Goodfellow Reports Its Results for the Third Quarter Ended August 31, 2015 and Declares an Eligible Dividend

DELSON, QUEBEC--(Marketwired - Oct. 13, 2015) - Goodfellow Inc. (TSX:GDL) announced today its financial results for the nine months ended August 31, 2015. The Company reported a net income of $6.6 million or $0.78 per share compared to $5.5 million or $0.64 per share a year ago. For the three months ended August 31, 2015, the Company reported net income of $3.7 million or $0.44 per share compared to $3.7 million or $0.43 per share a year ago. Consolidated sales for the nine months ended August 31, 2015 were $403.8 million compared to $375.7 million last year. Consolidated sales for the three months ended August 31, 2015 were $151.7 million compared to $146.3 million last year. Sales in Canada during the first nine months of fiscal 2015 increased 6% compared to the same period a year ago mainly due to increased market share in Western Canada and Atlantic provinces and increased Pressure Treated wood sales with retailer's customers group. Sales in the United States for the first nine months ended August 31, 2015 increased 18% on a Canadian dollar basis compared to the same period last year due to the increased foreign exchange conversion factor and increased demand for flooring and hardwood lumber product lines. On a non-converted basis, US denominated sales increased 3% compared to last year. Finally, Export sales increased 10% during the first nine months of fiscal 2015 compared to the same period a year ago mainly due to increasing demand for value added products in Asia and Europe mitigated by a decrease in the United Kingdom region. On the operating side, Selling, Administrative and General Expenses increased 7% compared to the corresponding period last year due to increased production output of value-added products, increased selling expenses related to the improved sales performance and increased administration expenses linked with the Saskatoon branch opening.

"We were successful with increased sales of treated wood and the introduction of new products. On the other hand a very soft construction market combined with low commodity prices caused us to fall short of our objectives. Sales slowed down significantly in August and this same situation continues in September." said Denis Fraser, President and Chief Executive Officer. "In this context, we are taking measures to contain cost and protect our profitability. Our order book for value added engineered products remains strong and we see some new strengths in the export market. These should support our results for the fourth quarter."

The Board of directors of Goodfellow Inc. declared an eligible dividend of $0.20 per share payable November 20, 2015, to all shareholders of record as of November 6, 2015.

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 nine months ended August 31, 2015 and 2014
(in thousands of dollars, except per share amounts)
(Unaudited)
		For the three months ended		For the nine months ended
		August 31 2015	August 31 2014	August 31 2015	August 31 2014
		$	$	$	$
Sales		151,749	146,289	403,821	375,679
Expenses
	Cost of goods sold	122,821	119,217	327,223	305,158
	Selling, administrative and general expenses	22,962	21,170	65,313	61,097
	Net financial costs	711	740	1,958	1,725
		146,494	141,127	394,494	367,980
Earnings before income taxes		5,255	5,162	9,327	7,699
Income taxes		1,524	1,497	2,705	2,233
Net earnings, being comprehensive income		3,731	3,665	6,622	5,466
Earnings per share
	Basic and diluted	0.44	0.43	0.78	0.64

GOODFELLOW INC.
Consolidated Statements of Financial Position
(in thousands of dollars)
		As at	As at	As at
		August 31	November 30	August 31
		2015	2014	2014
		(Unaudited)	(Audited)	(Unaudited)
		$	$	$
Assets
Current Assets
	Cash and cash equivalents	1,280	860	433
	Trade and other receivables	74,215	60,591	76,559
	Inventories	108,286	92,257	98,083
	Prepaid expenses	8,176	3,271	3,774
Total Current Assets		191,957	156,979	178,849
Non-Current Assets
	Property, plant and equipment	37,362	37,020	37,299
	Defined benefit plan asset	1,824	1,848	1,520
Total Non-Current Assets		39,186	38,868	38,819
Total Assets		231,143	195,847	217,668
Liabilities
Current liabilities
	Bank indebtedness	59,440	43,099	60,434
	Trade and other payables	39,225	25,779	29,782
	Income taxes payable	1,863	997	1,410
	Provision	938	979	-
	Current portion of long term debt	50	229	218
Total Current Liabilities		101,516	71,083	91,844
Non-Current Liabilities
	Provision	512	473	1,513
	Long term debt	25	692	716
	Deferred income taxes	2,535	2,535	2,393
	Defined benefit plan obligation	1,723	1,578	834
Total Non-Current Liabilities		4,795	5,278	5,456
Total Liabilities		106,311	76,361	97,300
Shareholders' equity
	Share capital	9,152	9,152	9,152
	Retained earnings	115,680	110,334	111,216
		124,832	119,486	120,368
Total Liabilities and Shareholders' Equity		231,143	195,847	217,668

GOODFELLOW INC.
Consolidated Statements of Cash Flows
For the three months and nine months ended August 31, 2015 and 2014
(in thousands of dollars)
(Unaudited)
			For the three months ended				For the nine months ended
			August 31		August 31		August 31		August 31
			2015		2014		2015		2014
			$		$		$		$
Operating Activities
	Net Earnings		3,731		3,665		6,622		5,466
	Adjustments for :
		Depreciation	758		777		2,235		2,186
		Accretion expense on environmental provision	10		12		(1	)	35
		Loss on disposal of property, plant and equipment	-		-		16		-
		Income tax expense	1,524		1,497		2,705		2,233
		Interest expense	424		499		1,231		1,126
		Funding in deficit (excess) of pension plan expense	57		56		170		(759	)
			6,504		6,506		12,978		10,287
	Changes in non-cash working capital items		4,814		12,350		(20,957	)	(32,123	)
	Interest paid		(623	)	(458	)	(1,388	)	(1,227	)
	Income taxes paid		(340	)	(445	)	(1,839	)	(1,361	)
			3,851		11,447		(24,184	)	(34,711	)
Net Cash Flows from Operating Activities			10,355		17,953		(11,206	)	(24,424	)
Financing Activities
	Increase (Decrease) in bank loans		7,000		(2,200	)	5,500		2,000
	(Decrease) Increase in banker's acceptances		(12,000	)	(9,000	)	10,000		32,000
	Long term debt		(12	)	(51	)	(845	)	784
	Dividends paid		(1,276	)	(1,701	)	(1,276	)	(1,701	)
			(6,288	)	(12,952	)	13,379		33,083
Investing Activities
	Acquisition of property, plant and equipment		(1,494	)	(270	)	(2,611	)	(4,341	)
	Proceeds on disposal of property, plant and equipment		-		-		17		-
			(1,494	)	(270	)	(2,594	)	(4,341	)
Net cash inflow (outflow)			2,573		4,731		(421	)	4,318
Cash position, beginning of period			(6,733	)	(8,732	)	(3,739	)	(8,319	)
Cash position, end of period			(4,160	)	(4,001	)	(4,160	)	(4,001	)
Cash position is comprised of :
	Cash and cash equivalents		1,280		433		1,280		433
	Bank overdraft		(5,440	)	(4,434	)	(5,440	)	(4,434	)
			(4,160	)	(4,001	)	(4,160	)	(4,001	)

GOODFELLOW INC.
Consolidated Statements of Change in Shareholders' Equity
For the nine months ended August 31, 2015 and 2014
(in thousands of dollars)
(Unaudited)
		Share Capital	Retained Earnings		Total
		$	$		$
Balance as at November 30, 2013		9,152	107,451		116,603
	Net earnings	-	5,466		5,466
	Dividends	-	(1,701	)	(1,701	)
Total Comprehensive income		9,152	111,216		120,368
Transactions with owners, recorded directly in shareholders' equity		-	-		-
Balance as at August 31, 2014		9,152	111,216		120,368
Balance as at November 30, 2014 (Audited)		9,152	110,334		119,486
	Net earnings	-	6,622		6,622
	Dividends	-	(1,276	)	(1,276	)
Total Comprehensive income		9,152	115,680		124,832
Transactions with owners, recorded directly in shareholders' equity		-	-		-
Balance as at August 31, 2015		9,152	115,680		124,832