Jewett-Cameron Reports Most Profitable Quarter in the Company's History



    NORTH PLAINS, Ore., July 14 /CNW/ -- Jewett-Cameron Trading Company Ltd.
(Nasdaq:   JCTCF; TSX: JCT) today reported financial results for the third
quarter and nine months ended May 31, 2008.  EPS for the quarter was $.40
making this quarter the most profitable in the company's history.
    Reported sales for the third quarter of 2008 were $17.7 million compared
to sales of $20.9 million for the third quarter of 2007.  The company reported
net income of $960 thousand or $.40 per diluted share compared to net income
of $757 thousand or $.32 per diluted share in the same period a year ago.
Third quarter EPS a year ago at the time was a record level of quarterly
earnings, and the current third quarter EPS is up 26% from that prior record.
    For the nine months ended May 31, 2008 Jewett-Cameron reported sales of
$47.0 million compared to $52.8 million for the same period a year ago.
Reported net income for the nine months of fiscal 2008 was $1,847 thousand or
$.77 per diluted share compared to net income of $1,366 thousand or $.57 per
diluted share in the prior fiscal year.  However, the year ago period included
an inventory reserve reversal that increased pre-tax income by $150,000.  If
this item is excluded, then earnings per diluted share in that period would
have been $.54, and the current year reflects a 43% increase over that level
of EPS in the prior year.
    The sales decline in the quarter and the nine month periods primarily
reflects a decrease in sales in our industrial wood segment that was only
partially offset by a sales increase in our lawn, garden, and pet segment.
However, income was up significantly based on margin improvement and operating
expense reduction in the industrial wood segment and more importantly a large
increase in sales of specialty metal products in our lawn, garden and pet
segment.  These metal products have a higher gross margin than our other
sales.
    Based on a recent review of the company's operations certain expense
reclassifications are reflected in the operating results for the nine months
ended May 31, 2008.  As a result of making these reclassifications certain
line items in the income statement for the three months ended May 31, 2008 are
less comparable, when compared with previous quarterly results.  The
reclassifications affect sales; cost of sales; selling, general and
administrative expense; and wages and employee benefits.  However, these
reclassifications have no effect on income for the three months and nine
months periods ended May 31, 2008.
    Finally, our balance sheet is very strong relative to our size.  We have
no borrowing under our line of credit, and we have significant excess
liquidity as evidenced by a ratio of current assets to current liabilities of
5.1.  Current assets include cash of over $1.1 million.
    
    Outlook
    
    Our industrial wood segment will likely continue to struggle based on
depressed market conditions coupled with the loss of a large customer.
However, demand for our specialty metal products; which includes dog kennels,
our proprietary gate support system, and perimeter fencing is very good.
Consequently, we continue to believe that the current fiscal year can be a
record year in terms of earnings.
    
    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 is a
manufacturer and distributor of specialty metal products and a wholesaler of
specialty wood products.  Greenwood Products is a processor and distributor of
industrial wood 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, our proprietary 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
    (Expressed in U.S. Dollars)
    (Prepared by Management)
    (Unaudited)
    

    
                              Three Month Periods      Nine Month Periods
                                 Ended May 31,            Ended May 31,
                               2008        2007         2008        2007
    

    
    SALES                  $17,664,365  $20,855,492  $47,010,755 $52,774,991
    

    
    COST OF SALES           14,541,768   17,700,854   38,629,371  44,659,739
    

    
    GROSS PROFIT             3,122,597    3,154,638    8,381,384   8,115,252
    

    
    OPERATING EXPENSES
    Selling, general and
     administrative expenses   163,127      743,090    1,604,254   2,278,760
    Depreciation and
     amortization               77,887       84,676      234,983     233,968
    Wages and employee
     benefits                1,302,001    1,018,768    3,414,288   3,157,009
                             1,543,015    1,846,534    5,253,525   5,669,737
    

    
    Income from operations   1,579,582    1,308,104    3,127,859   2,445,515
    

    
    OTHER ITEMS
    Gain on sale of
     property, plant
     and equipment              16,500        6,787       16,115       6,787
    Interest and other income      507       (3,863)         653           -
    Interest expense           (69,463)     (65,130)    (150,888)   (190,729)
                               (52,456)     (62,206)    (134,120)   (183,942)
    

    
    Income before income
     taxes                   1,527,126    1,245,898    2,993,739   2,261,573
    

    
    Income taxes               566,750      489,001    1,146,250     895,445
    

    
    Net income                $960,376     $756,897   $1,847,489  $1,366,128
    

    
    Basic earnings per
     common share                 $.40         $.32         $.77        $.57
    

    
    Diluted earnings per
     common share                 $.40         $.32         $.77        $.57
    

    
    Weighted average number
     of common shares
     outstanding:
    Basic                    2,390,977    2,377,289    2,390,232   2,377,289
    Diluted                  2,391,093    2,378,353    2,391,284   2,379,193
    



    
    JEWETT-CAMERON TRADING COMPANY LTD.
    CONSOLIDATED BALANCE SHEETS
    (Expressed in U.S. Dollars)
    (Prepared by Management)
    

    
                                                      May 31,     August 31,
                                                       2008          2007
                                                   (Unaudited)
    

    
    ASSETS
    

    
    Current assets
      Cash and cash equivalents                    $1,113,826       $257,131
      Accounts receivable, net of allowances
        of $7,747 (August 31, 2007 - $15,396)       7,065,213      6,445,284
      Inventory                                    10,708,014     10,878,543
      Prepaid expenses                                250,063        202,155
      Prepaid income taxes                            121,209
    

    
      Total current assets                         19,258,325     17,783,113
    

    
    Property, plant and equipment, net              1,891,614      2,033,671
    

    
    Intangible assets, net                            756,373        815,132
    

    
    Deferred income taxes                             119,700        119,700
    

    
    Total assets                                  $22,026,012    $20,751,616
    

    
    LIABILITIES AND STOCKHOLDERS' EQUITY
    

    
    Current liabilities
      Bank indebtedness                                    $-         $1,059
      Account payable                               2,098,673      2,106,051
      Accrued liabilities                           1,324,750      1,424,610
      Accrued income taxes payable
       (prepayment)                                         -        173,757
      Current portion of promissory note and
       note payable                                   366,689        363,896
    

    
      Total current liabilities                     3,790,112      4,069,373
    

    
    Long term liabilities
     Promissory note                                1,968,117      2,018,046
     Note payable                                           -        300,000
    

    
    Total long term liabilities                     1,968,117      2,318,046
    

    
    Total liabilities                               5,758,229      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                            13,410,868     11,563,379
    

    
      Total stockholders' equity                   16,267,783     14,364,197
    

    
      Total liabilities and stockholders'
       equity                                     $22,026,012    $20,751,616
    



    
    JEWETT-CAMERON TRADING COMPANY LTD.
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (Expressed in U.S. Dollars)
    (Prepared by Management)
    (Unaudited)
    

    
                                                      Nine Month Periods
                                                         Ended May 31,
                                                     2008             2007
    

    
    CASH FLOWS FROM OPERATING ACTIVITIES
    Net income                                    $1,847,489      $1,366,128
    

    
    Items not involving an outlay of cash:
      Depreciation and amortization                  234,983         233,968
      (Gain) loss on sale of property, plant
       and equipment                                 (16,115)         (6,787)
      Deferred income taxes                                -            (400)
      Stock based compensation expense                     -          26,389
    Changes in non-cash working capital items:
      (Increase) decrease in accounts receivable    (619,929)        476,124
      (Increase) decrease in inventory               170,529        (675,964)
      (Increase) decrease in prepaid expenses        (47,908)        (47,800)
      Increase (decrease) in accounts payable
       and accrued liabilities                      (107,239)       (649,676)
      Increase (decrease) in accrued income
       taxes                                        (294,966)        (20,023)
    

    
    Net cash provided by (used in) operating
     activities                                    1,166,844         701,959
    

    
    CASH FLOWS FROM FINANCING ACTIVITIES
    Proceeds (repayment) of bank indebtedness         (1,059)              -
    Promissory note                                  (47,134)        (44,502)
    Note payable                                    (300,000)        600,000
    Proceeds from issuance of stock                   56,097               -
    

    
    Net cash provided by (used in) financing        (292,096)        555,498
     activities
    

    
    CASH FLOWS FROM INVESTING ACTIVITIES
    Purchase of property, plant and equipment        (34,553)        (70,223)
    Purchase of intangible assets and other                -        (872,700)
    Proceeds from sale of property, plant             16,500           6,787
     and equipment
    

    
    Net cash provided by (used in) investing         (18,053)       (936,136)
     activities
    

    
    Net increase (decrease) in cash and cash
     equivalents                                     856,695         321,321
    

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

    
    Cash and cash equivalents, end of period      $1,113,826        $468,131
    
    Following is a summary of segment information for the nine months ended
May 31:

    
                                                     2008            2007
    Sales to unaffiliated customers:
    Industrial wood products                     $22,908,955     $32,153,736
    Lawn, garden, pet and other                   17,901,504      14,533,573
    Seed processing and sales                      5,398,978       5,296,785
    Industrial tools                                 801,318         790,897
                                                 $47,010,755     $52,774,991
    Income (loss) from operations:
    Industrial wood products                      $1,094,089        $790,802
    Lawn, garden, pet and other                    1,868,911       1,531,858
    Seed processing and sales                        186,844         220,204
    Industrial tools                                  60,391           1,595
    Unallocated overhead                             (82,376)        (98,944)
                                                  $3,127,859      $2,445,515
    




    
     Contact: Don Boone, President & CEO, (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.jewettcameron.com

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Jewett-Cameron Trading Company Ltd.

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