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JewettCameron Trading Company Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: July 11, 2012 04:17PM
JewettCameron Trading Company (JCTCF) filed Quarterly Report for the period ended 2012-05-31. Jewett-cameron Trading Co Ltd. has a market cap of $13.9 million; its shares were traded at around $9 with a P/E ratio of 10.3 and P/S ratio of 0.3. Jewett-cameron Trading Co Ltd. had an annual average earning growth of 15.5% over the past 10 years.
Highlight of Business Operations:Sales at JCLC for the three month ended May 31, 2012 were $11,923,892 compared to sales of $8,671,579 for the three months ended May 31, 2011. This represents an increase of $3,252,313, or 37.5%. Operating income before taxes was $1,479,190, which was an increase of $447,082 compared to operating income of $1,032,108 in the year-ago quarter. The increase in sales is due to many consumers redirecting their vacation time and money into their homes and pets, which is reflected in more home improvement projects and pet amenities. The Company has also had successful test marketing on several new products, some of which began shipping to customers in the current quarter. The increase in operating income was due to the higher sales, although the Company is still experiencing higher raw material and transportation costs which has severely limited the margin improvement.
Operating expenses decreased by $143,476 to $1,250,928 for the three month period ended May 31, 2012 from $1,394,404 in the three month period ended May 31, 2011. Selling, General and Administrative Expenses decreased by $165,279 from $399,226 as management worked to control sales costs which was aided by an increase in sales to existing customers. Wages and Employee Benefits rose slightly to $955,702 from $929,882 in the year ago period. Depreciation and Amortization declined $4,017 to $61,279 from $65,296.
Sales at JCSC were $4,452,635 for the nine months ended May 31, 2012 compared to sales of $3,974,494 for the nine months ended May 31, 2011, which was an increase of $478,141, or 12%. Higher cereal and livestock feed prices have caused a shift by some growers from grass seed to grains, which have begun to have a positive effect on recent surpluses and wholesale prices. However, overall demand remains relatively weak, primarily from the new home construction and golf course industry in North America. Operating income before taxes for the current nine month period was $142,578 which was a decrease of $57,923 compared to operating income of $200,501 in the prior years nine month period.
Operating expenses for the current nine month period decreased by $158,933, or 3.8%, to $3,973,053 compared to expenses of $4,131,986 for the nine month period ended May 31, 2011. Selling, General and Administrative expenses fell to $1,122,892 from $1,297,627 as higher sales to existing customers aided management's efforts to control costs. Wages and Employee Benefits were relatively unchanged at $2,663,388 in the current nine month period compared to $2,637,929 in the nine months ended May 31, 2011. Depreciation and Amortization declined slightly to $186,773 from $196,430 recorded in the prior nine month period.
As of May 31, 2012, the Company had working capital of $14,323,055 compared to working capital of $14,970,148 as of August 31, 2011. This represents a decrease of $647,093, as the positive reversal of the litigation reserve of $1,450,363 was more than offset by the repurchase of 340,486 common shares at a total cost of $3,075,559, all of which was funded from existing cash balances. The largest differences in individual components of working capital during the period were a $2,134,839 decrease in cash and cash equivalents; a $1,276,868 increase in accounts receivable and a $817,143 decrease in inventory, which were due to the Company's higher level of sales; a $20,000 increase in Note receivable; an increase of $859,629 in prepaid expenses; a decrease of $682,527 in prepaid income taxes; an increase of $157,777 in accounts payable; an increase of $257,497 in accrued liabilities; an increase in accrued income taxes of $204,170; and the decrease in litigation reserve of $1,450,363 due to the favorable ruling by the Oregon Supreme Court.
Stocks Discussed: JCTCF,