Sales for the Quarter Were Down 14%, but Earnings from Operations Were up 29% vs. the Same Period a Year Ago; Outlook is Positive
NORTH PLAINS, ORE., April 10 /CNW/ - Jewett-Cameron Trading Company Ltd. (NASDAQ:JCTCF)(TSX:JCT) today reported financial results for the second quarter and six months ended February 28, 2007.
Sales for the second quarter of 2007 totaled $16.4 million compared to sales of $18.9 million for the second quarter of 2006. The company reported net income of $0.3 million or $.20 per diluted share compared to net income of $0.6 million or $.39 per diluted share in the same period a year ago. However, the year ago period included a pre-tax gain of $0.6 million related to the sale of the company's distribution center in Utah, and excluding this item net income a year ago was $.16 per diluted share.
For the six months ended February 28, 2007 Jewett-Cameron reported sales of $31.9 million compared to $37.2 million for the same period a year ago. Net income for the first six months of fiscal 2007 was $0.6 million or $.38 per diluted share compared to net income of $1.2 million or $.74 per diluted share in the same period a year ago. The year ago period included the gain on the sale of the distribution center, and if this is excluded, net income for that period was $.51 per diluted share.
"Total company sales for the second quarter were down about 14% from the prior year, yet net income and earnings per share excluding the gain from the sale of property last year were up about 29%," said CEO Don Boone. "This reflects a coupling of a year over year sales decline in our industrial wood segment with more steady sales in our lumber and building materials segment, which includes higher profit sales than the industrial segment. In fact we continue to experience good sales increases in our non-wood specialty products like dog kennels, our proprietary fence gate systems, perimeter fencing, and greenhouses."
Mr. Boone went on to add, "Market conditions are continuing to be difficult for our industrial wood segment. However, in the lumber and building materials segment the third quarter is shaping up to be a good one. A seasonal surge in fencing sales will positively impact our third quarter, and we continue to have good success in increasing sales of our specialty non-wood products."
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.
Financial results for the second quarter and six months ended February 28, 2007 do not reflect this stock split.
About Jewett-Cameron Trading Company Ltd.
Jewett-Cameron is a wholesale distributor of specialty wood products principally for applications in the marine and transportation industries. The company is also a wholesaler of building materials and a manufacturer and distributor of specialty wood and metal products for home centers and other retailers. Other activities at Jewett-Cameron include the processing and distribution of agricultural seed and the distribution of pneumatic air tools and industrial clamps. The area of most significant growth within Jewett-Cameron is the manufacture and distribution of specialty metal products like dog kennels, gate support systems, perimeter fencing, and greenhouses.
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 STATEMENTS OF OPERATIONS
(Unaudited)
Three Month Periods Six Month Periods
Ended February 28, Ended February 28,
2007 2006 2007 2006
------------ ------------ ------------ ------------
SALES $16,378,530 $18,948,343 $31,919,499 $37,173,300
COST OF SALES 13,868,269 16,187,677 26,958,885 31,628,215
------------ ------------ ------------ ------------
GROSS PROFIT 2,510,261 2,760,666 4,960,614 5,545,085
------------ ------------ ------------ ------------
OPERATING EXPENSES
Selling, general
and administrative
expenses 793,860 896,557 1,535,670 1,529,614
Depreciation 81,442 70,919 149,292 142,881
Wages and employee
benefits 1,031,959 1,335,467 2,138,241 2,541,607
------------ ------------ ------------ ------------
1,907,261 2,302,943 3,823,203 4,214,102
------------ ------------ ------------ ------------
Income from
operations 603,000 457,723 1,137,411 1,330,983
------------ ------------ ------------ ------------
OTHER ITEMS
Gain on sale of
property, plant
and equipment - 599,825 - 599,825
Interest and other
income 3,807 1 3,863 60,435
Interest expense (72,459) (54,823) (125,599) (114,126)
------------ ------------ ------------ ------------
(68,652) 545,003 (121,736) 546,134
------------ ------------ ------------ ------------
Income before
income taxes 534,348 1,002,726 1,015,675 1,877,117
Income taxes 213,000 385,000 406,444 709,000
------------ ------------ ------------ ------------
Net income $ 321,348 $617,726 $ 609,231 $1,168,117
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Basic earnings per
common share $ .20 $.40 $ .38 $.76
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Diluted earnings
per common share $ .20 $.39 $ .38 $.74
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Weighted average
number of common
shares
outstanding:
Basic 1,584,859 1,532,359 1,584,859 1,527,984
Diluted 1,584,859 1,572,616 1,586,368 1,571,424
JEWETT-CAMERON TRADING COMPANY LTD.
CONSOLIDATED BALANCE SHEETS
February 28, August 31,
2007 2006
------------ ------------
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 577,945 $ 146,810
Accounts receivable, net of allowances
of $0 (August 31, 2006-$0) 7,135,891 6,822,197
Inventory 9,856,497 8,750,861
Prepaid expenses 322,750 139,936
Income taxes receivable 126,765 -
Note receivable 4,000 4,000
------------ ------------
Total current assets 18,023,848 15,863,804
Property, plant and equipment, net 2,119,770 2,217,756
Intangible assets, net 836,743 101
Deferred income taxes 143,300 142,900
------------ ------------
Total assets $21,123,661 $18,224,561
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JEWETT-CAMERON TRADING COMPANY LTD.
CONSOLIDATED BALANCE SHEETS
February 28, August 31,
2007 2006
------------ ------------
(Unaudited)
Continued
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Bank indebtedness $ 2,448,266 $ -
Account payable 1,878,116 2,514,801
Accrued liabilities 1,459,862 1,537,290
Accrued income taxes - 40,871
Current portion of long term liabilities 361,807 59,432
------------ ------------
Total current liabilities 6,148,051 4,152,394
Long term liabilities
Promissory note 2,049,786 2,081,963
Note payable 300,000 -
------------ ------------
Total long term liabilities 2,349,786 2,081,963
------------ ------------
Total liabilities 8,497,837 6,234,357
------------ ------------
Contingent liabilities and commitments
Stockholders' equity
Capital stock
Authorized
20,000,000 common shares, without par
value
10,000,000 preferred shares, without
par value
Issued
1,584,859 common shares (August 31,
2006-1,584,859) 2,138,468 2,138,468
Additional paid-in capital 609,600 583,211
Retained earnings 9,877,756 9,268,525
------------ ------------
Total stockholders' equity 12,625,824 11,990,204
------------ ------------
Total liabilities and stockholders' equity $21,123,661 $18,224,561
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JEWETT-CAMERON TRADING COMPANY LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Month
Periods Ended
February 28
------------------------
2007 2006
------------ -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 609,231 $1,168,117
Items not involving an outlay of cash:
Depreciation 149,292 142,881
Gain on sale of property, plant and
equipment - (599,825)
Deferred income taxes (400) 23,600
Stock based compensation expense 26,389 -
Changes in non-cash working capital items:
Increase in accounts receivable (313,694) (641,129)
(Increase) decrease in inventory (1,105,636) 105,768
Increase in prepaid expenses (182,814) (71,633)
Increase in income taxes receivable (126,765) (71,633)
Decrease in notes receivable - 25,338
Increase (decrease) in accounts payable and
accrued liabilities (714,113) 317,829
Decrease in accrued income taxes (40,871) (310,847)
------------ -----------
Net cash provided by (used in) operating
activities (1,699,381) 160,099
------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds (repayment) of bank indebtedness 2,448,266 (805,577)
Promissory note (29,802) (27,963)
Note payable 600,000 -
------------ -----------
Net cash provided by (used in) financing
activities 3,018,464 (833,540)
------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (32,948) (30,378)
Purchase of intangible assets and other (855,000) -
Proceeds on sale of property, plant and
equipment - 660,000
------------ -----------
Net cash provided by (used in) investing
activities (887,948) 629,622
------------ -----------
Net increase (decrease) in cash and cash
equivalents 431,135 (43,819)
Cash and cash equivalents, beginning of period 146,810 609,944
------------ -----------
Cash and cash equivalents, end of period $ 577,945 $ 566,125
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JEWETT-CAMERON TRADING COMPANY LTD.
SEGMENT INFORMATION
Following is a summary of segmented information for the six month
periods ended February 28:
2007 2006
------------ ------------
Sales to unaffiliated customers:
Industrial wood products $21,125,358 $26,031,360
Lumber, building materials & other 6,316,941 7,558,595
Seed processing and sales 4,000,874 3,128,027
Industrial tools 476,326 455,318
------------ ------------
$31,919,499 $37,173,300
------------ ------------
Income (loss) from operations:
Industrial wood products $ 442,369 $ 1,070,591
Lumber, building materials & other 670,713 193,425
Seed processing and sales 81,383 63,365
Industrial tools 16,759 62,809
General corporate (73,813) (59,207)
------------ ------------
$ 1,137,411 $ 1,330,983
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