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DELSON, QUEBEC--(Marketwire - June 25, 2010) - Goodfellow Inc. (TSX:GDL) today reported its financial results for the third quarter ended May 31, 2010. Net income from operations was $3.8 million or $0.45 per share compared to a net income of $2.1 million or $0.24 per share a year ago. Consolidated sales for the third quarter of fiscal 2010 were $140.0 million compared to $110.2 million for the same period a year ago. Cash flow from operations (excluding non-cash working capital) for the third quarter of fiscal 2010 increased to $3.2 million from $2.5 million for the same period last year. Sales in Canada grew 26% due to strong performances in all regional areas of our business and diversification of our product offering in Ontario and Western Canada. Sales in the US increased 33% due to market conditions improving throughout the spring season. Export sales increased 67% compared to last year due mainly to a strong performance in the UK and increasing sales to China and the Middle East. General expenses, selling and administrative costs for the third quarter ended May 31, 2010 increased from $17.1 million last year to $21.0 million. The increase reflects higher staffing and overhead costs to respond to the growth generated in the 3rd quarter. Selling and administrative costs reflects increased commission and profit sharing provisions, temporary staffing for the spring and summer season and higher energy costs linked with the increased production output. On the other hand, Bad debt provisions were 55% lower than last year when customer's credit limits were being reduced.

"The quarter, although not a record one, put us back on track to restore our yearly sales numbers to pre-recession levels." said Richard Goodfellow, President and Chief Executive Officer. "The contribution from our Ontario group was improved and all efforts are now focused on our key fourth quarter".

For the 9 months ended May 31, 2010, Consolidated Sales reached $357.1 million compared to $312.6 million for the same period last year. Net results from operations for the 9 months ended May 31, 2010 was $7.8 million or $0.91 per share compared to $2.3 million or $0.27 per share. Including the extraordinary gain of $3.2 million or $0.37 per share related to the revaluation at fair value, net income for the 9 months of fiscal 2009 reached $5.5 million or $0.64 per share.

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 earnings (in thousands of dollars, except per share amounts) (unaudited)
		Three Months ended May 31			Nine Months ended May 31
		2010	2009		2010	2009
		$	$		$	$
Sales		140,014	110,177		357,092	312,612
Expenses
	Cost of goods sold, selling, administrative and general expenses	133,625	106,654		343,392	306,857
	Amortization	380	387		1,106	1,040
	Financial	324	252		816	913
	Foreign currency loss	141	(184	)	447	355
		134,470	107,109		345,761	309,165
Earnings before income taxes and extraordinary item		5,544	3,068		11,331	3,447
Income taxes		1,748	993		3,573	1,115
Net earnings before extraordinary item		3,796	2,075		7,758	2,332
Extraordinary gain, net of income taxes of $1,143		-	-		-	3,191
Net earnings		3,796	2,075		7,758	5,523
Earnings per share
	Net earnings before extraordinary item	0.45	0.24		0.91	0.27
	Extraordinary item	-	-		-	0.37
	Basic and diluted	0.45	0.24		0.91	0.64

GOODFELLOW INC. Consolidated statements of retained earnings (in thousands of dollars) (unaudited)
	Nine Months ended May 31
	2010		2009
	$		$
Balance, beginning of year	101,932		94,559
Net earnings	7,758		5,523
	109,690		100,082
Dividends	(5,143	)	(2,144	)
Redemption of shares	-		(33	)
Balance, end of year	104,547		97,905

Consolidated statements of comprehensive income
(in thousands of dollars)
(unaudited)
		Three Months		Nine Months
		ended May 31		ended May 31
		2010	2009	2010	2009
		$	$	$	$
Net Income		3,796	2,075	7,758	5,523
Other comprehensive income
	Foreign currency translation adjustment	-	-	-	303
Total other comprehensive income		-	-	-	303
Comprehensive income		3,796	2,075	7,758	5,826

GOODFELLOW INC. Consolidated balance sheets (in thousands of dollars) (unaudited)
		May 31	May 31	August 31
		2010	2009	2009
		$	$	$
Assets
Current assets
	Cash	302	433	580
	Accounts receivable	81,186	66,553	65,330
	Income taxes recoverable	-	1,309	-
	Inventories	80,038	59,806	46,163
	Prepaid expenses	3,298	2,931	1,768
		164,824	131,032	113,841
Capital assets		30,489	30,345	30,369
Deferred pension asset		6,185	4,500	4,701
		201,498	165,877	148,911
Liabilities
Current liabilities
	Bank indebtedness	47,214	28,185	5,427
	Accounts payable and accrued liabilities	36,823	27,875	29,417
	Income taxes payable	1,018	-	239
		85,055	56,060	35,083
Future income taxes		2,674	2,690	2,674
		87,729	58,750	37,757
Shareholders' equity
	Capital stock	9,222	9,222	9,222
	Retained earnings	104,547	97,905	101,932
	Accumulated other comprehensive income	-	-	-
		113,769	107,127	111,154
		201,498	165,877	148,911

GOODFELLOW INC. Consolidate statements of cash flows (in thousands of dollars) (unaudited)
			Three Months ended May 31				Nine Months ended May 31
			2010		2009		2010		2009
			$		$		$		$
Cash flows from operating activities
	Net earnings		3,796		2,075		7,758		5,523
	Adjustments for :
		Extraordinary item	-		-		-		(4,334	)
		Amortization	380		386		1,106		1,040
		Amortization included in cost of good sold	265		268		775		694
		Gain on disposal of capital assets	-		-		6		36
		Future Income Taxes	-		-		-		1,192
		Impact of foreign exchange on cash	-		-		-		303
		Shortage of expense over pension plan funding	(1,247	)	(199	)	(1,484	)	(671	)
			3,194		2,531		8,161		3,783
	Changes in non-cash working capital items		(23,438	)	(6,741	)	(43,076	)	(6,364	)
			(20,244	)	(4,210	)	(34,915	)	(2,581	)
Cash flows used by financing activities
	(Decrease) increase in bank loan		1,000		(5,542	)	10,000		(8,911	)
	Increase in banker's acceptances		15,000		13,000		25,000		15,000
	Redemption of common shares		-		(3	)	-		(33	)
	Dividends		(2,571	)	-		(5,143	)	(2,144	)
			13,429		7,455		29,857		3,912
Cash flows used by investing activities
	Acquisition of capital assets		(577	)	(318	)	(2,028	)	(2,096	)
	Proceeds on disposal of capital assets		-		-		21		181
			(577	)	(318	)	(2,007	)	(1,915	)
Net cash (outflow) inflow			(7,392	)	2,927		(7,065	)	(584	)
(Bank overdraft), beginning of year			(4,520	)	(6,405	)	(4,847	)	(2,894	)
Bank overdraft, end of year			(11,912	)	(3,478	)	(11,912	)	(3,478	)
Bank overdraft is comprised of :
	Cash		302		433		302		433
	Bank overdraft		(12,214	)	(3,911	)	(12,214	)	(3,911	)
			(11,912	)	(3,478	)	(11,912	)	(3,478	)

Contributing Sources

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Market Wire

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