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
3,498,899common 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.
