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Jewett-Cameron Announces 2nd Quarter Financial Results

NORTH PLAINS, Ore., April 9, 2014 /PRNewswire/ -- Jewett-Cameron Trading Company Ltd. (NASDAQ: JCTCF) today reported financial results for the second quarter and six month periods of fiscal 2014 ended February 28, 2014.

Sales for the second quarter of fiscal 2014 totaled $9.7 million compared to sales of $14.2 million for the second quarter of fiscal 2013. Income from operations was $408,818 compared to income of $979,059 for the quarter ended February 28, 2013. Second quarter 2013 income included the one-time gain of $353,852 related to the sale of property. Net income after other items and income taxes for the current quarter was $237,398, or $0.08 per share, compared to net income of $790,631, or $0.25 per share, in the year-ago quarter.

For the six months ended February 28, 2014, Jewett-Cameron reported sales of $17.7 million compared to sales of $23.5 million for the six months ended February 28, 2013. Net income was $569,977, or $0.18 per share, compared to net income of $1,271,377, or $0.41 per share, in the first six months of fiscal 2013. The year ago period was positively affected by the one-time gain on the sale of property.

"The second quarter and six month results were negatively affected by a delay in our orders from our suppliers caused by manufacturing constraints around Chinese New Year," said CEO Don Boone. "Due to these constraints, shipments to our customers were delayed and also pushed back the rollout of several new products. We do not expect these constraints to continue in the remainder of fiscal 2014."

As of February 28, 2014, the Company's cash position was $5.8 million, and there was no borrowing against its $5.0 million line of credit. In the second quarter of fiscal 2014, the Company repurchased and cancelled 58,180 common shares at a cost of $569,019, which represents an average price of $9.78 per share. Subsequent to the end of the second quarter, the Company re-purchased and is in the process of cancelling a total of 255,313 additional shares of its common stock at a total cost of $2,486,571 at an average price of $9.74 per share. These purchases were pursuant to the Company's share re-purchase plan first announced on January 13, 2014 which has now been completed and terminated. Today the Company's Board of Directors authorized the implementation of a new share repurchase plan under Rule 10b-18. Under the new plan, the Company may purchase for cancellation up to 300,000 common shares, which represents approximately 10.6% of the 2,821,443 common shares currently outstanding. The Company has historically utilized its cash position by implementing share repurchase programs as an effective method of enhancing shareholder value.

About Jewett-Cameron Trading Company Ltd.

Jewett-Cameron Trading Company Ltd. was incorporated in British Columbia on July 8, 1987 as a holding company for Jewett-Cameron Lumber Corporation ("JCLC"), incorporated September 1953.  Jewett-Cameron Trading Company, Ltd. acquired all the shares of JCLC through a stock-for-stock exchange on July 13, 1987, and at that time JCLC became a wholly owned subsidiary. Effective September 1, 2013, Jewett-Cameron reorganized certain of its subsidiaries. JCLC's name was changed to JC USA Inc. ("JC USA"), and a new subsidiary, Jewett-Cameron Company ("JCC"), was incorporated. JC USA has the following wholly owned subsidiaries: MSI-PRO Co. ("MSI"), incorporated April 1996, Jewett-Cameron Seed Company, ("JCSC"), incorporated October 2000, Greenwood Products, Inc. ("Greenwood"), incorporated February 2002, and Jewett-Cameron Company ("JCC"), incorporated September 2013.  Jewett-Cameron Trading Company, Ltd. and its subsidiaries (the "Company") have no significant assets in Canada.

The Company, through its subsidiaries, operates out of facilities located in North Plains, Oregon. JCC's business consists of the manufacturing and distribution of specialty metal products and wholesale distribution of wood products to home centers and other retailers located primarily in the United States. Greenwood is a processor and distributor of industrial wood products used in a variety of markets and applications, including the marine and transportation markets. MSI is an importer and distributor of pneumatic air tools and industrial clamps in the United States. JCSC is a processor and distributor of agricultural seeds in the United States. JC USA provides professional and administrative services, including accounting and credit services, to its subsidiary companies.

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)



February 28,

2014


August 31,

2013





ASSETS








Current assets




  Cash

$   5,816,854


$    8,308,445

  Accounts receivable, net of allowance of $Nil (August 31, 2013 - $Nil)

4,256,286


3,344,777

  Inventory, net of allowance of $134,259 (August 31, 2013 - $134,259) (note 3)

7,528,726


8,520,991

  Note receivable

-


15,000

  Prepaid expenses

2,088,834


587,609

  Prepaid income taxes

492,032


270,423





  Total current assets

20,182,732


21,047,245





Property, plant and equipment, net (note 4)

2,213,436


2,241,950

 

Intangible assets, net (note 5)

 

332,310


 

368,662





Total assets

$  22,728,478


$  23,657,857





LIABILITIES AND STOCKHOLDERS' EQUITY








Current liabilities








  Accounts payable

$ 1,190,980


$  1,715,458

  Litigation reserve (note 13(a))

130,854


144,103

  Accrued liabilities

765,638


1,149,882





  Total current liabilities

2,087,472


3,009,443





Deferred tax liability (note 6)

42,027


50,393





Total liabilities

2,129,499


3,059,836





Contingent liabilities and commitments (note 13)








Stockholders' equity




  Capital stock (note 8)




     Authorized




      21,567,564 common shares, without par value




      10,000,000 preferred shares, without par value




    Issued




      3,076,756 common shares (August 31, 2013 - 3,134,936)

1,451,791


1,479,246

  Additional paid-in capital

600,804


600,804

  Retained earnings

18,546,384


18,517,971





  Total stockholders' equity

20,598,979


20,598,021





  Total liabilities and stockholders' equity

$  22,728,478


$  23,657,857

 


JEWETT-CAMERON TRADING COMPANY LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Expressed in U.S. Dollars)

(Prepared by Management)

(Unaudited)



Three Month Period

Ended February 28,


Six Month Period

Ended February 28,


2014


2013


2014


2013









SALES

$  9,732,649


$  14,227,824


$  17,738,930


$ 23,524,229









COST OF SALES

7,974,979


11,788,155


14,131,481


19,093,554









GROSS PROFIT

1,757,670


2,439,669


3,607,449


4,430,675









OPERATING EXPENSES








  Selling, general and administrative expenses

446,900


468,162


838,786


803,982

  Depreciation and amortization

69,531


64,202


139,550


121,696

  Wages and employee benefits

832,421


928,246


1,676,371


1,753,553


1,348,852


1,460,610


2,654,707


2,679,231









Income from operations

408,818


979,059


952,742


1,751,444









OTHER ITEMS








   Gain on sale of property, plant and equipment

-


353,852


4,109


353,852

   Interest and other income

6,612


6,605


13,273


23,315

   Interest expense

-


(400)


-


(400)


6,612


360,057


17,382


376,767









Income before income taxes

415,430


1,339,116


970,124


2,128,211









Income tax expense

(178,032)


(548,485)


(400,147)


(856,834)









Net income

$    237,398


$       790,631


$     569,977


$  1,271,377









Basic earnings per common share

$          0.08


$             0.25


$           0.18


$            0.41









Diluted earnings per common share

$          0.08


$             0.25


$           0.18


$            0.41









Weighted average number of common shares outstanding:








  Basic

3,129,764


3,135,860


3,132,365


3,135,902

  Diluted

3,129,764


3,135,860


3,132,365


3,135,902

 

JEWETT-CAMERON TRADING COMPANY LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in U.S. Dollars)

(Prepared by Management)

(Unaudited)



Three Month Period

Ended February 28,


Six Month Period

Ended February 28,


2014


2013


2014


2013









CASH FLOWS FROM OPERATING ACTIVITIES








Net income

$  237,398


$  790,631


$ 569,977


$ 1,271,377

Items not involving an outlay of cash:








  Depreciation and amortization

69,531


64,202


139,550


121,696

  Gain on sale of property, plant and equipment

-


(353,852)


(4,109)


(353,852)

  Deferred income taxes

(3,802)


137,100


(8,366)


151,423

  Interest income on litigation

(6,588)


(6,588)


(13,249)


(13,249)









Changes in non-cash working capital items:








  Increase in accounts receivable

(2,018,552)


(4,628,402)


(911,509)


(4,202,382)

  Decrease in inventory

846,025


68,731


992,265


1,393,096

  Decrease in note receivable

-


-


15,000


20,000

  (Increase) decrease in prepaid expenses

(1,205,662)


537,657


(1,501,225)


(1,041,955)

  Increase in prepaid income taxes

(448,288)


(253,952)


(221,609)


(253,952)

  Increase (decrease) in accounts payable and accrued liabilities

 

837,196


 

675,104


 

(908,722)


 

(296,125)

  Decrease in accrued income taxes

-


(330,957)


-


(37,203)









Net cash used in operating activities

(1,692,742)


(3,300,326)


(1,851,997)


(3,241,126)









CASH FLOWS FROM INVESTING ACTIVITIES








  Purchase of property, plant and equipment

(17,457)


(18,657)


(75,375)


(130,790)

  Proceeds from sale of property, plant and equipment

 

-


 

410,000


 

4,800


 

410,000









Net cash provided by (used in) investing activities

(17,457)


391,343


(70,575)


279,210









CASH FLOWS FROM FINANCING ACTIVITIES








  Redemption of common stock

(569,019)


(4,884)


(569,019)


(4,884)









Net cash used in financing activities

(569,019)


(4,884)


(569,019)


(4,884)









Net decrease in cash

(2,279,218)


(2,913,867)


(2,491,591)


(2,966,800)









Cash, beginning of period

8,096,072


7,256,455


8,308,445


7,309,388









Cash, end of period

$ 5,816,854


$  4,342,588


$  5,816,854


$  4,342,588

Contact: Don Boone, President & CEO, (503) 647-0110

SOURCE Jewett-Cameron Trading Company Ltd.

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