Goodfellow Inc.
TSX : GDL

Goodfellow Inc.

June 27, 2012 17:14 ET

Goodfellow Reports its Results for the Third Quarter Ended May 31, 2012

DELSON, QUEBEC--(Marketwire - June 27, 2012) - Goodfellow Inc. (TSX:GDL) announced today its financial results for the third quarter ended May 31, 2012. The Company recorded a net income of $1.6 million or $0.19 per share compared to a net income of $1.2 million or $0.15 per share a year ago. Consolidated sales for the three months ended May 31, 2012 were $141.2 million compared to $127.5 million in the previous year. Cash flow from operations (excluding non-cash working capital items) for the third quarter of Fiscal 2012 closed at $3.0 million from $2.6 million for the same period last year. The sales growth was due to strong demand for hardwood lumber, siding & composite decking products combined with increased shipments of treated wood products helped by the early start to the spring season compared to the third quarter last year. The Canadian housing market remained relatively active increasing 18.1% to 222,900 units on average (Source: CMHC) for the three months ended May 31, 2012 compared to 188,700 units in the third quarter a year ago. The sales increase also reflects our commitment to grow market share while keeping operational costs under control. As a result, operating costs during the third quarter decreased 1.2% compared to the third quarter last year.

On a year-to-date basis, the Company generated net earnings of $1.8 million or $0.22 per share compared to net earnings of $0.5 million or $0.06 per share a year ago. Consolidated sales for the nine months ended May 31, 2012 were $348.4 million compared to $331.8 million in the previous year. Cash flow from operations (excluding non-cash working capital items) for the first nine months of Fiscal 2012 increased to $4.3 million from $3.0 million for the same period last year.

"Our results for the third quarter were a slight improvement over last year but far from expectations." said Richard Goodfellow, President and Chief Executive Officer. "We remain cautiously optimistic for the key fourth quarter with expectations for our warehouse sales being strong."

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 May 31
Nine Months
ended May 31
2012 2011 2012 2011
$ $ $ $
Sales 141,242 127,535 348,403 331,767
Expenses
Cost of goods sold 117,149 103,702 286,814 269,809
Selling, administrative and general expenses 21,350 21,617 57,791 60,072
Financial costs 450 437 1,135 1,158
138,949 125,756 345,740 331,039
Earnings before income taxes 2,293 1,779 2,663 728
Income taxes 711 551 826 225
Net earnings, being comprehensive income 1,582 1,228 1,837 503
Earnings per share
Basic 0.19 0.15 0.22 0.06
Diluted 0.18 0.15 0.21 0.06
GOODFELLOW INC.
Condensed Interim Consolidated Statements of Financial Position
(in thousands of dollars)
(unaudited)
May 31 May 31 Aug 31 Sep 1
2012 2011 2011 2010
$ $ $ $
Assets
Current Assets
Cash and cash equivalents 249 443 210 548
Trade and other receivables 89,915 77,812 71,284 81,184
Income taxes recoverable 1,336 3,408 3,708 -
Inventories 86,465 82,421 58,722 63,367
Prepaid expenses 2,470 2,916 1,699 1,647
Total Current Assets 180,435 167,000 135,623 146,746
Non Current Assets
Property, plant and equipment 35,691 37,639 37,125 37,854
216,126 204,639 172,748 184,600
Liabilities
Current liabilities
Bank indebtedness 65,619 52,158 28,617 27,132
Trade and other payables 31,342 34,119 24,486 34,597
Income taxes payable - - - 1,584
Total Current Liabilities 96,961 86,277 53,103 63,313
Non-Current Liabilities
Provisions 1,529 1,482 1,498 1,400
Deferred income taxes 2,195 2,237 2,195 2,234
Defined benefit plan obligation 909 2,382 2,048 3,323
Total Non-Current Liabilities 4,633 6,101 5,741 6,957
101,594 92,378 58,844 70,270
Shareholders' equity
Share capital 9,176 9,222 9,222 9,222
Retained earnings 105,356 103,039 104,682 105,108
114,532 112,261 113,904 114,330
216,126 204,639 172,748 184,600
GOODFELLOW INC.
Condensed Consolidated Statements of Cash Flows
(in thousands of dollars)
(unaudited)
Three Months
ended May 31
Nine Months
ended May 31
2012 2011 2012 2011
$ $ $ $
Cash Flows Used From Operating Activities
Net Earnings 1,582 1,228 1,837 503
Adjustments for :
Depreciation 719 791 2,136 2,295
Accretion expense on Provisions 11 27 26 81
Future income tax - 3 - 3
Gain/Loss on disposal of fixed assets - 30 - 30
Income tax expenses 711 551 826 225
Interest expenses 271 324 614 797
Funding in excess of pension plan of expenses (330 ) (313 ) (1,139 ) (940 )
2,964 2,641 4,300 2,994
Changes in non-cash working capital items (37,718 ) (19,068 ) (40,220 ) (17,409 )
Interest paid (186 ) (256 ) (678 ) (817 )
Income taxes paid 2,887 (1,374 ) 1,546 (5,216 )
(35,017 ) (20,698 ) (39,352 ) (23,442 )
Cash Flows Used By Financing Activities
Increase (Decrease) in bank loan 4,000 (4,000 ) - (5,000 )
Increase in banker's acceptances 24,000 26,000 33,000 26,000
Redemption of shares (319 ) - (352 ) -
Dividends paid - - (857 ) (2,572 )
27,681 22,000 31,791 18,428
Cash Flows Used By Investing Activities
Acquisition of property, plant and equipment (230 ) (367 ) (702 ) (2,111 )
(230 ) (367 ) (702 ) (2,111 )
Net cash (outflow) inflow (4,602 ) 3,576 (3,963 ) (4,131 )
Cash position, beginning of period (8,768 ) (11,291 ) (9,407 ) (3,584 )
Cash position, end of period (13,370 ) (7,715 ) (13,370 ) (7,715 )
Cash position is comprised of :
Cash and cash equivalents 249 443 249 443
Bank overdraft (13,619 ) (8,158 ) (13,619 ) (8,158 )
(13,370 ) (7,715 ) (13,370 ) (7,715 )
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 - 1,837 1,837
Transactions with owners, recorded directly in equity
Dividends - (857 ) (857 )
Share repurchased (46 ) (306 ) (352 )
Balance as at May 31, 2012 9,176 105,356 114,532
Share Capital Retained Earnings
Total
$ $ $
Balance as at September 1, 2010 9,222 105,108 114,330
Net earnings - 503 503
Transactions with owners, recorded directly in equity
Dividends - (2,572 ) (2,572 )
Balance as at May 31, 2011 9,222 103,039 112,261

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