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Goodfellow Reports its Results for the Second Quarter Ended February 28, 2013

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DELSON, QUEBEC -- (Marketwire) -- 03/26/13 -- Goodfellow Inc. (TSX: GDL) announced today its financial results for the second quarter ended February 28, 2013. The Company recorded a net loss of $(0.9) million or $(0.11) per share compared to $(0.6) million or $(0.07) per share during the corresponding period a year ago. Consolidated sales for the three months ended February 28, 2013 were $95.4 million compared to $101.1 million last year. Sales during the second quarter declined due to unfavourable weather conditions, and a reduced demand from our retailers business. The decrease was mitigated by the increased demand for our value-added product lines and the introduction of new product lines compared to last year. The Canadian housing market conditions were sluggish with new housing starts decreasing 11.7% to 178,100 units on average (Source: CMHC) for the three months ended February 28, 2013 compared to 201,800 units during the second quarter a year ago.

Cash flow from operations (excluding non-cash working capital income tax and interest paid) for the second quarter of Fiscal 2013 closed at $(0.8) million from $(0.4) million for the same period last year. Operational costs during the second quarter increased with the increased production of value added products and higher maintenance costs during the cold winter months. As a result, operating costs during the second quarter increased 6% compared to the second quarter last year.

On a year-to-date basis, the Company recorded a net loss of $(0.2) million or $(0.02) per share compared to net income of $0.3 million or $0.03 per share a year ago. Consolidated sales for the six months ended February 28, 2013 were $207.5 million compared to $207.2 million in the previous year. Cash flow from operations (excluding non-cash working capital income tax and interest paid) for the first six months of Fiscal 2013 decreased to $0.7 million from $1.3 million for the same period last year.

"Continued global financial uncertainties, the harsh winter across the country, and the sharp reduction in demand at the retail customer level all added up to making Q2 a difficult one." said Richard Goodfellow, President and Chief Executive Officer. "We continue to be however cautiously optimistic for the spring period with a strong order file in hand."

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.Condensed Interim Consolidated Statements of Comprehensive Income(in thousands of dollars, except per share amounts)(unaudited)-------------------------------------------------------------------------------------------------------------------------------------------------------- Three Months Six Months ended Feb 28 ended Feb 28 2013 2012 2013 2012---------------------------------------------------------------------------- $ $ $ $Sales 95,429 101,122 207,476 207,161----------------------------------------------------------------------------Expenses Cost of goods sold 77,655 84,095 168,555 169,665 Selling, administrative and general expenses 18,700 17,595 38,364 36,441 Financial costs 367 351 809 685---------------------------------------------------------------------------- 96,722 102,041 207,728 206,791----------------------------------------------------------------------------Earnings before income taxes (1,293) (919) (252) 370Income taxes (375) (285) (73) 115----------------------------------------------------------------------------Net earnings, being comprehensive income (918) (634) (179) 255----------------------------------------------------------------------------Earnings per share-------------------------------------------------------------------------------------------------------------------------------------------------------- Basic and diluted (0.11) (0.07) (0.02) 0.03----------------------------------------------------------------------------



GOODFELLOW INC.Condensed Interim Consolidated Statements of Financial Position(in thousands of dollars)(unaudited)-------------------------------------------------------------------------------------------------------------------------------------------------------- Feb 28 Feb 29 Aug 31 2013 2012 2012---------------------------------------------------------------------------- $ $ $AssetsCurrent Assets Cash and cash equivalents 572 267 707 Trade and other receivables 58,838 58,976 83,083 Income taxes recoverable 511 4,934 - Inventories 85,868 72,679 63,736 Prepaid expenses 3,670 1,874 3,474----------------------------------------------------------------------------Total Current Assets 149,459 138,730 151,000Non Current Assets Property, plant and equipment 36,253 36,180 35,743 Defined benefit plan asset 358 - ----------------------------------------------------------------------------- 186,070 174,910 186,743--------------------------------------------------------------------------------------------------------------------------------------------------------LiabilitiesCurrent liabilities Bank indebtedness 45,345 33,035 37,157 Trade and other payables 22,036 23,658 29,060 Income taxes payable - - 22----------------------------------------------------------------------------Total Current Liabilities 67,381 56,693 66,239Non-Current Liabilities Provisions 1,457 1,513 1,442 Long term debt 150 - - Deferred income taxes 2,514 2,195 2,514 Defined benefit plan obligation - 1,239 512----------------------------------------------------------------------------Total Non-Current Liabilities 4,121 4,947 4,468-------------------------------------------------------------------------------------------------------------------------------------------------------- 71,502 61,640 70,707----------------------------------------------------------------------------Shareholders' equity Share capital 9,152 9,218 9,154 Retained earnings 105,416 104,052 106,882---------------------------------------------------------------------------- 114,568 113,270 116,036---------------------------------------------------------------------------- 186,070 174,910 186,743----------------------------------------------------------------------------



GOODFELLOW INC.Condensed Consolidated Statements of Cash Flows(in thousands of dollars)(unaudited)-------------------------------------------------------------------------------------------------------------------------------------------------------- Three Months Six Months ended Feb 28 ended Feb 28-------------------------------------------------------------------------------------------------------------------------------------------------------- 2013 2012 2013 2012---------------------------------------------------------------------------- $ $ $ $Cash Flows Used From Operating Activities Net Earnings (918) (634) (179) 255 Adjustments for : Depreciation 687 713 1,348 1,416 Accretion expense on Provisions 8 7 15 15 Income tax expenses (375) (284) (73) 115 Interest expenses 197 184 411 343 Funding in excess of pension plan of expenses (367) (361) (869) (809)---------------------------------------------------------------------------- (768) (375) 653 1,335---------------------------------------------------------------------------- Changes in non-cash working capital items (14,711) (3,335) (5,060) (2,592) Interest paid (247) (274) (460) (402) Income taxes paid (146) (432) (460) (1,341)---------------------------------------------------------------------------- (15,104) (4,041) (5,980) (4,335)----------------------------------------------------------------------------Cash Flows Used By Financing Activities Increase (Decrease) in bank loan 14,000 2,000 8,000 (4,000) (Decrease) Increase in banker's acceptances (5,000) 4,000 (4,000) 9,000 Long term debt 150 - 150 - Redemption of shares - (32) (14) (32) Dividends paid - - (1,275) (857)---------------------------------------------------------------------------- 9,150 5,968 2,861 4,111----------------------------------------------------------------------------Cash Flows Used By Investing Activities Acquisition of property, plant and equipment (563) (157) (1,857) (472)---------------------------------------------------------------------------- (563) (157) (1,857) (472)----------------------------------------------------------------------------Net cash (outflow) inflow (7,285) 1,395 (4,323) 639Cash position, beginning of period (5,488) (10,163) (8,450) (9,407)----------------------------------------------------------------------------Cash position, end of period (12,773) (8,768) (12,773) (8,768)--------------------------------------------------------------------------------------------------------------------------------------------------------Cash position is comprised of : Cash and cash equivalents 572 267 572 267 Bank overdraft (13,345) (9,035) (13,345) (9,035)---------------------------------------------------------------------------- (12,773) (8,768) (12,773) (8,768)----------------------------------------------------------------------------



GOODFELLOW INC.Condensed Consolidated Statements of Change in Shareholder's Equity(in thousands of dollars)(unaudited)-------------------------------------------------------------------------------------------------------------------------------------------------------- Share Retained Capital Earnings Total---------------------------------------------------------------------------- $ $ $Balance as at August 31, 2012 9,154 106,882 116,036----------------------------------------------------------------------------Net earnings - (179) (179)Transactions with owners, recorded directly in equity Dividends - (1,275) (1,275) Share repurchased (2) (12) (14)----------------------------------------------------------------------------Balance as at February 28, 2013 9,152 105,416 114,568---------------------------------------------------------------------------- Share Retained Capital Earnings Total---------------------------------------------------------------------------- $ $ $Balance as at August 31, 2011 9,222 104,682 113,904----------------------------------------------------------------------------Net earnings - 255 255Transactions with owners, recorded directly in equity Dividends - (857) (857) Share repurchased (4) (28) (32)--------------------------------------------------------------------------------------------------------------------------------------------------------Balance as at February 29, 2012 9,218 104,052 113,270----------------------------------------------------------------------------





Contacts:
Goodfellow Inc.
Richard Goodfellow
President and CEO
(450) 635-6511
(450) 635-3730 (FAX)
info@goodfellowinc.com



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