JewettCameron Trading Company Reports Operating Results (10-K)
Jewettcameron Trading Company has a market cap of $16.68 million; its shares were traded at around $8.74 with a P/E ratio of 7.6 and P/S ratio of 0.4. Jewettcameron Trading Company had an annual average earning growth of 20.2% over the past 10 years.
Highlight of Business Operations:The top ten customers were responsible for 56% and 58% of total Company sales for the years ended August 31, 2011 and August 31, 2010 respectively. Also, the Companys single largest customer was responsible for 18% and 18% of total Company sales for the years ended August 31, 2011 and August 31, 2010 respectively.
Gross margin for 2011 was 19.3% in fiscal 2011 compared to 21.8% in fiscal 2010. The gross margins for the current year were negatively affected by higher material and transportation costs. Operating expenses decreased by $523,355 from $5,813,468 in fiscal 2010 to $5,290,113 in fiscal 2011. The decline was primarily due to effective cost controls, particularly in Selling, General and Administrative, which fell to $1,680,428 from $2,162,812. Wages and Employee Benefits was declined slightly to $3,348,143 from $3,386,353 in fiscal 2010. Depreciation and Amortization was largely unchanged at $261,542 in fiscal 2011 compared to $264,303 in fiscal 2010. Due to the higher cost of sales, Income from Operations fell to $2,836,248 from $3,259,102.
Sales at Greenwood in fiscal 2011 were $8,498,680 compared to sales of $9,037,087 in fiscal 2010, which was a decrease of $538,407, or 6%. The year over year decline was largely due to continued weak demand for our products. Sales of plywood to boat manufacturers represented approximately 15% and 11% of Greenwoods total sales during 2011 and 2010 respectively, and demand from these customers has been severely affected by weak economic conditions. Boat manufacturers continue to work down excess inventory accumulated over the several years, and until such point, we do not foresee an industry recovery. We continue to develop a readiness to participate when the market rebounds. In the meantime, we have been searching for alternative uses for our industrial wood products and developing new customer relationships. Greenwood had an operating loss of ($343,400) in fiscal 2011 compared to an operating loss of ($534,798) in 2010. The smaller operating loss reflects management's operating expense control at Greenwood, but the current depressed economic conditions continues to be a challenge for this segment.
Sales at JCSC were $5,197,530 in fiscal 2011 compared to sales of $4,335,392 in fiscal 2010, which represents an increase of $862,138, or 20%. The increase is due to successful sales efforts of existing products to new customers. Higher cereal and livestock feed prices have caused a shift by some growers to grains, which have begun to have a positive effect on surpluses and wholesale prices. However, demand remains relatively weak, primarily from the new home construction and golf course industry in North America. Operating income at JCSC was $215,910 compared to an operating loss of ($316,513) in 2010. 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 $1,899,176 in fiscal 2011 compared to sales of $2,731,725 in fiscal 2010, which was a decrease of $832,549 or 30%. Operating income at MSI was $97,974 in fiscal 2011 compared to operating income of $129,640 in 2010, which was a decrease of $31,666 or 24%. These decreases were due to weak economic conditions, primarily in the housing industry.
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