Source: Goodfellow Inc.

Goodfellow Reports Its Results for the Third Quarter Ended August 31, 2017

DELSON, Quebec, Oct. 04, 2017 (GLOBE NEWSWIRE) -- Goodfellow Inc. (TSX:GDL) announced today its financial results for the third quarter ended August 31st, 2017. For the three months ended August 31st, 2017, the Company reported net earnings of $1.6M or $0.19 per share. Consolidated sales for the three months ended August 31st, 2017 were $143.0M. For the nine months ended August 31, 2017, the Company reported a net loss of $(4.3) M or $(0.51) per share. Consolidated sales for the nine months ended August 31st, 2017 were $396.1M.


The loosening of inventory restrictions in May of Q2 generated a favourable sales push which brought the Company back to monthly profitability. This positive momentum carried over into Q3 with profitable results. Margin levels continued on a positive trend and are approaching profitable historic norms.

Q3 is characterized by the detailed planning of our warehouse sales in August and their successful execution. The Company was able to attain the elusive $50M in sales target for August while continuing in its push to grow market share and retain customer loyalty.

Operationally Goodfellow took control of its pressure treating assets and began its own production once again on June 1st, 2017 as planned. ERP obstacles and challenges have widely been addressed and resolved and the Company is moving forward with efficiency initiatives.

Goodfellow is continuing in its focused strategy to steadily increase margin levels while simultaneously addressing elements of obsolete inventory. Inventory levels have been right sized in order to give Goodfellow the opportunity to capitalize on asset opportunities.

Q4 will bring many seasonal inventory and transitional challenges. Nonetheless Goodfellow now has a profitable framework moving forward. The Company is committed to improving its customer experience on an ongoing basis.

Goodfellow Inc. is a distributor of lumber products, building materials, and hardwood flooring products. Goodfellow shares trade on the Toronto Stock Exchange under the symbol GDL.

Consolidated Statements of Comprehensive Income
For the three and nine months ended August 31, 2017
(in thousands of dollars, except per share amounts)

 For the three months
Ended August 31, 2017
For the nine months
Ended August 31, 2017
Sales142,970 396,101 
Cost of goods sold119,074 337,762 
Selling, administrative and general expenses20,461 61,180 
Net financial costs1,121 3,145 
 140,656 402,087 
Earnings (Loss) before income taxes2,314 (5,986)
Income taxes682 (1,676)
Total comprehensive income (loss)1,632 (4,310)
Net earnings (loss) per share - Basic and diluted0.19(0.51)

Consolidated Statements of Financial Position
(in thousands of dollars)  
 As atAs at
 August 31
November 30
Current Assets  
Cash1,121 703
Trade and other receivables69,414 64,255
Income taxes receivable8,408 6,598
Inventories97,996 115,391
Prepaid expenses3,861 4,863
Total Current Assets180,800 191,810
Non-Current Assets  
Property, plant and equipment37,074 38,693
Intangible assets5,116 5,428
Defined benefit plan asset2,227 2,234
Investment in a joint venture282 3,403
Total Non-Current Assets44,699 49,758
Total Assets225,499 241,568
Current liabilities  
Bank indebtedness73,715 94,113
Trade and other payables39,305 30,721
Provision925 963
Current portion of long-term debt138 136
Total Current Liabilities114,083 125,933
Non-Current Liabilities  
Provision513 475
Long-term debt89 126
Deferred income taxes3,296 3,296
Defined benefit plan obligation1,135 1,045
Total Non-Current Liabilities5,033 4,942
Total Liabilities119,116 130,875
Shareholders’ equity  
Share capital9,152 9,152
Retained earnings97,231 101,541
 106,383 110,693
Total Liabilities and Shareholders’ Equity225,499 241,568

Consolidated Statements of Cash Flows   
For the three and nine months ended August 31, 2017
(in thousands of dollars)
 For the three months
Ended August 31, 2017
For the nine months
Ended August 31, 2017
Operating Activities   
Net earnings (loss)1,632  (4,310) 
Adjustments for:   
Depreciation987  2,893  
Accretion expense on provision12  37  
Decrease in provision(4)(37) 
Income taxes682  (1,676) 
Gain on disposal of property, plant and equipment(68)(55) 
Interest expense781  2,255  
Funding in deficit of pension plan expense50  97  
Share of the profits of the joint venture122  1  
 4,194  (795) 
Changes in non-cash working capital items5,475  21,876  
Interest paid(817)(2,309) 
Income taxes received (paid)474  (134) 
 5,132  19,433  
Net Cash Flows from Operating Activities 9,326  18,638  
Financing Activities   
Net decrease in bank loans(4,000)(4,000) 
Net decrease in banker’s acceptances(12,500)(20,500) 
Increase in long-term debt69  69  
Reimbursement of long-term debt(31)(104) 
Investing Activities   
Acquisition of property, plant and equipment(395)(796) 
Increase in intangible assets(73)(295) 
Proceeds on disposal of property, plant, equipment and intangible assets135 184  
Decrease in investment3,120  3,120  
 2,787  2,213  
Net cash outflow(4,349)(3,684) 
Cash position, beginning of period(1,245)(1,910) 
Cash position, end of period(5,594)(5,594) 
Cash position is comprised of:   
Cash and cash equivalents1,121  1,121  
Bank overdraft(6,715)(6,715) 

Consolidated Statements of Change in Shareholders’ Equity  
For the nine months ended August 31, 2017
(in thousands of dollars)
Balance as at November 30, 2016 (Audited) 9,152101,541 110,693  
Net loss -(4,310)(4,310) 
Total comprehensive loss -(4,310)(4,310) 
Balance as at August 31, 2017  9,152 97,231  106,383