DELSON, PQ - Goodfellow Inc. (TSX:GDL) today reported its financial results for the first quarter ended November 30, 2010. Net income from operations was $1.0 million or $0.11 per share compared to a net income of $2.0 million or $0.24 per share a year ago. Consolidated sales for the first quarter of fiscal 2011 were $109.4 million compared to $109.2 million for the same period a year ago.
Cash flow from operations (excluding non-cash working capital) for the first quarter of fiscal 2011 decreased to $1.4 million from $2.5 million for the same period last year.
Sales in Canada remained stable compared to last year despite the absence of the Home Renovation Tax Credit. Nevertheless, our industrial and manufacturing sales group posted a strong performance while flooring sales in the retail industry slowed down throughout the fall. Sales in the US increased 7% due to some recovery in the Northeast US retail lumber market.
Export sales increased 10% compared to last year due mainly to strong flooring sales in the UK and increasing sales to China and the Middle East. General expenses, selling and administrative costs for the first quarter ended November 30, 2010 increased from $17.4 million last year to $19.2 million. The increase reflects labour and energy costs to respond to the growth in industrial and value added production across our plants in the first quarter, an increase in warehousing lease costs and logistics requirements to reduce our inventory levels throughout the quarter. On the other hand, selling costs remained level with last year due to reduced commissions and lower bad debt provisions. Administrative costs increased 6% due to salary increase and training activities.
"It is clear our results reflect the tightening retail market across Canada along with the absence of the Home Renovation Tax Credit." said Richard Goodfellow, President and Chief Executive Officer. "All efforts are being made to adjust our cost base to the new reality.".
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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