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