Jewett-Cameron Announces 2nd Quarter Financial Results

Jewett-Cameron Announces 2nd Quarter Financial Results

PR Newswire

NORTH PLAINS, Ore., April 14, 2020 /PRNewswire/ -- Jewett-Cameron Trading Company Ltd. (NASDAQ: JCTCF) today reported financial results for the second quarter and six month periods of fiscal 2020 ended February 29, 2020.

Sales for the second quarter of fiscal 2020 totaled $7.62 million compared to sales of $7.86 million for the second quarter of fiscal 2019. Loss from operations was ($163,020) compared to income from operations of $57,625 for the quarter ended February 28, 2019. Net loss was ($174,262), or ($0.05) per share, compared to net income of $119,629, or $0.03 per share, in the year-ago quarter.

For the six months ended February 29, 2020, sales totaled $14.7 million compared to sales of $16.9 million for the six months ended February 28, 2019. Loss from operations was ($173,894) compared to income from operations of $536,634. Net loss was ($180,884), or ($0.05) per share, compared to net income of $469,323, or $0.11 per share, in the first six months of fiscal 2019.

"Although COVID-19 began to affect our operations in January," said CEO Charlie Hopewell, "We have adjusted our work processes to comply with the State of Oregon's directives. Many of our employees are working from home, while others are on split shifts. We continue operations with our full staff with no lay-offs or reduced hours. Even though the outlook for the rest of fiscal 2020 is uncertain due to the COVID-19 situation, demand for our pet and fencing products so far in the 3rd fiscal quarter has been consistent with historic levels."

As of February 29, 2020, the Company's cash position was approximately $3.875 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. During the period ended February 29, 2020, the Company privately repurchased for cancelation a total of 490,120 common shares from two large shareholders, including a current officer and director of Jewett-Cameron. The shares were repurchased 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 $3,867,046.

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.

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

JEWETT-CAMERON TRADING COMPANY LTD.




CONSOLIDATED BALANCE SHEETS




(Expressed in U.S. Dollars)




(Prepared by Management)




(Unaudited)









February 29,
2020


August 31,
2019







ASSETS












Current assets






  Cash and cash equivalents

$

3,875,531


$

9,652,310

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


 

2,700,664



 

2,835,952

  Inventory, net of allowance
  
 of $32,538 (August 31, 2019 - $119,357)


 

7,248,548



 

6,377,805

  Note receivable


897



1,197

  Prepaid expenses


867,792



393,539

  Prepaid income taxes


370,002



223,420







  Total current assets


15,063,434



19,484,223







Property, plant and equipment, net


2,775,867



2,727,406







Intangible assets, net


779



3,048







Total assets

$

17,840,080


$

22,214,677







LIABILITIES AND STOCKHOLDERS' EQUITY












Current liabilities












  Accounts payable

$

449,586


$

410,027

  Accrued liabilities


921,762



1,312,580







  Total current liabilities


1,371,348



1,722,607







Deferred tax liability


85,796



61,204







Total liabilities


1,457,144



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






3,481,162 common shares (August 31, 2019 – 3,971,282)


821,284



936,903

  Additional paid-in capital


618,707



618,707

  Retained earnings


14,942,945



18,875,256







  Total stockholders' equity


16,382,936



20,430,866







  Total liabilities and stockholders' equity

$

17,840,080


$

22,214,677







 

JEWETT-CAMERON TRADING COMPANY LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Expressed in U.S. Dollars)

(Prepared by Management)

(Unaudited)






Three Month
Periods at the
end of February


Six Month
Periods at the
end of February


2020

2019


2020

2019











SALES

$

7,621,927

$

7,857,175


$

14,677,105

$

16,923,275











COST OF SALES


5,616,672


6,095,887



10,623,507


12,852,901











GROSS PROFIT


2,005,255


1,761,288



4,053,598


4,070,374











OPERATING EXPENSES










  Selling, general and administrative expenses


763,910


405,888



1,412,920


962,036

  Depreciation and amortization


58,063


45,401



106,211


96,271

  Wages and employee benefits


1,346,302


1,252,374



2,708,361


2,475,433



2,168,275


1,703,663



4,227,492


3,533,740











(Loss) income from operations


(163,020)


57,625



(173,894)


536,634











OTHER ITEMS










   Gain on sale of property, plant and equipment


 

400


 

105,365



 

400


 

105,365

   Interest and other income


6,584


9,184



18,198


26,335



6,984


114,549



18,598


131,700











(Loss) income before income taxes


(156,036)


172,174



(155,296)


668,334











Income tax expense


(18,226)


(52,545)



(25,588)


(199,011)











Net (loss) income

$

(174,262)

$

119,629


$

(180,884)

$

469,323











Basic earnings per common share

$

(0.05)

$

0.03


$

(0.05)

$

0.11











Diluted earnings per common share

$

(0.05)

$

0.03


$

(0.05)

$

0.11











Weighted average number of common shares outstanding:










  Basic


3,562,630


4,218,348



3,811,956


4,218,672

  Diluted


3,562,630


4,218,348



3,811,956


4,218,672











 

JEWETT-CAMERON TRADING COMPANY LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in U.S. Dollars)

(Prepared by Management)

(Unaudited)



Six Month Period
at the end of February,


2020


2019






CASH FLOWS FROM OPERATING ACTIVITIES





Net (loss) income

$

(180,884)

$

469,323

Items not involving an outlay of cash:





  Depreciation and amortization


106,211


96,271

  (Gain) on sale of property, plant and equipment


(400)


(105,365)

  Deferred income taxes


24,592


(1,967)






Changes in non-cash working capital items:





  Decrease in accounts receivable


135,288


955,372

  (Increase) in inventory


(870,743)


(1,902,410)

  Decrease in note receivable


300


2,203

  (Increase) in prepaid expenses


(474,253)


(218,265)

  (Increase) in prepaid income taxes


(146,582)


(194,522)

  (Decrease) in accounts payable and

  accrued liabilities


 

(351,259)


 

(858,868)






Net cash used in operating activities


(1,757,730)


(1,758,228)






CASH FLOWS FROM INVESTING ACTIVITIES





  Purchase of property, plant and equipment


(152,403)


-

  Proceeds from sale of property, plant and

  equipment


 

400


 

324,674






Net cash provided by (used in) investing activities


(152,003)


324,674






CASH FLOWS FROM FINANCING ACTIVITIES





  Redemption of common stock


(3,867,046)


(957,305)






Net cash used in financing activities


(3,867,046)


(957,305)






Net decrease in cash


(5,776,779)


(2,390,859)






Cash, beginning of period


9,652,310


6,097,463






Cash, end of period

$

3,875,531

$

3,706,604

 

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SOURCE Jewett-Cameron Trading Company Ltd.

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