Jewett-Cameron Trading Q2 2025 Earnings Report

Jewett-Cameron Trading EPS Results

• Actual EPS: -$0.16
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: -$0.15

Jewett-Cameron Trading Revenue Results

• Actual Revenue: $9.06 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Jewett-Cameron Trading Announcement Details

• Quarter: Q2 2025
• Date: 4/14/2025
• Time: After Market Closes
• Conference Call Date: Monday, April 14, 2025
• Conference Call Time: 4:30PM ET

Jewett-Cameron Trading (NASDAQ:JCTC) is a supplier of `Value-added` building materials to major home improvement center chains in the western United States. The Company concentrates on the residential repair and remodeling segment of the building materials industry.

Jewett-Cameron Trading Q2 2025 Earnings Call Transcript

Presentation

[Operator]

Good afternoon, and welcome to the Jewett Cameron Trading Company Second Quarter Fiscal Year twenty twenty five Financial Results Conference Call. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. To submit a question, you may type it into the ask a question box Please note this event is being recorded. I would now like to turn the conference over to Robert Blum with Lytham Partners.

[Operator]

Please go ahead.

[Robert Blum, Managing Partner at Lytham Partners]

All right. Thank you very much, Gary, and thank everyone for joining us today to discuss Jewett Cameron's fiscal year twenty twenty five second quarter financial results for the period ended 02/28/2025. With us on the call representing the company today are Chad Summers, Jewett Cameron's Chief Executive Officer and Mitch Van Domelen, the company's Chief Financial Officer. At the conclusion of today's prepared remarks, we will open the call for a question and answer session. As the operator indicated, if you're listening through the webcast portal and would like to ask a question, you can submit your question through the Ask a Question feature in the webcast player.

[Robert Blum, Managing Partner at Lytham Partners]

Before we begin with prepared remarks, please note that statements made by the management team of Jewett Cameron during the course of this conference call may contain forward looking statements within the meaning of U. S. Securities laws. Forward looking statements describe future expectations, plans, results or strategies and are generally preceded by words such as may, future, plan, will, should, expected, anticipates or similar words. Listeners are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events or results to differ materially from those identified in the forward looking statements as a result of various factors and other risks identified in the company's 10 ks for the fiscal year ended 08/31/2024, and other filings made with the Securities and Exchange Commission.

[Robert Blum, Managing Partner at Lytham Partners]

An audio recording and webcast replay for today's conference call will also be available online on the company's Investor Relations page. With that said, let me turn the call over to Chad Summers, Chief Executive Officer for Jude Cameron. Chad, please proceed.

[Chad Summers, CEO & President at Jewett-Cameron Trading Company]

Thank you, Robert, and good afternoon. Today, I'll update you on our performance through second quarter as well as our progress on the key initiatives we've shared over the last six months to improve shareholder value. As Robert mentioned, Mitch Van Domen, Jewett Cameron's CFO, is with me again today, and we'll dive into the key drivers of our second quarter financial results. And at the conclusion of our prepared remarks, we'll be happy to answer any questions you might have. Jewett Cameron remains committed to improving the lives of professionals, do it yourselfers, dog owners with innovative products that enrich outdoor spaces.

[Chad Summers, CEO & President at Jewett-Cameron Trading Company]

Our quality products solve practical problems and fulfill unmet needs at competitive prices. For those of you who may be new to Jewett Cameron, it's worth mentioning that we were founded over seventy years ago and were owner operated and managed for nearly forty years. Over that time, the company was lean and opportunistic, acquiring an eclectic combination of businesses, but had an aging technology and operational processes unable to scale. My team and I have brought focus to Jewett Cameron in the last couple of years and created a strategic plan to drive profitability moving forward. We are aggressively enhancing our systems, improving processes and expanding our supply sourcing to serve our customers.

[Chad Summers, CEO & President at Jewett-Cameron Trading Company]

I'll now provide some updates on some of our key initiatives. Hewitt Cameron's innovation within our metal fence category is driving growth. We have had displayers of our Adjustigate product sold in aisle in thousands of stores over the years, and I'm excited to report that we exceeded our target through February of getting our new lifetime steel post displayers into over three thirty Home Depot and Lowe's stores. This is 65% more from just three months ago when we were approximately 200 stores. These are the right stores, in the right aisles, and next to the wood fence material.

[Chad Summers, CEO & President at Jewett-Cameron Trading Company]

Having our steel fence accessories commercialized with the wood and easily accessible for professionals and do it yourselfers, building a fence is essential. Point of sales data has been strong during the fall and winter months, providing encouraging indicators of future success during the fence building season of the spring and summer months ahead. More regions continue to request adding our displayers so demand is strong, and we are coordinating with them to ensure continued successful rollout and support. This rollout of our lifetime steel post displayers, which were initially produced domestically at high cost to meet our customers' demand schedule and the increased sales as a percent of our overall fence category sales has had an impact on our reduced margin in the first half of this year. We greatly reduced the displayer cost by producing these displayers overseas in the second quarter, which will diminish the margin impact in the future.

[Chad Summers, CEO & President at Jewett-Cameron Trading Company]

In other fence category news, it's worth stating restating that we launched our new, unique, low profile Adjust to Gate Unlimited earlier this year. This gate is unlike any other four corner steel frame gate kit on the market. It is one of the only full complete gate kits with hinges, latch, and strike plate included along with a truss cable to prevent sag, and most importantly, once installed, it is practically invisible, so the focus is on the wood gate, not the steel frame. This fully adjustable gate design empowers professionals and DIYers with greater control to create gates tailored to their unique needs. Keep an eye out for this innovative gate solution as we continue to get into more stores and online.

[Chad Summers, CEO & President at Jewett-Cameron Trading Company]

The kit supports both horizontal and vertical gate designs and accommodates sizes up to 72 inches high and 84 inches wide. Additionally, its patent pending design with anti sag technology ensures gait stays straight and secure over time, solving one of the gait owners' most common challenges. With its durable steel corner brackets, all necessary hardware, and a comprehensive installation guide, the Adjust to Get Unlimited is designed for users of all skill levels. Its straightforward installation process can be completed in very little time. Beyond its technological advancements, the Adjust to Gate Unlimited is sold as an all in one complete integrated system at a competitive price point compared to other gate kits that require purchasing additional parts, such as latches, hinges and other components to complete a gate project.

[Chad Summers, CEO & President at Jewett-Cameron Trading Company]

As you can hear, we are operating at a high level with our metal fence category. We are seeing growth in customer demand, growth in new stores carrying our in aisle displayers, and we are continuing to bring exciting new products to market. Transitioning for a moment, tariffs are clearly a topic of discussion today. And while the environment surrounding tariffs is rapidly evolving, the potential positive impact from the supply chain strategy we initiated approximately two years ago may prove to be significant. As background, we began supply chain initiatives two years ago to multisource our production.

[Chad Summers, CEO & President at Jewett-Cameron Trading Company]

Our dependence on a single supplier has been eliminated, and our expansion to sourcing countries outside of China have helped us to offer competitive pricing and, to some extent, lessen the impact of the current tariff situation. Hewitt Cameron's management team had the vision and fortitude to tackle multisourcing hundreds of products into various countries starting in 2023. Further, the success of this effort cannot be overstated as it has given us options that many other importers may not have at their disposal at a time of rapidly changing tariff policies. As we sit here today, the global steel tariff of 25% implemented in March impacts all imported steel products from around the world and will raise prices for everyone. The tariff landscape remains fluid, and we will continue to monitor it closely to strategize how best to serve our customers.

[Chad Summers, CEO & President at Jewett-Cameron Trading Company]

But given the sourcing initiatives we implemented over the last two years, I believe we are much better positioned today than we would have been otherwise. A huge credit goes to the entire Jewett Cameron team for their efforts. I'll now touch on the performance of other areas of our business. Our wood fence products revenue fell slightly from last year over the same time period due to material constraints. We continue to maintain our lumber program with a major big box retailer as a primary supplier of select fence board products in multiple markets.

[Chad Summers, CEO & President at Jewett-Cameron Trading Company]

Within our pet containment products, downstream retail channel inventory congestion continues to negatively impact our sales. However, online sales for several of our pet products have started to pick up recently. We continue to make progress as our pet inventory is down over 17% from a year ago and nearly 60% from our peak in February of twenty twenty three. Our pet product pricing that had been burdened by high shipping costs from a few years ago may now be highly attractive to many retailers in the near term, looking to keep their shelves stocked and avoid the new high tariff on importing similar products, particularly out of China. Within our sustainable products category, we transitioned from our Lucky Dog compostable poop bags over to an expanded line of sustainable bag products, including bin liners and post consumer recycled plastic dog waste bags under the brand Myeco World in calendar year 2023.

[Chad Summers, CEO & President at Jewett-Cameron Trading Company]

Initial sales under the new brand began in the fall of twenty twenty three. While a relatively small revenue contributor overall, the growth over a fifteen month period has been strong. Sales are being driven by online performance, new grocery channel adoption and the recent success of our post consumer recycled plastic dog waste bags Mexico. Finally, sales at Greenwood increased 31% for the current quarter to $1,100,000 compared to $900,000 in Q2 of twenty twenty four. Seed facility it's worth reminding everyone, as part of the conglomeration of the various businesses the company had over the years, we previously owned and operated a seed cleaning facility based on 11.6 acres not far from our headquarters in Oregon.

[Chad Summers, CEO & President at Jewett-Cameron Trading Company]

It is in a great location with a high quality warehousing space readily available. From an operations standpoint, we shut down the cleaning operation in August of twenty twenty three and wrapped up seed storage near the end of fiscal twenty twenty four. The property is currently on the market, and it is our belief that the value we will receive for this will be well north of what it is currently on the books for, and thus, it will be additive to our overall shareholder value. We originally listed it for sale at $9,000,000 although no assurance can be given that, that will be the price we receive for it, and it sits on our books for less than 600,000 We may also elect to lease all or part of the space to generate income in the near term, but it's important to note our goal is to fully monetize the asset and put the capital to best use once sold for the benefit of the company and our shareholders. With that said, let me turn it over to Mitch for a detailed review of the financials.

[Chad Summers, CEO & President at Jewett-Cameron Trading Company]

I will then provide some brief closing comments and turn it over, for any questions. Mitch?

[Mitch Van Domelen, CFO at Jewett-Cameron Trading Company]

Thank you, Chad, and good afternoon to everyone on the call today. My comments will focus on adding color to key areas and events that had material influence on the quarter. Let's review with the let's begin with the revenue line. I'd like to remind our longtime investors and more recent shareholders that our revenues tend to be very seasonal with the majority of our impactful sales occurring in our third and fourth fiscal quarters, March through August. As such, Q1 and Q2 sales results are typically lower than the second half of the year.

[Mitch Van Domelen, CFO at Jewett-Cameron Trading Company]

Revenue for Q2 twenty twenty five was $9,100,000 compared to $8,200,000 in Q2 of twenty twenty four. As Chad mentioned, sales of metal fencing products increased compared to Q2 of last year, driven by ongoing load in of new lifetime steel post in store displayers. Sales of compostable products were flat in the quarter as compared to the same quarter last year. And as Chad mentioned, we are experiencing growth with the Myeco World products online and as we transition our marketing efforts towards that brand. Sales at our Greenwood operating segment for the current quarter were 1,100,000.0 compared to $800,000 in Q2 twenty twenty four, as we saw tariff uncertainty accelerate some purchases from our customers.

[Mitch Van Domelen, CFO at Jewett-Cameron Trading Company]

The aforementioned growth by these product lines was offset in part by our wood fencing product sales, which decreased compared to the same period last year due to materials constraints. Additionally, demand for pet products continues to be weak as sales in the current quarter declined compared to Q2 twenty twenty four. As Chad mentioned, as we look to the remainder of fiscal twenty twenty five, the growth initiatives we have implemented, particularly the Lifetime Steel Post replenishment orders, anticipated reorders from the increased and improved marketing of Majestic Gate Displayers and onboarding new regional grocery retailers carrying our sustainable bags is expected to offset softness in our Pet Solutions business. It is not yet clear how the tariffs and pricing changes will impact our seasonal sales, but we will monitor our inventories closely to adjust to the market demand accordingly. Turning to gross margins.

[Mitch Van Domelen, CFO at Jewett-Cameron Trading Company]

Gross margins for Q2 twenty twenty five were 20.1% compared to 25.1% in Q2 twenty twenty four and compared to 18.3% in Q1 twenty twenty five. The decrease in gross profit margins from the year ago period primarily relate to a shift in sales mix to lower margin products and the high cost of additional in store display units produced domestically deployed during the quarter also increased our costs compared to the second quarter of fiscal twenty twenty four, but we believe this to be an investment in our future growth strategy. While the potential tariff situation plays itself out, our ongoing initiatives to improve gross margins, including new supply chain partners and enhanced pricing strategies are designed to improve margins in future quarters. However, no assurance can be made that this will be the case due to the fluidity and uncertainty of the tariff situation. Turning to OpEx.

[Mitch Van Domelen, CFO at Jewett-Cameron Trading Company]

Operating expenses during Q2 twenty twenty five were $2,600,000 compared to $2,800,000 in Q2 of twenty twenty four. The decrease is primarily due to a realignment and reduction in headcount to new business processes. Loss from operations for Q2 twenty twenty five was $800,000 compared to $700,000 loss in Q2 twenty twenty four. Net loss for Q2 twenty twenty five was $600,000 or $0.16 per basic and diluted share compared to net income of $500,000 or $0.15 per basic and diluted share in Q2 twenty twenty four. Finally, a few comments on the balance sheet.

[Mitch Van Domelen, CFO at Jewett-Cameron Trading Company]

As part of our initiatives to improve working capital, we've reduced our inventory balances by 23% to $14,900,000 at 02/28/2025 from $17,600,000 at 02/29/2024. Cash balance at 02/28/2025 was $400,000 compared to $1,100,000 at February 2024. We currently have no long term debt. I do want everyone to note that we do have access to a $6,000,000 revolving line of credit that we use for seasonal working capital needs. Based on the seasonality of our normal cash cycle, we typically see our working capital needs spike in the early spring as we transition our inventory to sales and collections.

[Mitch Van Domelen, CFO at Jewett-Cameron Trading Company]

Subsequent to the end of this second quarter, we began drawing on our line. Finally, our total stockholder equity at 02/28/2025 was $23,700,000 or $6.73 per share. And as Chad touched on, our carrying balance of the seed facility is less than 600,000 where we currently have it listed for sale for $9,000,000 The successful sale or lease of the real estate and facility would dramatically improve shareholder equity. We hit some of those topics from a pretty high level and covered a lot of them pretty quickly, but happy to answer any additional questions anyone may have. I will now pass the call back over to Chad.

[Chad Summers, CEO & President at Jewett-Cameron Trading Company]

Thanks, Mitch, for the overview. Let me just wrap things up with a few key comments and takeaways. First, our focus remains on driving shareholder value. Our strategy is focused in four key areas: growth drivers, product innovation, supply chain and operational efficiency and asset monetization. The successful growth in our metal fence category and encouraging traction of our Myeco World products is validation of good execution on our strategic focus.

[Chad Summers, CEO & President at Jewett-Cameron Trading Company]

Our product innovation continues to progress and drive our desire to enrich outdoor spaces and improve the lives of professionals, do it yourselfers, and dog owners with our new Adjust A Gate Unlimited Gate kit. We are not out of the woods yet, and there is much more work to be done as we navigate the rapidly changing geopolitical landscape impacting importers of quality products like ours. We are partnering with our suppliers and our customers to navigate the changing landscape over the coming months. With that, let me turn the call over to the operator for any questions. Operator?

[Operator]

We will now begin the question and answer session. To submit a question, you may type it into the ask a question box on your webcast screen. Robert, I'll turn it over to you to address the questions.

[Robert Blum, Managing Partner at Lytham Partners]

Thank you so much there. Looks like I just want to remind everyone if you are on the webcast player and like to submit a question, as the operator just said, submit it to the Ask a Question feature there on the webcast player. Chad, just a question here. If you can talk about sort of the why haven't, sort of yourself or members of the executive team, purchased shares in the open market? If you could maybe just talk in some generalities about insider purchases.

[Chad Summers, CEO & President at Jewett-Cameron Trading Company]

Sure. Thank you for the question. I, of course, cannot speak for everyone, but this is certainly something that I will review and evaluate. Oftentimes, management teams are locked out from purchasing shares due to material information. So it's clearly a factor that has to be considered, but I'll certainly, investigate that further.

[Robert Blum, Managing Partner at Lytham Partners]

Okay. Once again, to everyone on the line here, if you'd like to submit a question, type it into the webcast player. I'll pause for, just a moment to see if there's any, any additional questions. All right, Chad, I'm not showing any additional questions here. So, with that, I'll turn it back over to you for closing remarks.

[Chad Summers, CEO & President at Jewett-Cameron Trading Company]

Okay. Thank you, Robert. One final point. As part of our ongoing effort to increase investor awareness of the company, we have recently commenced quarterly conference calls. We have updated our NASDAQ trading symbol from JCTCF to JCTC to better highlight our U.

[Chad Summers, CEO & President at Jewett-Cameron Trading Company]

S.-based operations, and we have expanded our shareholder communications program. In furtherance, of this expansion, we will be attending the Planet Microcap Showcase in Las Vegas coming up on April. If you are attending, we look forward to seeing you there. If you're not attending, but would like to follow-up and learn more about at Cameron, please contact Robert Blum, to help coordinate an introduction. Again, I want to thank you all for your continued interest and support of Jewett Cameron, and thanks again for your participation.

[Chad Summers, CEO & President at Jewett-Cameron Trading Company]

Have a good afternoon.

[Operator]

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Participants

Executives

• Chad Summers, CEO & President
• Mitch Van Domelen, CFO

Analysts

• Robert Blum, Managing Partner at Lytham Partners