Goodfellow Reports its Results for the Fiscal Year Ended August 31, 2012 and Declares an Eligible Dividend

Construction/Building — November 7, 2012

DELSON, QUEBEC--(Marketwire - Nov. 7, 2012) - Goodfellow Inc. (TSX:GDL) announced today its financial results for the fiscal year ended August 31, 2012. The Company generated net earnings of $4.4 million or $0.51 per share compared to net earnings of $3.0 million or $0.35 per share a year ago. Consolidated sales for the fiscal year 2012 were $500.7 million compared to $466.8 million for the same period a year ago. Cash flow from operations (excluding non-cash working capital, income tax paid and interest paid) for fiscal 2012 increased to $8.3 million from $7.1 million for the same period last year. Fiscal 2011-2012 called for caution and Management responded with a focus on cost reduction during the first 3 quarters while maintaining its market share presence in an extremely competitive environment across all our regional markets. As such, consolidated sales grew 7% during fiscal 2012. Our focus on introducing profitable value-added product lines continued throughout the year with the development and expansion of our product offering. On the operating side, Management maintained its focus on controlling its variable costs within sales growth rates without affecting its customer service levels. As such, direct, selling and administrative expenses were reduced by 2% or $1.7 million.

The Company generated net income of $2.5 million or $0.29 per share during the fourth quarter of fiscal 2012 (same as the fourth quarter last year). Consolidated sales for the fourth quarter of fiscal 2012 were $152.3 million compared to $135.0 million for the same period a year ago. Cash flow from operations (excluding non-cash working capital, income tax paid and interest paid) for the fourth quarter of fiscal 2012 decreased to $4.0 million from $4.2 million for the same period last year.

"Our 2011/2012 fiscal year was one that showed a slight improvement over last year. Our sales (up 7%) recovered to the $500 million mark but margins continued to be squeezed in most areas." said Richard Goodfellow, President and Chief Executive Officer. "Our market share has continued to grow with consolidation of many in each business sector and this should help us continue to grow both our sales and improve profitability."

The Board of directors of Goodfellow Inc. declared an eligible dividend of $0.15 per share payable November 30, 2012, to all shareholders of record as of November 16, 2012.

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 years ended August 31, 2012 and 2011 (in thousands of dollars, except per share amounts)
		2012	2011
		$	$

Sales		500,688	466,809

Expenses
	Cost of goods sold	413,501	379,839
	Selling, administrative and general expenses	79,330	81,082
	Net financial costs	1,794	1,657
		494,625	462,578


Earnings before income taxes		6,063	4,231

Income taxes		1,708	1,228

Net earnings, being comprehensive income		4,355	3,003

Earnings per share
	Basic and diluted	0.51	0.35

GOODFELLOW INC. Consolidated Statements of Financial Position As at August 31, 2012, 2011 and September 1, 2010 (in thousands of dollars)
		2012	2011	2010
		$	$	$
Assets
Current Assets
	Cash and cash equivalents	707	210	548
	Trade and other receivables	83,083	71,284	81,184
	Income taxes recoverable	-	3,708	-
	Inventories	63,736	58,722	63,367
	Prepaid expenses	3,474	1,699	1,647
Total Current Assets		151,000	135,623	146,746

Non-Current Assets
	Property, plant and equipment	35,743	37,125	37,854
		186,743	172,748	184,600

Liabilities
Current liabilities
	Bank indebtedness	37,157	28,617	27,132
	Trade and other payables	29,060	24,486	34,597
	Income taxes payable	22	-	1,584
Total Current Liabilities		66,239	53,103	63,313

Non-Current Liabilities
	Provisions	1,442	1,498	1,400
	Deferred income taxes	2,514	2,195	2,234
	Defined benefit plan obligation	512	2,048	3,323
Total Non-Current Liabilities		4,468	5,741	6,957
		70,707	58,844	70,270

Shareholders' equity
	Share capital	9,154	9,222	9,222
	Retained earnings	106,882	104,682	105,108
		116,036	113,904	114,330
		186,743	172,748	184,600

GOODFELLOW INC. Consolidated Statements of Cash Flows Years ended August 31, 2012 and 2011 (in thousands of dollars)
			2012		2011
			$		$

Cash Flows Used in Operating Activities
	Net Earnings		4,355		3,003
	Adjustments for :
		Depreciation	2,872		3,089
		Accretion expense on environmental provision	120		98
		Decrease in environmental provision	(176	)	-
		Deferred income taxes	319		(39	)
		Income tax expense	1,389		1,267
		Gain on disposal of property, plant and equipment	-		(118	)
		Interest expense	961		1,053
		Funding in excess of pension plan expense	(1,536	)	(1,275	)
			8,304		7,078

	Changes in non-cash working capital items		(14,180	)	4,400
	Interest paid		(975	)	(1,033	)
	Income taxes paid (recovered)		2,341		(6,559	)
			(12,814	)	(3,192	)

Cash Flows From (Used In) Financing Activities
	Decrease in bank loans		-		(4,000	)
	Increase in banker's acceptances		9,000		-
	Redemption of shares		(515	)	-
	Dividends paid		(1,708	)	(3,429	)
			6,777		(7,429	)

Cash Flows Used In Investing Activities
	Acquisition of property, plant and equipment		(1,310	)	(2,448	)
	Proceeds on disposal of property, plant and equipment		-		168
			(1,310	)	(2,280	)

Net cash inflow (outflow)			957		(5,823	)
Cash position, beginning of year			(9,407	)	(3,584	)
Cash position, end of year			(8,450	)	(9,407	)

Cash position is comprised of :
	Cash and cash equivalents		707		210
	Bank overdraft		(9,157	)	(9,617	)
			(8,450	)	(9,407	)

GOODFELLOW INC. Consolidated Statements of Change in Shareholders' Equity Years ended August 31, 2012 and 2011 (in thousands of dollar)
		Share Capital		Retained Earnings		Total
		$		$		$

Balance as at September 1, 2010		9,222		105,108		114,330

Net earnings		-		3,003		3,003

Transactions with owners, recorded directly in shareholders' equity

	Dividends	-		(3,429	)	(3,429	)

Balance as at August 31, 2011		9,222		104,682		113,904

Net earnings		-		4,355		4,355

Transactions with owners, recorded directly in shareholders' equity

	Dividends	-		(1,708	)	(1,708	)
	Redemption of Shares	(68	)	(447	)	(515	)

Balance as at August 31, 2012		9,154		106,882		116,036