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Press release from Marketwire

CORRECTION FROM SOURCE/Goodfellow Reports Its Results for the First Quarter Ended November 30, 2010

Monday, December 20, 2010

CORRECTION FROM SOURCE/Goodfellow Reports Its Results for the First Quarter Ended November 30, 201015:29 EST Monday, December 20, 2010DELSON, QUEBEC--(Marketwire - Dec. 20, 2010) -A correction from source is being issued with respect to the release sent out earlier today December 20 at 12:24 PM ET. In the title it should read "Goodfellow Reports Its Results for the First Quarter Ended November 30, 2010" instead of "Goodfellow Reports Improved Results for the First Quarter Ended November 30, 2010".Goodfellow Inc. (TSX:GDL) today reported its financial results for the first quarter ended November 30, 2010. Net income from operations was $1.0 million or $0.11 per share compared to a net income of $2.0 million or $0.24 per share a year ago. Consolidated sales for the first quarter of fiscal 2011 were $109.4 million compared to $109.2 million for the same period a year ago. Cash flow from operations (excluding non-cash working capital) for the first quarter of fiscal 2011 decreased to $1.4 million from $2.5 million for the same period last year. Sales in Canada remained stable compared to last year despite the absence of the Home Renovation Tax Credit. Nevertheless, our industrial and manufacturing sales group posted a strong performance while flooring sales in the retail industry slowed down throughout the fall. Sales in the US increased 7% due to some recovery in the Northeast US retail lumber market. Export sales increased 10% compared to last year due mainly to strong flooring sales in the UK and increasing sales to China and the Middle East. General expenses, selling and administrative costs for the first quarter ended November 30, 2010 increased from $17.4 million last year to $19.2 million. The increase reflects labour and energy costs to respond to the growth in industrial and value added production across our plants in the first quarter, an increase in warehousing lease costs and logistics requirements to reduce our inventory levels throughout the quarter. On the other hand, selling costs remained level with last year due to reduced commissions and lower bad debt provisions. Administrative costs increased 6% due to salary increase and training activities."It is clear our results reflect the tightening retail market across Canada along with the absence of the Home Renovation Tax Credit." said Richard Goodfellow, President and Chief Executive Officer. "All efforts are being made to adjust our cost base to the new reality.".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 Nov 3020102009$$Sales109,378109,246ExpensesCost of goods sold, selling, administrative and general expenses107,056105,550Amortization366356Financial371231Foreign currency loss198147107,991106,284Earnings Before Income Taxes1,3872,962Income Taxes430934Net Earnings9572,028Earnings per shareBasic and Diluted0.110.24GOODFELLOW INC.Consolidated Statements of Retained Earnings(in thousands of dollars)(unaudited)Three Months ended Nov 3020102009$$Balance, beginning of year106,881101,932Net earnings9572,028107,838103,960Dividends(2,572)(2,572)Balance, end of year105,266101,388Consolidated Statements of Comprehensive Income(in thousands of dollars)(unaudited)Three Months ended Nov 3020102009$$Net Income9572,028Other comprehensive incomeForeign currency translation adjustment--Total other comprehensive income--Comprehensive Income9572,028GOODFELLOW INC.Consolidated Balance Sheets(in thousands of dollars)(unaudited)Nov 30Nov 30Aug 31201020092010$$$AssetsCurrent AssetsCash562924548Accounts receivable58,41856,54881,184Income tax receivable486--Inventories71,81965,63563,367Prepaid expenses2,1712,8511,647133,456125,958146,746Capital assets30,87530,74230,538Deferred pension asset6,6534,8126,520170,984161,512183,804LiabilitiesCurrent liabilitiesBank indebtedness24,05816,74127,132Accounts payable and accrued liabilities29,41631,29535,964Income taxes payable-1921,58453,47448,22864,680Future income taxes3,0222,6743,02256,49650,90267,702Shareholders' EquityCapital stock9,2229,2229,222Retained earnings105,266101,388106,880114,488110,610116,102170,984161,512183,804GOODFELLOW INC.Consolidate Statements of Cash Flows(in thousands of dollars)(unaudited)Three Months ended Nov 3020102009$$Cash Flows From Operating ActivitiesNet earnings9572,028Adjustments for :Amortization366356Amortization included in cost of good sold238252Gain on disposal of capital assets-(8)Shortage of expense over pension plan Funding(133)(111)1,4282,517Changes in non-cash working capital items5,174(9,941)6,602(7,424)Cash Flows Used By Financing Activities(Decrease) increase in bank loan(13,000)5,000Increase in banker's acceptances10,0005,000Dividends(2,572)(2,572)(5 572)7,428Cash Flows Used By Investing ActivitiesAcquisition of capital assets(942)(983)Proceeds on disposal of capital assets-9(942)(974)Net cash (outflow) inflow88(970)(Bank overdraft), beginning of year(26,584)(4,847)Bank Overdraft, end of period(26,496)(5,817)Bank overdraft is comprised of :Cash562924Bank overdraft(27,058)(6,741)(26,496)(5,817)FOR FURTHER INFORMATION PLEASE CONTACT: Richard GoodfellowGoodfellow Inc.President and CEO450-635-6511450-635-3730 (FAX)info@goodfellowinc.com