Jewett-Cameron Reports First Quarter Results in Line With Expectation and Showing Year Over Year Increase in Earnings



    NORTH PLAINS, Ore., Jan. 8 /CNW/ -- Jewett-Cameron Trading Company Ltd. 
(Nasdaq:   JCTCF; TSX: JCT) today reported financial results for the three
months ended November 30, 2007.
    Sales for the first quarter of fiscal 2008 totaled $14.3 million compared
to sales of $15.5 million for the first quarter of 2007.  In spite of lower
sales the company reported an increase in profitability.  Net income for the
three months ended November 30, 2007 was $374 thousand or $.16 per diluted
share compared to net income of $288 thousand or $.12 per diluted share in the
same period a year ago.  Furthermore, if an inventory reserve reversal, which
increased income in the year ago period, is excluded, then net income in that
period was $.08 per diluted share.  Reflecting this adjustment, earnings per
share for the first quarter of this year is double what it was a year ago.
    The sales decline from the same period a year ago primarily reflects a
relatively large decrease in sales in our industrial wood products segment
that was only partially offset by a significant increase in sales in our lawn,
garden and pet segment.  In spite of lower sales the industrial wood products
segment generated improved operating income based on gross margin improvement
and operating expense reduction.  A sales increase in the lawn, garden and pet
segment primarily reflects a significant increase in the sales of specialty
metal products along with a moderate increase in wood products sales.  In the
year ago period operating income in the lawn, garden and pet segment was
favorably impacted by the inventory reserve reversal referred to above, and if
this item is excluded, operating income in this segment was up significantly
compared to a year ago.  This is primarily based on the fact that the gross
margin on the sale of our specialty metal products is much higher than on wood
products sales.
    
    Outlook
    
    Our first quarter results are in line with the outlook that we indicated
in our year end earnings press release on October 30, 2007.  In that release
we disclosed that earnings per share in the first two quarters of what is now
the current fiscal year should be lower than in the final two quarters of the
prior year, and that this would be a reflection of a seasonal slowdown in our
lawn, garden and pet segment.
    Consistent with the outlook expressed in our year end press release, we
believe that the current fiscal year could be a record year in terms of
earnings.  Results in the second quarter, which will end on February 29, 2008,
will continue to reflect seasonal slowness in our lawn, garden and pet
segment.  However, based primarily on positive order and sales trends for our
specialty metal products we expect the third and fourth quarters of this
current fiscal year to be very strong.
    
    CEO Comment
    
    "We are pleased with our results in the quarter just ended," said Don
Boone, CEO of Jewett-Cameron.  "We are also encouraged with the continued
rapid growth in demand for our specialty metal products particularly for our
gate support systems, which sell under the trade name Adjust-A-Gate.  Finally,
our strong financial condition, which currently includes a significant surplus
of cash, is worth noting."
    
    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, and per share
financial results have been restated to reflect this stock split.
    
    About Jewett-Cameron Trading Company Ltd.
    
    Jewett-Cameron Trading Company is a holding company that operates through
subsidiary companies as follows.  Jewett-Cameron Lumber Corporation's business
consists of warehouse distribution and direct sales of wood products and
specialty metal products to home centers and other retailers.  Greenwood
Products is a processor and distributor of industrial wood and other specialty
building products principally to customers in the marine and transportation
industries.  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.  The area of most significant growth within Jewett-Cameron
is the manufacture and distribution of specialty metal products like dog
kennels, gate support systems, and perimeter fencing.
    
    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 erroneous and are subject to
certain risks, uncertainties, 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
                                                          November 30,
                                                    2007               2006
    

    SALES                                       $14,263,158       $15,540,969

    COST OF SALES                                11,739,134        13,090,616

    GROSS PROFIT                                  2,524,024         2,450,353

    
    OPERATING EXPENSES
    Selling, general and
     administrative expenses                        709,946           741,810
    Depreciation and amortization                    79,006            67,850
    Wages and employee benefits                   1,075,199         1,106,282
                                                  1,864,151         1,915,942
    

    Income from operations                          659,873           534,411

    OTHER ITEMS

    
    Interest and other income                             -                56
    Interest expense                                (42,208)          (53,140)
                                                    (42,208)          (53,084)
    

    Income before income taxes                      617,665           481,327

    Income taxes                                    243,750           193,444

    Net income                                    $ 373,915         $ 287,883

    Basic earnings per common share                    $.16             $ .12

    Diluted earnings per common share                  $.16             $ .12

    
    Weighted average number of
     common shares outstanding:
    Basic                                         2,388,258         2,377,289
    Diluted                                       2,391,265         2,379,483
    



    
    JEWETT-CAMERON TRADING COMPANY LTD.
    CONSOLIDATED BALANCE SHEETS
    


    
                                             November 30,           August 31,
                                                2007                   2007
                                             (Unaudited)
    

    ASSETS

    
    Current assets
    Cash and cash equivalents                 $3,124,820             $257,131
    Accounts receivable, net of allowances
    of $25,377 (August 31, 2007 - $15,396)     4,856,816            6,445,284
    Inventory                                  9,210,526           10,878,543
    Prepaid expenses                             153,339              202,155
    

    Total current assets                      17,345,501           17,783,113

    Property, plant and equipment, net         2,005,089            2,033,671

    Intangible assets, net                       795,545              815,132

    Deferred income taxes                        119,700              119,700

    Total assets                             $20,265,835          $20,751,616


    LIABILITIES AND STOCKHOLDERS' EQUITY

    
    Current liabilities
    Bank indebtedness                        $         -          $     1,059
    Account payable                            1,458,808            2,106,051
    Accrued liabilities                          928,951            1,424,610
    Accrued income taxes                         417,507              173,757
    Current portion of long term liabilities     364,955              363,896
    

    Total current liabilities                  3,170,221            4,069,373

    
    Long term liabilities
    Promissory note                            2,001,405            2,018,046
    Note payable                                 300,000              300,000
    

    Total long term liabilities                2,301,405            2,318,046

    Total liabilities                          5,471,626            6,387,419

    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
    2,390,977 common shares
     (August 31, 2007 -- 2,384,792)            2,256,111           2,200,014
    Additional paid-in capital                   600,804             600,804
    Retained earnings                         11,937,294          11,563,379
    

    Total stockholders' equity                14,794,209          14,364,197

    
    Total liabilities and
     stockholders' equity                    $20,265,835         $20,751,616
    



    
    JEWETT-CAMERON TRADING COMPANY LTD.
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    


    
                                                            Three Month
                                                           Periods Ended
                                                            November 30
                                                       2007            2006
    

    
    CASH FLOWS FROM OPERATING ACTIVITIES
    Net income                                      $373,915        $ 287,883
    Items not involving an outlay of cash:
    Depreciation and amortization                     79,006           67,850
    Deferred income taxes                                  -             (400)
    Stock based compensation expense                       -           26,389
    Changes in non-cash working capital items:
    Decrease in accounts receivable                1,588,468          979,698
     (Increase) decrease in inventory              1,668,017         (145,626)
     (Increase) decrease in prepaid expenses          48,816          (33,081)
    Decrease in accounts payable and
     accrued liabilities                          (1,142,902)      (1,218,834)
    Increase in accrued income taxes                 243,750           89,146
    

    Net cash provided by operating activities      2,859,070           53,025

    
    CASH FLOWS FROM FINANCING ACTIVITIES
    Repayment of bank indebtedness                    (1,059)               -
    Promissory note                                  (15,582)         (14,595)
    Proceeds from issuance of stock                   56,097                -
    

    
    Net cash provided by (used in)
     financing activities                             39,456          (14,595)
    

    
    CASH FLOWS PROVIDED BY (USED IN)
     INVESTING ACTIVITIES
    Purchase of property, plant and equipment        (30,837)         (26,553)
    

    Net cash used in investing activities            (30,837)        
(26,553)

    Net increase in cash and cash equivalents      2,867,689           11,877

    
    Cash and cash equivalents,
     beginning of period                             257,131          146,810
    

    Cash and cash equivalents, end of period      $3,124,820         $158,687



    
    JEWETT-CAMERON TRADING COMPANY LTD.
    SEGMENT INFORMATION
    


    
    Following is a summary of segment information for the three months ended
    November 30:
    


    
                                                      2007          2006
    Sales to unaffiliated customers:
    Industrial wood products                     $ 8,207,327    $10,823,767
    Lawn, garden, pet and other                    3,756,294      2,435,326
    Seed processing and sales                      2,117,708      2,019,997
    Industrial tools                                 181,829        261,879
                                                $ 14,263,158    $15,540,969
    Income (loss) from operations:
    Industrial wood products                        $420,076      $ 244,601
    Lawn, garden, pet and other                      145,250        245,472
    Seed processing and sales                        103,068         89,795
    Industrial tools                                  12,969            686
    Unallocated overhead                             (21,490)       (46,143)
                                                    $659,873      $ 534,411
    

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




For further information:

For further information: Don Boone, President & CEO of Jewett-Cameron 
Trading Company Ltd., +1-503-647-0110 Web Site: http://www.jewettcamerion.com

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Jewett-Cameron Trading Company Ltd.

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