DELSON, QUEBEC–(Marketwired – July 8, 2016) – Goodfellow Inc. (TSX:GDL) announced today its financial results for the second quarter ended May 31, 2016. For the three months ended May 31, 2016, the Company reported net income of $3.4 million or $0.40 per share compared to $3.2 million or $0.38 per share a year ago. Consolidated sales for the three months ended May 31, 2016 were $166.7 million compared to $154.0 million last year. For the six months ended May 31, 2016, the Company reported a net income of $2.5 million or $0.29 per share compared to $2.9 million or $0.34 per share a year ago.
Consolidated sales for the six months ended May 31, 2016 were $275.3 million compared to $252.1 million last year. Sales in Canada during the first six months of fiscal 2016 increased 14% compared to the same period a year ago mainly due to a strong second quarter in Ontario and the Atlantic provinces. Sales in the United States for the first six months ended May 31, 2016 decreased 5% on a Canadian dollar basis compared to the same period last year due to reduced demand for lumber products. On a non-converted basis, US denominated sales decreased 14% compared to last year. Finally, Export sales decreased 26% during the first six months of fiscal 2016 compared to the same period a year ago mainly due to decreasing demand for value added products in the UK and Asia. On the operating side, Selling, Administrative and General Expenses increased 6.8% compared to the corresponding period last year due to increased variables costs for the added volume and the acquisition of Quality Hardwoods Ltd. As a result, direct, selling, and administrative expenses increased to $45.2 million ($42.4 million last year).
“We are happy with our sales growth during the second quarter as we continue to leverage our recent transactions.” said Denis Fraser, President and Chief Executive Officer. “Nevertheless, our profitability remains less than expected mainly due to the implementation cost of our ERP system. Our results are expected to improve in the coming months as we continue to make progress with our efficiency.”
The Board of directors of Goodfellow Inc. declared an eligible dividend of $0.15 per share payable August 12, 2016, to all shareholders of record as of July 29, 2016.
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 | |||||
| For the three months and six months ended May 31, 2016 and 2015 | |||||
| (in thousands of dollars, except per share amounts) | |||||
| Unaudited | |||||
| For the three months ended |
For the six months ended |
||||
| May 31 2016 |
May 31 2015 |
May 31 2016 |
May 31 2015 |
||
| $ | $ | $ | $ | ||
| Sales | 166,669 | 153,975 | 275,328 | 252,072 | |
| Expenses | |||||
| Cost of goods sold | 137,237 | 126,325 | 225,216 | 204,402 | |
| Selling, administrative and general expenses | 23,927 | 22,362 | 45,230 | 42,351 | |
| Net financial costs | 824 | 713 | 1,459 | 1,247 | |
| 161,988 | 149,400 | 271,905 | 248,000 | ||
| Earnings before income taxes | 4,681 | 4,575 | 3,423 | 4,072 | |
| Income taxes | 1,307 | 1,327 | 955 | 1,181 | |
| Net earnings | 3,374 | 3,248 | 2,468 | 2,891 | |
| Net earnings per share – Basic and diluted | 0.40 | 0.38 | 0.29 | 0.34 | |
| GOODFELLOW INC. | ||||
| Consolidated Statements of Financial Position | ||||
| (in thousands of dollars) | ||||
| As at | As at | As at | ||
| May 31 2016 (Unaudited) |
November 30 2015 (Audited) |
May 31 2015 (Unaudited) |
||
| $ | $ | $ | ||
| Assets | ||||
| Current Assets | ||||
| Cash | 1,396 | 965 | 494 | |
| Trade and other receivables | 121,800 | 65,670 | 98,708 | |
| Income taxes receivable | 18 | – | – | |
| Inventories | 141,162 | 97,665 | 107,384 | |
| Prepaid expenses | 4,820 | 4,156 | 2,852 | |
| Total Current Assets | 269,196 | 168,456 | 209,438 | |
| Non-Current Assets | ||||
| Property, plant and equipment | 39,430 | 36,146 | 36,626 | |
| Intangible assets | 3,629 | 2,667 | – | |
| Defined benefit plan asset | 4,991 | 4,812 | 1,832 | |
| Investment in a joint venture | 3,444 | – | – | |
| Total Non-Current Assets | 51,494 | 43,625 | 38,458 | |
| Total Assets | 320,690 | 212,081 | 247,896 | |
| Liabilities | ||||
| Current liabilities | ||||
| Bank indebtedness | 102,107 | 46,781 | 66,227 | |
| Trade and other payables | 82,588 | 29,762 | 52,876 | |
| Income taxes payable | – | 1,595 | 679 | |
| Provision | 1,111 | 1,112 | 941 | |
| Current portion of long-term debt | 183 | 113 | 50 | |
| Total Current Liabilities | 185,989 | 79,363 | 120,773 | |
| Non-Current Liabilities | ||||
| Provision | 503 | 477 | 499 | |
| Long-term debt | 188 | – | 37 | |
| Deferred income taxes | 4,718 | 4,141 | 2,535 | |
| Defined benefit plan obligation | – | – | 1,675 | |
| Total Non-Current Liabilities | 5,409 | 4,618 | 4,746 | |
| Total Liabilities | 191,398 | 83,981 | 125,519 | |
| Shareholders’ equity | ||||
| Share capital | 9,152 | 9,152 | 9,152 | |
| Retained earnings | 120,140 | 118,948 | 113,225 | |
| 129,292 | 128,100 | 122,377 | ||
| Total Liabilities and Shareholders’ Equity | 320,690 | 212,081 | 247,896 | |
| GOODFELLOW INC. | ||||||||||
| Consolidated Statements of Cash Flows | ||||||||||
| For the three months and six months ended May 31, 2016 and 2015 | ||||||||||
| (in thousands of dollars) | ||||||||||
| (Unaudited) | ||||||||||
| For the three months ended | For the six months ended | |||||||||
| May 31 | May 31 | May 31 | May 31 | |||||||
| 2016 | 2015 | 2016 | 2015 | |||||||
| $ | $ | $ | $ | |||||||
| Operating Activities | ||||||||||
| Net Earnings | 3,374 | 3,248 | 2,468 | 2,891 | ||||||
| Adjustments for : | ||||||||||
| Depreciation | 838 | 746 | 1,636 | 1,477 | ||||||
| Accretion expense on provision | 13 | 3 | 26 | (11 | ) | |||||
| Income taxes | 1,307 | 1,327 | 955 | 1,181 | ||||||
| (Gain) Loss on disposal of property, plant and equipment | – | (21 | ) | – | 16 | |||||
| Interest expense | 529 | 463 | 963 | 807 | ||||||
| Funding in (excess) deficit of pension plan expense | (54 | ) | 56 | (179 | ) | 113 | ||||
| 6,007 | 5,822 | 5,869 | 6,474 | |||||||
| Changes in non-cash working capital items | (12,711 | ) | 4,134 | (48,225 | ) | (25,771 | ) | |||
| Interest paid | (508 | ) | (401 | ) | (1,164 | ) | (765 | ) | ||
| Income taxes paid | (2,322 | ) | (284 | ) | (2,875 | ) | (1,499 | ) | ||
| (15,541 | ) | 3,449 | (52,264 | ) | (28,035 | ) | ||||
| Net Cash Flows from Operating Activities | (9,534 | ) | 9,271 | (46,395 | ) | (21,561 | ) | |||
| Financing Activities | ||||||||||
| Net increase (decrease) in bank loans | 2,500 | (6,000 | ) | 15,500 | (1,500 | ) | ||||
| Increase in banker’s acceptances | 2,500 | 2,000 | 30,500 | 22,000 | ||||||
| Increase in long-term debt | 560 | – | 1,050 | – | ||||||
| Reimbursement of long-term debt | (56 | ) | (847 | ) | (792 | ) | (833 | ) | ||
| Dividends paid | (1,276 | ) | – | (1,276 | ) | – | ||||
| 4,228 | (4,847 | ) | 44,982 | 19,667 | ||||||
| Investing Activities | ||||||||||
| Acquisition of property, plant and equipment | (572 | ) | (611 | ) | (938 | ) | (1,117 | ) | ||
| Increase in intangible assets | (622 | ) | – | (1,305 | ) | – | ||||
| Proceeds on disposal of property, plant and equipment | – | 3 | – | 17 | ||||||
| Business acquisitions, net of cash acquired | (587 | ) | – | (4,795 | ) | – | ||||
| Investment in a joint venture | (444 | ) | – | (444 | ) | – | ||||
| (2,225 | ) | (608 | ) | (7,482 | ) | (1,100 | ) | |||
| Net cash (outflow) inflow | (7,531 | ) | 3,816 | (8,895 | ) | (2,994 | ) | |||
| Cash position, beginning of period | (3,180 | ) | (10,549 | ) | (1,816 | ) | (3,739 | ) | ||
| Cash position, end of period | (10,711 | ) | (6,733 | ) | (10,711 | ) | (6,733 | ) | ||
| Cash position is comprised of : | ||||||||||
| Cash and cash equivalents | 1,396 | 494 | 1,396 | 494 | ||||||
| Bank overdraft | (12,107 | ) | (7,227 | ) | (12,107 | ) | (7,227 | ) | ||
| (10,711 | ) | (6,733 | ) | (10,711 | ) | (6,733 | ) | |||
| GOODFELLOW INC. | ||||||
| Consolidated Statements of Change in Shareholders’ Equity | ||||||
| For the six months ended May 31, 2016 and 2015 | ||||||
| (in thousands of dollars) | ||||||
| Share | Retained | |||||
| Capital | Earnings | Total | ||||
| $ | $ | $ | ||||
| Balance as at November 30, 2014 (Audited) | 9,152 | 110,334 | 119,486 | |||
| Net earnings | – | 2,891 | 2,891 | |||
| Total comprehensive income | – | 2,891 | 2,891 | |||
| Balance as at May 31, 2015 (Unaudited) | 9,152 | 113,225 | 122,377 | |||
| Balance as at November 30, 2015 (Audited) | 9,152 | 118,948 | 128,100 | |||
| Net earnings | – | 2,468 | 2,468 | |||
| Total comprehensive income | – | 2,468 | 2,468 | |||
| Transactions with owners of the Company | ||||||
| Dividends | – | (1,276 | ) | (1,276 | ) | |
| Balance as at May 31, 2016 (Unaudited) | 9,152 | 120,140 | 129,292 | |||
Denis Fraser
President and CEO
450 635-6511
450 635-3730 (FAX)
info@goodfellowinc.com