DELSON, Quebec, Oct. 04, 2017 (GLOBE NEWSWIRE) — Goodfellow Inc. (TSX:GDL) announced today its financial results for the third quarter ended August 31st, 2017. For the three months ended August 31st, 2017, the Company reported net earnings of $1.6M or $0.19 per share. Consolidated sales for the three months ended August 31st, 2017 were $143.0M. For the nine months ended August 31, 2017, the Company reported a net loss of $(4.3) M or $(0.51) per share. Consolidated sales for the nine months ended August 31st, 2017 were $396.1M.
A SPECIAL STATEMENT
The loosening of inventory restrictions in May of Q2 generated a favourable sales push which brought the Company back to monthly profitability. This positive momentum carried over into Q3 with profitable results. Margin levels continued on a positive trend and are approaching profitable historic norms.
Q3 is characterized by the detailed planning of our warehouse sales in August and their successful execution. The Company was able to attain the elusive $50M in sales target for August while continuing in its push to grow market share and retain customer loyalty.
Operationally Goodfellow took control of its pressure treating assets and began its own production once again on June 1st, 2017 as planned. ERP obstacles and challenges have widely been addressed and resolved and the Company is moving forward with efficiency initiatives.
Goodfellow is continuing in its focused strategy to steadily increase margin levels while simultaneously addressing elements of obsolete inventory. Inventory levels have been right sized in order to give Goodfellow the opportunity to capitalize on asset opportunities.
Q4 will bring many seasonal inventory and transitional challenges. Nonetheless Goodfellow now has a profitable framework moving forward. The Company is committed to improving its customer experience on an ongoing basis.
Goodfellow Inc. is a distributor of lumber products, building materials, 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 and nine months ended August 31, 2017
(in thousands of dollars, except per share amounts)
Unaudited
| For the three months Ended August 31, 2017 |
For the nine months Ended August 31, 2017 |
||
| $ | $ | ||
| Sales | 142,970 | 396,101 | |
| Expenses | |||
| Cost of goods sold | 119,074 | 337,762 | |
| Selling, administrative and general expenses | 20,461 | 61,180 | |
| Net financial costs | 1,121 | 3,145 | |
| 140,656 | 402,087 | ||
| Earnings (Loss) before income taxes | 2,314 | (5,986 | ) |
| Income taxes | 682 | (1,676 | ) |
| Total comprehensive income (loss) | 1,632 | (4,310 | ) |
| Net earnings (loss) per share – Basic and diluted | 0.19 | (0.51 | ) |
| GOODFELLOW INC. | ||
| Consolidated Statements of Financial Position | ||
| (in thousands of dollars) | ||
| Unaudited | ||
| As at | As at | |
| August 31 2017 |
November 30 2016 |
|
| $ | $ | |
| Assets | ||
| Current Assets | ||
| Cash | 1,121 | 703 |
| Trade and other receivables | 69,414 | 64,255 |
| Income taxes receivable | 8,408 | 6,598 |
| Inventories | 97,996 | 115,391 |
| Prepaid expenses | 3,861 | 4,863 |
| Total Current Assets | 180,800 | 191,810 |
| Non-Current Assets | ||
| Property, plant and equipment | 37,074 | 38,693 |
| Intangible assets | 5,116 | 5,428 |
| Defined benefit plan asset | 2,227 | 2,234 |
| Investment in a joint venture | 282 | 3,403 |
| Total Non-Current Assets | 44,699 | 49,758 |
| Total Assets | 225,499 | 241,568 |
| Liabilities | ||
| Current liabilities | ||
| Bank indebtedness | 73,715 | 94,113 |
| Trade and other payables | 39,305 | 30,721 |
| Provision | 925 | 963 |
| Current portion of long-term debt | 138 | 136 |
| Total Current Liabilities | 114,083 | 125,933 |
| Non-Current Liabilities | ||
| Provision | 513 | 475 |
| Long-term debt | 89 | 126 |
| Deferred income taxes | 3,296 | 3,296 |
| Defined benefit plan obligation | 1,135 | 1,045 |
| Total Non-Current Liabilities | 5,033 | 4,942 |
| Total Liabilities | 119,116 | 130,875 |
| Shareholders’ equity | ||
| Share capital | 9,152 | 9,152 |
| Retained earnings | 97,231 | 101,541 |
| 106,383 | 110,693 | |
| Total Liabilities and Shareholders’ Equity | 225,499 | 241,568 |
| GOODFELLOW INC. | |||||||||
| Consolidated Statements of Cash Flows | |||||||||
| For the three and nine months ended August 31, 2017 | |||||||||
| (in thousands of dollars) Unaudited |
|||||||||
| For the three months Ended August 31, 2017 |
For the nine months Ended August 31, 2017 |
||||||||
| $ | $ | ||||||||
| Operating Activities | |||||||||
| Net earnings (loss) | 1,632 | (4,310 | ) | ||||||
| Adjustments for: | |||||||||
| Depreciation | 987 | 2,893 | |||||||
| Accretion expense on provision | 12 | 37 | |||||||
| Decrease in provision | (4 | ) | (37 | ) | |||||
| Income taxes | 682 | (1,676 | ) | ||||||
| Gain on disposal of property, plant and equipment | (68 | ) | (55 | ) | |||||
| Interest expense | 781 | 2,255 | |||||||
| Funding in deficit of pension plan expense | 50 | 97 | |||||||
| Share of the profits of the joint venture | 122 | 1 | |||||||
| 4,194 | (795 | ) | |||||||
| Changes in non-cash working capital items | 5,475 | 21,876 | |||||||
| Interest paid | (817 | ) | (2,309 | ) | |||||
| Income taxes received (paid) | 474 | (134 | ) | ||||||
| 5,132 | 19,433 | ||||||||
| Net Cash Flows from Operating Activities | 9,326 | 18,638 | |||||||
| Financing Activities | |||||||||
| Net decrease in bank loans | (4,000 | ) | (4,000 | ) | |||||
| Net decrease in banker’s acceptances | (12,500 | ) | (20,500 | ) | |||||
| Increase in long-term debt | 69 | 69 | |||||||
| Reimbursement of long-term debt | (31 | ) | (104 | ) | |||||
| (16,462 | ) | (24,535 | ) | ||||||
| Investing Activities | |||||||||
| Acquisition of property, plant and equipment | (395 | ) | (796 | ) | |||||
| Increase in intangible assets | (73 | ) | (295 | ) | |||||
| Proceeds on disposal of property, plant, equipment and intangible assets | 135 | 184 | |||||||
| Decrease in investment | 3,120 | 3,120 | |||||||
| 2,787 | 2,213 | ||||||||
| Net cash outflow | (4,349 | ) | (3,684 | ) | |||||
| Cash position, beginning of period | (1,245 | ) | (1,910 | ) | |||||
| Cash position, end of period | (5,594 | ) | (5,594 | ) | |||||
| Cash position is comprised of: | |||||||||
| Cash and cash equivalents | 1,121 | 1,121 | |||||||
| Bank overdraft | (6,715 | ) | (6,715 | ) | |||||
| (5,594 | ) | (5,594 | ) | ||||||
| GOODFELLOW INC. | |||||||||
| Consolidated Statements of Change in Shareholders’ Equity | |||||||||
| For the nine months ended August 31, 2017 | |||||||||
| (in thousands of dollars) Unaudited |
|||||||||
| Share | Retained | ||||||||
| Capital | Earnings | Total | |||||||
| $ | $ | $ | |||||||
| Balance as at November 30, 2016 (Audited) | 9,152 | 101,541 | 110,693 | ||||||
| Net loss | – | (4,310 | ) | (4,310 | ) | ||||
| Total comprehensive loss | – | (4,310 | ) | (4,310 | ) | ||||
| Balance as at August 31, 2017 | 9,152 | 97,231 | 106,383 | ||||||