Goodfellow Reports its Results for the Third Quarter Ended May 31, 2013

DELSON, QUEBEC--(Marketwired - June 26, 2013) - Goodfellow Inc. (TSX:GDL) announced today its financial results for the third quarter ended May 31, 2013. The Company recorded a net income of $2.5 million or $0.29 per share compared to $1.6 million or $0.19 per share during the corresponding period a year ago. Consolidated sales for the three months ended May 31, 2013 were $138.2 million compared to $141.2 million last year. Sales during the third quarter declined due to a late spring weather wise and a progressive slowdown in new housing starts during the latter part of the third quarter. The Canadian housing market conditions were sluggish with new housing starts decreasing 18% to 185,800 units on average (Source: CMHC) for the three months ended May 31, 2013 compared to 227,500 units during the third quarter a year ago. The sales decrease was mitigated by the increased demand for our value-added product lines and the introduction of new product lines compared to last year. The increased demand for value-added products helped improve our gross margins closing at 18.5% compared to 17.1% for the corresponding period a year ago. Cash flow from operations (excluding non-cash working capital income tax and interest paid) for the third quarter of Fiscal 2013 closed at $4.2 million from $3.0 million for the same period last year.

On a year-to-date basis, the Company recorded a net income of $2.3 million or $0.27 per share compared to net income of $1.8 million or $0.22 per share a year ago. Consolidated sales for the nine months ended May 31, 2013 were $345.7 million compared to $348.4 million in the corresponding period. Cash flow from operations (excluding non-cash working capital income tax and interest paid) for the first nine months of Fiscal 2013 increased to $4.9 million from $4.3 million for the same period last year.

"There is no doubt that there is a slowdown in the Canadian economy with housing starts being weak or non-existent in many areas." said Richard Goodfellow, President and Chief Executive Officer. "We expect the 4th Quarter to be more of the same - tough going into the headwinds of a slowing economy - but the 4th Quarter has always produced close to or over half of the year's results and we are postured to push very hard to meet this standard."

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		Nine Months
		ended May 31		ended May 31
		2013	2012	2013	2012
		$	$	$	$
Sales		138,195	141,242	345,671	348,403
Expenses
	Cost of goods sold	112,687	117,149	281,242	286,814
	Selling, administrative and general expenses	21,454	21,350	59,818	57,791
	Financial costs	554	450	1,363	1,135
		134,695	138,949	342,423	345,740
Earnings before income taxes		3,500	2,293	3,248	2,663
Income taxes		1,015	711	942	826
Net earnings, being comprehensive income		2,485	1,582	2,306	1,837
Earnings per share
	Basic and diluted	0.29	0.19	0.27	0.22

GOODFELLOW INC.
Condensed Interim Consolidated Statements of Financial Position
(in thousands of dollars)
(unaudited)
		May 31	May 31	Aug 31
		2013	2012	2012
		$	$	$
Assets
Current Assets
	Cash and cash equivalents	278	249	707
	Trade and other receivables	95,491	89,915	83,083
	Income taxes recoverable	-	1,336	-
	Inventories	91,054	86,465	63,736
	Prepaid expenses	5,773	2,470	3,474
Total Current Assets		192,596	180,435	151,000
Non Current Assets
	Property, plant and equipment	35,823	35,691	35,743
	Defined benefit plan asset	666	-	-
		229,085	216,126	186,743
Liabilities
Current liabilities
	Bank indebtedness	75,997	65,619	37,157
	Trade and other payables	31,638	31,342	29,060
	Income taxes payable	292	-	22
Total Current Liabilities		107,927	96,961	66,239
Non-Current Liabilities
	Provisions	1,441	1,529	1,442
	Long term debt	150	-	-
	Deferred income taxes	2,514	2,195	2,514
	Defined benefit plan obligation	-	909	512
Total Non-Current Liabilities		4,105	4,633	4,468
		112,032	101,594	70,707
Shareholders' equity
	Share capital	9,152	9,176	9,154
	Retained earnings	107,901	105,356	106,882
		117,053	114,532	116,036
		229,085	216,126	186,743

GOODFELLOW INC.
Condensed Consolidated Statements of Cash Flows
(in thousands of dollars)
(unaudited)
			Three Months				Nine Months
			ended May 31				ended May 31
			2013		2012		2013		2012
			$		$		$		$
Cash Flows Used From Operating Activities
	Net Earnings		2,485		1,582		2,306		1,837
	Adjustments for :
		Depreciation	701		719		2,049		2,136
		Accretion expense on Provisions	(16	)	11		(1	)	26
		Income tax expenses	1,015		711		942		826
		Interest expenses	364		271		775		614
		Funding in excess of pension plan of expenses	(308	)	(330	)	(1,177	)	(1,139	)
			4,241		2,964		4,894		4,300
	Changes in non-cash working capital items		(34,343	)	(37,718	)	(39,403	)	(40,220	)
	Interest paid		(362	)	(186	)	(822	)	(678	)
	Income taxes paid		(211	)	2,887		(671	)	1,546
			(34,916	)	(35,017	)	(40,896	)	(39,352	)
Cash Flows Used By Financing Activities
	(Decrease) Increase in bank loan		(7,000	)	4,000		1,000		-
	Increase in banker's acceptances		37,000		24,000		33,000		33,000
	Long term debt		-		-		150		-
	Redemption of shares		-		(319	)	(14	)	(352	)
	Dividends paid		-		-		(1,275	)	(857	)
			30,000		27,681		32,861		31,791
Cash Flows Used By Investing Activities
	Acquisition of property, plant and equipment		(271	)	(230	)	(2,128	)	(702	)
			(271	)	(230	)	(2,128	)	(702	)
Net cash (outflow) inflow			(946	)	(4,602	)	(5,269	)	(3,963	)
Cash position, beginning of period			(12,773	)	(8,768	)	(8,450	)	(9,407	)
Cash position, end of period			(13,719	)	(13,370	)	(13,719	)	(13,370	)
Cash position is comprised of :
	Cash and cash equivalents		278		249		278		249
	Bank overdraft		(13,997	)	(13,619	)	(13,997	)	(13,619	)
			(13,719	)	(13,370	)	(13,719	)	(13,370	)

GOODFELLOW INC.
Condensed Consolidated Statements of Change in Shareholder's Equity
(in thousands of dollars)
(unaudited)
		Share		Retained
		Capital		Earnings		Total
		$		$		$
Balance as at August 31, 2012		9,154		106,882		116,036
Net earnings		-		2,306		2,306
Transactions with owners, recorded directly in equity
	Dividends	-		(1,275	)	(1,275)
	Share repurchased	(2	)	(12	)	(14)
Balance as at May 31, 2013		9,152		107,901		117,053
		Share		Retained
		Capital		Earnings		Total
		$		$		$
Balance as at August 31, 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