Goodfellow Reports its Results for the Second Quarter Ended February 28, 2014

DELSON, QUEBEC--(Marketwired - Mar 25, 2014) - Goodfellow Inc. (TSX:GDL) announced today its financial results for the second quarter ended February 28, 2014. The Company reported a net loss of $0.3 million or $0.04 per share compared to a net loss of $0.9 million or $0.11 per share a year ago. Consolidated sales for the second quarter were $95.4 million (same as last year). Sales in the US and export activities continued to be strong throughout the second quarter while sales in Canada declined impacted by the slower economy in Quebec and decreasing housing starts in Eastern Canada. Ontario and Western Canada sales posted a strong performance to mitigate this decline. On the operating side, costs remained under control in the face of challenging winter conditions. As a result, direct, selling, and administrative expenses remained level with last year at $18.7 million. The Company renewed its loan agreement increasing its loan facility to $90 million and finalized its acquisition of its Drummondville plant for a total consideration of $3.4 million.

For the six months ended February 28, 2014, the Company generated net earnings of $0.9 million or $0.10 per share compared to net loss of $0.2 million or ($0.02) per share a year ago. Consolidated sales for the six months of fiscal 2014 were $205.7 million compared to $207.5 million for the same period a year ago.

"As usual the winter quarter poses a major challenge for the Company but the first half results are markedly better than last year. Combining this with the weaker Canadian dollar for US sourcing and Quebec's weak economy, the results were predictable." said Richard Goodfellow, President and Chief Executive Officer. "Our US export business and our hardwood and softwood core lumber businesses remained however very solid accounting for the improvement in the results. We are well postured now to face the expected spring demand."

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
Six months ended February 28 Three months ended February 28
2014 2013 2014 2013
$ $ $ $
Sales 205,721 207,476 95,355 95,429
Expenses
Cost of goods sold 165,735 168,555 76,631 77,655
Selling, administrative and general expenses 37,873 38,364 18,696 18,700
Net financial costs 861 809 418 367
204,469 207,728 95,745 96,722
Earnings before income taxes 1,252 (252 ) (390 ) (1,293 )
Income taxes 363 (73 ) (113 ) (375 )
Net earnings, being comprehensive income 889 (179 ) (277 ) (918 )
Earnings per share
Basic and diluted 0.10 (0.02 ) (0.04 ) (0.11 )
GOODFELLOW INC. Consolidated Statements of Financial Position (in thousands of dollars) Unaudited
February 28 2014 February 28 2013 (Restated) August 31 2013 (Restated)
$ $ $
Assets
Current Assets
Cash and cash equivalents 234 572 197
Trade and other receivables 56,651 58,838 72,838
Income taxes receivable 37 511 -
Inventories 95,447 85,868 74,255
Prepaid expenses 3,189 3,670 3,433
Total Current Assets 155,558 149,459 150,723
Non-Current Assets
Property, plant and equipment 38,095 36,253 35,422
Defined benefit plan asset (Note 3) 1,374 - 1,041
Deferred tax asset (Note 3) - 167 -
Total Non-Current Assets 39,469 36,420 36,463
195,027 185,879 187,186
Liabilities
Current liabilities
Bank indebtedness 44,041 45,345 34,169
Trade and other payables 28,725 22,036 29,457
Income taxes payable - - 742
Current portion of long term debt 219 - 38
Total Current Liabilities 72,985 67,381 64,406
Non-Current Liabilities
Provisions 1,490 1,457 1,471
Long Term Debt 840 150 112
Deferred income taxes (Note 3) 2,393 - 2,393
Defined benefit plan obligation (Note 3) 993 9,685 1,666
Total Non-Current Liabilities 5,716 11,292 5,642
78,701 78,673 70,048
Shareholders' equity
Share capital 9,152 9,152 9,152
Retained earnings (Note 3) 107,174 98,054 107,986
116,326 107,206 117,138
195,027 185,879 187,186
GOODFELLOW INC. Consolidated Statements of Cash Flows (in thousands of dollars) Unaudited
Six months ended February 28 Three months ended February 28
2014 2013 2014 2013
$ $ $ $
Cash Flows Used in Operating Activities
Net Earnings 889 (179 ) (277 ) (918 )
Adjustments for :
Depreciation 1,277 1,348 644 687
Accretion expense on environmental provision 20 15 12 8
Gain on disposal of fixed assets (5 ) - - -
Income tax expense 363 (73 ) (113 ) (375 )
Interest expense 444 411 230 197
Funding in excess of pension plan expense (1,005 ) (869 ) (453 ) (367 )
1,983 653 43 (768 )
Changes in non-cash working capital items (5,411 ) (5,060 ) (10,031 ) (14,691 )
Interest paid (528 ) (460 ) (352 ) (267 )
Income taxes paid (1,143 ) (460 ) (463 ) (146 )
(7,082 ) (5,980 ) (10,846 ) (15,104 )
Cash Flows From (Used In) Financing Activities
Decrease in bank loans 6,000 8,000 14,000 14,000
Increase in banker's acceptances 2,000 (4,000 ) 1,000 (5,000 )
Long term debt 909 150 909 150
Redemption of shares - (14 ) - -
Dividends paid (1,701 ) (1,275 ) - -
7,208 2,861 15,909 9,150
Cash Flows Used In Investing Activities
Acquisition of property, plant and equipment (3,954 ) (1,857 ) (3,594 ) (563 )
Proceeds on disposal of capital assets 10 - - -
(3,944 ) (1,857 ) (3,594 ) (563 )
Net cash inflow (outflow) (1,835 ) (4,323 ) 1,512 (7,285 )
Cash position, beginning of year (4,972 ) (8,450 ) (8,319 ) (5,488 )
Cash position, end of year (6,807 ) (12,773 ) (6,807 ) (12,773 )
Cash position is comprised of :
Cash and cash equivalents 234 572 234 572
Bank overdraft (7,041 ) (13,345 ) (7,041 ) (13,345 )
(6,807 ) (12,773 ) (6,807 ) (12,773 )
GOODFELLOW INC. Consolidated Statements of Change in Shareholders' Equity For The Six Months Ended February 28, 2014 and 2013 (in thousands of dollar) Unaudited
Share Capital Retained Earnings Total
$ $ $
Balance as at August 31, 2012 9,154 99,520 108,674
Net earnings - (179 ) (179 )
Transactions with owners, recorded directly in shareholders' equity
Dividends - (1,275 ) (1,275 )
Redemption of Shares (2 ) (12 ) (14 )
Balance as at February 28, 2013 9,152 98,054 107,206
Balance as at August 31, 2013 9,152 107,986 117,138
Net earnings - 889 889
Transactions with owners, recorded directly in shareholders' equity
Dividends - (1,701 ) (1,701 )
Balance as at February 28, 2014 9,152 107,174 116,326

Goodfellow Inc.Richard GoodfellowPresident and CEOTel: 450 635-6511450 635-3730info@goodfellowinc.com

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