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

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

DELSON, QUEBEC--(Marketwired - Jun 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

Goodfellow Inc.Richard GoodfellowPresident and CEO450 635-6511450 [e-mail]