Goodfellow Inc.
TSX : GDL

Goodfellow Inc.

July 08, 2016 13:30 ET

Goodfellow Reports its Results for the Second Quarter Ended May 31, 2016 and Declares an Eligible Dividend

DELSON, QUEBEC--(Marketwired - July 8, 2016) - Goodfellow Inc. (TSX:GDL) announced today its financial results for the second quarter ended May 31, 2016. For the three months ended May 31, 2016, the Company reported net income of $3.4 million or $0.40 per share compared to $3.2 million or $0.38 per share a year ago. Consolidated sales for the three months ended May 31, 2016 were $166.7 million compared to $154.0 million last year. For the six months ended May 31, 2016, the Company reported a net income of $2.5 million or $0.29 per share compared to $2.9 million or $0.34 per share a year ago.

Consolidated sales for the six months ended May 31, 2016 were $275.3 million compared to $252.1 million last year. Sales in Canada during the first six months of fiscal 2016 increased 14% compared to the same period a year ago mainly due to a strong second quarter in Ontario and the Atlantic provinces. Sales in the United States for the first six months ended May 31, 2016 decreased 5% on a Canadian dollar basis compared to the same period last year due to reduced demand for lumber products. On a non-converted basis, US denominated sales decreased 14% compared to last year. Finally, Export sales decreased 26% during the first six months of fiscal 2016 compared to the same period a year ago mainly due to decreasing demand for value added products in the UK and Asia. On the operating side, Selling, Administrative and General Expenses increased 6.8% compared to the corresponding period last year due to increased variables costs for the added volume and the acquisition of Quality Hardwoods Ltd. As a result, direct, selling, and administrative expenses increased to $45.2 million ($42.4 million last year).

"We are happy with our sales growth during the second quarter as we continue to leverage our recent transactions." said Denis Fraser, President and Chief Executive Officer. "Nevertheless, our profitability remains less than expected mainly due to the implementation cost of our ERP system. Our results are expected to improve in the coming months as we continue to make progress with our efficiency."

The Board of directors of Goodfellow Inc. declared an eligible dividend of $0.15 per share payable August 12, 2016, to all shareholders of record as of July 29, 2016.

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
For the three months and six months ended May 31, 2016 and 2015
(in thousands of dollars, except per share amounts)
Unaudited
For the three months
ended
For the six months
ended
May 31
2016
May 31
2015
May 31
2016
May 31
2015
$ $ $ $
Sales 166,669 153,975 275,328 252,072
Expenses
Cost of goods sold 137,237 126,325 225,216 204,402
Selling, administrative and general expenses 23,927 22,362 45,230 42,351
Net financial costs 824 713 1,459 1,247
161,988 149,400 271,905 248,000
Earnings before income taxes 4,681 4,575 3,423 4,072
Income taxes 1,307 1,327 955 1,181
Net earnings 3,374 3,248 2,468 2,891
Net earnings per share - Basic and diluted 0.40 0.38 0.29 0.34
GOODFELLOW INC.
Consolidated Statements of Financial Position
(in thousands of dollars)
As at As at As at
May 31
2016
(Unaudited)
November 30
2015
(Audited)
May 31
2015
(Unaudited)
$ $ $
Assets
Current Assets
Cash 1,396 965 494
Trade and other receivables 121,800 65,670 98,708
Income taxes receivable 18 - -
Inventories 141,162 97,665 107,384
Prepaid expenses 4,820 4,156 2,852
Total Current Assets 269,196 168,456 209,438
Non-Current Assets
Property, plant and equipment 39,430 36,146 36,626
Intangible assets 3,629 2,667 -
Defined benefit plan asset 4,991 4,812 1,832
Investment in a joint venture 3,444 - -
Total Non-Current Assets 51,494 43,625 38,458
Total Assets 320,690 212,081 247,896
Liabilities
Current liabilities
Bank indebtedness 102,107 46,781 66,227
Trade and other payables 82,588 29,762 52,876
Income taxes payable - 1,595 679
Provision 1,111 1,112 941
Current portion of long-term debt 183 113 50
Total Current Liabilities 185,989 79,363 120,773
Non-Current Liabilities
Provision 503 477 499
Long-term debt 188 - 37
Deferred income taxes 4,718 4,141 2,535
Defined benefit plan obligation - - 1,675
Total Non-Current Liabilities 5,409 4,618 4,746
Total Liabilities 191,398 83,981 125,519
Shareholders' equity
Share capital 9,152 9,152 9,152
Retained earnings 120,140 118,948 113,225
129,292 128,100 122,377
Total Liabilities and Shareholders' Equity 320,690 212,081 247,896
GOODFELLOW INC.
Consolidated Statements of Cash Flows
For the three months and six months ended May 31, 2016 and 2015
(in thousands of dollars)
(Unaudited)
For the three months ended For the six months ended
May 31 May 31 May 31 May 31
2016 2015 2016 2015
$ $ $ $
Operating Activities
Net Earnings 3,374 3,248 2,468 2,891
Adjustments for :
Depreciation 838 746 1,636 1,477
Accretion expense on provision 13 3 26 (11 )
Income taxes 1,307 1,327 955 1,181
(Gain) Loss on disposal of property, plant and equipment - (21 ) - 16
Interest expense 529 463 963 807
Funding in (excess) deficit of pension plan expense (54 ) 56 (179 ) 113
6,007 5,822 5,869 6,474
Changes in non-cash working capital items (12,711 ) 4,134 (48,225 ) (25,771 )
Interest paid (508 ) (401 ) (1,164 ) (765 )
Income taxes paid (2,322 ) (284 ) (2,875 ) (1,499 )
(15,541 ) 3,449 (52,264 ) (28,035 )
Net Cash Flows from Operating Activities (9,534 ) 9,271 (46,395 ) (21,561 )
Financing Activities
Net increase (decrease) in bank loans 2,500 (6,000 ) 15,500 (1,500 )
Increase in banker's acceptances 2,500 2,000 30,500 22,000
Increase in long-term debt 560 - 1,050 -
Reimbursement of long-term debt (56 ) (847 ) (792 ) (833 )
Dividends paid (1,276 ) - (1,276 ) -
4,228 (4,847 ) 44,982 19,667
Investing Activities
Acquisition of property, plant and equipment (572 ) (611 ) (938 ) (1,117 )
Increase in intangible assets (622 ) - (1,305 ) -
Proceeds on disposal of property, plant and equipment - 3 - 17
Business acquisitions, net of cash acquired (587 ) - (4,795 ) -
Investment in a joint venture (444 ) - (444 ) -
(2,225 ) (608 ) (7,482 ) (1,100 )
Net cash (outflow) inflow (7,531 ) 3,816 (8,895 ) (2,994 )
Cash position, beginning of period (3,180 ) (10,549 ) (1,816 ) (3,739 )
Cash position, end of period (10,711 ) (6,733 ) (10,711 ) (6,733 )
Cash position is comprised of :
Cash and cash equivalents 1,396 494 1,396 494
Bank overdraft (12,107 ) (7,227 ) (12,107 ) (7,227 )
(10,711 ) (6,733 ) (10,711 ) (6,733 )
GOODFELLOW INC.
Consolidated Statements of Change in Shareholders' Equity
For the six months ended May 31, 2016 and 2015
(in thousands of dollars)
Share Retained
Capital Earnings Total
$ $ $
Balance as at November 30, 2014 (Audited) 9,152 110,334 119,486
Net earnings - 2,891 2,891
Total comprehensive income - 2,891 2,891
Balance as at May 31, 2015 (Unaudited) 9,152 113,225 122,377
Balance as at November 30, 2015 (Audited) 9,152 118,948 128,100
Net earnings - 2,468 2,468
Total comprehensive income - 2,468 2,468
Transactions with owners of the Company
Dividends - (1,276 ) (1,276 )
Balance as at May 31, 2016 (Unaudited) 9,152 120,140 129,292

Contact Information