GDL Goodfellow Inc

Goodfellow Inc. (TSX: GDL) (the “Company” or “Goodfellow”) announced today its financial results for the third quarter ended August 31, 2022. The Company reported net earnings of $10.6 million or $1.24 per share compared to net earnings of $10.0 million or $1.17 per share a year ago. Consolidated sales for the three months ended August 31, 2022 were $167.6 million compared to $168.0 million last year.

For the nine months ended August 31, 2022, the Company reported net earnings of $28.2 million or $3.30 per share compared to net earnings of $27.8 million or $3.24 per share a year ago. Consolidated sales were $481.9 million compared to $472.9 million last year.

Results for the third quarter of fiscal 2022 were characteristic for this period where seasonal demand is historically strong, which was unexpected given current inflationary pressures. Attention paid to overhead expenses helped maintain margin levels as cost of goods increased. Inventory levels remain high and it will be crucial to level them out before year end in order for Goodfellow to reach its objectives.

The Board of Directors declared an eligible dividend of $0.50 per share payable on November 10, 2022 to shareholders of record at the close of business on October 27, 2022. This dividend is designated as an eligible dividend under the Income Tax Act (Canada). The declaration, timing, amount and payment of future dividends remain at the discretion of the Board of Directors.

About Goodfellow Goodfellow is a diversified manufacturer of value-added lumber products, as well as a wholesale distributor of building materials and floor coverings. Goodfellow has a distribution footprint from coast-to-coast in Canada servicing commercial and residential sectors through lumber yard retailer networks, manufacturers, industrial and infrastructure project partners, and floor covering specialists. Goodfellow also leverages its value-added product capabilities to serve lumber markets internationally. Goodfellow Inc. is a publicly traded company, and its shares are listed 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, 2022 and 2021
(in thousands of dollars, except per share amounts)
Unaudited
	For the three months ended		For the nine months ended
	August 31 2022	August 31 2021	August 31 2022	August 31 2021
	$	$	$	$
Sales	167,574	167,953	481,886	472,911
Expenses
Cost of goods sold	129,715	133,048	374,716	369,227
Selling, administrative and general expenses	22,126	20,210	65,464	62,922
Net financial costs	1,038	751	2,484	2,141
	152,879	154,009	442,664	434,290
Earnings before income taxes	14,695	13,944	39,222	38,621
Income taxes	4,115	3,905	10,983	10,837
Total comprehensive income	10,580	10,039	28,239	27,784
Net earnings per share – Basic and Diluted	1.24	1.17	3.30	3.24

GOODFELLOW INC.
Consolidated Statements of Financial Position
(in thousands of dollars) Unaudited
	As at	As at	As at
	August 31 2022	November 30 2021	August 31 2021
	$	$	$
Assets
Current Assets
Cash	2,279	4,253	1,726
Trade and other receivables	76,201	63,246	72,118
Income taxes receivable	33	-	-
Inventories	142,082	109,787	115,046
Prepaid expenses	3,237	4,189	4,290
Total Current Assets	223,832	181,475	193,180
Non-Current Assets
Property, plant and equipment	31,148	30,022	30,220
Intangible assets	2,235	2,650	2,789
Right-of-use assets	14,614	12,262	12,630
Defined benefit plan asset	10,441	10,397	1,901
Other assets	802	785	785
Total Non-Current Assets	59,240	56,116	48,325
Total Assets	283,072	237,591	241,505
Liabilities
Current Liabilities
Bank indebtedness	31,590	9,246	24,681
Trade and other payables	42,744	37,897	41,680
Income taxes payable	-	9,022	7,418
Provision	370	2,147	2,730
Current portion of lease liabilities	4,836	4,256	4,270
Total Current Liabilities	79,540	62,568	80,779
Non-Current Liabilities
Provision	2,281	-	-
Lease liabilities	12,338	10,924	11,405
Deferred income taxes	3,151	3,151	1,597
Defined benefit plan obligation	-	-	1,280
Total Non-Current Liabilities	17,770	14,075	14,282
Total Liabilities	97,310	76,643	95,061
Shareholders’ Equity
Share capital	9,424	9,424	9,424
Retained earnings	176,338	151,524	137,020
	185,762	160,948	146,444
Total Liabilities and Shareholders’ Equity	283,072	237,591	241,505

GOODFELLOW INC.
Consolidated Statements of Cash Flows
For the three and nine months ended August 31, 2022 and 2021
(in thousands of dollars) Unaudited
	For the three months ended				For the nine months ended
	August 31 2022		August 31 2021		August 31 2022		August 31 2021
	$		$		$		$
Operating Activities
Net earnings	10,580		10,039		28,239		27,784
Adjustments for:
Depreciation and amortization of:
Property, plant and equipment	636		636		1,788		1,901
Intangible assets	153		153		455		467
Right-of-use assets	1,175		1,055		3,365		3,111
Accretion expense on provision	25		11		76		33
(Decrease) increase in provision	(34	)	(76	)	428		1,224
Income taxes	4,115		3,905		10,983		10,837
Gain on disposal of property, plant and equipment	(10	)	(1	)	(45	)	(8	)
Interest expense	508		247		1,007		707
Interest on lease liabilities	152		143		430		446
Funding in (excess) deficit of pension plan expense	(15	)	63		(44	)	142
Other	(13	)	21		(38	)	(10	)
	17,272		16,196		46,644		46,634
Changes in non-cash working capital items	29,012		24,168		(39,462	)	(25,824	)
Interest paid	(539	)	(287	)	(1,426	)	(1,300	)
Income taxes paid	(3,070	)	(914	)	(20,038	)	(8,278	)
	25,403		22,967		(60,926	)	(35,402	)
Net Cash Flows from Operating Activities	42,675		39,163		(14,282	)	11,232
Financing Activities
Net (decrease) increase in bank loans	(5,000	)	14,000		6,000		9,000
Net (decrease) increase in banker’s acceptances	(35,000	)	(50,000	)	18,000		(12,000	)
Payment of lease liabilities	(1,282	)	(1,156	)	(3,702	)	(3,390	)
Dividend paid	-		-		(3,425	)	(4,710	)
	(41,282	)	(37,156	)	16,873		(11,100	)
Investing Activities
Acquisition of property, plant and equipment	(1,002	)	(238	)	(2,914	)	(975	)
Increase in intangible assets	-		-		(40	)	(18	)
Proceeds on disposal of property, plant and equipment	10		-		45		10
	(992	)	(238	)	(2,909	)	(983	)
Net cash inflow (outflow)	401		1,769		(318	)	(851	)
Cash position, beginning of period	(3,712	)	(3,724	)	(2,993	)	(1,104	)
Cash position, end of period	(3,311	)	(1,955	)	(3,311	)	(1,955	)
Cash position is comprised of:
Cash	2,279		1,726		2,279		1,726
Bank overdraft	(5,590	)	(3,681	)	(5,590	)	(3,681	)
	(3,311	)	(1,955	)	(3,311	)	(1,955	)

GOODFELLOW INC.
Consolidated Statements of Changes in Shareholders’ Equity
For the nine months ended August 31, 2022 and 2021
(in thousands of dollars)
Unaudited
	Share	Retained	Total
	Capital	Earnings
	$	$	$
Balance as at November 30, 2020	9,424	111,805	121,229
Net earnings	-	27,784	27,784
Total comprehensive income	-	27,784	27,784
Transactions with owners of the Company
Dividend	-	(2,569)	(2,569)
Balance as at August 31, 2021	9,424	137,020	146,444
Balance as at November 30, 2021	9,424	151,524	160,948
Net earnings	-	28,239	28,239
Total comprehensive income	-	28,239	28,239
Transactions with owners of the Company
Dividend	-	(3,425)	(3,425)
Balance as at August 31, 2022	9,424	176,338	185,762

From:

Goodfellow Inc. Patrick Goodfellow President and CEO T: 450 635-6511 F: 450 635-3730 info@goodfellowinc.com