Jewett-Cameron Announces 2nd Quarter Financial Results

NORTH PLAINS, Ore., April 11, 2012 /PRNewswire/ -- Jewett-Cameron Trading Company Ltd. (NASDAQ: JCTCF; TSX: JCT) today reported financial results for the second quarter and six month periods of fiscal 2012 ended February 29, 2012.

Sales for the second quarter of fiscal 2012 totaled $11.75 million compared to sales of $11.86 million for the second quarter of fiscal 2011.  For the quarter, income from operations was $672,436 compared to $755,337 in the year-ago quarter. In February 2012, the Company received a favorable decision from the Oregon Supreme Court in the Company's lawsuit filed in relation to the acquisition of inventory by Greenwood Products. As a result, the current quarter's results include a reversal of litigation reserves of $1,443,629 and interest expense of $16,023. These amounts have been treated as a one-time gain and contributed to net income after other items and income taxes of $1,287,774, or $0.71 per share, compared to net income of $496,949, or $0.25 per diluted share in last year's second quarter.

For the six months ended February 29, 2012 Jewett-Cameron reported sales of $19.0 million compared to sales of $17.9 million for the same period a year ago. Net income after other items and income taxes was $1,351,807, or $0.73 per share, compared to a net loss of ($349,386), or ($0.16) per share in the first six months of fiscal 2011. The current six month period was positively affected by the reversal of litigation reserves, while the year-ago six month period was negatively affected by the Company accruing ($1,370,151) to the litigation reserve. 

"We are pleased with the higher level of sales for the six month period and the favorable ruling by the Oregon Supreme Court," said CEO Don Boone. "However, the higher material and transportation costs continue to negatively affect our margins and net income."

As of February 29, 2012, the Company's cash position was $4.31 million, and currently there is no borrowing against its $5.0 million line of credit. In the second quarter of fiscal 2012, the Company repurchased and cancelled 248,587 common shares at a cost of $2,238,929, which represents an average price of $9.01 per share. These repurchases were pursuant to a new share repurchase plan in accordance with Rule 10b-18 approved by the Board of Directors on January 17, 2012 for the purchase and cancellation of up to 300,000 common shares. These purchases are in addition to the repurchase and cancellation of 50,000 common shares at a total cost of $454,120 at an average share price of $9.08 which were completed in the first quarter of 2012 ended November 30, 2011. The current repurchase program will remain in place until May 18, 2012 but may be limited or terminated at any time without prior notice.

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 Lumber Corporation'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 Products is a processor and distributor of industrial wood and other specialty building products principally to customers in the marine and transportation industries in the United States. 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.

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 29, 2012	August 31, 2011
ASSETS
Current assets
Cash and cash equivalents	$   4,310,547	$    6,774,127
Accounts receivable, net of allowance      of $6,299 (August 31, 2011 - $Nil)	3,954,043	3,897,086
Inventory, net of allowance of $192,810      (August 31, 2011 - $204,860) (note 3)	6,483,367	5,815,593
Note receivable	61,500	41,500
Prepaid expenses	1,201,725	848,341
Prepaid income taxes	-	682,527
Total current assets	16,011,182	18,059,174
Property, plant and equipment, net (note 4)	1,793,962	1,850,037
Intangible assets, net (note 5)	484,932	510,771
Deferred income taxes (note 6)	156,305	157,862
Total assets	$  18,446,381	$  20,577,844
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$    994,410	$   519,265
Litigation reserve (note 12(a))	184,286	1,627,915
Accrued liabilities	891,752	941,846
Accrued income taxes	228,358	-
Total current liabilities	2,298,806	3,089,026
Contingent liabilities and commitments (note 12)
Stockholders' equity
Capital stock (note 8)
Authorized
20,000,000 common shares, without par value
10,000,000 preferred shares, without par value
Issued
1,609,870 common shares (August 31, 2011 - 1,908,457)	1,519,261	1,801,043
Additional paid-in capital	600,804	600,804
Retained earnings	14,027,510	15,086,971
Total stockholders' equity	16,147,575	17,488,818
Total liabilities and stockholders' equity	$  18,446,381	$  20,577,844

 

 

JEWETT-CAMERON TRADING COMPANY LTD. CONSOLIDATED STATEMENTS OF OPERATIONS (Expressed in U.S. Dollars) (Prepared by Management) (Unaudited)
	Three Month Periods to the End of February				Six Month Periods to the End of February
	2012		2011		2012		2011
SALES	$11,751,797		$11,860,014		$ 18,992,407		$ 17,945,065
COST OF SALES	9,660,496		9,734,195		15,434,911		14,373,452
GROSS PROFIT	2,091,301		2,125,819		3,557,496		3,571,613
OPERATING EXPENSES
Selling, general and administrative expenses	460,595		418,217		888,944		898,401
Depreciation and amortization	64,297		65,757		125,495		131,134
Wages and employee benefits	893,973		886,508		1,707,686		1,708,047
	1,418,865		1,370,482		2,722,125		2,737,582
Income from operations	672,436		755,337		835,371		834,031
OTHER ITEMS
Gain (loss) on sale of property, plant and    equipment	-		(1,114)		-		4,336
Interest and other income	-		-		-		26
Interest expense (note 12(a))	16,203		(16,023)		-		(408,014)
Litigation reserves (note 12(a))	1,443,629		-		1,443,629		(962,137)
	1,459,832		(17,137)		1,443,629		(1,365,789)
Income (loss) before income taxes	2,132,268		738,200		2,279,000		(531,758)
Income tax (expense) recovery	(844,494)		(241,251)		(927,193)		182,372
Net income (loss)	$ 1,287,774		$    496,949		$  1,351,807		$  (349,386)
Basic earnings (loss) per common share	$          0.71		$          0.25		$            0.73		$        (0.16)
Diluted earnings (loss) per common share	$          0.71		$          0.25		$            0.73		$        (0.16)
Weighted average number of common shares outstanding:
Basic	1,823,423		2,014,865		1,861,819		2,162,580
Diluted	1,823,423		2,014,865		1,861,819		2,162,580

 

 

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
	2012		2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$ 1,351,807		$  (349,386)
Items not involving an outlay of cash:
Depreciation and amortization	125,495		131,134
Gain (loss) on sale of property, plant   and equipment	-		(4,336)
Deferred income taxes	1,557		8,232
Changes in non-cash working capital items:
Increase in accounts receivable	(56,957)		(2,062,853)
(Increase) decrease in inventory	(667,774)		(353,377)
Increase in note receivable	(20,000)		-
Increase in prepaid expenses	(353,385)		(104,470)
(Increase) decrease in prepaid income taxes	682,527		(567,112)
Increase in taxes receivable	-		(200,941)
Increase (decrease) in accounts payable and   accrued liabilities	(1,018,578)		2,007,459
Increase in accrued income taxes	228,358		-
Net cash provided by (used in) operating activities	273,050		(1,495,650)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment	(30,531)		(35,569)
Purchase of intangible assets and other	(13,050)		-
Proceeds from sale of property, plant and   equipment	-		5,450
Net cash used in investing activities	(43,581)		(30,119)
CASH FLOWS FROM FINANCING ACTIVITIES
Redemption of common stock	(2,693,049)		(2,450,844)
Net cash used in financing activities	(2,693,049)		(2,450,844)
Net decrease in cash and cash equivalents	(2,463,580)		(3,976,613)
Cash and cash equivalents, beginning of period	6,774,127		8,710,314
Cash and cash equivalents, end of period	$  4,310,547		$  4,733,701

Contact: Don Boone, President & CEO, [phone]

SOURCE Jewett-Cameron Trading Company Ltd.

Copyright 2012 PR Newswire