Jewett-Cameron Announces 3rd Quarter Financial Results

Rhea-AI Summary

Jewett-Cameron Trading Company Ltd. (JCTCF) reported Q3 fiscal 2022 results, showing sales of approximately $20.9 million, down from $21.6 million in Q3 2021. Income from operations fell to $2,019,644 from $2,638,011 year-over-year. Net income decreased to $1,494,111 ($0.43 per share) from $2,414,477 ($0.69 per share) in Q3 2021. For the nine-month period, sales increased to $47.9 million, with net income at $1,372,789 ($0.39 per share), down from $2,849,839 ($0.82 per share) in the same period last year. The company cites effective inventory management as a key factor in mitigating supply chain disruptions.

Positive

• Sales for nine months increased to $47.9 million, up from $42.4 million in 2021.
• Effective inventory management helped maintain product availability amidst supply chain disruptions.

Negative

• Q3 sales decreased to $20.9 million from $21.6 million in 2021.
• Net income for Q3 fell to $1,494,111 from $2,414,477 in 2021, and for nine months decreased to $1,372,789 from $2,849,839 in 2021.

NORTH PLAINS, Ore., July 14, 2022 /PRNewswire/ -- Jewett-Cameron Trading Company Ltd. (NASDAQ: JCTCF) today reported financial results for the third quarter and nine-month periods of fiscal 2022 ended May 31, 2022.

Sales for the third quarter of fiscal 2022 totaled approximately $20.9 million compared to sales of $21.6 million for the third quarter of fiscal 2021. Income from operations was $2,019,644 compared to $2,638,011 for the third quarter ended May 31, 2021. Net income after other items and income taxes for the current quarter was $1,494,111, or $0.43 per share, compared to net income of $2,414,477, or $0.69 per share, in the same quarter of 2021.

For the nine months ended May 31, 2022, Jewett-Cameron reported sales of $47.9 million compared to sales of $42.4 million for the nine months ended May 31, 2021. Net income was $1,372,789, or $0.39 per share, compared to net income of $2,849,839, or $0.82 per share, for the first nine months of fiscal 2021.

Net income for both the three and nine-month periods ended May 31, 2021 were positively affected by a one-time gain of $687,387 related to the forgiveness of the Company's PPP loans.

"Our decision to build our most important inventory at the beginning of our busy Spring and Summer season worked well," said CEO Chad Summers. "It reduced some product costs and helped insulate us against the continuing supply chain disruptions from China. We were able to provide high product availability and on-time fulfillment rates for our customers. We remain well positioned with our inventory on hand entering the 4^th quarter."

As of May 31, 2022, the Company's cash position was approximately $2.1 million, and there was $9.0 million borrowed against its $10.0 million line of credit. Subsequent to the end of the period, the Company repaid an additional $1.0 million, and as product is sold and accounts receivable are collected, we expect to continue to repay the amount drawn against the line.

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, 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)

	May 31, 2022			August 31, 2021
ASSETS
Current assets
Cash and cash equivalents	$	2,130,450		$	1,184,313
Accounts receivable, net of allowance of $Nil (August 31, 2021 - $0)		8,271,856			7,086,503
Inventory, net of allowance of $250,000 (August 31, 2021 - $250,000)		19,898,803			14,391,365
Prepaid expenses		2,257,576			2,305,820
Prepaid income taxes		3,876			252,958
Total current assets		32,562,561			25,220,959
Property, plant and equipment, net		4,661,706			3,886,543
Intangible assets, net		30,092			30,897
Total assets	$	37,254,359		$	29,138,399
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	1,794,717		$	1,349,677
Bank indebtedness		9,000,000			3,000,000
Accrued liabilities		2,045,281			1,798,088
Total current liabilities		12,839,998			6,147,765
Deferred tax liability		128,497			116,945
Total liabilities		12,968,495			6,264,710
Stockholders' equity
Capital stock     Authorized       21,567,564 common shares, no par value       10,000,000 preferred shares, no par value     Issued       3,492,842 common shares (August 31, 2021 –3,489,161)		824,039			823,171
Additional paid-in capital		725,729			687,211
Retained earnings		22,736,096			21,363,307
Total stockholders' equity		24,285,864			22,873,689
Total liabilities and stockholders' equity	$	37,254,359		$	29,138,399

 

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,
	2022		2021			2022			2021
SALES	$	20,922,190	$	21,619,952			$	47,900,665		$	42,396,591
COST OF SALES		15,569,380		16,037,702				36,658,766			31,239,866
GROSS PROFIT		5,352,810		5,582,250				11,241,899			11,156,725
OPERATING EXPENSES
Selling, general and administrative expenses		1,125,692		966,298				2,798,094			2,556,902
Depreciation and amortization		83,291		69,353				237,001			175,171
Wages and employee benefits		2,124,183		1,908,588				5,957,601			5,226,021
		3,333,166		2,944,239				8,992,696			7,958,094
Income from operations		2,019,644		2,638,011				2,249,203			3,198,631
OTHER ITEMS
Other income		903		3,000				(294,097)			9,000
Interest expense		(47,972)		(9,283)				(98,868)			(9,283)
Gain on extinguishment of debt		-		687,387				-			687,387
		(47,069)		681,104				(392,965)			687,104
Income before income taxes		1,972,575		3,319,115				1,856,238			3,885,735
Income tax expense		(478,464)		(904,638)				(483,449)			(1,035,896)
Net income	$	1,494,111	$	2,414,477			$	1,372,789		$	2,849,839
Basic earnings per common share	$	0.43	$	0.69			$	0.39		$	0.82
Diluted earnings per common share	$	0.43	$	0.69			$	0.39		$	0.82
Weighted average number of common shares outstanding:
Basic		3,492,842		3,489,161				3,492,266			3,485,525
Diluted		3,492,842		3,489,161				3,492,266			3,485,525

 

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,
	2022					2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	1,372,789		$	2,849,839
Items not involving an outlay of cash:
Depreciation and amortization		237,001			175,171
Stock-based compensation expense		39,386			70,391
Gain on extinguishment of debt		-			(680,707)
Deferred income tax expense		11,552			(57,768)
Changes in non-cash working capital items:
(Increase) in accounts receivable		(1,185,353)			(4,776,635)
(Increase) decrease in inventory		(5,507,438)			1,430,506
Decrease (increase) in prepaid expenses		48,244			(1,544,728)
Decrease in prepaid income taxes		249,082			-
Increase in accounts payable and accrued liabilities		692,233			736,595
Increase in income taxes payable		-			189,594
Net cash (used in) provided by operating activities		(4,042,504)			(1,607,742)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment		(1,011,359)			(1,019,259)
Net cash provided by (used in) investing activities		(1,011,359)			(1,019,259)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from bank indebtedness		6,000,000			996,010
Net cash provided by (used in) financing activities		6,000,000			996,010
Net increase (decrease) in cash		946,137			(1,630,991)
Cash, beginning of period		1,184,313			3,801,037
Cash, end of period	$	2,130,450		$	2,170,046

Contact: Chad Summers, President & CEO, (503) 647-0110

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SOURCE Jewett-Cameron Trading Company Ltd.

FAQ

What were Jewett-Cameron's earnings for Q3 fiscal 2022?

Jewett-Cameron's earnings for Q3 fiscal 2022 were $1,494,111, or $0.43 per share.

How did Jewett-Cameron's sales perform in the nine months of fiscal 2022?

Sales for the nine months ended May 31, 2022, were $47.9 million, an increase from $42.4 million in the same period last year.

What impact did PPP loan forgiveness have on Jewett-Cameron's previous earnings?

Earnings for both Q3 and the nine-month periods in 2021 included a one-time gain of $687,387 from PPP loan forgiveness.

What is Jewett-Cameron’s cash position as of May 31, 2022?

As of May 31, 2022, Jewett-Cameron had a cash position of approximately $2.1 million.

What strategic decision did Jewett-Cameron make regarding inventory?

Jewett-Cameron built its inventory at the beginning of the Spring and Summer season to counter supply chain disruptions.