Goodfellow Reports its Results for the Second Quarter Ended February 28, 2014

Goodfellow Reports its Results for the Second Quarter Ended February 28, 2014
  
 

DELSON, QUEBEC--(Marketwired - Mar 25, 2014) - Goodfellow Inc. (TSX:GDL) announced today its financial results for the second quarter ended February 28, 2014. The Company reported a net loss of $0.3 million or $0.04 per share compared to a net loss of $0.9 million or $0.11 per share a year ago. Consolidated sales for the second quarter were $95.4 million (same as last year). Sales in the US and export activities continued to be strong throughout the second quarter while sales in Canada declined impacted by the slower economy in Quebec and decreasing housing starts in Eastern Canada. Ontario and Western Canada sales posted a strong performance to mitigate this decline. On the operating side, costs remained under control in the face of challenging winter conditions. As a result, direct, selling, and administrative expenses remained level with last year at $18.7 million. The Company renewed its loan agreement increasing its loan facility to $90 million and finalized its acquisition of its Drummondville plant for a total consideration of $3.4 million.

For the six months ended February 28, 2014, the Company generated net earnings of $0.9 million or $0.10 per share compared to net loss of $0.2 million or ($0.02) per share a year ago. Consolidated sales for the six months of fiscal 2014 were $205.7 million compared to $207.5 million for the same period a year ago.

"As usual the winter quarter poses a major challenge for the Company but the first half results are markedly better than last year. Combining this with the weaker Canadian dollar for US sourcing and Quebec's weak economy, the results were predictable." said Richard Goodfellow, President and Chief Executive Officer. "Our US export business and our hardwood and softwood core lumber businesses remained however very solid accounting for the improvement in the results. We are well postured now to face the expected spring demand."

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
		Six months ended February 28			Three months ended February 28
		2014	2013		2014		2013
		$	$		$		$
Sales		205,721	207,476		95,355		95,429
Expenses
	Cost of goods sold	165,735	168,555		76,631		77,655
	Selling, administrative and general expenses	37,873	38,364		18,696		18,700
	Net financial costs	861	809		418		367
		204,469	207,728		95,745		96,722
Earnings before income taxes		1,252	(252	)	(390	)	(1,293	)
Income taxes		363	(73	)	(113	)	(375	)
Net earnings, being comprehensive income		889	(179	)	(277	)	(918	)
Earnings per share
	Basic and diluted	0.10	(0.02	)	(0.04	)	(0.11	)

GOODFELLOW INC. Consolidated Statements of Financial Position (in thousands of dollars) Unaudited
		February 28 2014	February 28 2013 (Restated)	August 31 2013 (Restated)
		$	$	$
Assets
Current Assets
	Cash and cash equivalents	234	572	197
	Trade and other receivables	56,651	58,838	72,838
	Income taxes receivable	37	511	-
	Inventories	95,447	85,868	74,255
	Prepaid expenses	3,189	3,670	3,433
Total Current Assets		155,558	149,459	150,723
Non-Current Assets
	Property, plant and equipment	38,095	36,253	35,422
	Defined benefit plan asset (Note 3)	1,374	-	1,041
	Deferred tax asset (Note 3)	-	167	-
Total Non-Current Assets		39,469	36,420	36,463
		195,027	185,879	187,186
Liabilities
Current liabilities
	Bank indebtedness	44,041	45,345	34,169
	Trade and other payables	28,725	22,036	29,457
	Income taxes payable	-	-	742
	Current portion of long term debt	219	-	38
Total Current Liabilities		72,985	67,381	64,406
Non-Current Liabilities
	Provisions	1,490	1,457	1,471
	Long Term Debt	840	150	112
	Deferred income taxes (Note 3)	2,393	-	2,393
	Defined benefit plan obligation (Note 3)	993	9,685	1,666
Total Non-Current Liabilities		5,716	11,292	5,642
		78,701	78,673	70,048
Shareholders' equity
	Share capital	9,152	9,152	9,152
	Retained earnings (Note 3)	107,174	98,054	107,986
		116,326	107,206	117,138
		195,027	185,879	187,186

GOODFELLOW INC. Consolidated Statements of Cash Flows (in thousands of dollars) Unaudited
			Six months ended February 28				Three months ended February 28
			2014		2013		2014		2013
			$		$		$		$
Cash Flows Used in Operating Activities
	Net Earnings		889		(179	)	(277	)	(918	)
	Adjustments for :
		Depreciation	1,277		1,348		644		687
		Accretion expense on environmental provision	20		15		12		8
		Gain on disposal of fixed assets	(5	)	-		-		-
		Income tax expense	363		(73	)	(113	)	(375	)
		Interest expense	444		411		230		197
		Funding in excess of pension plan expense	(1,005	)	(869	)	(453	)	(367	)
			1,983		653		43		(768	)
	Changes in non-cash working capital items		(5,411	)	(5,060	)	(10,031	)	(14,691	)
	Interest paid		(528	)	(460	)	(352	)	(267	)
	Income taxes paid		(1,143	)	(460	)	(463	)	(146	)
			(7,082	)	(5,980	)	(10,846	)	(15,104	)
Cash Flows From (Used In) Financing Activities
	Decrease in bank loans		6,000		8,000		14,000		14,000
	Increase in banker's acceptances		2,000		(4,000	)	1,000		(5,000	)
	Long term debt		909		150		909		150
	Redemption of shares		-		(14	)	-		-
	Dividends paid		(1,701	)	(1,275	)	-		-
			7,208		2,861		15,909		9,150
Cash Flows Used In Investing Activities
	Acquisition of property, plant and equipment		(3,954	)	(1,857	)	(3,594	)	(563	)
	Proceeds on disposal of capital assets		10		-		-		-
			(3,944	)	(1,857	)	(3,594	)	(563	)
Net cash inflow (outflow)			(1,835	)	(4,323	)	1,512		(7,285	)
Cash position, beginning of year			(4,972	)	(8,450	)	(8,319	)	(5,488	)
Cash position, end of year			(6,807	)	(12,773	)	(6,807	)	(12,773	)
Cash position is comprised of :
	Cash and cash equivalents		234		572		234		572
	Bank overdraft		(7,041	)	(13,345	)	(7,041	)	(13,345	)
			(6,807	)	(12,773	)	(6,807	)	(12,773	)

GOODFELLOW INC. Consolidated Statements of Change in Shareholders' Equity For The Six Months Ended February 28, 2014 and 2013 (in thousands of dollar) Unaudited
		Share Capital		Retained Earnings		Total
		$		$		$
Balance as at August 31, 2012		9,154		99,520		108,674
Net earnings		-		(179	)	(179	)
Transactions with owners, recorded directly in shareholders' equity
	Dividends	-		(1,275	)	(1,275	)
	Redemption of Shares	(2	)	(12	)	(14	)
Balance as at February 28, 2013		9,152		98,054		107,206

Balance as at August 31, 2013		9,152	107,986		117,138
Net earnings		-	889		889
Transactions with owners, recorded directly in shareholders' equity
	Dividends	-	(1,701	)	(1,701	)
Balance as at February 28, 2014		9,152	107,174		116,326

Goodfellow Inc.Richard GoodfellowPresident and CEOTel: 450 635-6511450 [e-mail]