,489 | 30,538 | |
| Deferred pension asset | 7,013 | 6,185 | 6,520 | |
| 204,737 | 201,498 | 183,804 | ||
| Liabilities | ||||
| Current liabilities | ||||
| Bank indebtedness | 52,158 | 47,214 | 27,132 | |
| Accounts payable and accrued liabilities | 35,531 | 36,823 | 35,964 | |
| Income taxes payable | - | 1,018 | 1,584 | |
| 87,689 | 85,055 | 64,680 | ||
| Future income taxes | 3,022 | 2,674 | 3,022 | |
| 90,711 | 87,729 | 67,702 | ||
| Shareholders' equity | ||||
| Capital stock | 9,222 | 9,222 | 9,222 | |
| Retained earnings | 104,804 | 104,547 | 106,880 | |
| Accumulated other comprehensive income | - | - | - | |
| 114,026 | 113,769 | 116,102 | ||
| 204,737 | 201,498 | 183,804 | ||
GOODFELLOW INC. Consolidated statements of cash flows (in thousands of dollars) (unaudited) | |||||||||
| Three Months ended May 31 | Nine Months ended May 31 | ||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||
| $ | $ | $ | $ | ||||||
| Cash flows from operating activities | |||||||||
| Net earnings | 1,226 | 3,796 | 495 | 7,758 | |||||
| Adjustments for : | |||||||||
| Amortization | 401 | 380 | 1,151 | 1,106 | |||||
| Amortization included in cost of good sold | 257 | 265 | 743 | 775 | |||||
| Loss on disposal of capital assets | 30 | - | 30 | 6 | |||||
| Shortage of expense over pension plan funding | (163 | ) | (1,247 | ) | (493 | ) | (1,484 | ) | |
| 1,751 | 3,194 | 1,926 | 8,161 | ||||||
| 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 acceptances | 26,000 | 15,000 | 26,000 | 25,000 | |||||
| Dividends | - | (2,571 | ) | (2,572 | ) | (5,143 | ) | ||
| 22,000 | 13,429 | 18,428 | 29,857 | ||||||
| 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) inflow | 3,576 | (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 : | |||||||||
| Cash | 443 | 302 | 443 | 302 | |||||
| Bank overdraft | (8,158 | ) | (12,214 | ) | (8,158 | ) | (12,214 | ) | |
| (7,715 | ) | (11,912 | ) | (7,715 | ) | (11,912 | ) | ||
Contact Information:
Richard Goodfellow
President and CEO
(450) 635-6511
(450) 635-3730 (FAX)
info@goodfellowinc.com