DELSON, QUEBEC - Goodfellow Inc. (TSE:GDL) announced today its financial results for the third quarter ended May 31, 2014.
The Company reported net earnings of $2.1 million or $0.25 per share compared to net earnings of $2.5 million or $0.29 per share a year ago. Consolidated sales for the third quarter were $134.0 million compared to $138.2 million last year. Sales in the U.S. and export activities maintained their growth throughout the third quarter while sales in Canada declined due to the late spring, the provincial election in Quebec and decreasing housing starts in Eastern Canada.
Ontario and Western Canada sales posted a stronger performance again to mitigate this decline. On the operating side, costs remained under control in the face of a challenging third quarter. As a result, direct, selling, and administrative expenses decreased slightly compared to last year at $21.2 million ($21.5 million last year).
For the nine months ended May 31, 2014, the Company generated net earnings of $3.0 million or $0.35 per share compared to net earnings of $2.3 million or $0.27 per share a year ago. Consolidated sales for the nine months of fiscal 2014 were $339.8 million compared to $345.7 million for the same period a year ago.
"The most difficult winter at most of our customers carried through into Q3 and results were far from expectations," said Richard Goodfellow, President and Chief Executive Officer. "There have been strong signs of confidence in most of the business community and some recovery since. All sectors and product groups were sluggish overall as retail and manufacturing were particularly hard hit in most areas. We do not hold out any unusual expectations for the 4th Quarter but clearly our year to August 31st will be determined by the results to come."
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 (in thousands of dollars, except per share amounts) Unaudited |
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| Nine months ended May 31 | Three months ended May 31 | ||||
| 2014 | 2013 | 2014 | 2013 | ||
| $ | $ | $ | $ | ||
| Sales | 339,756 | 345,671 | 134,035 | 138,195 | |
| Expenses | |||||
| Cost of goods sold | 275,045 | 281,242 | 109,310 | 112,687 | |
| Selling, administrative and general expenses | 59,104 | 59,818 | 21,231 | 21,454 | |
| Net financial costs | 1,428 | 1,363 | 567 | 554 | |
| 335,577 | 342,423 | 131,108 | 134,695 | ||
| Earnings before income taxes | 4,179 | 3,248 | 2,927 | 3,500 | |
| Income taxes | 1,212 | 942 | 849 | 1,015 | |
| Net earnings, being comprehensive income | 2,967 | 2,306 | 2,078 | 2,485 | |
| Earnings per share | |||||
| Basic and diluted | 0.35 | 0.27 | 0.25 | 0.29 | |
| GOODFELLOW INC. Consolidated Statements of Financial Position (in thousands of dollars) Unaudited |
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| May 31 2014 |
May 31 2013 (Restated) |
August 31 2013 (Restated) |
||
| $ | $ | $ | ||
| Assets | ||||
| Current Assets | ||||
| Cash and cash equivalents | 394 | 278 | 197 | |
| Trade and other receivables | 86,380 | 95,491 | 72,838 | |
| Income taxes receivable | - | - | - | |
| Inventories | 102,153 | 91,054 | 74,255 | |
| Prepaid expenses | 5,014 | 5,774 | 3,433 | |
| Total Current Assets | 193,941 | 192,597 | 150,723 | |
| Non-Current Assets | ||||
| Property, plant and equipment | 37,807 | 35,823 | 35,422 | |
| Defined benefit plan asset | 1,531 | - | 1,041 | |
| Deferred tax asset | - | 167 | - | |
| Total Non-Current Assets | 39,338 | 35,990 | 36,463 | |
| 233,279 | 228,587 | 187,186 | ||
| Liabilities | ||||
| Current liabilities | ||||
| Bank indebtedness | 76,326 | 75,997 | 34,169 | |
| Trade and other payables | 32,522 | 31,638 | 29,457 | |
| Income taxes payable | 359 | 292 | 742 | |
| Current portion of long term debt | 216 | - | 38 | |
| Total Current Liabilities | 109,423 | 107,927 | 64,406 | |
| Non-Current Liabilities | ||||
| Provisions | 1,502 | 1,441 | 1,471 | |
| Long Term Debt | 769 | 150 | 112 | |
| Deferred income taxes | 2,393 | - | 2,393 | |
| Defined benefit plan obligation | 788 | 9,377 | 1,666 | |
| Total Non-Current Liabilities | 5,452 | 10,968 | 5,642 | |
| 114,875 | 118,895 | 70,048 | ||
| Shareholders' equity | ||||
| Share capital | 9,152 | 9,152 | 9,152 | |
| Retained earnings | 109,252 | 100,540 | 107,986 | |
| 118,404 | 109,692 | 117,138 | ||
| 233,279 | 228,587 | 187,186 | ||
| GOODFELLOW INC. Consolidated Statements of Cash Flows (in thousands of dollars) Unaudited |
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| Nine months ended May 31 | Three months ended May 31 | |||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||
| $ | $ | $ | $ | |||||||
| Cash Flows Used in Operating Activities | ||||||||||
| Net Earnings | 2,967 | 2,306 | 2,078 | 2,485 | ||||||
| Adjustments for : | ||||||||||
| Depreciation | 2,042 | 2,049 | 765 | 701 | ||||||
| Accretion expense on environmental provision | 31 | (1 | ) | 11 | (16 | ) | ||||
| Gain on disposal of fixed assets | (5 | ) | - | - | - | |||||
| Income tax expense | 1,212 | 942 | 849 | 1,015 | ||||||
| Interest expense | 842 | 775 | 398 | 364 | ||||||
| Funding in excess of pension plan expense | (1,367 | ) | (1,177 | ) | (362 | ) | (308 | ) | ||
| 5,722 | 4,894 | 3,739 | 4,241 | |||||||
| Changes in non-cash working capital items | (39,853 | ) | (39,403 | ) | (34,442 | ) | (34,343 | ) | ||
| Interest paid | (945 | ) | (822 | ) | (417 | ) | (362 | ) | ||
| Income taxes paid | (1,596 | ) | (671 | ) | (453 | ) | (211 | ) | ||
| (42,394 | ) | (40,896 | ) | (35,312 | ) | (34,916 | ) | |||
| Cash Flows From (Used In) Financing Activities | ||||||||||
| (Decrease) Increase in bank loans | (3,800 | ) | 1,000 | (9,800 | ) | (7,000 | ) | |||
| Increase in banker's acceptances | 42,000 | 33,000 | 40,000 | 37,000 | ||||||
| Long term debt | 835 | 150 | (74 | ) | - | |||||
| Redemption of shares | - | (14 | ) | - | - | |||||
| Dividends paid | (1,701 | ) | (1,275 | ) | - | - | ||||
| 37,334 | 32,861 | 30,126 | 30,000 | |||||||
| Cash Flows Used In Investing Activities | ||||||||||
| Acquisition of property, plant and equipment | (4,431 | ) | (2,128 | ) | (477 | ) | (271 | ) | ||
| Proceeds on disposal of capital assets | 10 | - | - | - | ||||||
| (4,421 | ) | (2,128 | ) | (477 | ) | (271 | ) | |||
| Net cash outflow | (3,759 | ) | (5,269 | ) | (1,924 | ) | (946 | ) | ||
| Cash position, beginning of year | (4,972 | ) | (8,450 | ) | (6,807 | ) | (12,773 | ) | ||
| Cash position, end of year | (8,731 | ) | (13,719 | ) | (8,731 | ) | (13,719 | ) | ||
| Cash position is comprised of : | ||||||||||
| Cash and cash equivalents | 394 | 278 | 394 | 278 | ||||||
| Bank overdraft | (9,125 | ) | (13,997 | ) | (9,125 | ) | (13,997 | ) | ||
| (8,731 | ) | (13,719 | ) | (8,731 | ) | (13,719 | ) | |||
| GOODFELLOW INC. Consolidated Statements of Change in Shareholders' Equity For The Nine Months Ended May 31, 2014 and 2013 (in thousands of dollar) Unaudited |
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| Share Capital | Retained Earnings | Total |
|||||
| $ | $ | $ | |||||
| Balance as at August 31, 2012 | 9,154 | 99,521 | 108,675 | ||||
| Net earnings | - | 2,306 | 2,306 | ||||
| Transactions with owners, recorded directly in shareholders' equity | |||||||
| Dividends | - | (1,275 | ) | (1,275 | ) | ||
| Redemption of Shares | (2 | ) | (12 | ) | (14 | ) | |
| Balance as at May 31, 2013 | 9,152 | 100,540 | 109,692 | ||||
| Balance as at August 31, 2013 | 9,152 | 107,986 | 117,138 | ||||
| Net earnings | - | 2,967 | 2,967 | ||||
| Transactions with owners, recorded directly in shareholders' equity | |||||||
| Dividends | - | (1,701 | ) | (1,701 | ) | ||
| Balance as at May 31, 2014 | 9,152 | 109,252 | 118,404 | ||||
Goodfellow Reports its Results for the Third Quarter Ended May 31, 2014
DELSON, QUEBEC--(Marketwired - June 27, 2014) - Goodfellow Inc. (TSE:GDL) announced today its financial results for the third quarter ended May 31, 2014. The Company reported net earnings of $2.1 million or $0.25 per share compared to net earnings of $2.5 million or $0.29 per share a year ago. Consolidated sales for the third quarter were $134.0 million compared to $138.2 million last year. Sales in the US and export activities maintained their growth throughout the third quarter while sales in Canada declined due to the late spring, the provincial election in Quebec and decreasing housing starts in Eastern Canada. Ontario and Western Canada sales posted a stronger performance again to mitigate this decline. On the operating side, costs remained under control in the face of a challenging third quarter. As a result, direct, selling, and administrative expenses decreased slightly compared to last year at $21.2 million ($21.5 million last year).
For the nine months ended May 31, 2014, the Company generated net earnings of $3.0 million or $0.35 per share compared to net earnings of $2.3 million or $0.27 per share a year ago. Consolidated sales for the nine months of fiscal 2014 were $339.8 million compared to $345.7 million for the same period a year ago.
"The most difficult winter at most of our customers carried through into Q3 and results were far from expectations." said Richard Goodfellow, President and Chief Executive Officer. "There have been strong signs of confidence in most of the business community and some recovery since. All sectors and product groups were sluggish overall as retail and manufacturing were particularly hard hit in most areas. We do not hold out any unusual expectations for the 4th Quarter but clearly our year to August 31st will be determined by the results to come."
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.
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