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Press release from Marketwire

Goodfellow Reports its Results for the Third Quarter Ended May 31, 2013

Wednesday, June 26, 2013

Goodfellow Reports its Results for the Third Quarter Ended May 31, 2013

12:25 EDT Wednesday, June 26, 2013

DELSON, QUEBEC--(Marketwired - June 26, 2013) - Goodfellow Inc. (TSX:GDL) announced today its financial results for the third quarter ended May 31, 2013. The Company recorded a net income of $2.5 million or $0.29 per share compared to $1.6 million or $0.19 per share during the corresponding period a year ago. Consolidated sales for the three months ended May 31, 2013 were $138.2 million compared to $141.2 million last year. Sales during the third quarter declined due to a late spring weather wise and a progressive slowdown in new housing starts during the latter part of the third quarter. The Canadian housing market conditions were sluggish with new housing starts decreasing 18% to 185,800 units on average (Source: CMHC) for the three months ended May 31, 2013 compared to 227,500 units during the third quarter a year ago. The sales decrease was mitigated by the increased demand for our value-added product lines and the introduction of new product lines compared to last year. The increased demand for value-added products helped improve our gross margins closing at 18.5% compared to 17.1% for the corresponding period a year ago. Cash flow from operations (excluding non-cash working capital income tax and interest paid) for the third quarter of Fiscal 2013 closed at $4.2 million from $3.0 million for the same period last year.

On a year-to-date basis, the Company recorded a net income of $2.3 million or $0.27 per share compared to net income of $1.8 million or $0.22 per share a year ago. Consolidated sales for the nine months ended May 31, 2013 were $345.7 million compared to $348.4 million in the corresponding period. Cash flow from operations (excluding non-cash working capital income tax and interest paid) for the first nine months of Fiscal 2013 increased to $4.9 million from $4.3 million for the same period last year.

"There is no doubt that there is a slowdown in the Canadian economy with housing starts being weak or non-existent in many areas." said Richard Goodfellow, President and Chief Executive Officer. "We expect the 4th Quarter to be more of the same - tough going into the headwinds of a slowing economy - but the 4th Quarter has always produced close to or over half of the year's results and we are postured to push very hard to meet this standard."

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 Nine Months
ended May 31 ended May 31
2013 2012 2013 2012
$ $ $ $
Sales 138,195 141,242 345,671 348,403
Expenses
Cost of goods sold 112,687 117,149 281,242 286,814
Selling, administrative and general expenses 21,454 21,350 59,818 57,791
Financial costs 554 450 1,363 1,135
134,695 138,949 342,423 345,740
Earnings before income taxes 3,500 2,293 3,248 2,663
Income taxes 1,015 711 942 826
Net earnings, being comprehensive income 2,485 1,582 2,306 1,837
Earnings per share
Basic and diluted 0.29 0.19 0.27 0.22
GOODFELLOW INC.
Condensed Interim Consolidated Statements of Financial Position
(in thousands of dollars)
(unaudited)
May 31 May 31 Aug 31
2013 2012 2012
$ $ $
Assets
Current Assets
Cash and cash equivalents 278 249 707
Trade and other receivables 95,491 89,915 83,083
Income taxes recoverable - 1,336 -
Inventories 91,054 86,465 63,736
Prepaid expenses 5,773 2,470 3,474
Total Current Assets 192,596 180,435 151,000
Non Current Assets
Property, plant and equipment 35,823 35,691 35,743
Defined benefit plan asset 666 - -
229,085 216,126 186,743
Liabilities
Current liabilities
Bank indebtedness 75,997 65,619 37,157
Trade and other payables 31,638 31,342 29,060
Income taxes payable 292 - 22
Total Current Liabilities 107,927 96,961 66,239
Non-Current Liabilities
Provisions 1,441 1,529 1,442
Long term debt 150 - -
Deferred income taxes 2,514 2,195 2,514
Defined benefit plan obligation - 909 512
Total Non-Current Liabilities 4,105 4,633 4,468
112,032 101,594 70,707
Shareholders' equity
Share capital 9,152 9,176 9,154
Retained earnings 107,901 105,356 106,882
117,053 114,532 116,036
229,085 216,126 186,743
GOODFELLOW INC.
Condensed Consolidated Statements of Cash Flows
(in thousands of dollars)
(unaudited)
Three Months Nine Months
ended May 31 ended May 31
2013 2012 2013 2012
$ $ $ $
Cash Flows Used From Operating Activities
Net Earnings 2,485 1,582 2,306 1,837
Adjustments for :
Depreciation 701 719 2,049 2,136
Accretion expense on Provisions (16 ) 11 (1 ) 26
Income tax expenses 1,015 711 942 826
Interest expenses 364 271 775 614
Funding in excess of pension plan of expenses (308 ) (330 ) (1,177 ) (1,139 )
4,241 2,964 4,894 4,300
Changes in non-cash working capital items (34,343 ) (37,718 ) (39,403 ) (40,220 )
Interest paid (362 ) (186 ) (822 ) (678 )
Income taxes paid (211 ) 2,887 (671 ) 1,546
(34,916 ) (35,017 ) (40,896 ) (39,352 )
Cash Flows Used By Financing Activities
(Decrease) Increase in bank loan (7,000 ) 4,000 1,000 -
Increase in banker's acceptances 37,000 24,000 33,000 33,000
Long term debt - - 150 -
Redemption of shares - (319 ) (14 ) (352 )
Dividends paid - - (1,275 ) (857 )
30,000 27,681 32,861 31,791
Cash Flows Used By Investing Activities
Acquisition of property, plant and equipment (271 ) (230 ) (2,128 ) (702 )
(271 ) (230 ) (2,128 ) (702 )
Net cash (outflow) inflow (946 ) (4,602 ) (5,269 ) (3,963 )
Cash position, beginning of period (12,773 ) (8,768 ) (8,450 ) (9,407 )
Cash position, end of period (13,719 ) (13,370 ) (13,719 ) (13,370 )
Cash position is comprised of :
Cash and cash equivalents 278 249 278 249
Bank overdraft (13,997 ) (13,619 ) (13,997 ) (13,619 )
(13,719 ) (13,370 ) (13,719 ) (13,370 )
GOODFELLOW INC.
Condensed Consolidated Statements of Change in Shareholder's Equity
(in thousands of dollars)
(unaudited)
Share Retained
Capital Earnings Total
$ $ $
Balance as at August 31, 2012 9,154 106,882 116,036
Net earnings - 2,306 2,306
Transactions with owners, recorded directly in equity
Dividends - (1,275 ) (1,275)
Share repurchased (2 ) (12 ) (14)
Balance as at May 31, 2013 9,152 107,901 117,053
Share Retained
Capital Earnings Total
$ $ $
Balance as at August 31, 2011 9,222 104,682 113,904
Net earnings - 1,837 1,837
Transactions with owners, recorded directly in equity
Dividends - (857 ) (857)
Share repurchased (46 ) (306 ) (352)
Balance as at May 31, 2012 9,176 105,356 114,532

FOR FURTHER INFORMATION PLEASE CONTACT:

Contact Information:
Goodfellow Inc.
Richard Goodfellow
President and CEO
(450) 635-6511
(450) 635-3730 (FAX)
info@goodfellowinc.com

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