NORTH
PLAINS, Ore., April 13,
2023 /PRNewswire/ -- Jewett-Cameron Trading Company
Ltd. (NASDAQ: JCTCF) today reported financial results for the
second quarter and six month periods of fiscal 2023 ended
February 28, 2023.
Sales for the second quarter of fiscal 2023 were $8.14 million compared to sales of $14.06 million for the second quarter of fiscal
2022. Loss from operations was ($1,210,085) compared to income from operations
of $696,740 for the quarter ended
February 28, 2022. Net loss was
($972,038), or ($0.28) per share, compared to net income of
$269,820, or $0.08 per share, in the year-ago quarter.
For the six months ended February 28,
2023, sales totaled $20.7
million compared to sales of $27.0
million for the six months ended February 28, 2022. Loss from operations was
($1,216,883) compared to income from
operations of $229,559 for the six
months ending in February 28, 2022.
Net loss was ($1,045,798), or
($0.30) per share, compared to a net
loss of ($121,322), or ($0.03) per share, for the first six months of
fiscal 2022.
"We have had a slow start to our Spring and Summer selling
seasons as the extended winter weather across the US has pushed
back these seasonal product orders from many of our customers. The
current results were also affected by a change in how we record
some revenue from a major fencing customer, as many of those sales
are expected to be booked in this year's third and fourth quarters
instead," said CEO Chad Summers.
"Our new MyEcoWorld® sustainable bag products are officially
launching in the 3rd quarter. We are optimistic about
this new product line which is less seasonal and, based on our
success with our sustainable poop bag product, has the potential to
grow into a significant segment of our business over time."
In February 2023, our arbitration
case against a former distributor for breach of the distribution
agreement was decided in the Company's favor. We are seeking
damages and our costs. The monetary award is pending, and the
amount of any recovery is currently uncertain.
As of February 28, 2023, the
Company's cash position was approximately $268 thousand, and there was $8.5 million borrowed against its $10.0 million line of credit. Subsequent to the
end of the period, the Company has drawn an additional $1 million against the line. The Company is
currently in discussions with its lender U.S. Bank regarding the
possibility of either increasing its existing line of credit or
restructuring the existing line into an asset-based lending
agreement. No agreement has been reached, and there is no guarantee
that there will be any change to the Company's borrowing
arrangements. Based on the indications of availability of credit,
the timing of accounts receivable, and the seasonality of our
sales, the Company believes it will have sufficient working capital
available for the remainder of fiscal 2023.
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®, for
pet products; Adjust-A-Gate™, Fit-Right®, Perimeter Patrol®,
Infinity Euro Fence, and Lifetime Post™ for gates and fencing; 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)
|
|
|
February
28,
2023
|
|
August
31,
2022
|
|
|
|
|
ASSETS
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
268,389
|
|
$
|
484,463
|
Accounts
receivable, net of allowance of $0 (August 31, 2022 -
$0)
|
|
4,261,256
|
|
|
7,191,646
|
Inventory, net
of allowance of $449,707 (August 31, 2022 - $800,000)
|
|
23,079,647
|
|
|
20,632,313
|
Prepaid
expenses
|
|
794,566
|
|
|
1,112,575
|
Prepaid income
taxes
|
|
208,138
|
|
|
208,963
|
|
|
|
|
|
|
Total current
assets
|
|
28,611,996
|
|
|
29,629,960
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
4,931,022
|
|
|
4,828,420
|
|
|
|
|
|
|
Intangible assets,
net
|
|
32,822
|
|
|
33,358
|
|
|
|
|
|
|
Deferred tax
assets
|
|
397,990
|
|
|
24,998
|
|
|
|
|
|
|
Total
assets
|
$
|
33,973,830
|
|
$
|
34,516,736
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
$
|
710,174
|
|
$
|
1,566,047
|
Bank
indebtedness
|
|
8,500,000
|
|
|
7,000,000
|
Accrued
liabilities
|
|
1,691,501
|
|
|
1,856,039
|
|
|
|
|
|
|
Total
liabilities
|
|
10,901,675
|
|
|
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
|
|
21,481,632
|
|
|
22,527,430
|
|
|
|
|
|
|
Total
stockholders' equity
|
|
23,072,155
|
|
|
24,094,650
|
|
|
|
|
|
|
Total
liabilities and stockholders' equity
|
$
|
33,973,830
|
|
$
|
34,516,736
|
JEWETT-CAMERON
TRADING COMPANY LTD.
CONSOLIDATED STATEMENTS
OF OPERATIONS
(Expressed in U.S.
Dollars)
(Prepared by
Management)
(Unaudited)
|
|
|
Three
Month
Periods to the
end
of
February
|
|
Six
Month
Periods to the
end
of
February
|
|
|
2023
|
2022
|
|
2023
|
2022
|
|
|
|
|
|
|
|
|
|
|
SALES
|
$
|
8,143,421
|
$
|
14,060,751
|
|
$
|
20,720,921
|
$
|
26,978,475
|
|
|
|
|
|
|
|
|
|
|
COST OF
SALES
|
|
6,222,879
|
|
10,636,524
|
|
|
15,940,679
|
|
21,089,386
|
|
|
|
|
|
|
|
|
|
|
GROSS
PROFIT
|
|
1,920,542
|
|
3,424,227
|
|
|
4,780,242
|
|
5,889,089
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
|
Selling, general
and administrative expenses
|
|
1,096,090
|
|
684,116
|
|
|
1,922,897
|
|
1,672,403
|
Depreciation and
amortization
|
|
88,079
|
|
84,071
|
|
|
199,615
|
|
153,709
|
Wages and
employee benefits
|
|
1,946,458
|
|
1,959,300
|
|
|
3,874,613
|
|
3,833,418
|
|
|
3,130,627
|
|
2,727,487
|
|
|
5,997,125
|
|
5,659,530
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from
operations
|
|
(1,210,085)
|
|
696,740
|
|
|
(1,216,883)
|
|
229,559
|
|
|
|
|
|
|
|
|
|
|
OTHER
ITEMS
|
|
|
|
|
|
|
|
|
|
Other
income
|
|
-
|
|
2,000
|
|
|
-
|
|
5,000
|
Interest
expense
|
|
(114,530)
|
|
(30,620)
|
|
|
(201,082)
|
|
(50,896)
|
Accrual
for legal claim
|
|
-
|
|
(300,000)
|
|
|
-
|
|
(300,000)
|
|
|
(114,530)
|
|
(328,620)
|
|
|
(201,082)
|
|
(345,896)
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before
income taxes
|
|
(1,324,615)
|
|
368,120
|
|
|
(1,417,965)
|
|
(116,337)
|
|
|
|
|
|
|
|
|
|
|
Income tax recovery
(expense)
|
|
352,577
|
|
(98,300)
|
|
|
372,167
|
|
(4,985)
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
$
|
(972,038)
|
$
|
269,820
|
|
$
|
(1,045,798)
|
$
|
(121,322)
|
|
|
|
|
|
|
|
|
|
|
Basic (loss)
earnings per common share
|
$
|
(0.28)
|
$
|
0.08
|
|
$
|
(0.30)
|
$
|
(0.03)
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss)
earnings per common share
|
$
|
(0.28)
|
$
|
0.08
|
|
$
|
(0.30)
|
$
|
(0.03)
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
3,498,899
|
|
3,492,842
|
|
|
3,497,543
|
|
3,491,969
|
Diluted
|
|
3,498,899
|
|
3,492,842
|
|
|
3,497,543
|
|
3,491,969
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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,
|
|
Six Month
Period
at the end of
February,
|
|
2023
|
|
2022
|
|
|
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
|
Net (loss)
income
|
$
|
(1,045,798)
|
|
$
|
(121,322)
|
Items not involving an
outlay of cash:
|
|
|
|
|
|
Depreciation and
amortization
|
|
199,615
|
|
|
153,709
|
Stock-based
compensation expense
|
|
23,303
|
|
|
39,386
|
Deferred income
taxes
|
|
(372,992)
|
|
|
8,889
|
|
|
|
|
|
|
Changes in non-cash
working capital items:
|
|
|
|
|
|
(Increase)
decrease in accounts receivable
|
|
2,930,390
|
|
|
(2,050,751)
|
Increase in
inventory
|
|
(2,447,334)
|
|
|
(4,238,783)
|
Decrease
(increase) in prepaid expenses
|
|
318,009
|
|
|
(254,073)
|
Increase
(decrease) in accounts payable and
accrued
liabilities
|
|
(1,020,411)
|
|
|
591,335
|
Decrease
(increase) in prepaid income taxes
|
|
825
|
|
|
(5,247)
|
|
|
|
|
|
|
Net cash used in
operating activities
|
|
(1,414,393)
|
|
|
(5,876,857)
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
Purchase of
property, plant and equipment
|
|
(301,681)
|
|
|
(908,401)
|
|
|
|
|
|
|
Net cash used in
investing activities
|
|
(301,681)
|
|
|
(908,401)
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
Proceeds from
bank indebtedness
|
|
1,500,000
|
|
|
6,500,000
|
|
|
|
|
|
|
Net cash provided by
financing activities
|
|
1,500,000
|
|
|
6,500,000
|
|
|
|
|
|
|
Net decrease in
cash
|
|
(216,074)
|
|
|
(285,258)
|
|
|
|
|
|
|
Cash, beginning of
period
|
|
484,463
|
|
|
1,184,313
|
|
|
|
|
|
|
Cash, end of
period
|
$
|
268,389
|
|
$
|
899,055
|
Contact: Chad Summers, President
& CEO, (503) 647-0110
View original
content:https://www.prnewswire.com/news-releases/jewett-cameron-announces-2nd-quarter-financial-results-301797231.html
SOURCE Jewett-Cameron Trading Company Ltd.