Goodfellow Reports its Results for the Three Months Ended February 29, 2016

DELSON, QUEBEC--(Marketwired - Apr 8, 2016) - Goodfellow Inc. (TSX:GDL) announced today its financial results for the three months ended February 29, 2016. The Company reported a net loss of $(1.0) million or $(0.12) per share compared to $(0.4) million or $(0.04) per share a year ago. Consolidated sales for the three months ended February 29, 2016 were $108.7 million compared to $98.1 million last year. Sales in Canada during the first quarter of fiscal 2016 increased 22% compared to the same period a year ago mainly due to increased volume of Pressure Treated Wood sales, the acquisition of Quality Hardwoods and the introduction of new product lines. Although sales in the export market and the USA were short of expectation, we are optimistic with our ability to recapture lost volume in the coming months. On the operating side, Selling, Direct and Administrative costs increased 6.7% due to non-recurring added resources and expenses relating to our new ERP implementation and increased variables costs due to the added volumes and the acquisition of Quality Hardwood on December 30, 2015. As a result, direct, selling, and administrative expenses increased to $21.3 million ($20.0 million last year).

"Investing in our future - best summarizes the results of our first Quarter. We are pleased with our sales growth; our initiatives are delivering the expected results" said Denis Fraser, President and Chief Executive Officer. "Nevertheless, the resources invested in the deployment of the new ERP System, the start-up of the Joint Venture and the acquisition of Quality Hardwood impacted on results negatively. We remain confident to deliver the full value of these initiatives."

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

For the three months ended February 29, 2016 and February 28, 2015

(in thousands of dollars, except per share amounts)

Unaudited

For the three months ended

February 29
2016 February 28
2015

$ $

Sales 108,659 98,097

Expenses

Cost of goods sold 88,184 78,077

Selling, administrative and general expenses 21,303 19,989

Net financial costs 635 534

110,122 98,600

Earnings before income taxes (1,463 ) (503 )

Income taxes (411 ) (146 )

Net earnings (1,052 ) (357 )

Items that will not subsequently be reclassified to net earnings

Foreign currency translation adjustment 146 -

Total comprehensive income (906 ) (357 )

Net earnings per share - Basic and diluted (0.12 ) (0.04 )

GOODFELLOW INC.

Consolidated Statements of Financial Position

(in thousands of dollars)

As at As at As at

February 29 November 30 February 28

2016
(Unaudited) 2015
(Audited) 2015
(Unaudited)

$ $ $

Assets

Current Assets

Cash 1,983 965 782

Trade and other receivables 86,494 65,670 65,829

Income taxes receivable - - 364

Inventories 131,676 97,665 119,714

Prepaid expenses 8,077 4,156 5,582

Total Current Assets 228,230 168,456 192,271

Non-Current Assets

Property, plant and equipment 39,388 36,146 36,744

Intangible assets 3,630 2,667 -

Defined benefit plan asset 4,937 4,812 1,840

Investment 3,000 - -

Total Non-Current Assets 50,955 43,625 38,584

Total Assets 279,185 212,081 230,855

Liabilities

Current liabilities

Bank indebtedness 90,163 46,781 74,331

Trade and other payables 54,143 29,762 30,861

Income taxes payable 938 1,595 -

Provision 1,112 1,112 952

Current portion of long-term debt 208 113 247

Total Current Liabilities 146,564 79,363 106,391

Non-Current Liabilities

Provision 490 477 486

Long-term debt 219 - 688

Deferred income taxes 4,718 4,141 2,535

Defined benefit plan obligation - - 1,626

Total Non-Current Liabilities 5,427 4,618 5,335

Total Liabilities 151,991 83,981 111,726

Shareholders' equity

Share capital 9,152 9,152 9,152

Retained earnings 118,042 118,948 109,977

127,194 128,100 119,129

Total Liabilities and Shareholders' Equity 279,185 212,081 230,855

GOODFELLOW INC.

Consolidated Statements of Cash Flows

For the three months ended February 29, 2016 and February 28, 2015

(in thousands of dollars)

(Unaudited)

For the three months ended

February 29
2016 February 28
2015

$ $

Operating Activities

Net Earnings (1,052 ) (357 )

Adjustments for :

Depreciation 798 731

Accretion expense on provision 13 (14 )

Income taxes (411 ) (146 )

Loss on disposal of property, plant and equipment - 37

Interest expense 434 344

Funding in (excess) deficit of pension plan expense (125 ) 57

(343 ) 652

Changes in non-cash working capital items (32,412 ) (29,905 )

Interest paid (656 ) (364 )

Income taxes paid (553 ) (1,215 )

(33,621 ) (31,484 )

Net Cash Flows from Operating Activities (33,964 ) (30,832 )

Financing Activities

Net increase in bank loans 13,000 4,500

Increase in banker's acceptances 28,000 20,000

Increase in long-term debt 490 18

Reimbursement of long-term debt (736 ) (4 )

40,754 24,514

Investing Activities

Acquisition of property, plant and equipment (353 ) (506 )

Increase in intangible assets (683 ) -

Proceeds on disposal of property, plant and equipment - 14

Business acquisitions, net of cash acquired (4,118 ) -

Investment (3,000 ) -

(8,154 ) (492 )

Net cash outflow (1,364 ) (6,810 )

Cash position, beginning of period (1,816 ) (3,739 )

Cash position, end of period (3,180 ) (10,549 )

Cash position is comprised of :

Cash 1,983 782

Bank overdraft (5,163 ) (11,331 )

(3,180 ) (10,549 )

GOODFELLOW INC.

Consolidated Statements of Change in Shareholders' Equity

For the three months ended February 29, 2016 and February 28, 2015

(in thousands of dollars)

(Unaudited)

Share Retained

Capital Earnings Total

$ $ $

Balance as at November 30, 2014 9,152 110,334 119,486

Net earnings - (357 ) (357 )

Total comprehensive income 9,152 109,977 119,129

Transactions with owners of the Company - - -

Balance as at February 28, 2015 9,152 109,977 119,129

Balance as at November 30, 2015 (Audited) 9,152 118,948 128,100

Net earnings - (1,052 ) (1,052 )

Other comprehensive income - 146 146

Total comprehensive income 9,152 118,042 127,194

Transactions with owners of the Company - - -

Balance as at February 29, 2016 9,152 118,042 127,194

Goodfellow Inc.
Denis Fraser
President and CEO
450 635-6511
450 635-3730
[email protected]

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GOODFELLOW INC.
Consolidated Statements of Comprehensive Income
For the three months ended February 29, 2016 and February 28, 2015
(in thousands of dollars, except per share amounts)
Unaudited

		For the three months ended
		February 29 2016		February 28 2015
		$		$

Sales		108,659		98,097
Expenses
	Cost of goods sold	88,184		78,077
	Selling, administrative and general expenses	21,303		19,989
	Net financial costs	635		534
		110,122		98,600

Earnings before income taxes		(1,463	)	(503	)

Income taxes		(411	)	(146	)

Net earnings		(1,052	)	(357	)

Items that will not subsequently be reclassified to net earnings

Foreign currency translation adjustment		146		-

Total comprehensive income		(906	)	(357	)

Net earnings per share - Basic and diluted		(0.12	)	(0.04	)

GOODFELLOW INC.
Consolidated Statements of Financial Position
(in thousands of dollars)

		As at	As at	As at
		February 29	November 30	February 28
		2016 (Unaudited)	2015 (Audited)	2015 (Unaudited)
		$	$	$
Assets
Current Assets
	Cash	1,983	965	782
	Trade and other receivables	86,494	65,670	65,829
	Income taxes receivable	-	-	364
	Inventories	131,676	97,665	119,714
	Prepaid expenses	8,077	4,156	5,582
Total Current Assets		228,230	168,456	192,271

Non-Current Assets
	Property, plant and equipment	39,388	36,146	36,744
	Intangible assets	3,630	2,667	-
	Defined benefit plan asset	4,937	4,812	1,840
	Investment	3,000	-	-
Total Non-Current Assets		50,955	43,625	38,584
Total Assets		279,185	212,081	230,855

Liabilities
Current liabilities
	Bank indebtedness	90,163	46,781	74,331
	Trade and other payables	54,143	29,762	30,861
	Income taxes payable	938	1,595	-
	Provision	1,112	1,112	952
	Current portion of long-term debt	208	113	247
Total Current Liabilities		146,564	79,363	106,391

Non-Current Liabilities
	Provision	490	477	486
	Long-term debt	219	-	688
	Deferred income taxes	4,718	4,141	2,535
	Defined benefit plan obligation	-	-	1,626
Total Non-Current Liabilities		5,427	4,618	5,335
Total Liabilities		151,991	83,981	111,726

Shareholders' equity
	Share capital	9,152	9,152	9,152
	Retained earnings	118,042	118,948	109,977
		127,194	128,100	119,129
Total Liabilities and Shareholders' Equity		279,185	212,081	230,855

GOODFELLOW INC.
Consolidated Statements of Cash Flows
For the three months ended February 29, 2016 and February 28, 2015
(in thousands of dollars)
(Unaudited)

			For the three months ended
			February 29 2016		February 28 2015
			$		$

Operating Activities
	Net Earnings		(1,052	)	(357	)
	Adjustments for :
		Depreciation	798		731
		Accretion expense on provision	13		(14	)
		Income taxes	(411	)	(146	)
		Loss on disposal of property, plant and equipment	-		37
		Interest expense	434		344
		Funding in (excess) deficit of pension plan expense	(125	)	57
			(343	)	652

	Changes in non-cash working capital items		(32,412	)	(29,905	)
	Interest paid		(656	)	(364	)
	Income taxes paid		(553	)	(1,215	)
			(33,621	)	(31,484	)
Net Cash Flows from Operating Activities			(33,964	)	(30,832	)

Financing Activities
	Net increase in bank loans		13,000		4,500
	Increase in banker's acceptances		28,000		20,000
	Increase in long-term debt		490		18
	Reimbursement of long-term debt		(736	)	(4	)
			40,754		24,514

Investing Activities
	Acquisition of property, plant and equipment		(353	)	(506	)
	Increase in intangible assets		(683	)	-
	Proceeds on disposal of property, plant and equipment		-		14
	Business acquisitions, net of cash acquired		(4,118	)	-
	Investment		(3,000	)	-
			(8,154	)	(492	)

Net cash outflow			(1,364	)	(6,810	)
Cash position, beginning of period			(1,816	)	(3,739	)
Cash position, end of period			(3,180	)	(10,549	)

Cash position is comprised of :
	Cash		1,983		782
	Bank overdraft		(5,163	)	(11,331	)
			(3,180	)	(10,549	)

GOODFELLOW INC.
Consolidated Statements of Change in Shareholders' Equity
For the three months ended February 29, 2016 and February 28, 2015
(in thousands of dollars)
(Unaudited)

		Share	Retained
		Capital	Earnings		Total
		$	$		$

Balance as at November 30, 2014		9,152	110,334		119,486

	Net earnings	-	(357	)	(357	)

Total comprehensive income		9,152	109,977		119,129

	Transactions with owners of the Company	-	-		-

Balance as at February 28, 2015		9,152	109,977		119,129


Balance as at November 30, 2015 (Audited)		9,152	118,948		128,100

	Net earnings	-	(1,052	)	(1,052	)
	Other comprehensive income	-	146		146

Total comprehensive income		9,152	118,042		127,194

	Transactions with owners of the Company	-	-		-

Balance as at February 29, 2016		9,152	118,042		127,194

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Goodfellow Reports its Results for the Three Months Ended February 29, 2016

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Goodfellow Reports its Results for the Three Months Ended February 29, 2016

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