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Press release from Marketwire

Goodfellow Reports its Results for the Third Quarter Ended May 31, 2012

Wednesday, June 27, 2012

Goodfellow Reports its Results for the Third Quarter Ended May 31, 201217:14 EDT Wednesday, June 27, 2012DELSON, QUEBEC--(Marketwire - June 27, 2012) - Goodfellow Inc. (TSX:GDL) announced today its financial results for the third quarter ended May 31, 2012. The Company recorded a net income of $1.6 million or $0.19 per share compared to a net income of $1.2 million or $0.15 per share a year ago. Consolidated sales for the three months ended May 31, 2012 were $141.2 million compared to $127.5 million in the previous year. Cash flow from operations (excluding non-cash working capital items) for the third quarter of Fiscal 2012 closed at $3.0 million from $2.6 million for the same period last year. The sales growth was due to strong demand for hardwood lumber, siding & composite decking products combined with increased shipments of treated wood products helped by the early start to the spring season compared to the third quarter last year. The Canadian housing market remained relatively active increasing 18.1% to 222,900 units on average (Source: CMHC) for the three months ended May 31, 2012 compared to 188,700 units in the third quarter a year ago. The sales increase also reflects our commitment to grow market share while keeping operational costs under control. As a result, operating costs during the third quarter decreased 1.2% compared to the third quarter last year. On a year-to-date basis, the Company generated net earnings of $1.8 million or $0.22 per share compared to net earnings of $0.5 million or $0.06 per share a year ago. Consolidated sales for the nine months ended May 31, 2012 were $348.4 million compared to $331.8 million in the previous year. Cash flow from operations (excluding non-cash working capital items) for the first nine months of Fiscal 2012 increased to $4.3 million from $3.0 million for the same period last year."Our results for the third quarter were a slight improvement over last year but far from expectations." said Richard Goodfellow, President and Chief Executive Officer. "We remain cautiously optimistic for the key fourth quarter with expectations for our warehouse sales being strong."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. Condensed Interim Consolidated Statements of Comprehensive Income (in thousands of dollars, except per share amounts) (unaudited)Three Months ended May 31Nine Months ended May 312012201120122011$$$$Sales141,242127,535348,403331,767ExpensesCost of goods sold117,149103,702286,814269,809Selling, administrative and general expenses21,35021,61757,79160,072Financial costs4504371,1351,158138,949125,756345,740331,039Earnings before income taxes2,2931,7792,663728Income taxes711551826225Net earnings, being comprehensive income1,5821,2281,837503Earnings per shareBasic0.190.150.220.06Diluted0.180.150.210.06GOODFELLOW INC. Condensed Interim Consolidated Statements of Financial Position (in thousands of dollars) (unaudited)May 31May 31Aug 31Sep 12012201120112010$$$$AssetsCurrent AssetsCash and cash equivalents249443210548Trade and other receivables89,91577,81271,28481,184Income taxes recoverable1,3363,4083,708-Inventories86,46582,42158,72263,367Prepaid expenses2,4702,9161,6991,647Total Current Assets180,435167,000135,623146,746Non Current AssetsProperty, plant and equipment35,69137,63937,12537,854216,126204,639172,748184,600LiabilitiesCurrent liabilitiesBank indebtedness65,61952,15828,61727,132Trade and other payables31,34234,11924,48634,597Income taxes payable---1,584Total Current Liabilities96,96186,27753,10363,313Non-Current LiabilitiesProvisions1,5291,4821,4981,400Deferred income taxes2,1952,2372,1952,234Defined benefit plan obligation9092,3822,0483,323Total Non-Current Liabilities4,6336,1015,7416,957101,59492,37858,84470,270Shareholders' equityShare capital9,1769,2229,2229,222Retained earnings105,356103,039104,682105,108114,532112,261113,904114,330216,126204,639172,748184,600GOODFELLOW INC. Condensed Consolidated Statements of Cash Flows (in thousands of dollars) (unaudited)Three Months ended May 31Nine Months ended May 312012201120122011$$$$Cash Flows Used From Operating ActivitiesNet Earnings1,5821,2281,837503Adjustments for :Depreciation7197912,1362,295Accretion expense on Provisions11272681Future income tax-3-3Gain/Loss on disposal of fixed assets-30-30Income tax expenses711551826225Interest expenses271324614797Funding in excess of pension plan of expenses(330)(313)(1,139)(940)2,9642,6414,3002,994Changes in non-cash working capital items(37,718)(19,068)(40,220)(17,409)Interest paid(186)(256)(678)(817)Income taxes paid2,887(1,374)1,546(5,216)(35,017)(20,698)(39,352)(23,442)Cash Flows Used By Financing ActivitiesIncrease (Decrease) in bank loan4,000(4,000)-(5,000)Increase in banker's acceptances24,00026,00033,00026,000Redemption of shares(319)-(352)-Dividends paid--(857)(2,572)27,68122,00031,79118,428Cash Flows Used By Investing ActivitiesAcquisition of property, plant and equipment(230)(367)(702)(2,111)(230)(367)(702)(2,111)Net cash (outflow) inflow(4,602)3,576(3,963)(4,131)Cash position, beginning of period(8,768)(11,291)(9,407)(3,584)Cash position, end of period(13,370)(7,715)(13,370)(7,715)Cash position is comprised of :Cash and cash equivalents249443249443Bank overdraft(13,619)(8,158)(13,619)(8,158)(13,370)(7,715)(13,370)(7,715)GOODFELLOW INC. Condensed Consolidated Statements of Change in Shareholder's Equity (in thousands of dollars, except per share amounts) (unaudited)Share CapitalRetained EarningsTotal$$$Balance as at September 1, 20119,222104,682113,904Net earnings-1,8371,837Transactions with owners, recorded directly in equityDividends-(857)(857)Share repurchased(46)(306)(352)Balance as at May 31, 20129,176105,356114,532Share CapitalRetained Earnings Total$$$Balance as at September 1, 20109,222105,108114,330Net earnings-503503Transactions with owners, recorded directly in equityDividends-(2,572)(2,572)Balance as at May 31, 20119,222103,039112,261FOR FURTHER INFORMATION PLEASE CONTACT: Richard GoodfellowGoodfellow Inc.President and CEO(450) 635-6511(450) 635-3730 (FAX)info@goodfellowinc.com