Jewett-Cameron Reports Strong Second Quarter Results with EPS Up 50% from the Prior Year

NORTH PLAINS, Ore., March 26 /PRNewswire-FirstCall/ -- Jewett-Cameron Trading Company Ltd. (Nasdaq: JCTCF; TSX: JCT) today reported financial results for the second quarter and six months ended February 29, 2008.

Sales for the second quarter of 2008 totaled $15.1 million compared to sales of $16.4 million for the second quarter of 2007. The company reported net income of $513 thousand or $.21 per diluted share compared to net income of $321 thousand or $.14 per diluted share in the same period a year ago. EPS was up 50% vs. the year ago period.

For the six months ended February 29, 2008 Jewett-Cameron reported sales of $29.3 million compared to $31.9 million for the same period a year ago. Net income for the six months of fiscal 2008 was $887 thousand or $.37 per diluted share compared to net income of $609 thousand or $.26 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 $.22, and the current year reflects a 68% increase over that level of EPS in the prior year.

The sales decline in the quarter and the six month periods reflects a decrease in sales in our industrial wood segment that was only partially offset by sales increases in our other business segments. However, income was up significantly based primarily on margin improvement and operating expense reduction in the industrial wood segment coupled with 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.

Outlook

We continue to believe that the current fiscal year can be a record year in terms of earnings. Results in the third and fourth quarters should be significantly better than the first two quarters of the current fiscal year based on very positive order trends for our specialty metal products coupled with a normal seasonal pickup in activity in our lawn, garden and pet segment.

CEO Comment

"We are very pleased with our results so far this year," said Don Boone, CEO of Jewett-Cameron. "We are particularly encouraged with the continued rapid growth in demand for our specialty metal products, which include our gate support systems, perimeter fencing, and dog kennels. Also, 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
(Expressed in U.S. Dollars)
(Prepared by Management)
(Unaudited)

Three Month Periods to Six Month Periods to
the End of February the End of February
2008 2007 2008 2007

SALES $15,083,231 $16,378,530 $29,346,390 $31,919,499

COST OF SALES 12,348,468 13,868,269 24,087,602 26,958,885

GROSS PROFIT 2,734,763 2,510,261 5,258,788 4,960,614

OPERATING EXPENSES
Selling, general
and administrative
expenses 731,182 793,860 1,441,128 1,535,670
Depreciation and
amortization 78,089 81,442 157,095 149,292
Wages and employee
benefits 1,037,088 1,031,959 2,112,287 2,138,241
1,846,359 1,907,261 3,710,510 3,823,203

Income from
operations 888,404 603,000 1,548,278 1,137,411

OTHER ITEMS
Gain (loss) on sale
of property, plant
and equipment (385) - (385) - Interest and other
income 146 3,807 146 3,863
Interest expense (39,217) (72,459) (81,426) (125,599)
(39,456) (68,652) (81,665) 121,736

Income before income
taxes 848,948 534,348 1,466,613 1,015,675

Income taxes 335,750 213,000 579,500 406,444

Net income $ 513,198 $ 321,348 $ 887,113 $609,231

Basic earnings per
common share $ .21 $ .14 $ .37 $ .26

Diluted earnings per
common share $ .21 $ .14 $ .37 $ .26

Weighted average
number of common
shares outstanding:
Basic 2,390,977 2,377,289 2,389,618 2,377,289
Diluted 2,391,589 2,377,289 2,391,643 2,379,552

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

Februray 29, August 31,
2008 2007
(Unaudited)

ASSETS

Current assets
Cash and cash equivalents $ 603,185 $ 257,131
Accounts receivable, net
of allowances of $1,637
(August 31, 2007 - $15,396) 7,428,905 6,445,284
Inventory (note 3) 9,808,359 10,878,543
Prepaid expenses 283,592 202,155

Total current assets 18,124,041 17,783,113

Property, plant and
equipment, net (note 4) 1,945,001 2,033,671

Intangible assets, net (note 5) 775,959 815,132

Deferred income taxes (note 6) 119,700 119,700

Total assets $ 20,964,701 $ 20,751,616

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

February 29, August 31,
2008 2007
(Unaudited)

Continued

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
Bank indebtedness (note 7) $ - $ 1,059
Account payable 2,326,029 2,106,051
Accrued liabilities 1,272,476 1,424,610
Accrued income taxes payable
(prepayment) (291,743) 173,757
Current portion of promissory note 364,187 363,896

Total current liabilities 3,670,949 4,069,373

Long term liabilities
Promissory note (note 8) 1,986,345 2,018,046
Note payable (note 8) - 300,000

Total long term liabilities 1,986,345 2,318,046

Total liabilities 5,657,294 6,387,419

Contingent liabilities and commitments
(note 10)

Stockholders' equity
Capital stock (note 9)
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 12,450,492 11,563,379

Total stockholders' equity 15,307,407 14,364,197

Total liabilities and
stockholders' equity $20,964,701 $20,751,616

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

Six Month Periods to
the End of February

2008 2007

CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 887,113 $ 609,231
Items not involving an outlay of cash:
Depreciation and amortization 157,095 149,292
Gain (loss) on sale of property,
plant and equipment 385 - Deferred income taxes - (400)
Stock based compensation expense - 26,389
Changes in non-cash working capital items:
Increase in accounts receivable (983,621) (313,694)
(Increase) decrease in inventory 1,070,184 (1,105,636)
Increase in prepaid expenses (81,436) (182,814)
Increase in income taxes receivable - (126,765)
Increase (decrease) in accounts
payable and accrued liabilities 67,843 (714,113)
Decrease in accrued income taxes (465,500) (40,871)

Net cash provided by (used in)
operating activities 652,063 (1,699,381)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds (repayment) of bank
indebtedness (1,059) 2,448,266
Promissory note (31,409) (29,802)
Note payable (300,000) 600,000
Proceeds from issuance of stock 56,097 -
Net cash provided by (used in)
financing activities (276,371) 3,018,464

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property,
plant and equipment (29,638) (32,948)
Purchase of intangible assets
and other - (855,000)

Net cash provided by (used in)
investing activities (29,638) (887,948)

Net increase (decrease) in cash
and cash equivalents 346,054 431,135

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

Cash and cash equivalents,
end of period $ 603,185 $ 577,945

Following is a summary of segment information for the six month periods to
the end of February:

2008 2007
Sales to unaffiliated customers:
Industrial wood products $ 15,368,770 $ 21,125,358
Lawn, garden, pet and other 9,041,561 6,316,941
Seed processing and sales 4,392,509 4,000,874
Industrial tools 543,550 476,326
$ 29,346,390 $ 31,919,499

Income (loss) from operations:
Industrial wood products $ 782,261 $ 442,369
Lawn, garden, pet and other 608,066 670,713
Seed processing and sales 184,114 81,383
Industrial tools 28,790 16,759
Unallocated overhead (54,953) (73,813)
$ 1,548,278 $ 1,137,411

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

First Call Analyst:
FCMN Contact:

Source: Jewett-Cameron Trading Company Ltd.

CONTACT: Don Boone, President & CEO of Jewett-Cameron Trading Company
Ltd., +1-503-647-0110

Web site: http://www.jewettcameron.com/

2008-03-26 16:11:08 0320578 PRNEWSWIRE