Goodfellow Reports Its Results for the Second Quarter Ended February 28, 2011
25 Marzo 2011 - 9:38PM
Marketwired Canada
Goodfellow Inc. (TSX:GDL) today reported its financial results for the second
quarter ended February 28, 2011. Net loss from operations was $1.7 million or
$0.20 per share compared to a net income of $1.9 million or $0.22 per share a
year ago. Consolidated sales for the second quarter of fiscal 2011 were $94.9
million compared to $107.8 million for the same period a year ago. Cash flow
from operations (excluding non-cash working capital) for the second quarter of
fiscal 2011 decreased to $(1.3) million from $2.5 million last year. Sales in
Canada decreased 14% compared to last year mainly due to the absence of the Home
Renovation Tax Credit which was in full force during the second quarter of
fiscal 2010. Consequently, flooring sales were affected in the retail industry
which continued to slow down throughout the winter. Sales in the US increased 3%
due to the slow recovery in the Northeast US retail lumber and panel market.
Export sales increased 9% compared to last year due mainly to strong flooring
sales in the UK and increasing sales to China and the Middle East. Selling,
General and Administrative expenses for the second quarter of fiscal 2011
decreased slightly at $18.2 million compared to $18.4 million for the
corresponding period a year ago. The decrease is due to the reduction in selling
and administrative expenses due to reduced commissions linked with the sales
decrease, lower bad debt provisions and lower collection fees. On the other
hand, direct labour and energy costs increased due to the value-added production
build-up through the winter. Finally, leases and rental costs rose due to fleet
and logistics requirements linked with our commitment to improved customer
service.
For the six months ended February 28, 2011, the Company reported net loss from
operations of $0.7 million or $0.09 per share compared to a net income of $4.0
million or $0.46 per share a year ago. Consolidated sales were $204.2 million
compared to $217.1 million for the same period a year ago. Cash flow from
operations (excluding non-cash working capital) decreased to $0.2 million from
$5.0 million for the same period last year.
"The above results reflect the fact that business conditions were very tough
during the winter quarter. The harsh weather everywhere, the rapid rise in fuel
costs, and the sharp slump in retail demand all contributed to these
disappointing results" said Richard Goodfellow, President and Chief Executive
Officer. "Historically, the second quarter has been difficult but this year
presented even greater challenges. We remain however cautiously optimistic that
the 3rd and 4th quarter will mark a return to our usual level of profitability".
Goodfellow Inc. is one of Canada's largest independent re-manufacturers and
distributors of lumber and hardwood flooring products. Goodfellow shares trade
on the Toronto Stock Exchange under the symbol GDL.
GOODFELLOW INC.
Consolidated statements of earnings
(in thousands of dollars, except per share amounts)
(unaudited)
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Three Months Six Months
ended February 28 ended February 28
2011 2010 2011 2010
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$ $ $ $
Sales 94,853 107,832 204,231 217,078
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Expenses
Cost of goods sold, selling,
administrative and
general expenses 96,426 104,217 203,482 209,767
Amortization 384 370 750 726
Financial 296 261 667 492
Foreign currency loss 194 159 392 306
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97,300 105,007 205,291 211,291
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Earnings before income taxes (2,447) 2,825 (1,060) 5,787
Income taxes (759) 891 (329) 1,825
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Net earnings (1,688) 1,934 (731) 3,962
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Earnings per share
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Basic and diluted (0.20) 0.22 (0.09) 0.46
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GOODFELLOW INC.
Consolidated statements of retained earnings
(in thousands of dollars)
(unaudited)
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Six Months
ended February 28
2011 2010
$ $
Balance, beginning of year 106,880 101,932
Net earnings (731) 3,962
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106,149 105,894
Dividends (2,572) (2,572)
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Balance, end of year 103,577 103,322
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Consolidated statements of comprehensive income
(in thousands of dollars)
(unaudited)
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Three Months Six Months
ended February ended February
28 28
2011 2010 2011 2010
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$ $ $ $
Net Income (1,688) 1,934 (731) 3,962
Other comprehensive income
Foreign currency translation adjustment - - - -
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Total other comprehensive income - - - -
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Comprehensive income (1,688) 1,934 (731) 3,962
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GOODFELLOW INC.
Consolidated balance sheets
As at February 28, 2011 and 2010
(in thousands of dollars)
(unaudited)
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2011 2010
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$ $
Assets
Current assets
Cash 527 560
Accounts receivable 54,477 61,805
Income taxes recoverable 2,586 -
Inventories 74,777 72,714
Prepaid expenses 3,085 2,230
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135,452 137,309
Capital assets 31,044 30,558
Deferred pension asset 6,850 4,938
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173,346 172,805
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Liabilities
Current liabilities
Bank indebtedness 33,818 24,078
Accounts payable and accrued liabilities 23,707 33,197
Income taxes payable - 311
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57,525 57,586
Future income taxes 3,022 2,674
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60,547 60,260
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Shareholders' equity
Capital stock 9,222 9,222
Retained earnings 103,577 103,322
Accumulated other comprehensive income - -
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112,799 112,545
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173,346 172,805
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GOODFELLOW INC.
Consolidate statements of cash flows
(in thousands of dollars)
(unaudited)
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Three Months Six Months
ended February 28 ended February 28
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2011 2010 2011 2010
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$ $ $ $
Cash flows from operating
activities
Net earnings (1,688) 1,934 (731) 3,962
Adjustments for :
Amortization 384 370 750 726
Amortization included in
cost of good sold 249 258 487 510
Gain on disposal of
capital assets - 14 - 6
Shortage of expense over
pension plan
funding (197) (126) (329) (237)
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(1,252) 2,450 177 4,967
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Changes in non-cash working
capital items (7,741) (9,695) (2,568) (19,636)
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(8,993) (7,245) (2,391) (14,669)
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Cash flows used by financing
activities
(Decrease) increase in bank
loan 12,000 4,000 (1,000) 9,000
(Decrease) increase in
banker's acceptances (10,000) 5,000 - 10,000
Dividends - - (2,572) (2,572)
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2,000 9,000 (3,572) 16,428
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Cash flows used by investing
activities
Acquisition of capital
assets (802) (470) (1,744) (1,452)
Proceeds on disposal of
capital assets - 12 - 21
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(802) (458) (1,744) (1,432)
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Net cash (outflow) inflow (7,795) 1,297 (7,707) 327
(Bank overdraft), beginning of
year (26,496) (5,817) (26,584) (4,847)
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Bank overdraft, end of year (34,291) (4,520) (34,291) (4,520)
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Bank overdraft is comprised of
:
Cash 527 560 527 560
Bank overdraft (34,818) (5,080) (34,818) (5,080)
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(34,291) (4,520) (34,291) (4,520)
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