Jewett-Cameron Announces 3rd Quarter Financial Results

NORTH PLAINS, Ore., July 11, 2018 /PRNewswire/ — Jewett-Cameron Trading Company Ltd. (NASDAQ: JCTCF) today reported financial results for the third quarter and nine month periods of fiscal 2018 ended May 31, 2018.

Sales for the third quarter of fiscal 2018 totaled $19.9 million compared to sales of $16.7 million for the third quarter of fiscal 2017. Income from operations was $2,008,845 compared to $2,023,238 for the third quarter ended May 31, 2017. Net income after other items and income taxes for the current quarter was $1,389,209, or $0.31 per share, compared to $1,206,135, or $0.26 per share, in the year-ago quarter.

For the nine months ended May 31, 2018, Jewett-Cameron reported sales of $42.7 million compared to sales of $36.6 million for the nine months ended May 31, 2017. Net income was $2,219,940, or $0.50 per share, compared to net income of $2,001,068, or $0.44 per share, in the first nine months of fiscal 2017.

All share and per share numbers have been adjusted for the 2-for-1 stock split effective May 29, 2018.

“Higher sales of specialty lumber contributed to our sales increase in the current period, although those products have lower sales margins,” said CEO Charlie Hopewell. “We are continuing our efforts to add new customers. At a recent trade show in Europe, our products were well received by European retailers.”

As of May 31, 2018, the Company’s cash position was approximately $6.25 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. On June 6, 2018, the Company announced the Board of Directors approved a share repurchase plan to purchase for cancellation up to 250,000 common shares under Rule 10b5-1 of the U.S. Securities Exchange Act of 1934. Subsequent to the end of the 3rd quarter, the Company has repurchased for cancellation 12,200 common shares at an average price of $7.99 per share.

About Jewett-Cameron Trading Company Ltd.

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 specialty metal products and wholesale distribution of wood products to home centers and other retailers located primarily in the United States. Greenwood Products is a processor and distributor of industrial wood and other specialty building products principally to customers in the marine and transportation industries in the United States. MSI-PRO is an importer and distributor of pneumatic air tools, industrial clamps, and the Avenger Products line of sawblades and other products. Jewett-Cameron Seed Company is a processor and distributor of agricultural seeds. JC USA provides professional and administrative services, including accounting and credit services, to its subsidiary companies.

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)

May 31,
2018

August 31,
2017

ASSETS

Current assets

  Cash

$  6,251,001

$   5,912,250

  Accounts receivable, net of allowance of $Nil (August 31, 2017 – $1,725)

7,092,526

3,565,055

  Inventory, net of allowance of $117,906 (August 31, 2017 – $156,713)

7,713,010

8,807,545

  Prepaid expenses

775,919

595,776

  Prepaid income taxes

114,413

  Total current assets

21,946,869

18,880,626

Property, plant and equipment, net

3,101,128

3,222,572

Intangible assets, net

3,726

77,837

Total assets

$  25,051,723

$  22,181,035

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities

  Accounts payable

$  1,219,344

$    638,128

  Accrued liabilities

1,835,289

1,807,192

  Total current liabilities

3,054,633

2,445,320

Deferred tax liability

52,779

11,344

Total liabilities

3,107,412

2,456,664

Stockholders’ equity

  Capital stock

Authorized 21,567,564 common shares, without par value 10,000,000 preferred shares, without par value

   Issued 4,468,988 common shares (August 31, 2017 – 4,468,988)

1,054,316

1,054,316

  Additional paid-in capital

600,804

600,804

  Retained earnings

20,289,191

18,069,251

  Total stockholders’ equity

21,944,311

19,724,371

  Total liabilities and stockholders’ equity

$  25,051,723

$  22,181,035

 

JEWETT-CAMERON TRADING COMPANY LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Expressed in U.S. Dollars)

(Prepared by Management)

(Unaudited)

Three Month
Period Ended
May 31,

Nine Month
Period Ended
May 31,

2018

2017

2018

2017

SALES

$  19,934,709

$  16,718,234

$  42,690,017

$  36,639,323

COST OF SALES

15,944,995

12,906,533

33,877,749

28,304,118

GROSS PROFIT

3,989,714

3,811,701

8,812,268

8,335,205

OPERATING EXPENSES

  Selling, general and administrative expenses

596,830

466,014

1,658,781

1,470,731

  Depreciation and amortization

71,560

84,693

266,970

222,700

  Wages and employee benefits

1,312,479

1,237,756

3,587,126

3,277,797

(1,980,869)

(1,788,463)

(5,512,877)

(4,971,228)

Income from operations

2,008,845

2,023,238

3,299,391

3,363,977

OTHER ITEMS

  Loss on sale of property, plant and equipment

(27,022)

(393)

   Interest and other income

8,156

2,400

16,639

6,220

8,156

2,400

(10,383)

5,827

Income before income taxes

2,017,001

2,025,638

3,289,008

3,369,804

Income tax expense

(627,792)

(819,503)

(1,069,068)

(1,368,736)

Net income

$  1,389,209

$   1,206,135

$  2,219,940

$  2,001,068

Basic earnings per common share

$           0.31

$            0.26

$           0.50

$           0.44

Diluted earnings per common share

$           0.31

$            0.26

$           0.50

$           0.44

Weighted average number of common shares outstanding:

  Basic

4,468,988

4,572,588

4,468,988

4,572,588

  Diluted

4,468,988

4,572,588

4,468,988

4,572,588

 

JEWETT-CAMERON TRADING COMPANY LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in U.S. Dollars)

(Prepared by Management)

(Unaudited)

Nine Month
Period Ended
May 31,

2018

2017

CASH FLOWS FROM OPERATING ACTIVITIES

Net income

$  2,219,940

$  2,001,068

Items not involving an outlay of cash:

  Depreciation and amortization

266,970

222,700

  Loss on sale of property, plant and equipment

27,022

393

  Deferred income tax expense

41,435

2,162

Changes in non-cash working capital items:

  (Increase) in accounts receivable

(3,527,471)

(2,190,337)

  Decrease in inventory

1,094,535

15,354

  (Increase) decrease in prepaid expenses

(180,143)

60,093

  (Increase) decrease in prepaid income taxes

(114,413)

596

  Increase in accounts payable and accrued liabilities

609,313

287,928

  Increase in income taxes payable

317,074

Net cash provided by operating activities

437,188

717,031

CASH FLOWS FROM INVESTING ACTIVITIES

  Purchase of property, plant and equipment

(99,437)

(368,365)

  Proceeds from sale of property, plant and

  equipment

1,000

3,480

Net cash used in investing activities

(98,437)

(364,885)

Net increase in cash

338,751

352,146

Cash, beginning of period

5,912,250

4,519,922

Cash, end of period

$  6,251,001

$  4,872,068

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

 

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SOURCE Jewett-Cameron Trading Company Ltd.

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