Jewett-Cameron Announces 2nd Quarter Financial Results

15 April 2019

NORTH PLAINS, Ore., April 15, 2019 /PRNewswire/ -- Jewett-Cameron Trading Company Ltd. (NASDAQ: JCTCF) today reported financial results for the second quarter and six month periods of fiscal 2019 ended February 28, 2019.

Sales for the second quarter of fiscal 2018 totaled $7.86 million compared to sales of $13.3 million for the second quarter of fiscal 2018. Income from operations was $57,625 compared to income of $720,244 for the quarter ended February 28, 2018. Net income was $119,629, or $0.03 per share, compared to net income of $508,298, or $0.11 per share, in the year-ago quarter.

For the six months ended February 28, 2019, sales totaled $16.9 million compared to sales of $22.8 million for the six months ended February 28, 2018, and income from operations was $536,634 compared to $1,290,546. Net income was $469,323, or $0.11 per share, compared to net income of $830,731, or $0.19 per share, in the first six months of fiscal 2018.

"The results from the second quarter were disappointing, but were primarily from external factors," said CEO Charlie Hopewell. "The extended cold and wet weather across much of the United States caused retailers to delay purchases of Spring and Summer merchandise, and the tariffs on Chinese goods has resulted in continued uncertainty in the marketplace. So far in our fiscal third quarter however, we are seeing improvement in some important areas."

As of February 28, 2019, the Company's cash position was approximately $3.7 million, and there was no borrowing against its $3.0 million line of credit. The Company has historically utilized its cash position by implementing share repurchase programs as an effective method of enhancing shareholder value. Since the start of a new repurchase plan on February 18, 2019, the Company has repurchased a total of 189,400 common shares at a cost of $1,651,706, or $8.72 per share.

Jewett-Cameron Trading Company is a holding company that, through its subsidiaries (Jewett-Cameron Companies), operate out of facilities located in North Plains, Oregon. Those businesses consist of the manufacturing and distribution of patented and patent pending specialty metal products, wholesale distribution of wood products, seed processing and sales, and sales of industrial tools and clamps. 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 INFINITY Euro fence 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)





February 28,

2019



August 31,

2018













ASSETS























Current assets











  Cash and cash equivalents

$

3,706,604



$

6,097,463

  Accounts receivable, net of allowance of $Nil (August 31, 2018 - $Nil)



3,197,120





4,152,492

  Inventory, net of allowance of $89,424 (August 31, 2018 - $75,336)



11,705,607





9,803,197

  Note receivable



1,797





4,000

  Prepaid expenses



565,516





347,251

  Prepaid income taxes



308,832





114,310













  Total current assets



19,485,476





20,518,713













Property, plant and equipment, net



2,789,951





3,105,260













Intangible assets, net



3,319





3,590













Total assets

$

22,278,746



$

23,627,563













LIABILITIES AND STOCKHOLDERS' EQUITY























Current liabilities























  Accounts payable

$

368,673



$

377,092

  Accrued liabilities



944,758





1,795,207













  Total current liabilities



1,313,431





2,172,299













Deferred tax liability



79,886





81,853













Total liabilities



1,393,317





2,254,152













Stockholders' equity











  Capital stock











    Authorized











      21,567,564 common shares, without par value











      10,000,000 preferred shares, without par value











    Issued











      4,210,538 common shares (August 31, 2018 – 4,314,659)



993,344





1,017,908

  Additional paid-in capital



600,804





600,804

  Retained earnings



19,291,281





19,754,699













  Total stockholders' equity



20,885,429





21,373,411













  Total liabilities and stockholders' equity

$

22,278,746



$

23,627,563

 

JEWETT-CAMERON TRADING COMPANY LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Expressed in U.S. Dollars)

(Prepared by Management)

(Unaudited)





Three Month

Periods ended

February 28,



Six Month

Periods ended

February 28,



2019

2018



2019

2018





















SALES

$

7,857,175

$

13,341,338



$

16,923,275

$

22,755,308





















COST OF SALES



6,095,887



10,705,532





12,852,901



17,932,754





















GROSS PROFIT



1,761,288



2,635,806





4,070,374



4,822,554





















OPERATING EXPENSES



















  Selling, general and administrative expenses



405,888



616,074





962,036



1,061,951

  Depreciation and amortization



45,401



122,745





96,271



195,410

  Wages and employee benefits



1,252,374



1,176,743





2,475,433



2,274,647





1,703,663



1,915,562





3,533,740



3,532,008





















Income from operations



57,625



720,244





536,634



1,290,546





















OTHER ITEMS



















   (Loss) gain on sale of property, plant and equipment



105,365



530





105,365



(27,022)

   Interest and other income



9,184



5,793





26,335



8,483





114,549



6,323





131,700



(18,539)





















Income before income taxes



172,174



726,567





668,334



1,272,007





















Income tax expense



(52,545)



(218,269)





(199,011)



(441,276)





















Net income

$

119,629

$

508,298



$

469,323

$

830,731





















Basic earnings per common share

$

0.03

$

0.11



$

0.11

$

0.19





















Diluted earnings per common share

$

0.03

$

0.11



$

0.11

$

0.19





















Weighted average number of common shares outstanding:



















  Basic



4,218,348



4,468,988





4,218,672



4,468,988

  Diluted



4,218,348



4,468,988





4,218,672



4,468,988

 

JEWETT-CAMERON TRADING COMPANY LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in U.S. Dollars)

(Prepared by Management)

(Unaudited)





Six Month Period

ended February 28,



2019



2018













CASH FLOWS FROM OPERATING ACTIVITIES











Net income

$

469,323



$

830,731

Items not involving an outlay of cash:











  Depreciation and amortization



96,271





195,410

  (Gain) loss on sale of property, plant and equipment



(105,365)





27,022

  Deferred income taxes



(1,967)





25,691













Changes in non-cash working capital items:











  Decrease (increase) in accounts receivable



955,372





(2,499,848)

  (Increase) in inventory



(1,902,410)





(481,648)

  Decrease in note receivable



2,203





-

  (Increase) in prepaid expenses



(218,265)





(287,428)

  (Increase) in prepaid income taxes



(194,522)





(469,577)

  (Decrease) in accounts payable and accrued liabilities



(858,868)





(396,839)













Net cash used in operating activities



(1,758,228)





(3,056,486)













CASH FLOWS FROM INVESTING ACTIVITIES











  Purchase of property, plant and equipment



-





(66,041)

  Proceeds from sale of property, plant and equipment



324,674





1,000













Net cash provided by (used in) investing activities



324,674





(65,041)













CASH FLOWS FROM FINANCING ACTIVITIES











  Redemption of common stock



(957,305)





-













Net cash used in financing activities



(957,305)





-













Net decrease in cash



(2,390,859)





(3,121,527)













Cash, beginning of period



6,097,463





5,912,250













Cash, end of period

$

3,706,604



$

2,790,723

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

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SOURCE Jewett-Cameron Trading Company Ltd.