Jewett-Cameron Announces 2nd Quarter Financial Results
- Sales for the second quarter of fiscal 2024 increased slightly to $8.23 million compared to $8.14 million in the same period last year.
- Loss from operations decreased to ($726,687) from ($1,210,085) in the previous year's quarter.
- Net loss for the quarter was ($534,145), or ($0.15) per share, compared to a net loss of ($972,038), or ($0.28) per share, in the year-ago quarter.
- For the six months ended February 29, 2024, sales were $18.0 million, down from $20.7 million in the same period last year.
- After a one-time gain from an arbitration settlement, net income for the current six months was $757,395, or $0.22 per share, compared to a net loss of ($1,045,798), or ($0.30) per share, in the first six months of fiscal 2023.
- The company's cash position as of February 29, 2024, was approximately $1.15 million, with no borrowing against their bank line of credit.
- The bank reduced their line of credit from $10 million to $5 million, and the revised line will expire on June 30, 2024.
- Jewett-Cameron Trading Company is in negotiations with other lenders to establish a new line of credit of $5 million or less by May 31, 2024.
- Sales for the six months ended February 29, 2024, decreased compared to the same period last year.
- The company's net loss per share increased from the previous year's quarter.
- The reduction in the bank line of credit may indicate financial challenges for the company.
- Negotiations with other lenders for a new line of credit could result in unfavorable terms or conditions.
The reported increase in sales to $8.23 million from $8.14 million reflects a modest revenue growth year-over-year for the second quarter. However, the reduction in losses from operations from ($1,210,085) to ($726,687) suggests an improvement in operational efficiency. For investors, this could signal a company moving in the right direction, potentially leading to a positive market response in the short term. Comparing the per-share loss figures year-over-year also indicates a decreased loss per share, but the mention of a one-time gain implies that these numbers may not be entirely indicative of ongoing performance.
A critical point for shareholders is the company's announcement of cost reduction strategies and innovation. While this is typically a positive move, tangible results will be necessary to assess its effectiveness. The introduction of new product lines suggests diversification, which could mitigate risks, but also requires successful market penetration.
Reducing the line of credit could imply that the company is seeking to minimize debt exposure, which can be favorable in terms of financial health. However, the bank's decision not to meet their criteria for a line of credit may raise concerns about the company's creditworthiness. The search for new lenders could lead to different terms and affect the company's capital structure.
It is worth noting the emphasis on innovation and the development of core product lines, such as fencing, pet containment and sustainable products under the MyEcoWorld® brand. This strategic focus suggests an effort to capitalize on consumer trends towards sustainability, which can resonate positively with customers and investors seeking ESG-friendly investments. The expansion into sustainable goods could open new market segments and drive long-term growth.
CEO Chad Summers' comment on consumer spending being affected by inflation and economic pressures indicates that the company is operating in a challenging environment. This could help explain the sales decrease over the six-month period. For investors, these macroeconomic insights are important for adjusting expectations and understanding the broader context in which the company operates.
Sales for the second quarter of fiscal 2024 were
For the six months ended February 29, 2024, sales totaled
"Consumer spending continues to be negatively affected by inflation and general economic pressures," said CEO Chad Summers. "In response, we are focusing on innovation and growing our core product lines of fencing, pet containment and the new MyEcoWorld® line of sustainable bag products. These efforts include the addition of new customers and complementary new products, while working to identify cost reductions and improving our margins."
As of February 29, 2024, the Company's cash position was approximately
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) | |||||
February 29, 2024 | August 31, 2023 | ||||
ASSETS | |||||
Current assets | |||||
Cash and cash equivalents | $ | 1,149,316 | $ | 83,696 | |
Accounts receivable, net of allowance of | 4,676,317 | 5,634,924 | |||
Inventory, net of allowance of | 17,576,787 | 18,339,048 | |||
Prepaid expenses | 796,393 | 630,788 | |||
Total current assets | 24,198,813 | 24,688,456 | |||
Property, plant and equipment, net | 4,450,788 | 4,655,427 | |||
Intangible assets, net | 112,639 | 134,845 | |||
Deferred tax assets | 226,148 | 319,875 | |||
Total assets | $ | 28,988,388 | $ | 29,798,603 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
Current liabilities | |||||
Accounts payable | $ | 2,190,006 | $ | 2,181,194 | |
Bank indebtedness | - | 1,259,259 | |||
Income taxes payable | 172,722 | 147,629 | |||
Accrued liabilities | 1,738,874 | 2,113,194 | |||
Total liabilities | 4,101,602 | 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 | 23,264,199 | 22,506,804 | |||
Total stockholders' equity | 24,886,786 | 24,097,327 | |||
Total liabilities and stockholders' equity | $ | 28,988,388 | $ | 29,798,603 | |
JEWETT-CAMERON TRADING COMPANY LTD. CONSOLIDATED STATEMENTS OF OPERATIONS (Expressed in (Prepared by Management) (Unaudited) | |||||||||
Three Month Periods to the end of February | Six Month Periods to the end of February | ||||||||
2024 | 2023 | 2024 | 2023 | ||||||
SALES | $ | 8,229,192 | $ | 8,143,421 | $ | 18,035,033 | $ | 20,720,921 | |
COST OF SALES | 6,164,676 | 6,222,879 | 14,014,436 | 15,940,679 | |||||
GROSS PROFIT | 2,064,516 | 1,920,542 | 4,020,597 | 4,780,242 | |||||
OPERATING EXPENSES | |||||||||
Selling, general and administrative expenses | 967,426 | 1,096,090 | 1,915,907 | 1,922,897 | |||||
Depreciation and amortization | 91,039 | 88,079 | 188,943 | 199,615 | |||||
Wages and employee benefits | 1,732,738 | 1,946,458 | 3,431,658 | 3,874,613 | |||||
2,791,203 | 3,130,627 | 5,536,508 | 5,997,125 | ||||||
(Loss) income from operations | (726,687) | (1,210,085) | (1,515,911) | (1,216,883) | |||||
OTHER ITEMS | |||||||||
Other income | - | - | 2,450,000 | - | |||||
Interest income (expense) | 19,819 | (114,530) | 12,964 | (201,082) | |||||
(Loss) gain on sale of assets | (568) | - | 89,087 | - | |||||
19,251 | (114,530) | 2,552,051 | (201,082) | ||||||
(Loss) income before income taxes | (707,436) | (1,324,615) | 1,036,140 | (1,417,965) | |||||
Income tax recovery (expense) | 173,291 | 352,577 | (278,745) | 372,167 | |||||
Net (loss) income | (534,145) | $ | (972,038) | 757,395 | $ | (1,045,798) | |||
Basic (loss) earnings per common share | $ | (0.15) | $ | (0.28) | 0.22 | $ | (0.30) | ||
Diluted (loss) earnings per common share | $ | (0.15) | $ | (0.28) | 0.22 | $ | (0.30) | ||
Weighted average number of common shares outstanding: | |||||||||
Basic | 3,504,348 | 3,498,899 | 3,501,623 | 3,497,543 | |||||
Diluted | 3,504,348 | 3,498,899 | 3,501,623 | 3,497,543 | |||||
JEWETT-CAMERON TRADING COMPANY LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in (Prepared by Management) (Unaudited) | |||||
Six Month Period at the end of February, | Six Month Period at the end of February, | ||||
2024 | 2023 | ||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||
Net income (loss) | $ | 757,395 | $ | (1,045,798) | |
Items not involving an outlay of cash: | |||||
Depreciation and amortization | 188,943 | 199,615 | |||
Stock-based compensation expense | 32,064 | 23,303 | |||
Gain on sale of property, plant and equipment | (89,087) | - | |||
Write-down of intangible assets | 21,790 | - | |||
Deferred income taxes | 93,727 | (372,992) | |||
Changes in non-cash working capital items: | |||||
Decrease in accounts receivable | 958,607 | 2,930,390 | |||
Decrease (increase) in inventory | 762,261 | (2,447,334) | |||
(Increase) decrease in prepaid expenses | (165,605) | 318,009 | |||
(Decrease) in accounts payable and accrued liabilities | (365,508) | (1,020,411) | |||
Decrease (increase) in prepaid income taxes | - | 825 | |||
Increase in income taxes payable | 25,093 | - | |||
Net cash provided by (used in) operating activities | 2,219,680 | (1,414,393) | |||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||
Proceeds on sale of property, plant and equipment | 105,199 | - | |||
Purchase of property, plant and equipment | - | (301,681) | |||
Net cash used in investing activities | 105,199 | (301,681) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||
(Repayment) proceeds from bank indebtedness | (1,259,259) | 1,500,000 | |||
Net cash provided by (used in) financing activities | (1,259,259) | 1,500,000 | |||
Net increase (decrease) in cash | 1,065,620 | (216,074) | |||
Cash, beginning of period | 83,696 | 484,463 | |||
Cash, end of period | $ | 1,149,316 | $ | 268,389 | |
Contact: Chad Summers, President & CEO, (503) 647-0110
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SOURCE Jewett-Cameron Trading Company Ltd.
