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Press release from Marketwire

Goodfellow Reports Improved Results for the Third Quarter Ended May 31, 2010

Friday, June 25, 2010

Goodfellow Reports Improved Results for the Third Quarter Ended May 31, 201015:24 EDT Friday, June 25, 2010DELSON, QUEBEC--(Marketwire - June 25, 2010) - Goodfellow Inc. (TSX:GDL) today reported its financial results for the third quarter ended May 31, 2010. Net income from operations was $3.8 million or $0.45 per share compared to a net income of $2.1 million or $0.24 per share a year ago. Consolidated sales for the third quarter of fiscal 2010 were $140.0 million compared to $110.2 million for the same period a year ago. Cash flow from operations (excluding non-cash working capital) for the third quarter of fiscal 2010 increased to $3.2 million from $2.5 million for the same period last year. Sales in Canada grew 26% due to strong performances in all regional areas of our business and diversification of our product offering in Ontario and Western Canada. Sales in the US increased 33% due to market conditions improving throughout the spring season. Export sales increased 67% compared to last year due mainly to a strong performance in the UK and increasing sales to China and the Middle East. General expenses, selling and administrative costs for the third quarter ended May 31, 2010 increased from $17.1 million last year to $21.0 million. The increase reflects higher staffing and overhead costs to respond to the growth generated in the 3rd quarter. Selling and administrative costs reflects increased commission and profit sharing provisions, temporary staffing for the spring and summer season and higher energy costs linked with the increased production output. On the other hand, Bad debt provisions were 55% lower than last year when customer's credit limits were being reduced. "The quarter, although not a record one, put us back on track to restore our yearly sales numbers to pre-recession levels." said Richard Goodfellow, President and Chief Executive Officer. "The contribution from our Ontario group was improved and all efforts are now focused on our key fourth quarter".For the 9 months ended May 31, 2010, Consolidated Sales reached $357.1 million compared to $312.6 million for the same period last year. Net results from operations for the 9 months ended May 31, 2010 was $7.8 million or $0.91 per share compared to $2.3 million or $0.27 per share. Including the extraordinary gain of $3.2 million or $0.37 per share related to the revaluation at fair value, net income for the 9 months of fiscal 2009 reached $5.5 million or $0.64 per share.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 earnings (in thousands of dollars, except per share amounts) (unaudited) -------------------------------------------------------------------------- Three Months ended Nine Months ended May 31 May 31 2010 2009 2010 2009 -------------------------------------------------------------------------- $ $ $ $ Sales 140,014 110,177 357,092 312,612 -------------------------------------------------------------------------- Expenses Cost of goods sold, selling, administrative and general expenses 133,625 106,654 343,392 306,857 Amortization 380 387 1,106 1,040 Financial 324 252 816 913 Foreign currency loss 141 (184) 447 355 -------------------------------------------------------------------------- 134,470 107,109 345,761 309,165 -------------------------------------------------------------------------- Earnings before income taxes and extraordinary item 5,544 3,068 11,331 3,447 Income taxes 1,748 993 3,573 1,115 -------------------------------------------------------------------------- Net earnings before extraordinary item 3,796 2,075 7,758 2,332 -------------------------------------------------------------------------- Extraordinary gain, net of income taxes of $1,143 - - - 3,191 -------------------------------------------------------------------------- Net earnings 3,796 2,075 7,758 5,523 -------------------------------------------------------------------------- Earnings per share -------------------------------------------------------------------------- Net earnings before extraordinary item 0.45 0.24 0.91 0.27 Extraordinary item - - - 0.37 -------------------------------------------------------------------------- Basic and diluted 0.45 0.24 0.91 0.64 -------------------------------------------------------------------------- GOODFELLOW INC. Consolidated statements of retained earnings (in thousands of dollars) (unaudited) ------------------------------------------------------- Nine Months ended May 31 2010 2009 $ $ Balance, beginning of year 101,932 94,559 Net earnings 7,758 5,523 ------------------------------------------------------- 109,690 100,082 Dividends (5,143) (2,144) Redemption of shares - (33) ------------------------------------------------------- Balance, end of year 104,547 97,905 ------------------------------------------------------- Consolidated statements of comprehensive income (in thousands of dollars) (unaudited) -------------------------------------------------------------------------- -------------------------------------------------------------------------- Three Months Nine Months ended May 31 ended May 31 2010 2009 2010 2009 -------------------------------------------------------------------------- $ $ $ $ Net Income 3,796 2,075 7,758 5,523 Other comprehensive income Foreign currency translation adjustment - - - 303 -------------------------------------------------------------------------- Total other comprehensive income - - - 303 -------------------------------------------------------------------------- Comprehensive income 3,796 2,075 7,758 5,826 -------------------------------------------------------------------------- GOODFELLOW INC. Consolidated balance sheets (in thousands of dollars) (unaudited) ----------------------------------------------------------------- May 31 May 31 August 31 ----------------------------------------------------------------- 2010 2009 2009 $ $ $ Assets Current assets Cash 302 433 580 Accounts receivable 81,186 66,553 65,330 Income taxes recoverable - 1,309 - Inventories 80,038 59,806 46,163 Prepaid expenses 3,298 2,931 1,768 ----------------------------------------------------------------- 164,824 131,032 113,841 Capital assets 30,489 30,345 30,369 Deferred pension asset 6,185 4,500 4,701 ----------------------------------------------------------------- 201,498 165,877 148,911 ----------------------------------------------------------------- Liabilities Current liabilities Bank indebtedness 47,214 28,185 5,427 Accounts payable and accrued liabilities 36,823 27,875 29,417 Income taxes payable 1,018 - 239 ----------------------------------------------------------------- 85,055 56,060 35,083 Future income taxes 2,674 2,690 2,674 ----------------------------------------------------------------- 87,729 58,750 37,757 ----------------------------------------------------------------- Shareholders' equity Capital stock 9,222 9,222 9,222 Retained earnings 104,547 97,905 101,932 Accumulated other comprehensive income - - - ----------------------------------------------------------------- 113,769 107,127 111,154 ----------------------------------------------------------------- 201,498 165,877 148,911 ----------------------------------------------------------------- GOODFELLOW INC. Consolidate statements of cash flows (in thousands of dollars) (unaudited) -------------------------------------------------------------------------- Three Months ended Nine Months ended May May 31 31 -------------------------------------------------------------------------- 2010 2009 2010 2009 -------------------------------------------------------------------------- $ $ $ $ Cash flows from operating activities Net earnings 3,796 2,075 7,758 5,523 Adjustments for : Extraordinary item - - - (4,334) Amortization 380 386 1,106 1,040 Amortization included in cost of good sold 265 268 775 694 Gain on disposal of capital assets - - 6 36 Future Income Taxes - - - 1,192 Impact of foreign exchange on cash - - - 303 Shortage of expense over pension plan funding (1,247) (199) (1,484) (671) -------------------------------------------------------------------------- 3,194 2,531 8,161 3,783 -------------------------------------------------------------------------- Changes in non-cash working capital items (23,438) (6,741) (43,076) (6,364) -------------------------------------------------------------------------- (20,244) (4,210) (34,915) (2,581) -------------------------------------------------------------------------- Cash flows used by financing activities (Decrease) increase in bank loan 1,000 (5,542) 10,000 (8,911) Increase in banker's acceptances 15,000 13,000 25,000 15,000 Redemption of common shares - (3) - (33) Dividends (2,571) - (5,143) (2,144) -------------------------------------------------------------------------- 13,429 7,455 29,857 3,912 -------------------------------------------------------------------------- Cash flows used by investing activities Acquisition of capital assets (577) (318) (2,028) (2,096) Proceeds on disposal of capital assets - - 21 181 -------------------------------------------------------------------------- (577) (318) (2,007) (1,915) -------------------------------------------------------------------------- Net cash (outflow) inflow (7,392) 2,927 (7,065) (584) (Bank overdraft), beginning of year (4,520) (6,405) (4,847) (2,894) -------------------------------------------------------------------------- Bank overdraft, end of year (11,912) (3,478) (11,912) (3,478) -------------------------------------------------------------------------- Bank overdraft is comprised of : Cash 302 433 302 433 Bank overdraft (12,214) (3,911) (12,214) (3,911) -------------------------------------------------------------------------- (11,912) (3,478) (11,912) (3,478) FOR FURTHER INFORMATION PLEASE CONTACT: Goodfellow Inc. Richard Goodfellow President and CEO 450-635-6511 450-635-3730 (FAX) info@goodfellowinc.com