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Company: Jewett-Cameron Trading Company Ltd.
Ticker: NASDAQ: JCTCF
Sector: Industrials
Investor Contact: Robert Blum

Jewett-Cameron Announces 2nd Quarter Financial Results

NORTH PLAINS, Ore., April 14, 2020 — Jewett-Cameron Trading Company Ltd. (NASDAQ: JCTCF) today reported financial results for the second quarter and six month periods of fiscal 2020 ended February 29, 2020.

Sales for the second quarter of fiscal 2020 totaled $7.62 million compared to sales of $7.86 million for the second quarter of fiscal 2019. Loss from operations was ($163,020) compared to income from operations of $57,625 for the quarter ended February 28, 2019. Net loss was ($174,262), or ($0.05) per share, compared to net income of $119,629, or $0.03 per share, in the year-ago quarter.

For the six months ended February 29, 2020, sales totaled $14.7 million compared to sales of $16.9 million for the six months ended February 28, 2019. Loss from operations was ($173,894) compared to income from operations of $536,634. Net loss was ($180,884), or ($0.05) per share, compared to net income of $469,323, or $0.11 per share, in the first six months of fiscal 2019.

“Although COVID-19 began to affect our operations in January,” said CEO Charlie Hopewell, “We have adjusted our work processes to comply with the State of Oregon’s directives. Many of our employees are working from home, while others are on split shifts. We continue operations with our full staff with no lay-offs or reduced hours. Even though the outlook for the rest of fiscal 2020 is uncertain due to the COVID-19 situation, demand for our pet and fencing products so far in the 3rd fiscal quarter has been consistent with historic levels.”

As of February 29, 2020, the Company’s cash position was approximately $3.875 million, and there was no borrowing against its $3.0 million line of credit. The Company has historically utilized its cash position by implementing share repurchase programs as an effective method of enhancing shareholder value. During the period ended February 29, 2020, the Company privately repurchased for cancelation a total of 490,120 common shares from two large shareholders, including a current officer and director of Jewett-Cameron. The shares were repurchased at a price of $7.89 per share, calculated as the Volume Weighted Average Price (VWAP) of all the shares traded on NASDAQ during the first quarter of fiscal 2020. The total cost of the share repurchases was $3,867,046.

Jewett-Cameron Trading Company is a holding company that, through its subsidiaries (Jewett-Cameron Companies), operate out of facilities located in North Plains, Oregon. Those businesses consist of the manufacturing and distribution of patented and patent pending specialty metal products, wholesale distribution of wood products, seed processing and sales, and sales of industrial tools and clamps. The Company’s brands include Lucky Dog, Animal House and AKC licensed products in the expanding pet market; fencing products under the Adjust-A-Gates, Fit-Right, Perimeter Patrol, and INFINITY Euro fence systems brands; Early Start, Spring Gardner, and Weatherguard for greenhouses; and TrueShade for patio umbrellas, furniture covers and canopies. Additional information about the Company and its products can be found the Company’s website at www.jewettcameron.com.

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.

Contact: Charlie Hopewell, President & CEO, (503) 647-0110

JEWETT-CAMERON TRADING COMPANY LTD.

CONSOLIDATED BALANCE SHEETS

(Expressed in U.S. Dollars)

(Prepared by Management)

(Unaudited)

February 29,
2020

August 31,
2019

ASSETS

Current assets

Cash and cash equivalents

$

3,875,531

$

9,652,310

Accounts receivable, net of allowance
of $Nil (August 31, 2019 – $Nil)

2,700,664

2,835,952

Inventory, net of allowance
of $32,538 (August 31, 2019 – $119,357)

7,248,548

6,377,805

Note receivable

897

1,197

Prepaid expenses

867,792

393,539

Prepaid income taxes

370,002

223,420

Total current assets

15,063,434

19,484,223

Property, plant and equipment, net

2,775,867

2,727,406

Intangible assets, net

779

3,048

Total assets

$

17,840,080

$

22,214,677

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities

Accounts payable

$

449,586

$

410,027

Accrued liabilities

921,762

1,312,580

Total current liabilities

1,371,348

1,722,607

Deferred tax liability

85,796

61,204

Total liabilities

1,457,144

1,783,811

Stockholders’ equity

Capital stock

Authorized

21,567,564 common shares, without par value

10,000,000 preferred shares, without par value

Issued

3,481,162 common shares (August 31, 2019 – 3,971,282)

821,284

936,903

Additional paid-in capital

618,707

618,707

Retained earnings

14,942,945

18,875,256

Total stockholders’ equity

16,382,936

20,430,866

Total liabilities and stockholders’ equity

$

17,840,080

$

22,214,677

JEWETT-CAMERON TRADING COMPANY LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Expressed in U.S. Dollars)

(Prepared by Management)

(Unaudited)

Three Month
Periods at the
end of February

Six Month
Periods at the
end of February

2020

2019

2020

2019

SALES

$

7,621,927

$

7,857,175

$

14,677,105

$

16,923,275

COST OF SALES

5,616,672

6,095,887

10,623,507

12,852,901

GROSS PROFIT

2,005,255

1,761,288

4,053,598

4,070,374

OPERATING EXPENSES

Selling, general and administrative expenses

763,910

405,888

1,412,920

962,036

Depreciation and amortization

58,063

45,401

106,211

96,271

Wages and employee benefits

1,346,302

1,252,374

2,708,361

2,475,433

2,168,275

1,703,663

4,227,492

3,533,740

(Loss) income from operations

(163,020)

57,625

(173,894)

536,634

OTHER ITEMS

Gain on sale of property, plant and equipment

400

105,365

400

105,365

Interest and other income

6,584

9,184

18,198

26,335

6,984

114,549

18,598

131,700

(Loss) income before income taxes

(156,036)

172,174

(155,296)

668,334

Income tax expense

(18,226)

(52,545)

(25,588)

(199,011)

Net (loss) income

$

(174,262)

$

119,629

$

(180,884)

$

469,323

Basic earnings per common share

$

(0.05)

$

0.03

$

(0.05)

$

0.11

Diluted earnings per common share

$

(0.05)

$

0.03

$

(0.05)

$

0.11

Weighted average number of common shares outstanding:

Basic

3,562,630

4,218,348

3,811,956

4,218,672

Diluted

3,562,630

4,218,348

3,811,956

4,218,672

JEWETT-CAMERON TRADING COMPANY LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in U.S. Dollars)

(Prepared by Management)

(Unaudited)

Six Month Period
at the end of February,

2020

2019

CASH FLOWS FROM OPERATING ACTIVITIES

Net (loss) income

$

(180,884)

$

469,323

Items not involving an outlay of cash:

Depreciation and amortization

106,211

96,271

(Gain) on sale of property, plant and equipment

(400)

(105,365)

Deferred income taxes

24,592

(1,967)

Changes in non-cash working capital items:

Decrease in accounts receivable

135,288

955,372

(Increase) in inventory

(870,743)

(1,902,410)

Decrease in note receivable

300

2,203

(Increase) in prepaid expenses

(474,253)

(218,265)

(Increase) in prepaid income taxes

(146,582)

(194,522)

(Decrease) in accounts payable and

accrued liabilities

(351,259)

(858,868)

Net cash used in operating activities

(1,757,730)

(1,758,228)

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property, plant and equipment

(152,403)

Proceeds from sale of property, plant and

equipment

400

324,674

Net cash provided by (used in) investing activities

(152,003)

324,674

CASH FLOWS FROM FINANCING ACTIVITIES

Redemption of common stock

(3,867,046)

(957,305)

Net cash used in financing activities

(3,867,046)

(957,305)

Net decrease in cash

(5,776,779)

(2,390,859)

Cash, beginning of period

9,652,310

6,097,463

Cash, end of period

$

3,875,531

$

3,706,604

Cision View original content:http://www.prnewswire.com/news-releases/jewett-cameron-announces-2nd-quarter-financial-results-301040488.html

SOURCE Jewett-Cameron Trading Company Ltd.

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