0

1

FINANCIAL HIGHLIGHTS (in thousands of dollars except per share amounts) Years ended November 30 (*August 31), OPERATING RESULTS 2014 2013 2012 2011 2010 IFRS *IFRS *IFRS *IFRS *CGAAP (15 months) (Restated) Sales $610,587 $483,485 $500,688 $466,809 $504,477 Earnings before income taxes $11,128 $7,307 $6,063 $4,231 $18,097 Net earnings $8,125 $5,279 $4,355 $3,003 $12,663 -per share $0.96 $0.62 $0.51 $0.35 $1.48 Cash flow (excluding non-cash working capital, Income tax paid and interest paid) $15,228 $9,681 $8,304 $7,078 $13,753 -per share $1.79 $1.14 $0.97 $0.83 $1.60 Shareholders’ equity $119,486 $117,138 $116,036 $113,904 $116,102 -per share $14.05 $13.77 $13.57 $13.29 $13.54 Share price at year-end $9.50 $9.06 $8.10 $9.85 $11.50 Dividend paid per share $0.65 $0.35 $0.20 $0.40 $0.90

TABLE OF CONTENTS

Message to the Shareholders ................................ 2

Management Discussion and Analysis .................. 3

Financial Statements and Notes ........................... 11

Directors and Officers .......................................... 19

Sales Offices and Distributions Centres .............. 20

HEAD OFFICE Toll-Free Canada: 1-800-361-6503 225 Goodfellow Street Tel.: 450-635-6511 Delson, Quebec Fax: 450-635-3729 J5B 1V5 info@goodfellowinc.com Canada www.goodfellowinc.com

13 $

3 $

4 $

5 $

$8

2010

2011

2012

2013

2014

NET EARNINGS (in million $)

11,50 $

9,85 $

8,10 $

9,06 $

9,50 $

2010

2011

2012

2013

2014

SHARE PRICE

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PRESIDENT’S REPORT TO THE SHAREHOLDERS The first quarter is largely an unfulfilled promise. All analysts and industry observers were claiming the return of the good times in the later part of 2014. The combined impact of a soft Canadian dollar and the expectation of substantial economic growth in the USA suggested this was a reasonable scenario. The reality fell short of expectations. A rather difficult winter – extreme cold or lots of snow - certainly had its impact. Delayed projects were the norm across all markets and in the Atlantic Provinces operations were paralysed for several days. We believe this mostly delayed economic activity. The US market did not pull as expected either. Perhaps the best indicator of the slow pace of our industry is the continuous commodity price slide. The framing index (1) is down 18% from last year’s high point, losing 12% in the last 2 months alone. The Panel index (1) did not fare much better, losing 10% from the high point last year and 4% in 2015. This is hardly the hallmark of strong demand. Fortunately, we have been spared much of the price decline in Canada, sheltered by the large drop of the Canadian dollar in January. The rather soft demand though remained our reality. Amidst the turmoil we have our share of good stories. Our efforts to get back on track in Ottawa are paying off with over 25% sales increase. International sales are up nearly 6% and our US sales are also very strong posting growth of 20 to 30%. The hardwood division continues to do very well, leveraging the assets acquired in Drummondville last year. We have opened a new branch in Saskatoon which promises a much better penetration of this market. We have solid plans in place to assure substantial growth in 2015. Overall sales were up 2.9% for the quarter but not enough to bring the quarter to break even. Net income shows a loss of 357 K$ for the period, an 80k$ deterioration from last year. Expenses could not be adjusted in time for the abrupt slowdown in February. Our order book remains healthy as exemplified by our remanufacturing operations running at a pace 26% higher than last year. We expect this will translate into strong sales in the coming months. Despite the fact our overall sales volume was short of expectation for the quarter, we remain optimistic. We have a strong order book and with better weather shipments will resume to the expected level. As the improving level of activity pushes the index up, prices will be substantially on the rise. We anticipate that managing price increases during the second quarter will be a challenge. Although in the end a general price increase will be beneficial for our business, the transition is expected to be difficult and will require careful management. Our inventory position is long and this should offer us some support during the transition. We continue to progress our long term agenda; investing substantial resources in our future. We have put in place the team to develop and implement a new ERP system. We have confirmed the choice of Epicor; a leading software provider well-tuned to our enterprise needs. We are looking forward to the many benefits this new tool will afford us; improved customer service and significant productivity gains. Remanufacturing costs are under scrutiny and a number of initiatives should help improve our competitiveness. I wish to thank all our shareholders for their support and our employees for their commitment to our success.

(1) Source Random Length

Denis Fraser President and CEO April 14, 2015

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MANAGEMENT’S DISCUSSION AND ANALYSIS PROSPECTIVE FINANCIAL INFORMATION The following Management’s Discussion and Analysis (“MD&A”) and Goodfellow Inc. (hereafter the “Company”) consolidated financial statements were approved by the Audit Committee and the Board of Directors on April 14, 2015. The MD&A should be read in conjunction with the consolidated financial statements and the corresponding notes for the fifteen months ended November 30, 2014 and twelve months ended August 31, 2013. The MD&A provides a review of the significant developments and results of operations of the Company during the three months ended February 28, 2015 and three months ended February 28, 2014. The interim unaudited consolidated financial statements ended February 28, 2015 and February 28, 2014 are prepared in accordance with International Financial Reporting Standards (“IFRS”). All amounts in this MD&A are in Canadian dollars unless otherwise indicated. This MD&A contains implicit and/or explicit forecasts, as well as forward looking statements on the objectives, strategies, financial position, operating results and activities of Goodfellow Inc. These statements are forward looking to the extent that they are based on expectations relative to markets in which the Company exercises its activities and on various assessments and assumptions. These expectations seemed reasonable to us at the time this report was written and issued. Our actual results could however differ significantly from management’s expectations if recognized or unrecognized risks affect our results or if our assessments or assumptions are inaccurate. For these reasons, we cannot guarantee the results of these forward looking statements. The MD&A will give an insight into our past performance as well as the future strategies and key performance indicators as viewed by our management team at Goodfellow Inc. The Company disclaims any obligation to update or revise these forward-looking statements, except as required by applicable law. Additional information relating to Goodfellow Inc., including the Annual Information Form and the Annual Report can be found on SEDAR at www.sedar.com. CHANGE OF YEAR-END DATE The Company announced last year a change of its fiscal year-end, from August 31 to November 30, taking effect for the fiscal year commencing September 1, 2013. The change in fiscal year-end better aligns with current Company business seasonality and is expected to reduce operational costs incurred during the busy summer season. The first quarter period from December 1, 2014 to February 28, 2015 will be compared to the same period ended February 28, 2014 representing the second quarter of Fiscal 2014. NON-GAAP MEASURES Cash flow from operations (excluding non-cash working capital), cash flow per share and return on shareholders’ equity, operating income before depreciation of property, plant and equipment and amortization of intangible assets (also referred to as earnings before interest, taxes, depreciation and amortization [“EBITDA”]), are financial measures not prescribed by the International Financial Reporting Standards (“IFRS”) and are not likely to be comparable to similar measures presented by other issuers. Management considers it to be useful information to assist knowledgeable investors in evaluating the cash generating capabilities of the Company. Funded Debt includes bank indebtedness reduced by the amounts of cash and cash equivalents. Capitalization represents the sum of funded debt and shareholders’ equity.

Reconciliation of EBITDA and operating income to net income (thousands of dollars)

For the three months ended

February 28 February 28 2015 2014

$ $

Net income for the period (357) (277)Provision for income taxes (146) (113)Financial expenses 534 418 Operating income 31 28 Depreciation and amortization 731 644 EBITDA 762 672

BUSINESS OVERVIEW Goodfellow Inc. is one of Eastern Canada’s largest independent remanufacturers and distributors of lumber products and hardwood flooring products. The company carries on the business of wholesale distribution of wood products and remanufacturing, distribution and brokerage of lumber. The Company sells to over 7000 customers who represent three main sectors - retail trade, industrial, and manufacturing. The company operates 12 distribution centres, 8 processing plants in Canada, and 1 distribution centre in the USA.

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The Company’s strength lies in its experienced sales force, focusing on an exceptional product mix and offering outstanding customer service combined with an experienced product management team and its ability to take advantage of opportunistic purchasing. Our focus, which is key to our business model, remains on value-added products with a diversified array of product offerings servicing our customers with value-added services and building strong business relations with key suppliers.

SELECTED ANNUAL INFORMATION (in thousands of dollars, except per share amounts)

COMPARISON FOR THE THREE MONTHS ENDED FEBRUARY 28, 2015 AND FEBRUARY 28, 2014

Sales in Canada during the first quarter of fiscal 2015 remained stable increasing 0.3% compared to the same period a year ago mainly due to improved market presence in Western Canada, and changes in distribution agreements with retailer’s customers group. Total monthly average new housing starts in Canada decreased 6.2% to 174,100 units on average (Source: CMHC) for the three months ended February 28, 2015 compared to 185,600 units in the comparable three months a year ago. Market prices of panel products during the first quarter traded at higher prices compared to the same period a year ago. As such, the Random Lengths Structural Panel Composite Price Index average during the three months ended February 28, 2015 increased 6% compared to the corresponding period last year. Quebec sales decreased 1% compared to last year due to the tough winter conditions which affected new housing and renovations markets. Sales in Ontario decreased 4% impacted by weakness of the new housing market and the loss of a building material distribution line. Atlantic region sales decreased 1% due the heavy snow and cold weather affecting delivery services during the first quarter of Fiscal 2015. Western Canada sales increased 12% impacted by the strong demand for composite decking products and siding products as result of the solid performance of our sales team in Alberta and Saskatchewan during the first quarter of fiscal 2015.

2014(15 months)

2013 (12 months)

Restated

2012(12 months)

Consolidated sales $610,587 $483,485 $500,688Earnings before income taxes $11,128 $7,307 $6,063Net earnings $8,125 $5,279 $4,355 Total Assets $195,847 $187,186 $188,288Total Long-Term Debt $692 $112 -Cash Dividends $5,529 $2,977 $1,708Redemption of shares - $14 $515 PER COMMON SHARE Earnings per share Basic and Diluted $0.96 $0.62 $0.51 Cash Flow from Operations (excluding non-cash working capital item, income tax paid and interest paid) $1.79 $1.14 $0.97Shareholders’ Equity $14.05 $13.77 $13.57Share Price $9.50 $9.06 $8.10Cash Dividends $0.65 $0.35 $0.20

HIGHLIGHTS FOR THE THREE MONTHS ENDED FEBRUARY 28, 2015

Q1-2015 Q2-2014

Variance

%

Consolidated sales $98,097 $95,355 +2.9%Earnings before income taxes $(503) $(390) -29.0%Net earnings $(357) $(277) -28.9%Earnings per share Basic and Diluted $(0.04) $(0.04) SameCash Flow from Operations (excluding non-cash

working capital item, income tax paid and interest paid) $652

$43 +1416.3%EBITDA $762 $672 +13.4%Average Bank indebtedness $57,370 $37,290 +53.8%Inventory average $112,419 $96,035 +17.1%

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13%

16%

12%

27%

32%

US and Exports

Atlantic

Western Canada

Ontario

Quebec

Geographical Distribution of Sales for the First Quarter ended February 28, 2015

Sales in the United States for the first quarter ended February 28, 2015 increased 25% on a Canadian dollar basis compared to the same period last year due to the increased market presence and increased demand for our value-added product lines. On a non-converted basis, US denominated sales increased 13% compared to last year. The North Eastern states housing market where impacted by the tough winter conditions during the first quarter and according to the US Census Bureau, new housing starts decreased 6% during the three months ended February 28, 2015 compared to the comparative quarter a year ago. The average USD/CAD exchange rate for the first quarter of fiscal 2015 increased 10.8 % (1.2049 vs 1.0879 last year). Finally, Export sales increased 6% during the first quarter of fiscal 2015 compared to the same period a year ago mainly due to increasing demand for value added products in Asia and Europe mitigated by a decrease in the United Kingdom region.

45%

7%

24%

24%

Lumber

Building Material

Specialty & Commodity Panel

Flooring

Product Distribution of Sales for the First Quarter ended Febraury 28,2015

These previously discussed factors impacted to various degrees our sales mix. Flooring and Specialty sales for the first quarter ended February 28, 2015 decreased 7% compared to the corresponding period last year. The flooring sales results were impacted by slower demand from our retailer’s customers group and the effect of foreign exchange pressure on prices. Specialty and Commodity Panel sales for the first quarter increased 7% compared to the corresponding period last year. Demand for panel products was impacted by increasing market prices for structural plywood compared to the corresponding period last year. Building Materials sales for the first quarter of fiscal 2015 decreased 18% compared to the corresponding period last year. Building Material sales were impacted by the foreign exchange increasing prices thus reducing demand compared to the three months ended February 28, 2014. Finally, Lumber sales for the first quarter of fiscal 2015 grew 7% compared to the corresponding period last year. Lumber sales were strong due to the growth in the treated wood business and engineered wood beams.

Cost of Goods Sold Cost of goods sold for the first quarter of fiscal 2015 was $78.1 million compared to $76.6 million for the corresponding period a year ago. Cost of purchased goods increased 2.1% compared to the corresponding period last year reflecting the increased sales activities and foreign exchange impact on our goods imported from Asia and the United States during the first quarter. Total freight and logistics cost decreased 0.5% compared to the same period a year ago. As a percentage of sales, total freight costs decreased 0.3% compared to last year. Average gas and diesel purchased prices during the first quarter decreased approximately 16% compared to the three months ended February 28, 2014. Gross profits increased 6.9% during the first quarter ended February 28, 2015 compared to the corresponding period last year while gross margins increased from 19.6% to 20.4% due to increased distribution agreements and the weaker Canadian dollar against US dollar.

Selling, Administrative and General Expenses Selling, Administrative and General Expenses for the first quarter ended February 28, 2015 was $20.0 million compared to $18.7 million for the corresponding period last year. Selling, Administrative and General Expenses increased 6.9% compared to the corresponding quarter last year due to ramping up of value-added product inventory and increased energy costs related to the cold winter conditions.

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Net Financial Cost Net financial costs for the first quarter of fiscal 2015 were $0.5 million ($0.4 million a year ago). The Canadian prime rate decreased to 2.85% on January 27, 2015. The average US prime rate remained unchanged compared to last year at 3.25% for the first quarter. Average bank indebtedness during the first quarter of fiscal 2015 was $57.4 million compared to $37.3 million for the corresponding period last year. Average inventory during the first quarter of fiscal 2015 was $112.4 million compared to $96.0 million for the same period last year.

SUMMARY OF THE LAST NINE MOST RECENTLY COMPLETED QUARTERS (In thousands of dollars, except earnings per share)

May-2014 Aug-2014 Nov-2014 Feb-2015

Sales $134,035

$146,289 $124,542 $98,097Net Earnings $2,078 $3,665 $1,493 $(357) Earnings per share Basic and Diluted $0.25 $0.43 $0.18 $(0.04)

May-2013 Aug-2013

(restated) Nov-2013 Feb-2014

Sales $138,195

$137,814 $110,366 $95,355Net Earnings $2,485 $ 2,973 $1,166 $(277) Earnings per share Basic and Diluted $0.29 $0.35 $0.14 $(0.04)

STATEMENT OF FINANCIAL POSITION

Total Assets Total assets at February 28, 2015 increased from $195.0 million at February 28, 2014 to $230.9 million. Cash and cash equivalents at February 28, 2015 closed at $0.8 million ($0.2 million at February 28, 2014). Trade and other receivables at February 28, 2015 was $65.8 million compared to $56.7 million at February 28, 2014 reflecting the increased sales volume during the first quarter and longer payment terms compared to the corresponding quarter last year. Income tax receivable at February 28, 2015 was $0.4 million compared to $37 thousand last year. Inventories at February 28, 2015 was $119.7 million compared to $95.4 million at February 28, 2014 reflecting the increased commitment toward value-added lumber products which requires longer processing time. Prepaid expenses at February 28, 2015 was $5.6 million compared to $3.2 million at February 28, 2014. Defined benefit plan assets was $1.8 million at February 28, 2015 compared to $1.4 million a year ago.

Property, Plant and equipment Property, plant and equipment at February 28, 2015 was $36.7 million compared to $38.1 million at February 28, 2014. Capital expenditures during the three months of fiscal 2015 amounted to $0.5 million ($3.6 million for the three months ended February 28, 2014). Property, plant and equipment capitalized during the first three months ended February 28, 2015 included the acquisition of production equipment in Campbellville, Ont., computers, and yard equipment. Proceeds on disposal of capital assets during the first three months of fiscal 2015 amounted to $14 thousand ($nil for the corresponding period a year ago). Depreciation of Property, Plant and Equipment during the first three months of fiscal 2015 was $0.7 million ($0.6 million for the three months ended February 28, 2014). Historically, capital expenditures in general have been capped at depreciation levels. Capital expenditures were financed from operational cash flows except for an unsecured promissory note of $0.8 million US in the acquisition of Drummondville.

Total Liabilities Total liabilities at February 28, 2015 were $111.7 million ($78.7 million last year). Bank indebtedness was $74.3 million compared to $44.0 million on February 28, 2014. Trade and other payables at on February 28, 2015 was $30.9 million compared to $28.7 million on February 28, 2014. Trade and other payables reflect higher trade payable levels, volume rebates provision and lower sales tax liabilities. Provision at February 28, 2015 was $1.4 million ($ 1.5 million at February 28, 2014). Long term debt was $0.9 million ($1.1 million on February 28, 2014). Long term debt is composed of an outstanding $0.1 million governmental funding contribution for our Deer Lake plant in the form of a non-interest bearing long term debt repayable over 3 years and coming to maturity in February 2017 and an outstanding unsecured promissory note of $0.8 million US repayable over 5 years bearing interest at 3.7%. Deferred income taxes at February 28, 2015 closed at $2.5 million ($2.4 million on February 28, 2014). Defined benefit plan obligations was $1.6 million at February 28, 2015 compared to $1.0 million at February 28, 2014.

Shareholders’ Equity Total Shareholders’ Equity at February 28, 2015 increased to $119.1 million from $116.3 million last year. The Company generated a return on equity of (1.2) % during the first three months of fiscal 2015 compared to (1.0) % for the three months ended February 28, 2014. Market share price closed at $10.27 per share on February 28, 2015 ($9.81 on February 28, 2014). Share book value at February 28, 2015 was $14.00 per share ($13.67 on February 28, 2014). Share capital closed at $9.2 million (same as last year). No eligible dividend was paid during the first three months of fiscal 2015 (same as last year).

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LIQUIDITY AND CAPITAL RESOURCES

Financing The Company has renewed its credit agreement with two chartered Canadian banks. The credit agreement has a maximum revolving operating facility of $90 million renewable after 454 days in May 2015. At February 28, 2015, the Company was using $63.0 million of its facility compared to $37.0 million on February 28, 2014. The loans are secured by a first ranking security on the universality of the movable property of the Company. At February 28, 2015, all covenant ratios were respected. The Company’s business follows a seasonal pattern with sales activities traditionally higher in the second and third quarter. As a result, cash flow requirements are generally higher during these periods. The current facility is considered by management to be adequate to support our current forecasted cash flow requirements. Source of funding and access to capital is disclosed in details under LIQUIDITY AND RISK MANAGEMENT IN THE CURRENT ECONOMIC CONDITIONS.

Cash Flow Cash flow from operating activities for the first three months of fiscal 2015 decreased to $(30.8) million from $(10.8) million for the same period last year. Financing activities during the first three months of fiscal 2015 increased $24.5 million compared to $15.9 million for the three months ended February 28, 2014. Financing activities reflects the increased cash flow requirements linked with the increased inventory commitment during the first three months of fiscal 2015. Investing activities during the first three months of fiscal 2015 were $0.5 million ($3.6 million for the corresponding period a year ago) (See Property, plant and equipment for more details).

The Company’s objectives remain substantially unchanged from those included in the Company’s Annual MD&A contained in its 2014 Annual Report. For the three months ended February 28, 2015, the Company achieved the following results regarding its capital management objectives:

For the Company, Debt-to-capitalization ratio represents the funded debt over total shareholders’ equity while debt service coverage includes Net earnings plus amortization/depreciation and interest expense divided by principal repayment, interest payments and lease payments.

LIQUIDITY AND RISK MANAGEMENT IN THE CURRENT ECONOMIC CONDITIONS

The risk and uncertainty factors affecting the Company in the future remain substantially unchanged from those included in the Company’s Annual MD&A contained in its 2014 Annual report. For further information, the principal risk factors to which the Company is exposed are described in the Management’s Discussion and Analysis contained in its 2014 Annual Report as well as in the 2014 Annual Information Form available on SEDAR (www.sedar.com). Only those factors with variability components are described below:

Cost Structure, Working Capital Requirements and Debt Service Furthermore, the Company benefits from a strong balance sheet and a healthy financial position:

1. At February 28, 2015, its total debt to capitalization ratio stood at 35.1% compared to 24.8% on February 28, 2014. 2. The $90 million revolving credit facility was renewed for an additional 454 days to May 2015.

COMMITMENTS AND CONTINGENCIES

As at February 28, 2015, the minimum future rentals payable under long-term operating leases, for offices, warehouses, vehicles, yards and equipment, did not materially change and are as follows:

Contractual obligations Payments due by Period (in thousands of dollars) Total Less than

1 year 1 – 3 Years

4 –5 Years

After 5 years

Operating Leases 16,461 4,678 5,362 2,903 3,518 Purchase obligations 516 516 - - - Total Contractual Obligations 16,977 5,194 5,362 2,903 3,518

As at As at

Capital management February 28, February 28,

2015 2014 Debt-to-capitalization ratio 35.1 % 24.8 % Return on shareholders’ equity (1.2) % (1.0) % Current ratio 1.8 2.1 Debt service coverage 1.9 1.6

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RISKS AND UNCERTAINTIES

The risks and uncertainty factors affecting the Company in the future remains substantially unchanged from those included in the Company’s Annual MD&A contained in its 2014 Annual report. Only those factors with variability components are described below:

Dependence on Major Customers The Company does not have long term contracts with any of its customers. Distribution agreements are usually awarded annually and can be revoked. Only two major customers exceed 10% of total company sales in 2015 and only one customer in 2014. Total sales consisting primarily of various wood products for those two customers represent approximately $21.6 million or 22.0% of total sales during the three months ended February 28, 2015 compared to $10.2 million or 10.7% for the corresponding period last year. The loss of any major customer could have a material effect on the Company’s results, operations and financial positions.

FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS The Financial instruments and other instruments remains substantially unchanged from those included in the Company’s Annual MD&A contained in its 2014 Annual report. Only those factors with variability components are described below:

The following are the contractual maturities of financial liabilities as at February 28, 2015: (in thousands of dollars)

Financial Liabilities Carrying

Amount Contractual cash flows

0 to 6 Months

6 to 36 Months

Bank indebtedness 74,331 74,331 74,331 - Trade and other payable 30,861 30,861 30,861 - Long term debt 935 935 123 812 Total Financial Liabilities

106,127

106,127

105,315 812

Currency Risk As at February 28, 2015, the Company had the following currency exposure on;

Financial assets and liabilities measured at amortized costs (in thousands of dollars)

USD GBP Euro

Cash and cash equivalents 747 214 15 Trade and other receivables 7,952 590 - Trade and other payables Long term debt

(6,144) (668)

(73) -

(169) -

Net exposure 1,887 731 (154)

CAD exchange rate as at February 28, 2015 1,2503 1,9303 1,3992 Impact on Net Earnings based on a fluctuation of 5% on CAD

84

50

(8)

Credit Risk The Company is exposed to credit risks from customers. As a result of having a diversified customer mix, this risk is alleviated by minimizing the amount of exposure the Company has to any one customer. Additionally, the Company has a system of credit management to mitigate the risk of losses due to insolvency or bankruptcy of its customers. It also utilizes credit insurance for foreign accounts to reduce the potential for credit losses in foreign countries. Finally, the Company has adopted a credit policy that defines the credit conditions to be met by its customers and specific credit limit for each customer is established and regularly revised. Accounts receivable over 60 days past their due date and not impaired represents 2.7% (1.6% on February 28, 2014) of total trade and other receivables at February 28, 2015. Based on historical payment behaviour and current credit information and experience available, the Company believes that, apart from the above, no impairment allowance is necessary in respect of trade receivables not past due or past due. The Company does not have long term contracts with any of its customers. Distribution agreements are usually awarded annually and can be revoked. Only two major customers exceed the 10% of total company sales threshold in 2015 and only one

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customer in 2014. Total sales consisting primarily of various wood products for those two customers represent approximately $21.6 million or 22.0% of total sales during the three months ended February 28, 2015 compared to $10.2 million or 10.7% for the corresponding period last year. The loss of any major customer could have a material effect on the Company’s results, operations and financial position. The carrying amounts of financial assets represent the maximum credit exposure.

RELATED PARTY TRANSACTIONS

The Related Party Transactions remains substantially unchanged from those included in the Company’s Annual MD&A contained in its 2014 Annual report.

CRITICAL ACCOUNTING ESTIMATES

The critical accounting estimates remain substantially unchanged from those included in the Company’s Annual MD&A contained in its 2014 Annual report.

SIGNIFICANT ACCOUNTING POLICIES

The Company’s significant accounting policies are described in Note 3 to the consolidated financial statements for the year ended November 30, 2014.

CHANGES IN ACCOUNTING POLICIES

The changes in accounting policies remain substantially unchanged from those included in its 2014 Annual report.

DISCLOSURE OF OUTSTANDING SHARE DATA

At February 28, 2015, there were 8,506,554 common shares issued (same last year). The Company has authorized an unlimited number of common shares to be issued, without par value. At April 14, 2015, there were 8,506,554 common shares outstanding.

SUBSEQUENT EVENT

No subsequent events to report.

OUTLOOK

During Fiscal 2015, Management will focus on modernizing its operations, growing the top line profitably and review its service offering in order to improve its position as market leader. Management is committed to maintain sales growth and margin discipline while growing its market share by introducing and researching new products and acquisition opportunities. Our focus on value-added and profitable product lines will continue to be at the forefront of our core strategy. According to CMHC the housing starts are expected to decline by 1.0% in 2015 ranging between 154,000 and 201,000 closing on average at an annualized average of 187,400 units compared to 189,329 in 2014 (Source: CMHC Q1-2015). Home sales continue to increase and should have a positive impact on renovation spending. The Company’s strong balance sheet and low debt leverage enables us to take advantage of purchasing or investing opportunities in the future. In the United States, the housing market has gradually picked up some momentum in the past 12 months which should indicate some progress ahead.

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CERTIFICATION

Disclosure Controls and Procedures The Company’s management is responsible for establishing and maintaining appropriate control systems, procedures and information systems, thereby ensuring that the information it discloses is reliable and complete. The Company applies financial information disclosure rules and takes the necessary actions to comply with new accounting standards once they come into force. The Company also applies the standards set by the capital markets regulatory authorities. The Chief Executive Officer and the Chief Financial Officer together with Management, after evaluating the effectiveness of the Company’s internal control systems, procedures and information systems as of February 28, 2015 concluded that the Company’s internal control systems, procedures and information systems were effective. The evaluation was performed in accordance with the Committee of Sponsoring Organizations of the Treadway Commission (COSO 1992) control framework adopted by the Company.

Internal Control over Financial Reporting The Chief Executive Officer and the Chief Financial Officer are responsible for establishing and maintaining appropriate internal controls over financial reporting (ICFR) to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with IFRS, The Chief Executive Officer and the Chief Financial Officer together with Management, after evaluating the effectiveness of the Company’s internal control over financial reporting as of February 28, 2015 concluded that the Company’s internal control over financial reporting was effective. Delson, April 14, 2015

Denis Fraser Pierre Lemoine, CPA, CMA President and C.E.O. Vice President and C.F.O.

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NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS

Under National Instrument 51-102 “Continuous Disclosure Obligations”, if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor. The Company’s independent auditors, KPMG LLP., has not performed a review of these financial statements in accordance with standards established by the Canadian Institute of Chartered Accountants for a review of interim financial statements by an entity’s auditor. The accompanying unaudited interim financial statements of the company have been prepared by and are the responsibility of the Company’s management. GOODFELLOW INC. Consolidated Statements of Comprehensive Income For the three months ended February 28, 2015 and 2014 (in thousands of dollars, except per share amounts) (Unaudited)

For the three months ended

February 28 2015

February 282014

$ $

Sales 98,097 95,355 Expenses

Cost of goods sold (Note 4) 78,077 76,631 Selling, administrative and general expenses (Note 4) 19,989 18,696 Net financial costs 534 418

98,600 95,745

Earnings before income taxes (503) (390)

Income taxes (146) (113)

Net earnings, being comprehensive income (357) (277)

Earnings per share Basic and diluted (0.04) (0.04)

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GOODFELLOW INC. Consolidated Statements of Financial Position (in thousands of dollars) As at As at As at February 28

2015(Unaudited)

November 30 2014

(Audited)

February 28 2014

(Unaudited) $ $ $Assets Current Assets Cash and cash equivalents 782 860 234 Trade and other receivables (Note 6)

Income taxes receivable 65,829

36460,591

-56,651

37 Inventories 119,714 92,257 95,447 Prepaid expenses 5,582 3,271 3,189Total Current Assets 192,271 156,979 155,558 Non-Current Assets

Property, plant and equipment 36,744 37,020 38,095Defined benefit plan asset 1,840 1,848 1,374

Total Non-Current Assets 38,584 38,868 39,469Total Assets 230,855 195,847 195,027 Liabilities Current liabilities Bank indebtedness (Note 5) 74,331 43,099 44,041 Trade and other payables (Note 11) 30,861 25,779 28,725

Income taxes payable - 997 -Provision 952 979 -

Current portion of long term debt (Note 5) 247 229 219Total Current Liabilities 106,391 71,083 72,985 Non-Current Liabilities

Provision Long term debt (Note 5) Deferred income taxes

486688

2,535

473 692

2,535

1,490

840 2,393

Defined benefit plan obligation 1,626 1,578 993Total Non-Current Liabilities 5,335 5,278 5,716Total Liabilities 111,726 76,361 78,701 Shareholders’ equity Share capital 9,152 9,152 9,152 Retained earnings 109,977 110,334 107,174 119,129 119,486 116,326Total Liabilities and Shareholders’ Equity 230,855 195,847 195,027

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GOODFELLOW INC. Consolidated Statements of Cash Flows (in thousands of dollars) (Unaudited)

For the three months ended

February 28 2015

February 282014

$ $ Operating Activities

Net Earnings (357) (277) Adjustments for : Depreciation 731 644 Accretion expense on environmental provision (14) 12 Income tax expense (146) (113) Loss on disposal of property, plant and equipment 37 -

Interest expense 344 230Funding in deficit (excess) of pension plan expense 57 (453)

652 43 Changes in non-cash working capital items (Note 14) (29,905) (10,031)

Interest paid (364) (352)Income taxes paid (1,215) (463)

(31,484) (10,846)Net Cash Flows from Operating Activities (30,832) (10,803) Financing Activities Increase in bank loans 4,500 14,000 Increase in banker’s acceptances 20,000 1,000

Long term debt 14 909 24,514 15,909 Investing Activities Acquisition of property, plant and equipment (506) (3,594) Proceeds on disposal of property, plant and equipment 14 - (492) (3,594) Net cash (outflow) inflow (6,810) 1,512Cash position, beginning of year (3,739) (8,319)Cash position, end of year (10,549) (6,807) Cash position is comprised of : Cash and cash equivalents 782 234 Bank overdraft (Note 5) (11,331) (7,041) (10,549) (6,807)

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GOODFELLOW INC. Consolidated Statements of Change in Shareholders’ Equity (in thousands of dollars) (Unaudited) Share

CapitalRetained Earnings Total

$ $ $ Balance as at November 30, 2013 9,152 107,451 116,603

Net earnings - (277) (277)

Total Comprehensive income 9,152 107,174 116,326 Transactions with owners, recorded directly in shareholders’ equity - - - Balance as at February 28, 2014 9,152 107,174 116,326 Balance as at November 30, 2014 (Audited) 9,152 110,334 119,486 Net earnings - (357) (357) Total Comprehensive income 9,152 109,977 119,129 Transactions with owners, recorded directly in shareholders’ equity

- - -

Balance as at February 28, 2015 9,152 109,977 119,129

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For Three Months Period Ended February 28, 2015 and 2014 (tabular amounts are in thousands of dollars, except per share amounts)

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1. Status and nature of activities Goodfellow Inc. (hereafter the “Company”), incorporated under the Canada Business Corporations Act, carries on various business activities related to remanufacturing and distribution of lumber and wood products. The Company’s head office and primary place of business is located at 225 Goodfellow Street in Delson (Quebec), Canada, J5B 1V5. The condensed interim consolidated financial statements of the Company as at and for the three months ended February 28, 2015 and February 28, 2014 includes the accounts of the Company and its wholly-owned subsidiary. The Company decided to change its fiscal year-end, from August 31 to November 30, taking effect for the fiscal year commencing September 1, 2013. The change in fiscal year-end better aligns with current Company business seasonality and is expected to reduce operational costs incurred during the busy summer season.

2. Basis of preparation

These interim consolidated financial statements have been prepared in compliance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). These condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting (“IAS 34”). These interim consolidated financial statements should be read in conjunction with the audited consolidated statements for the year ended November 30, 2014, as set out in the 2014 annual report. The financial statements were authorized for issue by the Board of Directors on April 14, 2015. These financial statements are available on the SEDAR website at www.sedar.com and on the Company’s website at www.goodfellowinc.com.

3. Significant Accounting Policies

The Company’s significant accounting policies are described in Note 3 contained in its 2014 Annual Report.

IFRS Standard Issued, But Not Yet Effective

i) IFRS 15, Revenue from Contracts with Customers On May 28, 2014, the IASB issued IFRS 15, Revenue from Contracts with Customers. IFRS 15 will replace IAS 18, Revenue, among other standards. The standard contains a single model that applies to contracts with customers and two approaches to recognizing revenue: at a point in time or over time. The model features a contract-based five-step analysis of transactions to determine whether, how much and when revenue is recognized. New estimates and judgmental thresholds have been introduced, which may affect the amount and/or timing of revenue recognized. The new standard applies to contracts with customers. The new standard is effective for annual periods beginning on or after January 1, 2017, with earlier adoption permitted. The Company has not yet assessed the impact of adoption of IFRS 15, and does not intend to early adopt IFRS 15 in its consolidated financial statements. ii) IFRS 9, Financial Instruments IFRS 9, Financial Instruments, was issued in November 2009. It addresses classification and measurement of financial assets and liabilities. In November 2013, the International Accounting Standards Board (IASB) issued a new general hedge accounting standard, which forms part of IFRS 9, Financial Instruments (2013). On July 24, 2014, the IASB issued the final version of IFRS 9, bringing together the classification and measurement, impairment and hedge accounting phases of the IASB’s project to replace IAS 39, Financial Instruments: Recognition and Measurement. The final version of IFRS 9 supersedes all previous versions of IFRS 9 and is effective for annual periods beginning on or after January 1, 2018, with earlier adoption permitted. The Company has not yet assessed the impact of adoption of IFRS 9, and does not intend to early adopt IFRS 9 in its consolidated financial statements.

4. Additional information on comprehensive income

For the three months ended

February 28,2015

February 28,2014

$ $ Employee benefits expense 13,093 12,128 Write-down of inventories included in cost of goods sold (99) 34 Depreciation included in cost of goods sold 306 235 Depreciation included in selling, administrative and general expenses 425 409 Expense related to minimum operating lease payments recognized in net earnings 1,240 1,214 Foreign exchange gains (409) (88)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For Three Months Period Ended February 28, 2015 and 2014 (tabular amounts are in thousands of dollars, except per share amounts)

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5. Bank Indebtedness and Long-Term Debt

Feb 28 2015

Nov 302014

Feb 282014

$ $ $Bank Loans 8,000 3,500 17,000Banker’s Acceptances 55,000 35,000 20,000Bank overdraft 11,331 4,599 7,041

74,331 43,099 44,041 The Company has entered into an agreement with two Canadian financial institutions for credit facilities totaling $90 million renewable in May 2015. Funds advanced under these credit facilities bear interest at the prime rate plus a premium and are secured by first ranking security on the universality of the movable property of the Company. As at February 28, 2015, the Company is in compliance with all covenants. Long term debt is composed of an outstanding amount of $0.1 million governmental funding contribution for our Deer Lake plant in the form of a non-interest bearing long term debt repayable over 3 years and coming to maturity in February 2017 and an unsecured promissory note outstanding of $0.8 million US repayable over 5 years bearing interest at 3.7% per annum.

6. Trade and other receivables

Feb 28 2015

Nov 302014

Feb 282014

$ $ $Trade receivables 64,849 60,273 56,479 Allowance for doubtful accounts (308) (261) (351)

64,541 60,012 56,128

Other receivables 1,288 579 523 65,829 60,591 56,651

7. Share Capital

a) Authorized An unlimited number of common shares, without par value

Feb 282015

Nov 302014

Feb 28 2014

Number of shares outstanding at the end of the year 8,506,554 8,506,554 8,506,554

b) Earnings per share

Feb 28

2015Feb 28

2014 $ $

Basic and diluted (0.04) (0.04)

8. Seasonal Pattern

The Company’s business follows a seasonal pattern, with merchandise sales traditionally higher in the second and third quarter as compared to the other quarterly periods. As a result, a higher share of total earnings is typically earned in the second and third quarter. This business seasonality results in performance, for the three months ended February 28, 2015 which is not necessarily indicative of performance for the balance of the year.

9. Post-employment benefits

Employee future benefits expenses relating to the company’s defined benefit plans for the three months ended February 28, 2015 were $56,625 compared to $56,925 for the three months ended February 28, 2014.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For Three Months Period Ended February 28, 2015 and 2014 (tabular amounts are in thousands of dollars, except per share amounts)

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10. Economic Dependence Only two major customers exceed the 10% of total company sales threshold in 2015 and only one customer in 2014. Total sales consisting primarily of various wood products for those two customers represent approximately $21.6 million or 22.0% of total sales during the three months ended February 28, 2015 compared to $10.2 million or 10.7% for the corresponding period last year.

11. Trade and other payables

Feb 28 2015

Nov 302014

Feb 282014

$ $ $Trade payables and accruals 25,521 18,343 22,610Payroll related liabilities 5,214 4,828 5,203Sales taxes payables 126 2,608 912 30,861 25,779 28,725

12. Financial Instruments and Financial Risk Management

Financing and Liquidity Risk The Company makes use of short term financing with two chartered Canadian banks. The Company operates with negligible term debt at February 28, 2015. Should a significant decrease in cash and cash equivalents occur, the Company could make use of these facilities. The following are the contractual maturities of financial liabilities as at February 28, 2015:

Financial Liabilities Carrying

Amount Contractual cash flows

0 to 6 Months

6 to 36 Months

Bank indebtedness 74,331 74,331 74,331 - Trade and other payable 30,861 30,681 30,861 - Long term debt 935 935 123 812 Total Financial Liabilities

106,127

106,127

105,315 812

Currency Risk The Company could enter into forward exchange contracts to hedge certain trade payables and from time to time future purchase commitments denominated in U.S. dollars, Euros and Pound sterling. Certain valuation risks exist depending on the performance of the Canadian dollar compared to the U.S. dollar, Euro and the Pound sterling. The Company through diversification of its customer base and product offering, coupled with developments of its markets, reduces global risks related to certain business segments. During the three months ended February 28, 2015, the Company did not use foreign exchange contracts. Consequently, as at February 28, 2015, there were no outstanding foreign exchange contracts. Fluctuation in the Canadian dollar of 5% in relation to foreign currencies would not have a material effect on the Company’s net earnings. As at February 28, 2015, the Company had the following currency exposure on;

Financial assets and liabilities measured at amortized costs

USD GBP Euro

Cash and cash equivalents 747 214 15 Trade and other receivables 7,952 590 - Trade and other payables Long term debt

(6,144) (668)

(73) -

(169) -

Net exposure 1,887 731 (154)

CAD exchange rate as at February 28, 2015 1,2503 1,9303 1,3992

Impact on Net Earnings based on a fluctuation of 5% on CAD

84

50

(8)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For Three Months Period Ended February 28, 2015 and 2014 (tabular amounts are in thousands of dollars, except per share amounts)

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13. Commitments and Contingent liabilities Commitments As at February 28, 2015, the minimum future rentals payable under long-term operating leases, for offices, warehouses, vehicles, yards, and equipment are as follows:

$ Not later than 1 year 5,194 More than 1 year, but less than 5 years 8,265 Later than 5 years 3,518 16,977

Contingent liabilities The Company is party to claims which are being contested during the ordinary course of business and relate primarily to damaged goods, quality issues or transportation related issues. The amount of claims currently being contested and/or addressed is approximately $0.2 million. Management believes that the resolution of these claims will not have a material adverse effect on the Company’s financial position, earnings or cash flows.

14. Additional Cash Flow Information

Changes in Non-Cash Working Capital Items

For the three months ended

February 28,2015

February 28,2014

$ $Trade and other receivables (5,238) (4,106)Inventories (27,457) (6,805)Prepaid expenses (2,305) (510)Trade and other payables 5,095 1,390 (29,905) (10,031)

15. Capital Management

For the three months ended February 28, 2015 and 2014, the Company achieved the following results regarding its capital management objectives:

For the Company, Debt-to-capitalization ratio represents the funded debt over total shareholders’ equity while debt service coverage includes net earnings plus amortization/depreciation and interest expense divided by principal repayment, interest payments and lease payments.

16. Comparative information

Certain prior period information has been reclassified to conform with the current period presentation.

As at As at

Capital management February 28, February 28,

2015 2014 Debt-to-capitalization ratio 35.1 % 24.8 % Return on shareholders’ equity (1.2) % (1.0) % Current ratio 1.8 2.1 Debt service coverage 1.9 1.6

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BOARD OF DIRECTORS Claude Garcia */** G. Douglas Goodfellow ** Stephen A. Jarislowsky */** Chairman of the Board Secretary of the Board Director Goodfellow Inc. Partner, Jarislowsky Fraser & Co. Ltd Normand Morin */** David A. Goodfellow R. Keith Rattray Chairman of the Audit Committee Director Director * Member of the Audit Committee ** Member of the Executive Compensation Committee OFFICERS Denis Fraser, Eng., MBA G. Douglas Goodfellow Pierre Lemoine, CPA, CMA President & Chief Executive Officer Secretary of the Board Vice President & Chief Financial Officer Mary Lohmus Harold Sheepwash Patrick Goodfellow Senior Vice President, Vice President, Vice President, Ontario and Western Canada Industrial & Manufactured Products Hardwood Rose Ann Loranger Luc Pothier David Warren Vice President, Vice President, Vice President, Pine Operations Atlantic Gerry McDonald Vice President, Quebec MANAGEMENT COMMITTEE Denis Fraser * G. Douglas Goodfellow Patrick Goodfellow* Pierre Lemoine * Harold Sheepwash* Gerry McDonald * Mary Lohmus * David Warren* Luc Pothier * Rose Ann Loranger * * Member of the Executive Committee OTHER INFORMATION Head Office Sollicitors Auditors 225 Goodfellow Street Bernier Beaudry KPMG LLP Delson, Quebec J5B 1V5 Quebec, Quebec Montreal, Quebec Tel.: 450-635-6511 Fax : 450-635-3730 Transfer Agent Stock Exchange Wholly-owned Subsidiary Computershare Investor Services Inc. Toronto Goodfellow Distribution Inc. Montreal, Quebec Trading Symbol: GDL

CORPORATE INFORMATION

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CANADA DELSON, QUEBEC CAMPBELLVILLE, ONTARIO QUEBEC CITY, QUEBEC Head Office, Sales Office, Sales Office & Sales Office, Distribution Centre Distribution Centre Distribution Centre & Manufacturing Facility 5100 John-Molson & Manufacturing Facilities P.O. Box 460 Quebec, QC G1X 3X4 225 Goodfellow Street 9184 Twiss Road Tel.: 418-650-5100 Delson, QC J5B 1V5 Campbellville, ON L0P 1B0 Fax: 418-650-0171 Tel.: 450-635-6511 Tel.: 905-854-5800 Fax: 450-635-3730 Fax: 905-854-6104

DARTMOUTH, NOVA-SCOTIA MONCTON, NEW BRUNSWICK OTTAWA, ONTARIO Sales Office & Sales Office & Sales Office & Distribution Centre Distribution Centre Distribution Centre 20 Vidito Drive 660 Edinburgh Drive 3091 Albion Road North Dartmouth, NS B3B 1P5 Moncton, NB E1E 4C6 Ottawa, ON K1V 9V9 Tel.: 902-468-2256 Tel.: 506-857-2134 Tel.: 613-244-3169 Fax: 902-468-9409 Fax: 506-859-7184 Fax: 613-244-0488

CALGARY, ALBERTA EDMONTON, ALBERTA WINNIPEG, MANITOBA Sales Office, Sales Office & Sales Office & Distribution Centre Distribution Centre Distribution Centre & Manufacturing Facility 11128-158th Street 1361 Border Street, Unit #9 Bay 11 - 5375, 50th Street S.E. Edmonton, AB T5M 1Y4 Winnipeg, MB R3H 0N1 Calgary, AB T2C 3W1 Tel.: 780-469-1299 Tel.: 204-779-3370 Tel.: 403-252-9638 Fax: 780-469-1717 Fax: 204-779-3314 Fax: 403-252-9516

NEWFOUNDLAND RICHMOND, BRITISH COLUMBIA Also plants in: WEST & CENTRAL Sales Office & Elmsdale, NS Sales Office & Distribution Centre Tremblant, QC Distribution Centre 2060 Van Dyke Place Trois-Rivieres, QC & Manufacturing Facility Richmond, BC V6V 1X9 Drummondville, QC 4 Wellon Drive Tel.: 604-940-9640 Deer Lake, NL A8A 2G5 Fax: 604-940-9641 Tel.: 709-635-2991 Fax: 709-635-3079 NEWFOUNDLAND SASKATOON, SASKATCHEWAN EAST Sales Office & 31 Cypress Street Distribution Centre St. Johns, NL A1H 0H8 802 58th Street East Tel.: 709-740-0017 Saskatoon, SK S7K 5Z4 Fax: 709-364-3954 Tel.: 306-242-9977 Fax: 306-242-9997

USA U.K. MANCHESTER, NEW HAMPSHIRE U.K. DISTRIBUTION Sales Office & Bonc Farm House Distribution Centre Llwynmawr 368 Pepsi Road Llangollen, Clwyd Manchester, NH 03109 UK LL207BJ Tel.: 603-623-9811 Tel.: 44-1-691718872 Fax: 603-623-9484 Fax: 44-1-691718436

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