Jewett-Cameron Announces 3rd Quarter Financial Results

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Jul 15, 2024, 22:00 ET

NORTH PLAINS, Ore., July 15, 2024 /PRNewswire/ -- Jewett-Cameron Trading Company Ltd. (NASDAQ: JCTCF) today reported financial results for the third quarter and nine-month periods of fiscal 2024 ended May 31, 2024.

Sales for the third quarter of fiscal 2024 totaled approximately $15.9 million compared to sales of $18.9 million for the third quarter of fiscal 2023. Income from operations was $55,595 compared to $1,251,019 for the third quarter ended May 31, 2023. Net income after other items and income taxes for the current quarter was $154,862, or $0.04 per share, compared to net income of $734,951, or $0.21 per share, in the 3^rd quarter of 2023.

For the nine months ended May 31, 2024, Jewett-Cameron reported sales of approximately $33.9 million compared to sales of $39.7 million for the nine months ended May 31, 2023. After a one-time gain from a favorable arbitration settlement, net income was $912,257, or $0.26 per share, compared to a net loss of ($310,847), or ($0.09) per share, for the first nine months of fiscal 2023.

"Economic factors and restrained consumer spending, particularly in the home improvement and pet categories, continue to challenge our sales and margins" said CEO Chad Summers. "In response, we are continuing to focus on our core products and increase our visibility and brand recognition with consumers. This includes the expansion of our successful in-store product placement campaign for several of our core fence products into more stores in the 4^th quarter and into fiscal 2025".

As of May 31, 2024, the Company's cash position was approximately $1.05 million. Subsequent to the end of the 3^rd quarter, we established a new asset-based line with Northrim Funding Services for short-term operating capital as needed. Although the interest rate on the new line is higher than we were previously paying, it does provide us with additional financial flexibility. We currently have no borrowing against this new line.

About Jewett-Cameron Trading Company Ltd.

Jewett-Cameron Trading Company is a holding company that, through its subsidiaries, operates out of facilities located in North Plains, Oregon. Jewett-Cameron Company's business consists of the manufacturing and distribution of patented and patent pending specialty metal and sustainable bag products, and wholesale distribution of wood products. The Company's brands include Lucky Dog®, for pet products; Adjust-A-Gate™, Fit-Right®, Perimeter Patrol®, Infinity Euro Fence, and Lifetime Post™ for gates and fencing; MyEcoWorld® for sustainable bag products; and Early Start, Spring Gardner™, Greenline®, and Weatherguard for greenhouses. Additional information about the Company and its products can be found the Company's website at www.jewettcameron.com.

Forward-looking Statements

The information in this release contains certain forward-looking statements that anticipate future trends and events. These statements are based on certain assumptions that may prove to be erroneous and are subject to certain risks, including but not limited to, the uncertainties of the Company's new product introductions, the risks of increased competition and technological change in the Company's industry, and other factors detailed in the Company's SEC filings. Accordingly, actual results may differ, possibly materially, from predictions contained herein.

JEWETT-CAMERON TRADING COMPANY LTD. CONSOLIDATED BALANCE SHEETS (Expressed in U.S. Dollars) (Prepared by Management) (Unaudited)

	May 31, 2024		August 31, 2023

ASSETS
Current assets
Cash and cash equivalents	$	1,054,704	$	83,696
Accounts receivable, net of allowance of $0 (August 31, 2023 - $0)		7,408,344		5,634,924
Inventory, net of allowance of $90,536 (August 31, 2023 - $497,884)		13,470,934		18,339,048
Prepaid expenses		1,402,472		630,788

Total current assets		23,336,454		24,688,456

Property, plant and equipment, net		4,482,130		4,655,427

Intangible assets, net		112,431		134,845

Deferred tax assets		396,788		319,875

Total assets	$	28,327,803	$	29,798,603

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities

Accounts payable	$	787,563	$	2,181,194
Bank indebtedness		-		1,259,259
Income taxes payable		244,108		147,629
Accrued liabilities		2,254,484		2,113,194

Total liabilities		3,286,155		5,701,276

Stockholders' equity
Capital stock Authorized 21,567,564 common shares, no par value 10,000,000 preferred shares, no par value Issued 3,504,802 common shares (August 31, 2023 – 3,498,899)		826,861		825,468
Additional paid-in capital		795,726		765,055
Retained earnings		23,419,061		22,506,804

Total stockholders' equity		25,041,648		24,097,327

Total liabilities and stockholders' equity	$	28,327,803	$	29,798,603

JEWETT-CAMERON TRADING COMPANY LTD. CONSOLIDATED STATEMENTS OF OPERATIONS (Expressed in U.S. Dollars) (Prepared by Management) (Unaudited)

	Three Month Period Ended May 31,					Nine Month Period Ended May 31,
	2024		2023			2024	2023

SALES	$	15,896,017	$	18,945,738	$	33,931,050	$	39,666,658

COST OF SALES		12,944,941		14,532,366		26,959,377		30,473,044

GROSS PROFIT		2,951,076		4,413,372		6,971,673		9,193,614

OPERATING EXPENSES
Selling, general and administrative expenses		1,026,071		961,566		2,941,978		2,884,463
Depreciation and amortization		79,406		99,962		268,349		299,577
Wages and employee benefits		1,790,004		2,100,825		5,221,662		5,975,438

		2,895,481		3,162,353		8,431,989		9,159,478

Income (loss) from operations		55,595		1,251,019		(1,460,316)		34,136

OTHER ITEMS
Other income		-		-		2,450,000		-
Gain on sale of assets		1,450		-		90,537		-
Interest (expense) income		(1,437)		(152,905)		11,527		(353,987)
		13		(152,905)		2,552,064		(353,987)

Income (loss) before income taxes		55,608		1,098,114		1,091,748		(319,851)

Income tax expense (recovery)		(99,254)		363,163		179,491		(9,004)

Net income (loss)	$	154,862	$	734,951	$	912,257	$	(310,847)

Basic earnings (loss) per common share	$	0.04	$	0.21	$	0.26	$	(0.09)

Diluted earnings (loss) per common share	$	0.04	$	0.21	$	0.26	$	(0.09)

Weighted average number of common shares outstanding:
Basic		3,504,802		3,498,899		3,502,399		3,498,000
Diluted		3,504,802		3,498,899		3,502,399		3,498,000

JEWETT-CAMERON TRADING COMPANY LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in U.S. Dollars) (Prepared by Management) (Unaudited)

	Nine Month Period Ended May 31,
	2024		2023

CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	912,257	$	(310,847)
Items not involving an outlay of cash:
Depreciation and amortization		268,349		299,577
Stock-based compensation expense		32,064		23,303
Gain on sale of property, plant and equipment		(90,537)		-
Write-down of intangible assets		21,790		-
Deferred income tax expense		(76,913)		(366,566)

Changes in non-cash working capital items:
Increase in accounts receivable		(1,773,420)		(338,489)
Decrease in inventory		4,868,114		103,083
(Increase) decrease in prepaid expenses		(771,684)		242,427
Decrease in prepaid income taxes		-		208,963
(Decrease) increase in accounts payable and accrued liabilities		(1,252,341)		1,541,107
Increase in income taxes payable		96,479		147,215

Net cash provided by operating activities		2,234,158		1,549,773

CASH FLOWS FROM INVESTING ACTIVITIES
Increase in intangible assets		-		(102,500)
Proceeds on sale of property, plant and equipment		106,649
Purchase of property, plant and equipment		(110,540)		(215,685)

Net cash used in investing activities		(3,891)		(318,185)

CASH FLOWS FROM FINANCING ACTIVITIES
(Repayment to) proceeds from bank indebtedness		(1,259,259)		1,000,000

Net cash (used in) provided by financing activities		(1,259,259)		1,000,000

Net increase in cash		971,008		2,231,588

Cash, beginning of period		83,696		484,463

Cash, end of period	$	1,054,704	$	2,716,051