Delson, Quebec, June 21--Goodfellow Inc. announced today its sales and net income for third quarter ending May 31, 2005. Sales decreased 5.7% to $139.7 million compared to $148.2 million a year ago. All amounts are expressed in Canadian dollars unless otherwise indicated.
Net income decreased to $3.2 million or $0.75 per share compared to $5.1 million or $1.21 per share for the same period last year. Sales activities were affected by a slower and uneven housing market for new construction combined with a weaker US dollar against the Canadian currency compared to the third quarter last year.
Nevertheless, gross margins remained strong throughout the third quarter of fiscal 2004-2005. Direct costs for the third quarter 2004-2005 increased from $9.1 million to $9.7 million during the third quarter ended May 31, 2005. This was due to new business activities in the US, higher energy and fuel costs and above average maintenance work on our equipment.
Selling costs for the third quarter 2004-2005 increased from $6.6 million to $6.9 million due to faster accruals during the first nine months in connection with year-end profit sharing compared to previous fiscal periods.
Administrative costs for the third quarter 2004-2005 decreased from $2.0 million to $1.8 million due the reduction of our communication and office expenses. Financial costs increased from $610 thousand to $701 thousand in the third quarter ended May 31, 2005 due to increased inventory levels.
For the first nine months ended May 31, 2005, sales remained at same level as last year from $376.4 million to $376.0 million. Net income for that period decreased from $9.6 million or $2.29 per share to $7.0 million or $1.66 per share.
"Profitable operations continued in the 3rd quarter but certainly not at the level of last year. Market conditions, the poor spring weather, and strong competition for a reduced volume of business all contributed to the reduction," said Richard Goodfellow, Goodfellow's president and chief executive officer. "The company remains, however, on budget and optimistic for a successful fourth quarter."
Goodfellow Inc. is eastern Canada's largest independent re-manufacturer and distributor of lumber products and Canada's largest distributor of hardwood flooring products. Goodfellow shares trade on the Toronto Stock Exchange under the symbol GDL.
