Jewett-Cameron Announces 3rd Quarter Financial Results
Jewett-Cameron Trading Company (NASDAQ: JCTCF) reported financial results for Q3 and nine months of fiscal 2024. Q3 sales decreased to $15.9 million from $18.9 million in Q3 2023. Net income for Q3 was $154,862 ($0.04 per share), down from $734,951 ($0.21 per share) in Q3 2023. For the nine-month period, sales declined to $33.9 million from $39.7 million, but net income improved to $912,257 ($0.26 per share) from a loss of $310,847 ($0.09 per share) in 2023, aided by a one-time arbitration settlement gain.
CEO Chad Summers cited economic factors and restrained consumer spending as challenges. The company is focusing on core products and expanding in-store product placement. As of May 31, 2024, cash position was $1.05 million, with a new asset-based credit line established for financial flexibility.
- Established a new asset-based credit line for improved financial flexibility
- Expansion of successful in-store product placement campaign for core fence products
- Nine-month net income improved to $912,257 ($0.26 per share) from a loss in the previous year
- Q3 sales decreased to $15.9 million from $18.9 million in Q3 2023
- Q3 net income declined to $154,862 ($0.04 per share) from $734,951 ($0.21 per share) in Q3 2023
- Nine-month sales declined to $33.9 million from $39.7 million in the previous year
- Economic factors and restrained consumer spending challenging sales and margins
- Higher interest rate on the new credit line compared to previous financing
Insights
Jewett-Cameron Trading Company Ltd. has reported a noticeable decline in both sales and net income for the third quarter of fiscal 2024 compared to the previous year. The drop in sales from
For the nine months ended May 31, 2024, the overall decline in sales from
From an investor’s perspective, the introduction of a new asset-based line with Northrim Funding Services, despite a higher interest rate, provides short-term financial flexibility. However, the need for this line could raise concerns about the company's cash flow management and reliance on external funding.
Investors should be cautious of the declining operational income and the dependency on one-time gains for net profitability. The ongoing economic factors and restrained consumer spending also cast uncertainty on future performance.
The home improvement and pet categories, which are significant segments for Jewett-Cameron, are currently experiencing subdued consumer spending. This aligns with the broader market trends where discretionary spending has been impacted by economic uncertainty. CEO Chad Summers mentioned efforts to increase visibility and brand recognition, which is a strategic move, yet may not yield immediate financial results.
The expansion of in-store product placement campaigns could enhance brand exposure and potentially drive sales in the long term. However, competitive pressures and market saturation in the home improvement sector could moderate these gains. Investors should weigh the potential benefits of these marketing strategies against the immediate costs and the time required to see tangible improvements in financial metrics.
Jewett-Cameron's reliance on enhancing core products and increasing store placements displays a proactive approach but will require sustained efforts and effective implementation to counter the declining trend in sales and margins.
Sales for the third quarter of fiscal 2024 totaled approximately
For the nine months ended May 31, 2024, Jewett-Cameron reported sales of approximately
"Economic factors and restrained consumer spending, particularly in the home improvement and pet categories, continue to challenge our sales and margins" said CEO Chad Summers. "In response, we are continuing to focus on our core products and increase our visibility and brand recognition with consumers. This includes the expansion of our successful in-store product placement campaign for several of our core fence products into more stores in the 4th quarter and into fiscal 2025".
As of May 31, 2024, the Company's cash position was approximately
About Jewett-Cameron Trading Company Ltd.
Jewett-Cameron Trading Company is a holding company that, through its subsidiaries, operates out of facilities located in
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 (Prepared by Management) (Unaudited) | |||||
May 31, 2024 | August 31, 2023 | ||||
ASSETS | |||||
Current assets | |||||
Cash and cash equivalents | $ | 1,054,704 | $ | 83,696 | |
Accounts receivable, net of allowance of | 7,408,344 | 5,634,924 | |||
Inventory, net of allowance of | 13,470,934 | 18,339,048 | |||
Prepaid expenses | 1,402,472 | 630,788 | |||
Total current assets | 23,336,454 | 24,688,456 | |||
Property, plant and equipment, net | 4,482,130 | 4,655,427 | |||
Intangible assets, net | 112,431 | 134,845 | |||
Deferred tax assets | 396,788 | 319,875 | |||
Total assets | $ | 28,327,803 | $ | 29,798,603 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
Current liabilities | |||||
Accounts payable | $ | 787,563 | $ | 2,181,194 | |
Bank indebtedness | - | 1,259,259 | |||
Income taxes payable | 244,108 | 147,629 | |||
Accrued liabilities | 2,254,484 | 2,113,194 | |||
Total liabilities | 3,286,155 | 5,701,276 | |||
Stockholders' equity | |||||
Capital stock Authorized 21,567,564 common shares, no par value 10,000,000 preferred shares, no par value Issued 3,504,802 common shares (August 31, 2023 – 3,498,899) | 826,861 | 825,468 | |||
Additional paid-in capital | 795,726 | 765,055 | |||
Retained earnings | 23,419,061 | 22,506,804 | |||
Total stockholders' equity | 25,041,648 | 24,097,327 | |||
Total liabilities and stockholders' equity | $ | 28,327,803 | $ | 29,798,603 | |
JEWETT-CAMERON TRADING COMPANY LTD. CONSOLIDATED STATEMENTS OF OPERATIONS (Expressed in (Prepared by Management) (Unaudited) | ||||||||
Three Month Period Ended May 31, | Nine Month Period Ended May 31, | |||||||
2024 | 2023 | 2024 | 2023 | |||||
SALES | $ | 15,896,017 | $ | 18,945,738 | $ | 33,931,050 | $ | 39,666,658 |
COST OF SALES | 12,944,941 | 14,532,366 | 26,959,377 | 30,473,044 | ||||
GROSS PROFIT | 2,951,076 | 4,413,372 | 6,971,673 | 9,193,614 | ||||
OPERATING EXPENSES | ||||||||
Selling, general and administrative expenses | 1,026,071 | 961,566 | 2,941,978 | 2,884,463 | ||||
Depreciation and amortization | 79,406 | 99,962 | 268,349 | 299,577 | ||||
Wages and employee benefits | 1,790,004 | 2,100,825 | 5,221,662 | 5,975,438 | ||||
2,895,481 | 3,162,353 | 8,431,989 | 9,159,478 | |||||
Income (loss) from operations | 55,595 | 1,251,019 | (1,460,316) | 34,136 | ||||
OTHER ITEMS | ||||||||
Other income | - | - | 2,450,000 | - | ||||
Gain on sale of assets | 1,450 | - | 90,537 | - | ||||
Interest (expense) income | (1,437) | (152,905) | 11,527 | (353,987) | ||||
13 | (152,905) | 2,552,064 | (353,987) | |||||
Income (loss) before income taxes | 55,608 | 1,098,114 | 1,091,748 | (319,851) | ||||
Income tax expense (recovery) | (99,254) | 363,163 | 179,491 | (9,004) | ||||
Net income (loss) | $ | 154,862 | $ | 734,951 | $ | 912,257 | $ | (310,847) |
Basic earnings (loss) per common share | $ | 0.04 | $ | 0.21 | $ | 0.26 | $ | (0.09) |
Diluted earnings (loss) per common share | $ | 0.04 | $ | 0.21 | $ | 0.26 | $ | (0.09) |
Weighted average number of common shares outstanding: | ||||||||
Basic | 3,504,802 | 3,498,899 | 3,502,399 | 3,498,000 | ||||
Diluted | 3,504,802 | 3,498,899 | 3,502,399 | 3,498,000 | ||||
JEWETT-CAMERON TRADING COMPANY LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in (Prepared by Management) (Unaudited) | |||||
Nine Month Period Ended May 31, | |||||
2024 | 2023 | ||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||
Net income (loss) | $ | 912,257 | $ | (310,847) | |
Items not involving an outlay of cash: | |||||
Depreciation and amortization | 268,349 | 299,577 | |||
Stock-based compensation expense | 32,064 | 23,303 | |||
Gain on sale of property, plant and equipment | (90,537) | - | |||
Write-down of intangible assets | 21,790 | - | |||
Deferred income tax expense | (76,913) | (366,566) | |||
Changes in non-cash working capital items: | |||||
Increase in accounts receivable | (1,773,420) | (338,489) | |||
Decrease in inventory | 4,868,114 | 103,083 | |||
(Increase) decrease in prepaid expenses | (771,684) | 242,427 | |||
Decrease in prepaid income taxes | - | 208,963 | |||
(Decrease) increase in accounts payable and accrued liabilities | (1,252,341) | 1,541,107 | |||
Increase in income taxes payable | 96,479 | 147,215 | |||
Net cash provided by operating activities | 2,234,158 | 1,549,773 | |||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||
Increase in intangible assets | - | (102,500) | |||
Proceeds on sale of property, plant and equipment | 106,649 | ||||
Purchase of property, plant and equipment | (110,540) | (215,685) | |||
Net cash used in investing activities | (3,891) | (318,185) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||
(Repayment to) proceeds from bank indebtedness | (1,259,259) | 1,000,000 | |||
Net cash (used in) provided by financing activities | (1,259,259) | 1,000,000 | |||
Net increase in cash | 971,008 | 2,231,588 | |||
Cash, beginning of period | 83,696 | 484,463 | |||
Cash, end of period | $ | 1,054,704 | $ | 2,716,051 | |
Contact: Chad Summers, President & CEO, (503) 647-0110
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SOURCE Jewett-Cameron Trading Company Ltd.
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