GDL Goodfellow Inc

Goodfellow Inc. (TSX: GDL) announced today its financial results for the first quarter ended February 29, 2020. The Company reported a net loss of $2.1 million or $0.24 per share compared to a net loss of $1.6 million or $0.18 per share a year ago.

Consolidated sales for the three months ended February 29, 2020 were $88.9 million compared to $88.2 million last year. Sales in Canada increased 2% compared to the same period a year ago, while sales in the United States decreased 1% (on a Canadian dollar basis) and export sales decreased 13% compared to the same period a year ago. On the operating side, selling, administrative and general expenses increased overall by $1.1 million and overall gross profit before selling and administrative costs increased by $0.5 million.

"During Fiscal year 2019-2020 Goodfellow will put strong emphasis on market share growth within and outside its customer base. In what is lining up to be a very difficult year for Canadians, Goodfellow will pursue a responsible and conservative strategy. Our concentration on value added product lines will be front and center to support construction, renovation and infrastructure projects. The company will put great emphasis on cost control and right sizing its inventories to adapt to what certainly will be an unprecedented year of challenges and obstacles in North America & Overseas."

Subsequent to February 29, 2020 the COVID-19 outbreak was declared a pandemic by the World Health Organization. The current challenging economic climate should have a direct or indirect impact on the Company’s operating results and financial position in the future. The situation is dynamic and the ultimate duration and magnitude of the impact on the economy and the financial effect on our business is not known at this time.

Goodfellow Inc. is a distributor of lumber products, building materials and floor coverings. Goodfellow shares trade on the Toronto Stock Exchange under the symbol GDL.

GOODFELLOW INC.
Consolidated Statements of Comprehensive Income
For the three months ended February 29, 2020 and February 28, 2019
(in thousands of dollars, except per share amounts)
Unaudited
	For the three months ended
	February 29 2020		February 28 2019
	$		$
Sales	88,856		88,153
Expenses
Cost of goods sold	71,480		71,241
Selling, administrative and general expenses	19,518		18,367
(Gain) loss on disposal of property, plant and equipment	(15	)	7
Net financial costs	734		691
	91,717		90,306
Loss before income taxes	(2,861	)	(2,153	)
Income taxes	(801	)	(603	)
Total comprehensive loss	(2,060	)	(1,550	)
Net loss per share – Basic and Diluted	(0.24	)	(0.18	)

GOODFELLOW INC.
Consolidated Statements of Financial Position
(in thousands of dollars)
Unaudited
	As at		As at		As at
	February 292020		November 302019		February 282019
	$		$		$
Assets
Current Assets
Cash	2,089		2,364		2,159
Trade and other receivables	54,082		48,498		54,342
Income taxes receivable	1,096		-		647
Inventories	99,300		87,339		107,879
Prepaid expenses	4,250		2,563		2,133
Total Current Assets	160,817		140,764		167,160
Non-Current Assets
Property, plant and equipment	32,517		32,838		33,958
Intangible assets	3,746		3,927		4,292
Right-of-use assets	16,304		-		-
Defined benefit plan asset	2,210		2,222		2,703
Investment in a joint venture	25		25		25
Other assets	753		805		849
Total Non-Current Assets	55,555		39,817		41,827
Total Assets	216,372		180,581		208,987
Liabilities
Current liabilities
Bank indebtedness	47 845		31,204		56,155
Trade and other payables	35 549		29,048		36,066
Income taxes payable	-		734		-
Provision	1 478		1,470		336
Dividend payable	856		856		851
Current portion of lease liabilities	4 254		15		14
Total Current Liabilities	89 982		63,327		93,422
Non-Current Liabilities
Provision	-		-		1,321
Lease liabilities	15,547		28		39
Deferred income taxes	2,269		3,209		3,652
Defined benefit plan obligation	649		609		91
Total Non-Current Liabilities	18,465		3,846		5,103
Total Liabilities	108,447		67,173		98,525
Shareholders’ Equity
Share capital	9,424		9,424		9,152
Retained earnings	98,501		103,984		101,310
	107,925		113,408		110,462
Total Liabilities and Shareholders’ Equity	216,372		180,581		208,987

GOODFELLOW INC.
Consolidated Statements of Cash Flows
For the three months ended February 29, 2020 and February 28, 2019
(in thousands of dollars)
Unaudited
	For the three months ended
	February 29	February 28
	2020	2019
	$	$
Operating Activities
Net loss	(2,060)	(1,550)
Adjustments for:
Depreciation and amortization of:
Property, plant and equipment	651	696
Right-of-use assets	1,093	-
Intangible assets	181	171
Accretion expense on provision	18	3
Decrease in provision	(10)	-
Income taxes	(801)	(603)
(Gain) loss on disposal of property, plant and equipment	(15)	7
Interest expense	323	482
Interest on lease liabilities	179	-
Funding in deficit of pension plan expense	52	35
Other assets	-	67
	(389)	(692)
Changes in non-cash working capital items	(12,616)	(11,781)
Interest paid	(348)	(486)
Income taxes paid	(1,029)	(453)
	(13,993)	(12,720)
Net Cash Flows from Operating Activities	(14,382)	(13,412)
Financing Activities
Net decrease in bank loans	(3,000)	(3,000)
Net increase in banker’s acceptances	13,000	15,000
Payment of lease liabilities	(1,333)	(4)
Dividend Paid	(856)	-
	7,811	11,996
Investing Activities
Acquisition of property, plant and equipment	(361)	(312)
Increase in intangible assets	-	(19)
Proceeds on disposal of property, plant and equipment	16	8
	(345)	(323)
Net cash outflow	(6,916)	(1,739)
Cash position, beginning of period	1,160	743
Cash position, end of period	(5,756)	(996)
Cash position is comprised of:
Cash	2,089	2,159
Bank overdraft	(7,845)	(3,155)
	(5,756)	(996)

GOODFELLOW INC.
Consolidated Statements of Change in Shareholders’ Equity
For the three months ended February 29, 2020 and February 28, 2019
(in thousands of dollars)
Unaudited
		Share				Retained				Total
		Capital				Earnings
		$				$				$
Balance as at November 30, 2018		9,152				103,711				112,863
Net loss		-				(1,550)				(1,550)
Total comprehensive loss		-				(1,550)				(1,550)
Transactions with owners of the Company
Dividend		-				(851)				(851)
Balance as at February 28, 2019		9,152				101,310				110,462
Balance as at November 30, 2019		9,424				103,984				113,408
IFRS 16 adoption adjustment, net of taxes of $940		-				(2,567)				(2,567)
Balance as at December 1, 2019		9,424				101,417				110,841
Net loss		-				(2,060)				(2,060)
Total comprehensive loss		-				(2,060)				(2,060)
Transactions with owners of the Company
Dividend		-				(856)				(856)
Balance as at February 29, 2020		9,424				98,501				107,925

From:Goodfellow inc.Patrick GoodfellowPresident and CEOTel: 450 635-6511Fax: 450 635-3730Internet: info@goodfellowinc.com