DELSON, QC - Its second quarter earnings audited and restated and stock trading suspended for management, Goodfellow Inc., one of eastern Canada's largest independent re-manufacturers and distributors of lumber and hardwood flooring products, was able to release third quarter results. The audit, which found inventory was not valued correctly, led to a $1 million adjustment in second quarter earnings. 

In the third quarter, Goodfellow Inc. (TSE:GDL) reported a net loss of $2.5 million all figures in Canadian dollars) compared to net income of $3.7 million a year ago. Sales for the three months ended August 31, 2016 were $159.1 million compared to $151.7 million last year.
Sales in Canada during the first nine months of  2016 increased 11 percent, mainly due to a strong performance in Ontario and strong sales of pressure treated wood. Sales in the United States for the first nine months ended August 31, 2016 decreased 6 percent on a Canadian dollar basis due to lower demand of flooring products and lower industrial projects deliveries.
Export sales decreased 13 percent during the first nine months of fiscal 2016 due to decreasing demand from Asia and lower sales in the United Kingdom impacted by uncertainties following the Brexit vote.
The delay in producing the third quarter resulted from discrepancies in recording inventory value and its impact on the cost of goods sold. Auditor KPMG  was retained. "Sales at $159 million dollars, although 4.87 percent higher than last year, were below expectation," said Denis Fraser, CEO. "Margin realized in two of our predominant product categories were disappointing. Increase in raw material cost was not recovered."

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