JewettCameron Trading Company Reports Operating Results (10-K)
Jewettcameron Trading Company has a market cap of $19.2 million; its shares were traded at around $8 with a P/E ratio of 11.8 and P/S ratio of 0.4. Jewettcameron Trading Company had an annual average earning growth of 19.7% over the past 10 years.
Highlight of Business Operations: Operating expenses decreased by $429,486 from $6,242,954 in fiscal 2009 to $5,813,468 in 2010. The decline was primarily due to effective cost controls. Wages and Employee Benefits fell to $3,386,353 from $3,743,847, and Depreciation and Amortization declined to $264,303 from $316,964. Selling, General and Administrative expenses were relatively unchanged. Interest expense decreased from $43,363 in 2009 to $16,231 in 2010 due to a lower level of borrowing.
Net income for 2010 was $1,982,814 or $0.83 per diluted share, compared to $1,582,477, or $0.66 per diluted share, in 2009.
Sales at Greenwood in fiscal 2010 were $9,037,087 compared to sales of $11,484,094 in fiscal 2009, which was a decrease of $2,447,007, or 21%. The year over year decline was largely due to continued weak demand from the boat manufacturing industry. Sales of plywood to boat manufacturers represented approximately 11% and 24% of Greenwoods total sales during 2010 and 2009 respectively, and demand from these customers has been severely affected by weak economic conditions. Greenwood had an operating loss of ($534,798) in 2010 compared to a loss of ($368,098) in 2009. The larger operating loss reflects the decrease in sales. Management has been conducting operating expense control at Greenwood, but the current depressed economic conditions, particularly in the boating industry, continues to be a challenge for Greenwood.
Sales at JCSC were $4,335,392 in fiscal 2010 compared to sales of $4,376,530 in 2009. This represents a decrease of $41,138. Decreased demand for grass seed from new home construction and the golf course industry in North America, combined with price and alternative source changes in the livestock feed industry contributed to the segment's flat sales. Operating loss at JCSC was ($316,513) compared to operating income of $99,972 in 2009. The fiscal 2010 results were negatively affected by a one-time $463,498 inventory write-down due to the significant decrease in market value which was recorded in November 2009.
Sales at MSI were $2,731,725 in fiscal 2010 compared to sales of $1,510,087 for 2009, which was an increase of $1,221,638 or 81%. Operating income at MSI was $129,640 compared to operating income of $42,399 in 2009, which was an increase of $87,241 or 206%. The higher operating income was in line with the higher level of sales for the year.
As of August 31, 2010 the Company had working capital of $17,336,242 compared to working capital of $15,816,890 as of August 31, 2009, which represented an increase of $1,519,352. The largest changes affecting working capital were an increase in cash of $1,881,743 which was primarily based on higher net income, and higher accounts receivable, which were slightly offset by lower inventory, prepaid expenses and prepaid income taxes. Accounts receivable increased by $270,198, while Inventory decreased by $689,029 and included a one-time $463,498 inventory write-down at JCSC. Current Liabilities decreased to $1,612,164 as of August 31, 2010 from $1,816,522 as of August 31, 2009. Accounts Payable decreased by $534,397 and Accrued Liabilities rose by $321,906. The ratio of current assets to current liabilities or current ratio as of August 31, 2010 was 11.8 reflecting a very high degree of liquidity.
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