Goodfellow Reports its Results for the Second Quarter Ended February 28, 2013

DELSON, QUEBEC--(Marketwire - March 26, 2013) - Goodfellow Inc. (TSX:GDL) announced today its financial results for the second quarter ended February 28, 2013. The Company recorded a net loss of $(0.9) million or $(0.11) per share compared to $(0.6) million or $(0.07) per share during the corresponding period a year ago. Consolidated sales for the three months ended February 28, 2013 were $95.4 million compared to $101.1 million last year. Sales during the second quarter declined due to unfavourable weather conditions, and a reduced demand from our retailers business. The decrease was mitigated by the increased demand for our value-added product lines and the introduction of new product lines compared to last year. The Canadian housing market conditions were sluggish with new housing starts decreasing 11.7% to 178,100 units on average (Source: CMHC) for the three months ended February 28, 2013 compared to 201,800 units during the second quarter a year ago.

Cash flow from operations (excluding non-cash working capital income tax and interest paid) for the second quarter of Fiscal 2013 closed at $(0.8) million from $(0.4) million for the same period last year. Operational costs during the second quarter increased with the increased production of value added products and higher maintenance costs during the cold winter months. As a result, operating costs during the second quarter increased 6% compared to the second quarter last year.

On a year-to-date basis, the Company recorded a net loss of $(0.2) million or $(0.02) per share compared to net income of $0.3 million or $0.03 per share a year ago. Consolidated sales for the six months ended February 28, 2013 were $207.5 million compared to $207.2 million in the previous year. Cash flow from operations (excluding non-cash working capital income tax and interest paid) for the first six months of Fiscal 2013 decreased to $0.7 million from $1.3 million for the same period last year.

"Continued global financial uncertainties, the harsh winter across the country, and the sharp reduction in demand at the retail customer level all added up to making Q2 a difficult one." said Richard Goodfellow, President and Chief Executive Officer. "We continue to be however cautiously optimistic for the spring period with a strong order file in hand."

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.
Condensed Interim Consolidated Statements of Comprehensive Income
(in thousands of dollars, except per share amounts)
(unaudited)
		Three Months				Six Months
		ended Feb 28				ended Feb 28
		2013		2012		2013		2012
		$		$		$		$
Sales		95,429		101,122		207,476		207,161
Expenses
	Cost of goods sold	77,655		84,095		168,555		169,665
	Selling, administrative and general expenses	18,700		17,595		38,364		36,441
	Financial costs	367		351		809		685
		96,722		102,041		207,728		206,791
Earnings before income taxes		(1,293	)	(919	)	(252	)	370
Income taxes		(375	)	(285	)	(73	)	115
Net earnings, being comprehensive income		(918	)	(634	)	(179	)	255
Earnings per share
	Basic and diluted	(0.11	)	(0.07	)	(0.02	)	0.03

GOODFELLOW INC.
Condensed Interim Consolidated Statements of Financial Position
(in thousands of dollars)
(unaudited)
		Feb 28	Feb 29	Aug 31
		2013	2012	2012
		$	$	$
Assets
Current Assets
	Cash and cash equivalents	572	267	707
	Trade and other receivables	58,838	58,976	83,083
	Income taxes recoverable	511	4,934	-
	Inventories	85,868	72,679	63,736
	Prepaid expenses	3,670	1,874	3,474
Total Current Assets		149,459	138,730	151,000
Non Current Assets
	Property, plant and equipment	36,253	36,180	35,743
	Defined benefit plan asset	358	-	-
		186,070	174,910	186,743
Liabilities
Current liabilities
	Bank indebtedness	45,345	33,035	37,157
	Trade and other payables	22,036	23,658	29,060
	Income taxes payable	-	-	22
Total Current Liabilities		67,381	56,693	66,239
Non-Current Liabilities
	Provisions	1,457	1,513	1,442
	Long term debt	150	-	-
	Deferred income taxes	2,514	2,195	2,514
	Defined benefit plan obligation	-	1,239	512
Total Non-Current Liabilities		4,121	4,947	4,468
		71,502	61,640	70,707
Shareholders' equity
	Share capital	9,152	9,218	9,154
	Retained earnings	105,416	104,052	106,882
		114,568	113,270	116,036
		186,070	174,910	186,743

GOODFELLOW INC.
Condensed Consolidated Statements of Cash Flows
(in thousands of dollars)
(unaudited)
			Three Months				Six Months
			ended Feb 28				ended Feb 28
			2013		2012		2013		2012
			$		$		$		$
Cash Flows Used From Operating Activities
	Net Earnings		(918	)	(634	)	(179	)	255
	Adjustments for :
		Depreciation	687		713		1,348		1,416
		Accretion expense on Provisions	8		7		15		15
		Income tax expenses	(375	)	(284	)	(73	)	115
		Interest expenses	197		184		411		343
		Funding in excess of pension plan of expenses	(367	)	(361	)	(869	)	(809	)
			(768	)	(375	)	653		1,335
	Changes in non-cash working capital items		(14,711	)	(3,335	)	(5,060	)	(2,592	)
	Interest paid		(247	)	(274	)	(460	)	(402	)
	Income taxes paid		(146	)	(432	)	(460	)	(1,341	)
			(15,104	)	(4,041	)	(5,980	)	(4,335	)
Cash Flows Used By Financing Activities
	Increase (Decrease) in bank loan		14,000		2,000		8,000		(4,000	)
	(Decrease) Increase in banker's acceptances		(5,000	)	4,000		(4,000	)	9,000
	Long term debt		150		-		150		-
	Redemption of shares		-		(32	)	(14	)	(32	)
	Dividends paid		-		-		(1,275	)	(857	)
			9,150		5,968		2,861		4,111
Cash Flows Used By Investing Activities
	Acquisition of property, plant and equipment		(563	)	(157	)	(1,857	)	(472	)
			(563	)	(157	)	(1,857	)	(472	)
Net cash (outflow) inflow			(7,285	)	1,395		(4,323	)	639
Cash position, beginning of period			(5,488	)	(10,163	)	(8,450	)	(9,407	)
Cash position, end of period			(12,773	)	(8,768	)	(12,773	)	(8,768	)
Cash position is comprised of :
	Cash and cash equivalents		572		267		572		267
	Bank overdraft		(13,345	)	(9,035	)	(13,345	)	(9,035	)
			(12,773	)	(8,768	)	(12,773	)	(8,768	)

GOODFELLOW INC.
Condensed Consolidated Statements of Change in Shareholder's Equity
(in thousands of dollars)
(unaudited)
		Share		Retained
		Capital		Earnings		Total
		$		$		$
Balance as at August 31, 2012		9,154		106,882		116,036
Net earnings		-		(179	)	(179	)
Transactions with owners, recorded directly in equity
	Dividends	-		(1,275	)	(1,275	)
	Share repurchased	(2	)	(12	)	(14	)
Balance as at February 28, 2013		9,152		105,416		114,568
		Share		Retained
		Capital		Earnings		Total
		$		$		$
Balance as at August 31, 2011		9,222		104,682		113,904
Net earnings		-		255		255
Transactions with owners, recorded directly in equity
	Dividends	-		(857	)	(857	)
	Share repurchased	(4	)	(28	)	(32	)
Balance as at February 29, 2012		9,218		104,052		113,270