Jewett-Cameron Announces Fiscal 2019 Financial Results

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Nov 13, 2019, 16:20 ET

NORTH PLAINS, Ore., Nov. 13, 2019 /PRNewswire/ -- Jewett-Cameron Trading Company Ltd. (NASDAQ: JCTCF) today reported financial results for its fourth quarter and fiscal year ended August 31, 2019.

For the fiscal year ended August 31, 2019, Jewett-Cameron reported sales of $45.4 million and net income of $2,100,452, or $0.50 per shares, compared to sales of $53.9 million and net income of $2,920,639, or $0.66 per share, for fiscal 2018.

Sales for the fourth quarter of fiscal 2019 totaled $11.8 million compared to sales of $11.2 in the prior year's fourth quarter.

Net income was $532,918, or $0.13 per share, compared to net income of $700,699, or $0.16 per share, in the fourth quarter of fiscal 2018.

"The prolonged wet weather during the spring and early summer across North America delayed the purchase of lawn and garden products," said CEO Charlie Hopewell. "The poor weather, combined with the increase in US tariffs on many of our Chinese manufactured metal products, were primarily responsible for the decline in our 2019 sales and earnings. However, we were notified in September 2019 that many of our Chinese manufactured products will be exempted from tariffs going forward. This reclassification should help the Company's products to remain competitive in the marketplace."

As of August 31, 2019, the Company's cash position was $9.65 million, and currently there is no borrowing against its $3.0 million line of credit. During fiscal 2019, the Company repurchased for cancellation a total of 345,671 common shares at a cost of $3,061,441, which represents an average price of $8.86 per share. The Board may consider utilizing a portion of the Company's cash position to repurchase additional shares in the future.

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 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. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Expressed in U.S. Dollars)
AS OF AUGUST 31

	2019		2018

ASSETS

Current assets
Cash and cash equivalents	$	9,652,310	$	6,097,463
Accounts receivable, net of allowance of $Nil (August 31, 2018 - $Nil)		2,835,952		4,152,492
Inventory, net of allowance of $119,357 (August 31, 2018 - $75,336)		6,377,805		9,803,197
Note receivable		1,197		4,000
Prepaid expenses		393,539		347,251
Prepaid income taxes		223,420		114,310

Total current assets		19,484,223		20,518,713

Property, plant and equipment, net		2,727,406		3,105,260

Intangible assets, net		3,048		3,590

Total assets	$	22,214,677	$	23,627,563

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Accounts payable	$	410,027	$	377,092
Accrued liabilities		1,312,580		1,795,207

Total current liabilities		1,722,607		2,172,299

Deferred tax liability		61,204		81,853

Total liabilities		1,783,811		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
3,971,282 common shares (August 31, 2018 – 4,314,659)		936,903		1,017,908
Additional paid-in capital		618,707		600,804
Retained earnings		18,875,256		19,754,699

Total stockholders' equity		20,430,866		21,373,411

Total liabilities and stockholders' equity	$	22,214,677	$	23,627,563

JEWETT-CAMERON TRADING COMPANY LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Expressed in U.S. Dollars)
YEARS ENDED AUGUST 31

	2019		2018

SALES	$	45,446,362	$	53,923,152

COST OF SALES		35,481,931		42,325,338

GROSS PROFIT		9,964,431		11,597,814

OPERATING EXPENSES
Selling, general and administrative		2,127,296		2,103,899
Depreciation and amortization		191,819		274,065
Wages and employee benefits		4,907,766		4,943,431

		7,226,881		7,321,395

Income from operations		2,737,550		4,276,419

OTHER ITEMS
Gain (loss) on sale of property, plant and equipment		105,366		(27,022)
Interest and other income		45,228		30,026
		150,594		3,004

Income before income taxes		2,888,144		4,279,423

Income taxes
Current		808,341		1,288,275
Deferred (recovery)		(20,649)		70,509

Net income for the year	$	2,100,452	$	2,920,639

Basic earnings per common share	$	0.50	$	0.66

Diluted earnings per common share	$	0.50	$	0.66

Weighted average number of common shares outstanding:
Basic		4,233,304		4,430,940
Diluted		4,233,304		4,430,940

JEWETT-CAMERON TRADING COMPANY LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in U.S. Dollars)
YEARS ENDED AUGUST 31

	2019		2018

CASH FLOWS FROM OPERATING ACTIVITIES
Net income for the year	$	2,100,452	$	2,920,639
Items not affecting cash:
Depreciation and amortization		191,819		274,065
(Gain) loss on sale of property, plant and equipment		(105,366)		27,022
Deferred income taxes		(20,649)		70,509

Changes in non-cash working capital items:
Decrease (increase) in accounts receivable		1,316,540		(587,437)
Decrease (increase) in note receivable		2,803		(4,000)
Decrease (increase) in inventory		3,425,392		(995,652)
(Increase) decrease in prepaid expenses		(46,288)		248,525
(Increase) in prepaid income taxes		(109,110)		(114,310)
(Decrease) in accounts payable and accrued liabilities		(449,692)		(273,021)

Net cash provided by operating activities		6,305,901		1,566,340

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds on sale of property, plant and equipment		324,675		1,000
Purchase of property, plant and equipment		(32,732)		(110,528)

Net cash used in investing activities		291,943		(109,528)

CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock		18,444		-
Redemption of common stock		(3,061,441)		(1,271,599)

Net cash used in financing activities		(3,042,997)		(1,271,599)

Net increase in cash		3,554,847		185,213

Cash, beginning of year		6,097,463		5,912,250

Cash, end of year	$	9,652,310	$	6,097,463