Goodfellow Inc.
TSX : GDL

Goodfellow Inc.

June 27, 2014 16:01 ET

Goodfellow Reports its Results for the Third Quarter Ended May 31, 2014

DELSON, QUEBEC--(Marketwired - June 27, 2014) - Goodfellow Inc. (TSE:GDL) announced today its financial results for the third quarter ended May 31, 2014. The Company reported net earnings of $2.1 million or $0.25 per share compared to net earnings of $2.5 million or $0.29 per share a year ago. Consolidated sales for the third quarter were $134.0 million compared to $138.2 million last year. Sales in the US and export activities maintained their growth throughout the third quarter while sales in Canada declined due to the late spring, the provincial election in Quebec and decreasing housing starts in Eastern Canada. Ontario and Western Canada sales posted a stronger performance again to mitigate this decline. On the operating side, costs remained under control in the face of a challenging third quarter. As a result, direct, selling, and administrative expenses decreased slightly compared to last year at $21.2 million ($21.5 million last year).

For the nine months ended May 31, 2014, the Company generated net earnings of $3.0 million or $0.35 per share compared to net earnings of $2.3 million or $0.27 per share a year ago. Consolidated sales for the nine months of fiscal 2014 were $339.8 million compared to $345.7 million for the same period a year ago.

"The most difficult winter at most of our customers carried through into Q3 and results were far from expectations." said Richard Goodfellow, President and Chief Executive Officer. "There have been strong signs of confidence in most of the business community and some recovery since. All sectors and product groups were sluggish overall as retail and manufacturing were particularly hard hit in most areas. We do not hold out any unusual expectations for the 4th Quarter but clearly our year to August 31st will be determined by the results to come."

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.
Consolidated Statements of Comprehensive Income
(in thousands of dollars, except per share amounts)
Unaudited
Nine months ended May 31 Three months ended May 31
2014 2013 2014 2013
$ $ $ $
Sales 339,756 345,671 134,035 138,195
Expenses
Cost of goods sold 275,045 281,242 109,310 112,687
Selling, administrative and general expenses 59,104 59,818 21,231 21,454
Net financial costs 1,428 1,363 567 554
335,577 342,423 131,108 134,695
Earnings before income taxes 4,179 3,248 2,927 3,500
Income taxes 1,212 942 849 1,015
Net earnings, being comprehensive income 2,967 2,306 2,078 2,485
Earnings per share
Basic and diluted 0.35 0.27 0.25 0.29
GOODFELLOW INC.
Consolidated Statements of Financial Position
(in thousands of dollars)
Unaudited
May 31
2014
May 31
2013
(Restated)
August 31
2013
(Restated)
$ $ $
Assets
Current Assets
Cash and cash equivalents 394 278 197
Trade and other receivables 86,380 95,491 72,838
Income taxes receivable - - -
Inventories 102,153 91,054 74,255
Prepaid expenses 5,014 5,774 3,433
Total Current Assets 193,941 192,597 150,723
Non-Current Assets
Property, plant and equipment 37,807 35,823 35,422
Defined benefit plan asset 1,531 - 1,041
Deferred tax asset - 167 -
Total Non-Current Assets 39,338 35,990 36,463
233,279 228,587 187,186
Liabilities
Current liabilities
Bank indebtedness 76,326 75,997 34,169
Trade and other payables 32,522 31,638 29,457
Income taxes payable 359 292 742
Current portion of long term debt 216 - 38
Total Current Liabilities 109,423 107,927 64,406
Non-Current Liabilities
Provisions 1,502 1,441 1,471
Long Term Debt 769 150 112
Deferred income taxes 2,393 - 2,393
Defined benefit plan obligation 788 9,377 1,666
Total Non-Current Liabilities 5,452 10,968 5,642
114,875 118,895 70,048
Shareholders' equity
Share capital 9,152 9,152 9,152
Retained earnings 109,252 100,540 107,986
118,404 109,692 117,138
233,279 228,587 187,186
GOODFELLOW INC.
Consolidated Statements of Cash Flows
(in thousands of dollars)
Unaudited
Nine months ended May 31 Three months ended May 31
2014 2013 2014 2013
$ $ $ $
Cash Flows Used in Operating Activities
Net Earnings 2,967 2,306 2,078 2,485
Adjustments for :
Depreciation 2,042 2,049 765 701
Accretion expense on environmental provision 31 (1 ) 11 (16 )
Gain on disposal of fixed assets (5 ) - - -
Income tax expense 1,212 942 849 1,015
Interest expense 842 775 398 364
Funding in excess of pension plan expense (1,367 ) (1,177 ) (362 ) (308 )
5,722 4,894 3,739 4,241
Changes in non-cash working capital items (39,853 ) (39,403 ) (34,442 ) (34,343 )
Interest paid (945 ) (822 ) (417 ) (362 )
Income taxes paid (1,596 ) (671 ) (453 ) (211 )
(42,394 ) (40,896 ) (35,312 ) (34,916 )
Cash Flows From (Used In) Financing Activities
(Decrease) Increase in bank loans (3,800 ) 1,000 (9,800 ) (7,000 )
Increase in banker's acceptances 42,000 33,000 40,000 37,000
Long term debt 835 150 (74 ) -
Redemption of shares - (14 ) - -
Dividends paid (1,701 ) (1,275 ) - -
37,334 32,861 30,126 30,000
Cash Flows Used In Investing Activities
Acquisition of property, plant and equipment (4,431 ) (2,128 ) (477 ) (271 )
Proceeds on disposal of capital assets 10 - - -
(4,421 ) (2,128 ) (477 ) (271 )
Net cash outflow (3,759 ) (5,269 ) (1,924 ) (946 )
Cash position, beginning of year (4,972 ) (8,450 ) (6,807 ) (12,773 )
Cash position, end of year (8,731 ) (13,719 ) (8,731 ) (13,719 )
Cash position is comprised of :
Cash and cash equivalents 394 278 394 278
Bank overdraft (9,125 ) (13,997 ) (9,125 ) (13,997 )
(8,731 ) (13,719 ) (8,731 ) (13,719 )
GOODFELLOW INC.
Consolidated Statements of Change in Shareholders' Equity
For The Nine Months Ended May 31, 2014 and 2013
(in thousands of dollar)
Unaudited
Share Capital Retained Earnings
Total
$ $ $
Balance as at August 31, 2012 9,154 99,521 108,675
Net earnings - 2,306 2,306
Transactions with owners, recorded directly in shareholders' equity
Dividends - (1,275 ) (1,275 )
Redemption of Shares (2 ) (12 ) (14 )
Balance as at May 31, 2013 9,152 100,540 109,692
Balance as at August 31, 2013 9,152 107,986 117,138
Net earnings - 2,967 2,967
Transactions with owners, recorded directly in shareholders' equity
Dividends - (1,701 ) (1,701 )
Balance as at May 31, 2014 9,152 109,252 118,404

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