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 $0.64
per share.
Goodfellow Inc. is one of eastern Canada's largest independent re-manufacturers
and distributors of lumber and hardwood flooring products. Goodfellow shares
trade on the Toronto Stock Exchange under the symbol GDL.
GOODFELLOW INC.
Consolidated statements of earnings
(in thousands of dollars, except per share amounts)
(unaudited)
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Three Months ended Nine Months ended
May 31 May 31
2010 2009 2010 2009
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$ $ $ $
Sales 140,014 110,177 357,092 312,612
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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
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134,470 107,109 345,761 309,165
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Earnings before income taxes and
extraordinary item 5,544 3,068 11,331 3,447
Income taxes 1,748 993 3,573 1,115
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Net earnings before extraordinary
item 3,796 2,075 7,758 2,332
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Extraordinary gain, net of income
taxes of $1,143 - - - 3,191
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Net earnings 3,796 2,075 7,758 5,523
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Earnings per share
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Net earnings before
extraordinary item 0.45 0.24 0.91 0.27
Extraordinary item - - - 0.37
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Basic and diluted 0.45 0.24 0.91 0.64
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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
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109,690 100,082
Dividends (5,143) (2,144)
Redemption of shares - (33)
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Balance, end of year 104,547 97,905
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Consolidated statements of
comprehensive income
(in thousands of dollars)
(unaudited)
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Three Months Nine Months
ended May 31 ended May 31
2010 2009 2010 2009
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$ $ $ $
Net Income 3,796 2,075 7,758 5,523
Other comprehensive income
Foreign currency translation
adjustment - - - 303
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Total other comprehensive income - - - 303
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Comprehensive income 3,796 2,075 7,758 5,826
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GOODFELLOW INC.
Consolidated balance sheets
(in thousands of dollars)
(unaudited)
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May 31 May 31 August 31
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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
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164,824 131,032 113,841
Capital assets 30,489 30,345 30,369
Deferred pension asset 6,185 4,500 4,701
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201,498 165,877 148,911
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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
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85,055 56,060 35,083
Future income taxes 2,674 2,690 2,674
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87,729 58,750 37,757
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Shareholders' equity
Capital stock 9,222 9,222 9,222
Retained earnings 104,547 97,905 101,932
Accumulated other comprehensive
income - - -
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113,769 107,127 111,154
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201,498 165,877 148,911
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GOODFELLOW INC.
Consolidate statements of cash flows
(in thousands of dollars)
(unaudited)
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Three Months ended Nine Months ended May
May 31 31
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2010 2009 2010 2009
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$ $ $ $
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)
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3,194 2,531 8,161 3,783
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Changes in non-cash working
capital items (23,438) (6,741) (43,076) (6,364)
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(20,244) (4,210) (34,915) (2,581)
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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)
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13,429 7,455 29,857 3,912
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Cash flows used by investing
activities
Acquisition of capital
assets (577) (318) (2,028) (2,096)
Proceeds on disposal of
capital assets - - 21 181
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(577) (318) (2,007) (1,915)
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Net cash (outflow) inflow (7,392) 2,927 (7,065) (584)
(Bank overdraft), beginning of
year (4,520) (6,405) (4,847) (2,894)
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Bank overdraft, end of year (11,912) (3,478) (11,912) (3,478)
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Bank overdraft is comprised of
:
Cash 302 433 302 433
Bank overdraft (12,214) (3,911) (12,214) (3,911)
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(11,912) (3,478) (11,912) (3,478)
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