EX-99.1 2 jcq2resultsnr.htm SECOND QUARTER RESULTS Jewett Cameron Q2 Results

NEWS RELEASE

April 10, 2007


JEWETT-CAMERON TRADING COMPANY LTD.

Telephone: (503) 647-0110, Facsimile (503) 647-2272

Web: www.jewettcameron.com


Jewett-Cameron Announces Second Quarter 2007 Results

Sales for the quarter were down 14%, but earnings from operations were up 29% vs. the same period a year ago.  Outlook is positive.


Jewett-Cameron Trading Company Ltd. (NASDAQ: JCTCF and 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 Ended February 28,

 

Six Month Periods 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

        

Basic earnings per common share

$            .20

 

$         .40

 

$        .38

 

$         .76

        

Diluted earnings per common share

$            .20

 

$         .39

 

$        .38

 

$         .74

        

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

    


- Continued -





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

  

   





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





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




For more information contact: Donald M. Boone, President & CEO (503) 647-0110


Source: Jewett-Cameron Trading Company Ltd.

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