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Jewett-Cameron Announces 1st Quarter Financial Results

NORTH PLAINS, Ore., Jan. 14, 2020 /PRNewswire/ -- Jewett-Cameron Trading Company Ltd. (NASDAQ: JCTCF) today reported financial results for the first quarter of fiscal 2020 ended November 30, 2019.

Sales for the first quarter of fiscal 2020 totaled $7.1 million compared to sales of $9.1 million for the first quarter of fiscal 2019. Net loss for the current quarter was ($6,621), or ($0.00) per share, compared to net income of $349,694, or $0.08 per share, in the year-ago quarter.

"Several of our major accounts postponed their expected purchases during the quarter," said CEO Charlie Hopewell. "The delay may be related to the timing of reduced tariffs on some of our products, as we received notice during the quarter that a number of our metal products imported from China have been reclassified and are no longer subject to the 25% tariff. During the quarter, we also continued to invest in our infrastructure while rationalizing our product offerings by deciding to discontinue our involvement in Industrial Tools through the closure of our MSI-Pro Division. Although all these changes come with initial costs, we believe they will help to better position the Company for the future."

As of November 30, 2019, the Company's cash position was approximately $8.97 million, and there was no borrowing against its $3.0 million line of credit. The Company has also continued to use its excess cash to repurchase and cancel common shares. Subsequent to the end of the fiscal period, the Company privately repurchased for cancelation a total of 490,120 common shares from two large shareholders. The shares were repurchased by the Company at a price of $7.89 per share, calculated as the Volume Weighted Average Price (VWAP) of all the shares traded on NASDAQ during the first quarter of fiscal 2020. The total cost of the share repurchases was $3,867,047. The Company has historically utilized its cash position by implementing share repurchase programs as an effective method of enhancing shareholder value, and the Board of Directors will consider implementing new share repurchase plans in the future.

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 products, wholesale distribution of wood products, and seed processing and sales. The Company's brands include Lucky Dog, Animal House and AKC licensed products in the expanding pet market; fencing products under the Adjust-A-Gates, Fit-Right, Perimeter Patrol, and LIFETIME POST™ systems brands; Early Start, Spring Gardner, and Weatherguard for greenhouses; and TrueShade for patio umbrellas, furniture covers and canopies. 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)



November 30, 2019


August 31, 2019







ASSETS












Current assets






  Cash and cash equivalents

$

8,969,249


$

9,652,310

  Accounts receivable, net of allowance of $Nil (August 31, 2019 - $Nil)


2,164,026



2,835,952

  Inventory, net of allowance of $165,000 (August 31, 2019 - $119,357)


7,280,126



6,377,805

  Note receivable


997



1,197

  Prepaid expenses


568,815



393,539

  Prepaid income taxes


201,956



223,420







  Total current assets


19,185,169



19,484,223







Property, plant and equipment, net


2,708,144



2,727,406







Intangible assets, net


2,912



3,048







Total assets

$

21,896,225


$

22,214,677













LIABILITIES AND STOCKHOLDERS' EQUITY












Current liabilities












  Accounts payable

$

238,133


$

410,027

  Accrued liabilities


1,186,744



1,312,580







  Total current liabilities


1,424,877



1,722,607







Deferred tax liability


47,103



61,204







Total liabilities


1,471,980



1,783,811







Stockholders' equity






  Capital stock






    Authorized






      21,567,564 common shares, without par value






      10,000,000 preferred shares, without par value






    Issued






      3,971,282 common shares (August 31, 2019 – 3,971,282)


936,903



936,903

  Additional paid-in capital


618,707



618,707

  Retained earnings


18,868,635



18,875,256







  Total stockholders' equity


20,424,245



20,430,866







  Total liabilities and stockholders' equity

$

21,896,225


$

22,214,677

 

JEWETT-CAMERON TRADING COMPANY LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Expressed in U.S. Dollars)

(Prepared by Management)

(Unaudited)



Three Months

Ended

November 30,

2019


Three Months
Ended

November 30,

2018







SALES

$

7,055,178


$

9,066,100







COST OF SALES


5,006,835



6,757,014







GROSS PROFIT


2,048,343



2,309,086







OPERATING EXPENSES






  Selling, general and administrative expenses


649,010



556,148

  Depreciation and amortization


48,148



50,870

  Wages and employee benefits


1,362,059



1,223,059









2,059,217



1,830,077







Income from continuing operations


(10,874)



479,009







OTHER ITEMS






Interest and other income


11,615



17,151







Income before income taxes


741



496,160







Income tax expense


(7,362)



(146,466)







Net (loss) income

$

(6,621)


$

349,694







Basic earnings per common share

$

(0.00)


$

0.08







Diluted earnings per common share

$

(0.00)


$

0.08







Weighted average number of common shares outstanding:






  Basic


3,971,282



4,256,361

  Diluted


3,971,282



4,256,361

 

JEWETT-CAMERON TRADING COMPANY LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in U.S. Dollars)

(Prepared by Management)

(Unaudited)



Three Months
Ended
November 30,


Three Months
Ended
November 30,


2019


2018







CASH FLOWS FROM OPERATING ACTIVITIES






Net (loss) income

$

(6,621)


$

349,694

Items not involving an outlay of cash:






    Depreciation and amortization


48,148



50,870

    Deferred income taxes


(14,101)



4,826







Changes in non-cash working capital items:






    Decrease (increase) in accounts receivable


671,926



417,942

    (Increase) in inventory


(902,321)



(1,121,813)

    Decrease in note receivable


200



1,903

    (Increase) in prepaid expenses


(175,276)



(157,361)

    Increase (decrease) in accounts payable and accrued liabilities


(297,730)



536,032

    Decrease in prepaid income taxes


21,464



114,310

    Increase in income taxes payable


-



27,330







Net cash provided by (used by) operating activities


(654,311)



223,733







CASH FLOWS FROM INVESTING ACTIVITIES






    Purchase of property, plant and equipment


(28,750)



-







Net cash used in investing activities


(28,750)



-







CASH FLOWS FROM FINANCING ACTIVITIES






    Redemption of common stock


-



(893,376)







Net cash used in financing activities


-



(893,376)







Net decrease in cash


(683,061)



(669,643)







Cash, beginning of period


9,652,310



6,097,463







Cash, end of period

$

8,969,249


$

5,427,820

Contact: Charlie Hopewell, President & CEO, (503) 647-0110

 

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SOURCE Jewett-Cameron Trading Company Ltd.