DELSON, Quebec, July 09, 2020 (GLOBE NEWSWIRE) -- Goodfellow Inc. (TSX: GDL) announced today its financial results for the second quarter ended May 31, 2020. The Company reported a net income of $3.4 million or $0.40 per share compared to a net income of $1.9 million or $0.22 per share a year ago. Consolidated sales were $103.8 million compared to $123.7 million last year. Sales in Canada decreased 15% compared to the same period a year ago, while sales in the United States decreased 18% (on a Canadian dollar basis) and export sales decreased 35% compared to the same period a year ago. On the operating side, selling, administrative and general expenses decreased overall by $6.2 million.
For the six months ended May 31, 2020, the Company reported a net income of $1.3 million or $0.16 per share compared to a net income of $0.3 million or $0.04 per share a year ago. Consolidated sales were $192.6 million compared to $211.9 million last year. Sales in Canada decreased 8% compared to the same period a year ago, while sales in the United States decreased 11% (on a Canadian dollar basis) and export sales decreased 26% compared to the same period a year ago. On the operating side, selling, administrative and general expenses decreased overall by $5.0 million.
In the face of the COVID-19 pandemic, the Company implemented rigorous hygiene practices and physical distancing measures in its workplaces to mitigate health risks to its employees, business partners and communities where it operates. Although the Company was able to keep most of its facilities opened during the COVID-19 pandemic relying on exemptions from mandatory closures for essential products and services. The Company also implemented a number of cost-reduction measures such as reduced expenses related to non-essential travel and has temporarily reduced its workforce. Furthermore, the Company benefited from the Canada Emergency Wage Subsidy that contributed in particular to maintaining jobs relating to the production and distribution of essential services.
“Our result in the second quarter is as a result of unforeseen pandemic circumstances combined with a contrasting, unprecedented surge in seasonal demand.’’
Despite the fact that the impacts of the COVID-19 pandemic in the coming months remain unpredictable, we expect to continue generating positive cash flows from our operating activities.
Goodfellow Inc. is a distributor of lumber products, building materials and floor coverings. Goodfellow shares trade on the Toronto Stock Exchange under the symbol GDL.
| GOODFELLOW INC. | |||||||
| Consolidated Statements of Comprehensive Income | |||||||
| For the three and six months ended May 31, 2020 and 2019 | |||||||
| (in thousands of dollars, except per share amounts) | |||||||
| Unaudited | |||||||
| For the three months ended | For the six months ended | ||||||
| May 31 2020 | May 31 2019 | May 31 2020 | May 31 2019 | ||||
| $ | $ | $ | $ | ||||
| Sales | 103,763 | 123,713 | 192,619 | 211,866 | |||
| Expenses | |||||||
| Cost of goods sold | 84,238 | 100,007 | 155,718 | 171,248 | |||
| Selling, administrative and general expenses | 14,060 | 20,260 | 33,578 | 38,627 | |||
| Loss (gain) on disposal of property, plant and equipment | 5 | - | (10) | 7 | |||
| Net financial costs | 739 | 863 | 1,473 | 1,554 | |||
| 99,042 | 121,130 | 190,759 | 211,436 | ||||
| Earnings before income taxes | 4,721 | 2,583 | 1,860 | 430 | |||
| Income taxes | 1,322 | 728 | 521 | 125 | |||
| Total comprehensive income | 3,399 | 1,855 | 1,339 | 305 | |||
| Net earnings per share – Basic | 0.40 | 0.22 | 0.16 | 0.04 | |||
| Net earnings per share – Diluted | 0.40 | 0.21 | 0.16 | 0.03 | |||
| GOODFELLOW INC. | |||||
| Consolidated Statements of Financial Position | |||||
| (in thousands of dollars) | |||||
| Unaudited | |||||
| As at | As at | As at | |||
| May 31 2020 | November 30 2019 | May 31 2019 | |||
| $ | $ | $ | |||
| Assets | |||||
| Current Assets | |||||
| Cash | 1,854 | 2,364 | 2,942 | ||
| Trade and other receivables | 69,531 | 48,498 | 75,939 | ||
| Income taxes receivable | - | - | 142 | ||
| Inventories | 92,071 | 87,339 | 108,594 | ||
| Prepaid expenses | 1,469 | 2,563 | 2,626 | ||
| Total Current Assets | 164,925 | 140,764 | 190,243 | ||
| Non-Current Assets | |||||
| Property, plant and equipment | 31,992 | 32,838 | 33,186 | ||
| Intangible assets | 3,600 | 3,927 | 4,145 | ||
| Right-of-use assets | 15,723 | - | - | ||
| Defined benefit plan asset | 2,198 | 2,222 | 2,702 | ||
| Investment in a joint venture | 25 | 25 | 25 | ||
| Other assets | 753 | 805 | 849 | ||
| Total Non-Current Assets | 54,291 | 39,817 | 40,907 | ||
| Total Assets | 219,216 | 180,581 | 231,150 | ||
| Liabilities | |||||
| Current liabilities | |||||
| Bank indebtedness | 43,562 | 31,204 | 68,000 | ||
| Trade and other payables | 40,492 | 29,048 | 45,696 | ||
| Income taxes payable | 164 | 734 | - | ||
| Provision | 1,496 | 1,470 | 336 | ||
| Dividend payable | - | 856 | - | ||
| Current portion of lease liabilities | 4,242 | 15 | 15 | ||
| Total Current Liabilities | 89,956 | 63,327 | 114,047 | ||
| Non-Current Liabilities | |||||
| Provision | - | - | 1,324 | ||
| Lease liabilities | 14,975 | 28 | 36 | ||
| Deferred income taxes | 2,269 | 3,209 | 3,652 | ||
| Defined benefit plan obligation | 692 | 609 | 125 | ||
| Total Non-Current Liabilities | 17,936 | 3,846 | 5,137 | ||
| Total Liabilities | 107,892 | 67,173 | 119,184 | ||
| Shareholders’ Equity | |||||
| Share capital | 9,424 | 9,424 | 9,152 | ||
| Retained earnings | 101,900 | 103,984 | 102,814 | ||
| 111,324 | 113,408 | 111,966 | |||
| Total Liabilities and Shareholders’ Equity | 219,216 | 180,581 | 231,150 | ||
| GOODFELLOW INC. | ||||||||||||
| Consolidated Statements of Cash Flows | ||||||||||||
| For the three and six months ended May 31, 2020 and 2019 (in thousands of dollars) Unaudited | ||||||||||||
| For the three months ended | For the six months ended | |||||||||||
| May 31 2020 | May 31 2019 | May 31 2020 | May 31 2019 | |||||||||
| $ | $ | $ | $ | |||||||||
| Operating Activities | ||||||||||||
| Net earnings | 3,399 | 1,855 | 1,339 | 305 | ||||||||
| Adjustments for: | ||||||||||||
| Depreciation and amortization of: | ||||||||||||
| Property, plant and equipment | 673 | 684 | 1,324 | 1,380 | ||||||||
| Right-of-use assets | 1,088 | - | 2,181 | - | ||||||||
| Intangible assets | 182 | 172 | 363 | 343 | ||||||||
| Accretion expense on provision | 18 | 4 | 36 | 7 | ||||||||
| Decrease in provision | - | - | (10 | ) | - | |||||||
| Income taxes | 1,322 | 728 | 521 | 125 | ||||||||
| Loss (gain) on disposal of property, plant and equipment | 5 | - | (10 | ) | 7 | |||||||
| Interest expense | 315 | 623 | 638 | 1,105 | ||||||||
| Interest on lease liabilities | 174 | - | 353 | - | ||||||||
| Funding in deficit of pension plan expense | 54 | 36 | 106 | 71 | ||||||||
| Other assets | - | - | - | 67 | ||||||||
| Other | 41 | - | 41 | - | ||||||||
| 7,271 | 4,102 | 6,882 | 3,410 | |||||||||
| Changes in non-cash working capital items | (538 | ) | (13,424 | ) | (13,154 | ) | (25,205 | ) | ||||
| Interest paid | (271 | ) | (725 | ) | (619 | ) | (1,211 | ) | ||||
| Income taxes paid | (62 | ) | (223 | ) | (1,091 | ) | (676 | ) | ||||
| (871 | ) | (14,372 | ) | (14,864 | ) | (27,092 | ) | |||||
| Net Cash Flows from Operating Activities | 6,400 | (10,270 | ) | (7,982 | ) | (23,682 | ) | |||||
| Financing Activities | ||||||||||||
| Net (decrease) increase in bank loans | (2,000 | ) | 5,000 | (5,000 | ) | 2,000 | ||||||
| Net increase in banker’s acceptances | 3,000 | 10,000 | 16,000 | 25,000 | ||||||||
| Payment of lease liabilities | (1,309 | ) | (2 | ) | (2,642 | ) | (6 | ) | ||||
| Dividend Paid | (856 | ) | (851 | ) | (1,712 | ) | (851 | ) | ||||
| (1,165 | ) | 14,147 | 6,646 | 26,143 | ||||||||
| Investing Activities | ||||||||||||
| Acquisition of property, plant and equipment | (149 | ) | 87 | (510 | ) | (225 | ) | |||||
| Increase in intangible assets | (36 | ) | (26 | ) | (36 | ) | (45 | ) | ||||
| Proceeds on disposal of property, plant and equipment | (2 | ) | - | 14 | 8 | |||||||
| (187 | ) | 61 | (532 | ) | (262 | ) | ||||||
| Net cash inflow (outflow) | 5,048 | 3,938 | (1,868 | ) | 2,199 | |||||||
| Cash position, beginning of period | (5,756 | ) | (996 | ) | 1,160 | 743 | ||||||
| Cash position, end of period | (708 | ) | 2,942 | (708 | ) | 2,942 | ||||||
| Cash position is comprised of: | ||||||||||||
| Cash | 1,854 | 2,942 | 1,854 | 2,942 | ||||||||
| Bank overdraft | (2,562 | ) | - | (2,562 | ) | - | ||||||
| (708 | ) | 2,942 | (708 | ) | 2,942 | |||||||
| GOODFELLOW INC. | ||||||
| Consolidated Statements of Change in Shareholders’ Equity | ||||||
| For the six months ended May 31, 2020 and 2019 | ||||||
| (in thousands of dollars) | ||||||
| Unaudited | ||||||
| Share | Retained | Total | ||||
| Capital | Earnings | |||||
| $ | $ | $ | ||||
| Balance as at November 30, 2018 | 9,152 | 103,711 | 112,863 | |||
| Net earnings | - | 305 | 305 | |||
| Total comprehensive income | - | 305 | 305 | |||
| Transactions with owners of the Company | ||||||
| Dividend | - | (851) | (851) | |||
| Modification of share-based payment | - | (351) | (351) | |||
| Balance as at May 31, 2019 | 9,152 | 102,814 | 111,966 | |||
| Balance as at November 30, 2019 | 9,424 | 103,984 | 113,408 | |||
| IFRS 16 adoption adjustment, net of taxes of $940 | - | (2,567) | (2,567) | |||
| Balance as at December 1, 2019 | 9,424 | 101,417 | 110,841 | |||
| Net earnings | - | 1,339 | 1,339 | |||
| Total comprehensive income | - | 1,339 | 1,339 | |||
| Transactions with owners of the Company | ||||||
| Dividend | - | (856) | (856) | |||
| Balance as at May 31, 2020 | 9,424 | 101,900 | 111,324 | |||
| From: | Goodfellow Inc. |
| Patrick Goodfellow | |
| President and CEO | |
| Tel: 450 635-6511 | |
| Fax: 450 635-3730 | |
| Internet: info@goodfellowinc.com |