Quebec based Goodfellow Inc. reports results for Q3-2009

Goodfellow Inc. announced today its financial results for the third quarter ended May 31, 2009. Consolidated sales reached $110.2 million compared to $131.5 million a year ago. Results from operations for the third quarter of fiscal 2009 show a net income of $2.1 million or $0.24 per share compared to $1.7 million or $0.20 per share a year ago. The third quarter of fiscal 2009 was impacted by the overall slowdown in the Canadian and US economy combined with the depressed housing market on both sides of the border. The Company's gross margin increased to an average of 19.1% compared to 18.1% last year impacted by a strong performance of our traditional value-added product mix. In addition, the Company focused on controlling its operating costs to adapt to the business conditions which remained difficult. With the weakened economy and tight credit conditions, additional bad debt provisions were taken during the third quarter. Finally, low interest rate combined with lower bank indebtedness resulted in savings which helped the Company achieve these results.

For the nine months ended May 31, 2009, consolidated sales reached $312.6 million compared to $348.8 million for the same period a year ago. The Company generated net income from operations for the nine months ended May 31, 2009 of $2.3 million or $0.27 per share. The results from operations excludes a non recurring gain of $3.1 million or $0.37 per share which represents the revaluation at fair value of fixed assets exchanged resulting from the expropriation of part of our Delson facility. Consequently net income for the first nine months of fiscal 2009 reached $5.5 million or $0.64 per share compared to $3.6 million or $0.42 per share a year ago. Finally, cash flow from operations (excluding non-cash working capital) for the first nine months ended May 31, 2009 decreased to $3.5 million from $4.8 million for the same period last year.

"Challenging times continue for us in most of our market areas but decisions taken recently helped us return to operating profitability during the third quarter" said Richard Goodfellow, President and Chief Executive Officer. "We are now poised for our key fourth quarter and it is expected sales levels will continue below expectations but we should remain at similar profit levels to last year. Our order files continue to remain relatively strong and the fourth quarter has traditionally been the best one for the company."