Jewett-Cameron Reports Solid Fourth Quarter and Year End Results - Outlook for the Coming Year Is Very Positive



    NORTH PLAINS, Ore., Oct. 30 /CNW/ -- Jewett-Cameron Trading Company Ltd.
(Nasdaq:   JCTCF; TSX: JCT) today reported financial results for the fourth
quarter and 12 months ended August 31, 2007.
    Sales for the fourth quarter of 2007 totaled $17.7 million compared to
sales of $18.4 million for the fourth quarter of 2006.  The company reported
net income of $929 thousand or $.39 per diluted share compared to net income
of $610 thousand or $.26 per diluted share in the same period a year ago.
    For the 12 months and fiscal year ended August 31, 2007 Jewett-Cameron
reported sales of $70.5 million compared to $76.1 million for the same period
a year ago.  Net income for the 12 months of fiscal 2007 was $2,295 thousand
or $.96 per diluted share compared to net income of $2,339 thousand or $1.02
per diluted share in the prior fiscal year.
    
    Fourth Quarter
    
    Earnings in the fourth quarter of 2007 include a number of items that
relate to prior periods.  One particularly large item that increased reported
income in the quarter is an accrual of a rebate from a supplier that relates
to business done over the entire fiscal year.  Other items that increased
income include the reversal of prior over-accruals for a number of different
expenses, which was partially offset by an inventory write-down that was taken
in the fourth quarter.  The net effect of these unusual items was an increase
in earnings of $.10 per diluted share.  Diluted earnings per share for the
quarter without these items were $.29 compared with $.26, which was reported
for the fourth quarter a year ago.
    In spite of lower sales in the fourth quarter compared to the same period
a year ago profitability improved.  This is based primarily on a change in
sales mix that reflects the rapid growth in sales of specialty metal products,
which have a much higher gross margin than most of the company's other sales.
    
    Year
    
    Reported results for all of 2007 include several items that relate to the
prior year.  These items are the reversal of an inventory reserve that was
booked in 2006 and subsequently reversed in the first quarter of 2007, the
booking of rebates from a supplier in the second and third quarters of 2007
that relate to business done in 2006, and the reversal of another sizable
accrued expense in the fourth quarter of 2007 that was booked in 2006 and
subsequently determined to not be needed.  The effect of these items was an
increase in earnings of $.11 per diluted share in 2007, and earnings without
these items were $.85 per diluted share.
    Reported results for 2006 include a one-time gain from the sale of the
company's distribution center in Utah, which alone contributed $.17 to diluted
earnings per share.  Also, 2006 results include a rebate from a supplier that
relates to business done in 2005.  Therefore, if these items are excluded from
earnings for 2006, and the items that got reflected in 2007 that really relate
to 2006 are shifted back to 2006, then earnings for 2006 were $.96 per diluted
share.
    The decline in adjusted earnings from $.96 per diluted earnings per share
in 2006 to $.85 in 2007 primarily reflects the significantly lower earnings in
our industrial wood segment, which was only partially offset by improved
results in our lawn, garden and pet segment.
    
    Outlook
    
    In the first two quarters of the new fiscal year earnings per share
should be lower than in the final two quarters of the year just ended.  This
would be a reflection of a seasonal slowdown in our lawn, garden and pet
segment. However, based particularly on positive sales trends for our
specialty metal products we expect 2008 to be a very good year.  It could
possibly be a record year in terms of earnings.
    
    CEO Comment
    
    "We view the fourth quarter as a satisfying conclusion to a good year and
are optimistic about the outlook for the coming year," said Don Boone, CEO of
Jewett-Cameron.  "Also, a significant transformation is taking place at
Jewett-Cameron as specialty metal products like dog kennels, our proprietary
gate support system, and perimeter fencing continue to grow in total sales and
become a bigger part of our sales mix.  Investors may still tend to view us as
a lumber or wood products wholesaler, but this characterization is becoming
less accurate.  Specialty metal products have grown from about 14% of total
company sales in 2006 to about 21% in 2007, and in 2008 these products could
be around 30% of total sales.  This is a very important and positive trend,
since metal products have a much higher gross margin than other products that
the company sells."
    Mr. Boone also noted, "It is gratifying that our balance sheet is very
strong relative to the size of the company.  In fact our financial condition
is as strong as it has ever been."
    
    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
    

    
                      Three Month Periods Ended  Twelve Month Periods Ended
                               August 31,                August 31,
                           2007         2006         2007         2006
    

    SALES              $17,740,605  $18,365,241  $70,515,596  $76,096,037

    COST OF SALES       14,110,584   15,532,434   58,770,323   64,767,599

    GROSS PROFIT         3,630,021    2,832,807   11,745,273   11,328,438

    
    OPERATING EXPENSES
    Selling, general
     and administrative
     expenses              646,514      454,419    2,925,274    2,727,164
    Depreciation and
     amortization           81,334       71,654      315,302      286,434
    Wages and employee
     benefits            1,322,665    1,375,036    4,479,674    5,112,290
                         2,050,513    1,901,109    7,720,250    8,125,888
    

    
    Income from
     operations          1,579,508      931,698    4,025,023    3,202,550
    

    
    OTHER ITEMS
    Gain on sale of
     property, plant and
     equipment                   -            -        6,787      599,825
    Interest and other income    -       14,314            -       74,749
    Interest expense       (43,860)     (44,111)    (234,589)    (211,604)
                           (43,860)     (29,797)    (227,802)     462,970
    

    
    Income before income
     taxes               1,535,648      901,901    3,797,221    3,665,520
    

    Income taxes           606,921      291,800    1,502,366    1,326,800

    Net income            $928,727     $610,101  $ 2,294,855   $2,338,720

    
    Basic earnings per
     common share             $.39         $.26         $.96       $ 1.02
    

    
    Diluted earnings per
     common share             $.39         $.26         $.96       $ 1.02
    

    
    Weighted average number
     of common shares outstanding:
    Basic                2,381,613    2,336,202    2,378,381    2,297,172
    Diluted              2,384,964    2,336,202    2,379,085    2,297,172
    



    
    JEWETT-CAMERON TRADING COMPANY LTD.
    CONSOLIDATED BALANCE SHEETS
    

    
                                                   August 31,     August 31,
                                                     2007           2006
    ASSETS
    

    
    Current assets
     Cash and cash equivalents                      $257,131       $146,810
     Accounts receivable, net of allowances
      of $15,396 (August 31, 2006-$0)              6,445,284      6,822,197
     Inventory                                    10,878,543      8,750,861
     Prepaid expenses                                202,155        139,936
     Note receivable                                       -          4,000
    

    Total current assets                         17,783,113     15,863,804

    Property, plant and equipment, net             2,033,671      2,217,756

    Intangible assets, net                           815,132            101

    Deferred income taxes                            119,700        142,900

    Total assets                                 $20,751,616    $18,224,561


    LIABILITIES AND STOCKHOLDERS' EQUITY

    
    Current liabilities
     Bank indebtedness                                $1,059             $-
     Account payable                               2,106,051      2,514,801
     Accrued liabilities                           1,424,610      1,537,290
     Accrued income taxes                            173,757         40,871
     Current portion of long term liabilities        363,896         59,432
    

    Total current liabilities                     4,069,373      4,152,394

    
    Long term liabilities
     Promissory note                               2,018,046      2,081,963
     Note payable                                    300,000              -
    

    Total long term liabilities                   2,318,046      2,081,963

    Total liabilities                              6,387,419      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
      2,384,792 common shares
       (August 31, 2006 - 2,377,292)               2,200,014      2,138,468
     Additional paid-in capital                      600,804        583,211
     Retained earnings                            11,563,379      9,268,525
    

    Total stockholders' equity                   14,364,197     11,990,204

    Total liabilities and stockholders' equity  $20,751,616    $18,224,561



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

    
                                                            Twelve Month
                                                           Periods Ended
                                                              August 31
                                                        2007           2006
    

    
    CASH FLOWS FROM OPERATING ACTIVITIES
    Net income                                    $2,294,855    $ 2,338,720
    Items not involving an outlay of cash:
     Depreciation and amortization                   315,302        286,434
     Gain on sale of property, plant and equipment    (6,787)      (599,825)
     Deferred income taxes                            23,200         34,200
     Loss on write-off of note receivable              4,000              -
     Stock based compensation expense                 26,389              -
    Changes in non-cash working capital items:
     (Increase) decrease in accounts receivable      376,913       (420,432)
     (Increase) decrease in inventory             (2,127,682)      (976,448)
     (Increase) decrease in prepaid expenses         (62,219)       (85,245)
     Increase (decrease) in accounts payable
      and accrued liabilities                       (521,429)       652,992
     Increase (decrease) in accrued income taxes     132,886       (310,126)
    

    Net cash provided by operating activities        455,428        920,270

    
    CASH FLOWS FROM FINANCING ACTIVITIES
    Proceeds (repayment) of bank indebtedness          1,059     (2,077,063)
    Issuance of capital stock for cash                52,750        137,364
    Note payable                                     600,000              -
    Promissory note                                  (59,453)       (55,684)
    

    
    Net cash provided by (used in) financing
     activities                                      594,356     (1,995,383)
    

    
    CASH FLOWS FROM INVESTING ACTIVITIES
    Repayment of note receivable                           -         34,238
    Purchase of property, plant and equipment        (73,550)       (82,259)
    Purchase of intangible assets and other         (872,700)             -
    Proceeds on sale of property, plant
     and equipment                                     6,787        660,000
    

    
    Net cash provided by (used in) investing
     activities                                     (939,463)       611,979
    

    Net increase in cash and cash equivalents        110,321       (463,134)

    Cash and cash equivalents, beginning of period   146,810        609,944

    Cash and cash equivalents, end of period        $257,131       $146,810



    
    JEWETT-CAMERON TRADING COMPANY LTD.
    SEGMENT INFORMATION
    
    Following is a summary of segment information for the twelve months ended
August 31:

    
                                                     2007           2006
    Sales to unaffiliated customers:
    Industrial wood products                    $ 41,172,163    $49,127,586
    Lawn, garden, pet and other                   21,352,384     20,409,383
    Seed processing and sales                      6,984,412      5,626,985
    Industrial tools                               1,006,637        932,083
                                                $ 70,515,596    $76,096,037
    

    
    Income (loss) from operations:
    Industrial wood products                      $1,136,948    $ 1,704,006
    Lawn, garden, pet and other                    2,741,985      1,484,296
    Seed processing and sales                        183,991        118,565
    Industrial tools                                  78,896         33,216
    Unallocated overhead                            (116,797)      (137,533)
                                                  $4,025,023    $ 3,202,550
    



    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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