Jewett-Cameron Announces Fiscal 2023 Financial Results

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Nov 28, 2023, 17:30 ET

NORTH PLAINS, Ore., Nov. 28, 2023 /PRNewswire/ -- Jewett-Cameron Trading Company Ltd. (NASDAQ: JCTCF) today reported financial results for its fourth quarter and fiscal year ended August 31, 2023.

For the fiscal year ended August 31, 2023, Jewett-Cameron had sales of $54.3 million and a net loss of ($20,626), or ($0.01) per share, compared to sales of $62.9 million and net income of $1,164,123, or $0.33 per share, for fiscal 2022.

Sales for the fourth quarter of fiscal 2023 totaled $14,6 million compared to sales of $15.0 million in Q4 2022. Net income in the current fourth quarter was $290,221, or $0.08 per share, compared to a net loss of ($208,666), or ($0.06) per share, in the fourth quarter of fiscal 2022.

"Our results were hurt by the extended winter weather across the US which delayed, and then reduced, purchases of our outdoor lines" said CEO Chad Summers. "Inflationary pressures also negatively affected results as consumers reduced their discretionary spending, particularly on home improvement and pet products. During the year, we improved our operations and favorably adjusted key supply and logistic agreements. We are continuing the launch of our new MyEcoWorld® sustainable bag products as a less seasonal product line while firmly focusing on our strengths and core product lines."

The Company has successfully ended cleaning operations at its Jewett-Cameron Seed segment effective August 31, 2023. Full closure of the facility is expected to be completed by the end of calendar 2023.

As of August 31, 2023, the Company's cash position was approximately $84 thousand and had borrowed $1.26 million against its $10 million line of credit. Subsequent to the end of the fiscal year, the Company repaid the remaining balance borrowed against the line of credit.

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. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Expressed in U.S. Dollars) AS OF AUGUST 31

	2023		2022

ASSETS
Current assets
Cash and cash equivalents	$	83,696	$	484,463
Accounts receivable, net of allowance of $0 (August 31, 2022 - $0)		5,634,924		7,191,646
Inventory, net of allowance of $497,884 (August 31, 2022 - $800,000)		18,339,048		20,632,313
Prepaid expenses		630,788		1,112,575
Prepaid income taxes		-		208,963

Total current assets		24,688,456		29,629,960

Property, plant and equipment, net		4,655,427		4,828,420

Intangible assets, net		134,845		33,358

Deferred tax assets		319,875		24,998

Total assets	$	29,798,603	$	34,516,736

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities

Accounts payable	$	2,181,194	$	1,566,047
Bank indebtedness		1,259,259		7,000,000
Income taxes payable		147,629		-
Accrued liabilities		2,113,194		1,856,039

Total liabilities		5,701,276		10,422,086

Stockholders' equity
Capital stock Authorized 21,567,564 common shares, no par value 10,000,000 preferred shares, no par value Issued 3,498,899 common shares (August 31, 2022 – 3,495,342)		825,468		824,629
Additional paid-in capital		765,055		742,591
Retained earnings		22,506,804		22,527,430

Total stockholders' equity		24,097,327		24,094,650

Total liabilities and stockholders' equity	$	29,798,603	$	34,516,736

JEWETT-CAMERON TRADING COMPANY LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Expressed in U.S. Dollars) YEARS ENDED AUGUST 31

	2023		2022


SALES	$	54,289,303	$	62,901,831

COST OF SALES		42,042,178		49,108,772

GROSS PROFIT		12,247,125		13,793,059

OPERATING EXPENSES
Selling, general and administrative		3,973,055		4,008,166
Depreciation and amortization (notes 4, 5)		397,922		319,617
Wages and employee benefits		7,445,464		7,495,723

		11,816,441		11,823,506

Income from operations		430,684		1,969,553

OTHER ITEMS
Gain on sale of property, plant and equipment		70,250		4,526
Other income (loss) (note 14)		-		(230,034)
Interest expense		(458,463)		(163,045)
		(388,213)		(388,553)

Income before income taxes		42,471		1,581,000

Income taxes (note 6)
Current		(63,097)		(558,820)
Deferred recovery		-		141,943

Net (loss) income for the year	$	(20,626)	$	1,164,123

Basic (loss) earnings per common share	$	(0.01)	$	0.33

Diluted (loss) earnings per common share	$	(0.01)	$	0.33

Weighted average number of common shares outstanding:
Basic		3,498,236		3,493,807
Diluted		3,498,236		3,493,807

JEWETT-CAMERON TRADING COMPANY LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in U.S. Dollars) YEARS ENDED AUGUST 31

	2023		2022


CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income for the year	$	(20,626)	$	1,164,123
Items not affecting cash:
Depreciation and amortization		397,922		319,617
Stock-based compensation expense		23,303		56,838
Gain on sale of property, plant and equipment		(70,250)		(4,526)
Deferred income taxes		(294,877)		(141,943)

Changes in non-cash working capital items:
Decrease (increase) in accounts receivable		1,556,722		(105,143)
Decrease (increase) in inventory		2,293,265		(6,240,948)
Decrease in prepaid expenses		481,787		1,193,245
Decrease in prepaid income taxes		208,963		43,995
Increase in accounts payable and accrued liabilities		872,302		274,321
Increase in income taxes payable		147,629		-

Net cash and cash equivalents provided by (used by) operating activities		5,596,140		(3,440,421)

CASH FLOWS FROM INVESTING ACTIVITIES
Increase in intangible assets		(102,500)		(3,535)
Proceeds on sale of property, plant and equipment		70,250		-
Purchase of property, plant and equipment		(223,916)		(1,255,894)

Net cash and cash equivalents used in investing activities		(256,166)		(1,259,429)

CASH FLOWS FROM FINANCING ACTIVITIES
(Repayment) proceeds from bank indebtedness		(5,740,741)		4,000,000

Net cash and cash equivalents provided by (used in) financing activities		(5,740,741)		4,000,000

Net (decrease) in cash and cash equivalents		(400,767)		(699,850)

Cash and cash equivalents, beginning of year		484,463		1,184,313

Cash and cash equivalents, end of year	$	83,696	$	484,463