NORTH PLAINS, Ore., March 26 /PRNewswire-FirstCall/ -- Jewett-Cameron Trading Company Ltd. (Nasdaq: JCTCF; TSX: JCT) today reported financial results for the second quarter and six months ended February 29, 2008.
Sales for the second quarter of 2008 totaled $15.1 million compared to sales of $16.4 million for the second quarter of 2007. The company reported net income of $513 thousand or $.21 per diluted share compared to net income of $321 thousand or $.14 per diluted share in the same period a year ago. EPS was up 50% vs. the year ago period.
For the six months ended February 29, 2008 Jewett-Cameron reported sales of $29.3 million compared to $31.9 million for the same period a year ago. Net income for the six months of fiscal 2008 was $887 thousand or $.37 per diluted share compared to net income of $609 thousand or $.26 per diluted share in the prior fiscal year. However, the year ago period included an inventory reserve reversal that increased pre-tax income by $150,000. If this item is excluded, then earnings per diluted share in that period would have been $.22, and the current year reflects a 68% increase over that level of EPS in the prior year.
The sales decline in the quarter and the six month periods reflects a decrease in sales in our industrial wood segment that was only partially offset by sales increases in our other business segments. However, income was up significantly based primarily on margin improvement and operating expense reduction in the industrial wood segment coupled with a large increase in sales of specialty metal products in our lawn, garden and pet segment. These metal products have a higher gross margin than our other sales.
Outlook
We continue to believe that the current fiscal year can be a record year in terms of earnings. Results in the third and fourth quarters should be significantly better than the first two quarters of the current fiscal year based on very positive order trends for our specialty metal products coupled with a normal seasonal pickup in activity in our lawn, garden and pet segment.
CEO Comment
"We are very pleased with our results so far this year," said Don Boone, CEO of Jewett-Cameron. "We are particularly encouraged with the continued rapid growth in demand for our specialty metal products, which include our gate support systems, perimeter fencing, and dog kennels. Also, our financial condition is as strong as it has ever been."
Stock Split
At Jewett-Cameron's annual meeting, which was held on March 9, 2007, shareholders approved a three for two stock split, which was distributed on or about March 23, 2007 to holders of record on March 19, 2007. The stock started trading on a post-split basis on March 15, 2007, and per share financial results have been restated to reflect this stock split.
About Jewett-Cameron Trading Company Ltd.
Jewett-Cameron Trading Company is a holding company that operates through subsidiary companies as follows. Jewett-Cameron Lumber Corporation's business consists of warehouse distribution and direct sales of wood products and specialty metal products to home centers and other retailers. Greenwood Products is a processor and distributor of industrial wood and other specialty building products principally to customers in the marine and transportation industries. 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. The area of most significant growth within Jewett-Cameron is the manufacture and distribution of specialty metal products like dog kennels, gate support systems, and perimeter fencing.
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 erroneous and are subject to certain risks, uncertainties, 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 STATEMENTS OF OPERATIONS (Expressed in U.S. Dollars) (Prepared by Management) (Unaudited) Three Month Periods to Six Month Periods to the End of February the End of February 2008 2007 2008 2007 SALES $15,083,231 $16,378,530 $29,346,390 $31,919,499 COST OF SALES 12,348,468 13,868,269 24,087,602 26,958,885 GROSS PROFIT 2,734,763 2,510,261 5,258,788 4,960,614 OPERATING EXPENSES Selling, general and administrative expenses 731,182 793,860 1,441,128 1,535,670 Depreciation and amortization 78,089 81,442 157,095 149,292 Wages and employee benefits 1,037,088 1,031,959 2,112,287 2,138,241 1,846,359 1,907,261 3,710,510 3,823,203 Income from operations 888,404 603,000 1,548,278 1,137,411 OTHER ITEMS Gain (loss) on sale of property, plant and equipment (385) - (385) - Interest and other income 146 3,807 146 3,863 Interest expense (39,217) (72,459) (81,426) (125,599) (39,456) (68,652) (81,665) 121,736 Income before income taxes 848,948 534,348 1,466,613 1,015,675 Income taxes 335,750 213,000 579,500 406,444 Net income $ 513,198 $ 321,348 $ 887,113 $609,231 Basic earnings per common share $ .21 $ .14 $ .37 $ .26 Diluted earnings per common share $ .21 $ .14 $ .37 $ .26 Weighted average number of common shares outstanding: Basic 2,390,977 2,377,289 2,389,618 2,377,289 Diluted 2,391,589 2,377,289 2,391,643 2,379,552 JEWETT-CAMERON TRADING COMPANY LTD. CONSOLIDATED BALANCE SHEETS (Expressed in U.S. Dollars) (Prepared by Management) Februray 29, August 31, 2008 2007 (Unaudited) ASSETS Current assets Cash and cash equivalents $ 603,185 $ 257,131 Accounts receivable, net of allowances of $1,637 (August 31, 2007 - $15,396) 7,428,905 6,445,284 Inventory (note 3) 9,808,359 10,878,543 Prepaid expenses 283,592 202,155 Total current assets 18,124,041 17,783,113 Property, plant and equipment, net (note 4) 1,945,001 2,033,671 Intangible assets, net (note 5) 775,959 815,132 Deferred income taxes (note 6) 119,700 119,700 Total assets $ 20,964,701 $ 20,751,616 JEWETT-CAMERON TRADING COMPANY LTD. CONSOLIDATED BALANCE SHEETS (Expressed in U.S. Dollars) (Prepared by Management) February 29, August 31, 2008 2007 (Unaudited) Continued LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Bank indebtedness (note 7) $ - $ 1,059 Account payable 2,326,029 2,106,051 Accrued liabilities 1,272,476 1,424,610 Accrued income taxes payable (prepayment) (291,743) 173,757 Current portion of promissory note 364,187 363,896 Total current liabilities 3,670,949 4,069,373 Long term liabilities Promissory note (note 8) 1,986,345 2,018,046 Note payable (note 8) - 300,000 Total long term liabilities 1,986,345 2,318,046 Total liabilities 5,657,294 6,387,419 Contingent liabilities and commitments (note 10) Stockholders' equity Capital stock (note 9) Authorized 20,000,000 common shares, without par value 10,000,000 preferred shares, without par value Issued 2,390,977 common shares (August 31, 2007 - 2,384,792) 2,256,111 2,200,014 Additional paid-in capital 600,804 600,804 Retained earnings 12,450,492 11,563,379 Total stockholders' equity 15,307,407 14,364,197 Total liabilities and stockholders' equity $20,964,701 $20,751,616 JEWETT-CAMERON TRADING COMPANY LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in U.S. Dollars) (Prepared by Management) (Unaudited) Six Month Periods to the End of February 2008 2007 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 887,113 $ 609,231 Items not involving an outlay of cash: Depreciation and amortization 157,095 149,292 Gain (loss) on sale of property, plant and equipment 385 - Deferred income taxes - (400) Stock based compensation expense - 26,389 Changes in non-cash working capital items: Increase in accounts receivable (983,621) (313,694) (Increase) decrease in inventory 1,070,184 (1,105,636) Increase in prepaid expenses (81,436) (182,814) Increase in income taxes receivable - (126,765) Increase (decrease) in accounts payable and accrued liabilities 67,843 (714,113) Decrease in accrued income taxes (465,500) (40,871) Net cash provided by (used in) operating activities 652,063 (1,699,381) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds (repayment) of bank indebtedness (1,059) 2,448,266 Promissory note (31,409) (29,802) Note payable (300,000) 600,000 Proceeds from issuance of stock 56,097 - Net cash provided by (used in) financing activities (276,371) 3,018,464 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment (29,638) (32,948) Purchase of intangible assets and other - (855,000) Net cash provided by (used in) investing activities (29,638) (887,948) Net increase (decrease) in cash and cash equivalents 346,054 431,135 Cash and cash equivalents, beginning of period 257,131 146,810 Cash and cash equivalents, end of period $ 603,185 $ 577,945 Following is a summary of segment information for the six month periods to the end of February: 2008 2007 Sales to unaffiliated customers: Industrial wood products $ 15,368,770 $ 21,125,358 Lawn, garden, pet and other 9,041,561 6,316,941 Seed processing and sales 4,392,509 4,000,874 Industrial tools 543,550 476,326 $ 29,346,390 $ 31,919,499 Income (loss) from operations: Industrial wood products $ 782,261 $ 442,369 Lawn, garden, pet and other 608,066 670,713 Seed processing and sales 184,114 81,383 Industrial tools 28,790 16,759 Unallocated overhead (54,953) (73,813) $ 1,548,278 $ 1,137,411 Contact: Don Boone, President & CEO, (503) 647-0110
