Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $12.6 million, down from $15.9 million in Q3 2024, but up from $9.1 million in Q2 2025, indicating a seasonal recovery [24] - Gross profit margins decreased to 15% from 18.6% in Q3 2024, primarily due to higher tariff and shipping costs [25] - Net loss for Q3 2025 was $600,000, or negative $0.18 per share, compared to net income of $200,000, or $0.04 per share in Q3 2024 [27] Business Line Data and Key Metrics Changes - Metal fence business only saw a 4% decline year-over-year, attributed to the expansion of the lifetime steel post business, which increased by 85% in product sales [6][24] - Pet business experienced a significant decline of 44% compared to Q3 2024, although it showed slight improvement from the previous quarter [7] - Wood fencing product sales decreased due to material constraints, impacting the ability to fulfill cedar fence orders [9] Market Data and Key Metrics Changes - The uncertainty surrounding tariffs has led to deferred purchases of imported metal products, affecting overall sales [5][11] - Sales of MyECO World products increased by 265% over the comparative period in fiscal 2024, indicating strong demand for sustainable products [18] - Sales in the Greenwood operating segment decreased by 24% to $700,000 compared to $900,000 in Q3 2024, due to supply issues [19] Company Strategy and Development Direction - The company is focusing on four key areas: growth drivers, product innovation, supply chain and operational efficiency, and asset monetization [30] - A multi-sourcing strategy has been implemented to reduce dependence on suppliers from high-tariff countries, enhancing supply chain resilience [13] - The company is actively managing production capacity constraints and logistical issues to support existing display replenishment demand [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism that resolution to ongoing tariff negotiations will lead to normalized customer purchasing patterns [6][12] - The company anticipates that challenges experienced in Q3 will likely extend into Q4, with continued uncertainty affecting demand [21][22] - Demand for metal goods has started to pick up as customers adjust to new pricing, although it is not expected to return to normalized levels immediately [22] Other Important Information - The company is marketing a 6-acre seed processing facility in Oregon, which has a book value of just over $550,000 [20] - The cash balance at May 31, 2025, was $1.2 million, and stockholders' equity decreased to $23.1 million due to the net loss during the quarter [29] Q&A Session Summary Question: Can you elaborate on your tariff mitigation strategies? - The company began multi-sourcing production to countries other than China in early 2023, which helped reduce dependence on a single supplier and mitigate higher tariffs [32][33] Question: What are your revised operating expense expectations? - The company aims to be more efficient across operations and continues to evaluate technology to enhance efficiency [34] Question: Any updates on the property for sale? - The company is actively marketing the property and will provide updates when a definitive arrangement is secured [35] Question: What percentage of total sales are the lifetime steel fence posts? - Currently, lifetime steel fence posts account for 8% of gross sales [38] Question: Is there overlap between customers purchasing different product lines? - There is likely some overlap in target audiences, but definitive evidence of the same consumers is not available [39] Question: Have you considered cutting support for underperforming products? - The company continuously evaluates product performance and its contribution to shareholder value [41]

[Part I](index=3&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements of Jewett-Cameron Trading Company Ltd. for the period ended May 31, 2025, including the balance sheets, statements of operations, stockholders' equity, and cash flows, along with detailed notes on the company's operations, significant accounting policies, and specific financial accounts [Consolidated Balance Sheets](index=4&type=section&id=JEWETT-CAMERON%20TRADING%20COMPANY%20LTD.%20CONSOLIDATED%20BALANCE%20SHEETS) | Metric | May 31, 2025 | August 31, 2024 | | :--------------------------------- | :----------- | :-------------- | | Cash and cash equivalents | $1,204,719 | $4,853,367 | | Accounts receivable, net | $6,789,582 | $3,668,815 | | Inventory, net | $15,257,917 | $13,157,243 | | Total current assets | $24,523,688 | $23,187,463 | | Total assets | $29,238,886 | $27,490,514 | | Total liabilities | $6,209,261 | $2,639,370 | | Total stockholders' equity | $23,029,625 | $24,851,144 | - Total assets increased by **$1,748,372** from August 31, 2024, to May 31, 2025, primarily driven by increases in accounts receivable and inventory[10](index=10&type=chunk) - Total liabilities significantly increased from **$2,639,370** to **$6,209,261**, mainly due to new bank indebtedness of **$2,422,305**[10](index=10&type=chunk) [Consolidated Statements of Operations](index=5&type=section&id=JEWETT-CAMERON%20TRADING%20COMPANY%20LTD.%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Three Month Period Ended May 31 | Metric | 2025 | 2024 | | :--------------------------------- | :----------- | :----------- | | Sales | $12,605,344 | $15,896,017 | | Gross Profit | $1,889,007 | $2,951,076 | | Income (loss) from operations | $(687,781) | $55,595 | | Net (loss) income | $(649,634) | $154,862 | | Basic (loss) earnings per common share | $(0.18) | $0.04 | Nine Month Period Ended May 31 | Metric | 2025 | 2024 | | :--------------------------------- | :----------- | :----------- | | Sales | $30,927,295 | $33,931,050 | | Gross Profit | $5,398,617 | $6,971,673 | | Income (loss) from operations | $(2,316,413) | $(1,460,316) | | Net (loss) income | $(1,881,445) | $912,257 | | Basic (loss) earnings per common share | $(0.54) | $0.26 | - The company reported a net loss of **$(649,634)** for the three months ended May 31, 2025, a significant decline from a net income of **$154,862** in the prior year, primarily due to decreased sales and gross profit[11](index=11&type=chunk) - For the nine-month period, the company incurred a net loss of **$(1,881,445)** in 2025, compared to a net income of **$912,257** in 2024, driven by lower sales and a substantial increase in operating loss[11](index=11&type=chunk) [Consolidated Statements of Stockholders' Equity](index=6&type=section&id=JEWETT-CAMERON%20TRADING%20COMPANY%20LTD.%20CONSOLIDATED%20STATEMENTS%20OF%20STOCKHOLDERS%27%20EQUITY) | Metric | August 31, 2023 | May 31, 2024 | August 31, 2024 | May 31, 2025 | | :--------------------------------- | :-------------- | :----------- | :-------------- | :----------- | | Total Stockholders' Equity | $24,097,327 | $25,041,648 | $24,851,144 | $23,029,625 | | Common Shares Outstanding | 3,498,899 | 3,504,802 | 3,504,802 | 3,518,119 | | Net Income (Loss) | | $912,257 | $(190,504) | $(1,881,445) | - Total stockholders' equity decreased from **$24,851,144** at August 31, 2024, to **$23,029,625** at May 31, 2025, primarily due to a net loss of **$(1,881,445)** for the nine-month period[13](index=13&type=chunk) - The number of common shares outstanding increased by **13,317** shares during the nine months ended May 31, 2025, due to shares issued under compensation plans[13](index=13&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=JEWETT-CAMERON%20TRADING%20COMPANY%20LTD.%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Nine Month Period Ended May 31 | Metric | 2025 | 2024 | | :--------------------------------- | :----------- | :----------- | | Net cash provided by (used in) operating activities | $(5,978,369) | $2,234,158 | | Net cash used in investing activities | $(92,584) | $(3,891) | | Net cash provided by (used in) financing activities | $2,422,305 | $(1,259,259) | | Net (decrease) increase in cash and cash equivalents | $(3,648,648) | $971,008 | | Cash and cash equivalents, end of period | $1,204,719 | $1,054,704 | - Operating activities used **$5,978,369** in cash for the nine months ended May 31, 2025, a significant change from providing **$2,234,158** in the prior year, primarily due to the net loss and increases in accounts receivable and inventory[15](index=15&type=chunk) - Financing activities provided **$2,422,305** in cash in 2025, mainly from proceeds from bank indebtedness, contrasting with cash used in financing activities in 2024[15](index=15&type=chunk) [Notes to the Consolidated Financial Statements](index=8&type=section&id=JEWETT-CAMERON%20TRADING%20COMPANY%20LTD.%20NOTES%20TO%20THE%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) [1. Nature of Operations](index=8&type=section&id=1.%20NATURE%20OF%20OPERATIONS) Jewett-Cameron Trading Company Ltd. is a holding company operating through subsidiaries like JC USA Inc., Jewett-Cameron Company (JCC), and Greenwood Products, Inc. JCC focuses on manufacturing and distributing pet, fencing, and other products, while Greenwood processes and distributes industrial wood products. The seed cleaning operations of Jewett-Cameron Seed Company (JCSC) ceased in August 2023 - JCC's business involves manufacturing and distribution of pet, fencing, and other products to home centers, retailers, online, and direct consumers in the U.S[18](index=18&type=chunk) - Greenwood Products processes and distributes industrial wood and specialty building products, primarily to marine and transportation industries[18](index=18&type=chunk) - JCSC ended seed cleaning operations in August 2023 and ceased active operations, selling most equipment for wind-up[19](index=19&type=chunk) [2. Significant Accounting Policies](index=8&type=section&id=2.%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This section outlines the significant accounting policies used in preparing the consolidated financial statements, including the basis of presentation (US GAAP, unaudited), principles of consolidation, use of estimates, and specific policies for cash and cash equivalents, accounts receivable, inventory, property, plant and equipment, intangibles, asset retirement obligations, impairment of long-lived assets, currency translation, earnings per share, comprehensive income, stock-based compensation, financial instruments, income taxes, shipping and handling costs, and revenue recognition - The financial statements are prepared in conformity with US GAAP for interim financial information and SEC regulations, and are unaudited[21](index=21&type=chunk) - Consolidated statements include wholly-owned subsidiaries JC USA, JCC, JCSC, and Greenwood, with all inter-company balances eliminated[22](index=22&type=chunk)[23](index=23&type=chunk) - Revenue is recognized from product sales (lumber, building supply, industrial wood, specialty metal, other specialty products and tools) when products are shipped, title passes, and collection is reasonably assured[47](index=47&type=chunk) [3. Inventory](index=13&type=section&id=3.%20INVENTORY) The company's inventory primarily consists of finished goods, valued at the lower of cost (average cost method) and market (net realizable value). An allowance for non-saleable inventory is maintained based on excess stock or obsolescence | Inventory Category | May 31, 2025 | August 31, 2024 | | :----------------- | :----------- | :-------------- | | Pet, fencing, and other products | $14,418,442 | $12,407,495 | | Industrial wood products | $839,475 | $749,748 | | Total Inventory | $15,257,917 | $13,157,243 | - Total inventory increased by **$2,100,674** from August 31, 2024, to May 31, 2025, with the largest increase in pet, fencing, and other products[49](index=49&type=chunk) [4. Property, Plant and Equipment](index=14&type=section&id=4.%20PROPERTY%2C%20PLANT%20AND%20EQUIPMENT) Property, plant, and equipment are recorded at cost less accumulated depreciation. The company reviews long-lived assets for impairment when circumstances indicate the carrying amount may not be recoverable. An 11.6-acre property formerly housing JCSC operations is held for sale | Asset Category | May 31, 2025 | August 31, 2024 | | :--------------- | :----------- | :-------------- | | Office equipment | $681,260 | $668,260 | | Warehouse equipment | $1,466,148 | $1,285,278 | | Buildings | $5,211,588 | $5,211,588 | | Land | $158,500 | $158,500 | | Accumulated depreciation | $(3,815,990) | $(3,473,826) | | Net book value | $3,701,506 | $3,849,800 | - Net book value of property, plant, and equipment decreased by **$148,294** from August 31, 2024, to May 31, 2025[50](index=50&type=chunk) - An asset held for sale, the former JCSC property, remains at a carrying value of **$566,022** as of May 31, 2025[51](index=51&type=chunk) [5. Intangible Assets](index=14&type=section&id=5.%20INTANGIBLE%20ASSETS) The company's intangible assets have a finite life and are amortized using the straight-line method. They are reviewed annually for impairment | Metric | May 31, 2025 | August 31, 2024 | | :----------------- | :----------- | :-------------- | | Intangible assets | $131,405 | $131,405 | | Accumulated amortization | $(19,808) | $(19,183) | | Net book value | $111,597 | $112,222 | - Net book value of intangible assets slightly decreased from **$112,222** to **$111,597** due to amortization[52](index=52&type=chunk) [6. Deferred Income Taxes](index=14&type=section&id=6.%20DEFERRED%20INCOME%20TAXES) Deferred income tax assets and liabilities are recorded for temporary differences between financial and tax reporting, and net operating loss carryforwards. A valuation allowance is applied if realization of deferred tax assets is unlikely | Metric | May 31, 2025 | August 31, 2024 | | :----------------- | :----------- | :-------------- | | Deferred income tax asset | $902,095 | $341,029 | - Deferred income tax assets increased significantly from **$341,029** to **$902,095**, reflecting changes in temporary differences[53](index=53&type=chunk) [7. Bank Indebtedness](index=15&type=section&id=7.%20BANK%20INDEBTEDNESS) The company has a line of credit agreement with Northrim Funding Services, providing short-term operating capital through purchasing accounts receivable invoices or loans against inventory. The maximum draw is $6,000,000, with an interest rate of prime plus 4.75% (12.25% as of May 31, 2025). This line was renewed in June 2025 and expires on June 30, 2026 - As of May 31, 2025, the company's indebtedness under the Northrim line of credit was **$2,422,305**, compared to **$Nil** at August 31, 2024[54](index=54&type=chunk) - The maximum amount Northrim will purchase in AR invoices is **80%** of eligible accounts, not exceeding **$6,000,000**[54](index=54&type=chunk) - Borrowing against inventory is **25%** of eligible inventory, not exceeding **$4,000,000**, with a total maximum draw of **$6,000,000**[54](index=54&type=chunk) [8. Capital Stock](index=15&type=section&id=8.%20CAPITAL%20STOCK) Holders of common stock are entitled to one vote per share. The company has not declared any dividends since incorporation - As of May 31, 2025, **3,518,119** common shares were issued, compared to **3,504,802** at August 31, 2024[10](index=10&type=chunk) - The company is authorized to issue **21,567,564** common shares and **10,000,000** preferred shares, both with no par value[10](index=10&type=chunk) [9. Restricted Share Plan](index=15&type=section&id=9.%20RESTRICTED%20SHARE%20PLAN) The company operates a Restricted Share Plan (the "Plan") and a new 2024 Restricted Share Plan, allowing grants of restricted shares to directors, officers, employees, and consultants. Shares are nontransferable during a restricted period but grant voting and dividend rights - In December 2024, **13,317** common shares valued at **$59,926** were issued under the Plan to officers, directors, and employees[59](index=59&type=chunk)[63](index=63&type=chunk) - The 2024 Plan reserves **1%** of issued and outstanding common shares, totaling **35,181** shares, for future grants[60](index=60&type=chunk) - As of May 31, 2025, **2,755** shares remained available under the original Plan[59](index=59&type=chunk) [10. Pension and Profit-Sharing Plans](index=16&type=section&id=10.%20PENSION%20AND%20PROFIT-SHARING%20PLANS) The company offers a deferred compensation 401(k) plan for eligible employees, including non-elective discretionary contributions and matching employee contributions 401(k) Compensation Expense | Period | 2025 | 2024 | | :----- | :----------- | :----------- | | Nine-month period ended May 31 | $186,114 | $311,026 | - 401(k) compensation expense decreased by **$124,912** for the nine months ended May 31, 2025, compared to the prior year[64](index=64&type=chunk) [11. Segment Information](index=16&type=section&id=11.%20SEGMENT%20INFORMATION) The company operates in four principal reportable segments: Pet, Fencing and Other; Industrial wood products; Seed processing and sales; and Corporate and administration. Performance is evaluated primarily based on business segment income before taxes Sales to Unaffiliated Customers (Nine Months Ended May 31) | Segment | 2025 | 2024 | | :----------------- | :----------- | :----------- | | Industrial wood products | $2,658,723 | $2,883,190 | | Lawn, garden, pet and other | $28,268,572 | $30,964,142 | | Seed processing and sales | $— | $83,718 | | Total Sales | $30,927,295 | $33,931,050 | (Loss) Income Before Income Taxes (Nine Months Ended May 31) | Segment | 2025 | 2024 | | :----------------- | :----------- | :----------- | | Industrial wood products | $(68,148) | $41,146 | | Lawn, garden, pet and other | $(2,615,470) | $384,102 | | Seed processing and sales | $— | $32,242 | | Corporate and administrative | $325,258 | $634,258 | | Total (Loss) Income Before Taxes | $(2,358,360) | $1,091,748 | - Sales to unaffiliated customers decreased by **9%** overall, with significant declines in Lawn, garden, pet and other, and the cessation of Seed processing and sales[68](index=68&type=chunk) - The company reported a total loss before income taxes of **$(2,358,360)** in 2025, a substantial shift from income of **$1,091,748** in 2024, primarily driven by losses in the Lawn, garden, pet and other segment[69](index=69&type=chunk) [12. Risks](index=18&type=section&id=12.%20RISKS) The company is exposed to credit risk, particularly due to concentrations of accounts receivable with a small number of customers, and volume of business risk, relying on a few key suppliers for a significant portion of purchases - Two customers accounted for **78%** of total accounts receivable at May 31, 2025, indicating high credit risk concentration[71](index=71&type=chunk) - Four suppliers accounted for **10%** or greater of total purchases for the nine months ended May 31, 2025, aggregating to **$16,818,001**, highlighting supplier concentration risk[72](index=72&type=chunk) [13. Supplemental Disclosure with Respect to Cash Flows](index=18&type=section&id=13.%20SUPPLEMENTAL%20DISCLOSURE%20WITH%20RESPECT%20TO%20CASH%20FLOWS) This section provides supplemental cash flow information, detailing cash payments for interest and income taxes Cash Payments (Nine Months Ended May 31) | Payment Type | 2025 | 2024 | | :----------- | :----------- | :----------- | | Interest | $77,650 | $32,619 | | Income taxes | $15,000 | $173,717 | - Cash paid for interest increased significantly in 2025, while cash paid for income taxes decreased[73](index=73&type=chunk) [14. Contingencies](index=18&type=section&id=14.%20CONTINGENCIES) The company settled an arbitration case against a former distributor in September 2023, receiving a cash payment of $2,450,000 - The arbitration settlement resulted in a **$2,450,000** cash payment received in October 2023[74](index=74&type=chunk) [15. Subsequent Event](index=18&type=section&id=15.%20SUBSEQUENT%20EVENT) In June 2025, the company renewed its line of credit agreement with Northrim, extending its expiration to June 30, 2026 - The line of credit agreement with Northrim was renewed in June 2025, extending its expiration to June 30, 2026[75](index=75&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, highlighting challenges such as new US tariffs, operational issues, and a soft pet market, which significantly reduced revenues and negatively impacted margins. The company is focusing on operational efficiencies, multi-sourcing strategies, and resolving logistical impediments - Sales for the three months ended May 31, 2025, declined by **21%** from the prior year, resulting in a net loss of **($0.18)** per share[100](index=100&type=chunk) - New US tariffs, particularly on imported metal products, have caused significant market turmoil, increased costs, and uncertainty in deliveries, leading retailers and consumers to defer purchases[101](index=101&type=chunk)[102](index=102&type=chunk) - The company anticipates continued challenges in the fourth quarter due to fluctuating tariff rates, depressed consumer sentiment, stubborn inflation, and high interest rates, expecting a loss for the full year[111](index=111&type=chunk) [Business Description](index=19&type=section&id=Business%20Description) The company is committed to providing innovative products for outdoor spaces, categorized into three reportable operating segments: Pet, Fencing and Other; Industrial Wood Products; and Seed Processing and Sales (now wound up), along with a Corporate and Administrative segment. Products include patented gate support systems, pet products, and sustainable/PCR bag products - The company's operations are classified into three reportable operating segments: Pet, Fencing and Other; Industrial wood products; and Corporate and administrative[77](index=77&type=chunk) - Key products include Adjust-A-Gate® and Fit-Right® gate support systems, Lucky Dog® pet products, and MyEcoWorld® sustainable/PCR bag products[80](index=80&type=chunk)[94](index=94&type=chunk)[96](index=96&type=chunk)[97](index=97&type=chunk) - The Seed Processing and Sales segment (JCSC) ceased regular operations in August 2023 and is being wound up, with its property listed for sale[88](index=88&type=chunk)[99](index=99&type=chunk) [Pet, Fencing and Other Operating Segment](index=19&type=section&id=Pet%2C%20Fencing%20and%20Other%20Operating%20Segment) This segment focuses on pet, fencing, and sustainable products, serving new and existing home and pet owners. It is seasonal, with higher sales from February to August. The company holds patents and trademarks for products like Adjust-A-Gate® and Fit-Right®, providing a competitive advantage - The home improvement business is seasonal, with higher sales occurring between February and August, leading to inventory buildup until the season starts[78](index=78&type=chunk) - The company owns patents and manufacturing rights for Adjust-A-Gate® and Fit-Right® products, which are gate support systems, providing a competitive advantage[80](index=80&type=chunk) - The newest product category is Sustainable and Post-Consumer Recycled ("PCR") bag products under the MyEcoWorld® brand, aiming to reduce single-use plastic[94](index=94&type=chunk) [Industrial Wood Products - Greenwood](index=20&type=section&id=Industrial%20Wood%20Products%20-%20Greenwood) Greenwood is a wholesale distributor of specialty wood products, primarily focused on the transportation industry, including advanced noise and vibration reduction panels (dB-Ply®) and structural panels. This segment's market has decreased in economic sensitivity but faced contractions due to COVID-19 and supply chain disruptions - Greenwood's products are focused on the transportation industry, including municipal and mass transit sectors[83](index=83&type=chunk)[84](index=84&type=chunk) - Greenwood utilizes contract manufacturers and maintains inventory at non-owned warehouses, shipping primarily on a just-in-time basis[85](index=85&type=chunk)[93](index=93&type=chunk) - Key products include dB-Ply® acoustical panels for noise/vibration reduction, durable structural panels, and Jumbo Concrete Forms[98](index=98&type=chunk) [Seed Processing and Sales - JCSC](index=20&type=section&id=Seed%20Processing%20and%20Sales%20-%20JCSC) JCSC, formerly involved in agricultural seed processing and distribution, ceased regular operations effective August 31, 2023. The company has sold most of its remaining seed inventory and equipment, and its 11.6-acre property is listed for sale at $9,000,000 - JCSC ended regular operations on August 31, 2023, and sold most of its remaining equipment and seed inventory[88](index=88&type=chunk)[99](index=99&type=chunk) - The JCSC property, an **11.6-acre** facility with **109,500** square feet of buildings, is listed for sale at **$9,000,000**[89](index=89&type=chunk)[110](index=110&type=chunk) - The property is currently zoned 'Rural Industrial' (RIND), and rezoning efforts are being explored but face economic and political challenges[89](index=89&type=chunk)[110](index=110&type=chunk) [Corporate and Administration – JC USA](index=20&type=section&id=Corporate%20and%20Administration%20%E2%80%93%20JC%20USA) JC USA serves as the parent company for Greenwood, JCC, and JCSC, providing professional and administrative services, including warehousing, accounting, and credit services, from its North Plains, Oregon offices - JC USA provides professional and administrative services, including warehousing, accounting, and credit services, to its subsidiary companies[90](index=90&type=chunk) [Company Products](index=20&type=section&id=Company%20Products) The company designs, sources, commercializes, and distributes innovative products for outdoor spaces, many of which are patent-protected. These include fencing solutions (Adjust-A-Gate®, Fit-Right®, Lifetime Steel Post®, Euro Fence, Perimeter Patrol®, Cedar fencing), Lucky Dog® pet products (kennels, covers, crates, exercise pens), and MyEcoWorld® sustainable products (compostable food waste, yard waste, and pet poop bags) - Fencing products include Adjust-A-Gate®, Fit-Right®, Lifetime Steel Post®, Euro Fence, Perimeter Patrol® Portable Security Panels, and Cedar fencing[96](index=96&type=chunk) - Pet products under the Lucky Dog® brand include STAY Series Studio Kennels, Outdoor Kennel Covers, Dwell Series® Crates, and Exercise Pens[96](index=96&type=chunk) - Sustainable products under the MyEcoWorld® brand include Compostable Food Waste Bags, Yard Waste Bags, and Pet Poop Bags, with PCR options available[95](index=95&type=chunk)[97](index=97&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) The company's results were significantly impacted by new US tariffs on imported metal products, operational issues, and a soft pet market, leading to reduced revenues and negative margins. Sales declined across segments, with JCC and Greenwood experiencing losses. The company is implementing operational efficiencies and managing production constraints - Sales for the current 3rd quarter declined by **21%** from the prior year, resulting in a net loss of **($0.18)** per share[100](index=100&type=chunk) - New US tariffs, particularly on imported metal products, caused immense turmoil, stressing logistics, increasing costs, and leading customers to defer purchases[101](index=101&type=chunk)[102](index=102&type=chunk) - Lifetime Steel Posts® sales were up **85%** compared to Q3 fiscal 2024, with **55** new display units deployed, though further expansion is temporarily paused due to production and logistical constraints[104](index=104&type=chunk) - MyEcoWorld® sales for the current nine months are up **265%** over the comparative period in fiscal 2024, driven by consumer demand for sustainable products and shifting LuckyDog® compostable bags[107](index=107&type=chunk) - Employee headcount was reduced by **33%** year-to-date, and the company is upgrading warehouse technology to improve productivity and reduce costs[109](index=109&type=chunk) [Three Months Ended May 31, 2025 and May 31, 2024](index=25&type=section&id=Three%20Months%20Ended%20May%2031%2C%202025%20and%20May%2031%2C%202024) For the three months ended May 31, 2025, total sales decreased by 21% to $12,605,344, primarily due to tariff uncertainty and fencing shortages. JCC sales declined by 20%, and Greenwood sales decreased by 24%. The company reported a net loss of $(649,634), compared to a net income of $154,862 in the prior year, with gross margin falling to 15.0% from 18.6% Key Financials (Three Months Ended May 31) | Metric | 2025 | 2024 | Change (%) | | :--------------------------------- | :----------- | :----------- | :--------- | | Sales | $12,605,344 | $15,896,017 | -21% | | JCC Sales | $11,900,284 | $14,957,204 | -20% | | Greenwood Sales | $705,059 | $924,767 | -24% | | Gross Margin | 15.0% | 18.6% | -3.6 pp | | Net (Loss) Income | $(649,634) | $154,862 | -519% | | Basic (Loss) Earnings Per Share | $(0.18) | $0.04 | -550% | - Operating expenses decreased by **$318,693**, with wages and employee benefits declining due to a **20%** reduction in employee headcount[118](index=118&type=chunk) - Interest expense increased significantly to **($74,147)** from **($1,437)** due to borrowings against the line of credit[118](index=118&type=chunk) [Nine Months Ended May 31, 2025 and May 31, 2024](index=25&type=section&id=Nine%20Months%20Ended%20May%2031%2C%202025%20and%20May%2031%2C%202024) For the nine months ended May 31, 2025, total sales decreased by 9% to $30,927,295, primarily due to restrained consumer spending and increased tariff rates. JCC sales declined by 9%, and Greenwood sales decreased by 8%. The company reported a net loss of $(1,881,445), a significant shift from a net income of $912,257 in the prior year, with gross margin falling to 17.5% from 20.5% Key Financials (Nine Months Ended May 31) | Metric | 2025 | 2024 | Change (%) | | :--------------------------------- | :----------- | :----------- | :--------- | | Sales | $30,927,295 | $33,931,050 | -9% | | JCC Sales | $28,268,572 | $30,964,142 | -9% | | Greenwood Sales | $2,658,723 | $2,883,190 | -8% | | Gross Margin | 17.5% | 20.5% | -3.0 pp | | Net (Loss) Income | $(1,881,445) | $912,257 | -306% | | Basic (Loss) Earnings Per Share | $(0.54) | $0.26 | -308% | - Operating expenses declined to **$7,715,030** from **$8,431,989**, driven by lower headcount and reduced wages and employee benefits[126](index=126&type=chunk) - The prior year's period included **$2,450,000** in other income from an arbitration settlement and a **$90,537** gain on asset sales, which were not present in the current period[127](index=127&type=chunk) [Liquidity and Capital Resources](index=26&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) The company's working capital decreased by $2,233,666 to $18,314,427 as of May 31, 2025. Cash and cash equivalents significantly decreased due to inventory purchases and accounts receivable timing. Current liabilities increased due to bank indebtedness. The company relies on an asset-based line of credit with Northrim, from which it has drawn $2,422,305 to fund seasonal inventory Working Capital and Cash Position | Metric | May 31, 2025 | August 31, 2024 | | :--------------------------------- | :----------- | :-------------- | | Working Capital | $18,314,427 | $20,548,093 | | Cash and Cash Equivalents | $1,204,719 | $4,853,367 | | Inventory | $15,257,917 | $13,157,243 | | Accounts Receivable | $6,789,582 | $3,668,815 | | Current Liabilities | $6,209,261 | $2,639,370 | | Bank Indebtedness | $2,422,305 | $— | - Cash and cash equivalents decreased by **$3,648,648**, primarily due to increased inventory purchases for the Spring/Summer seasons and timing of accounts receivable collection[130](index=130&type=chunk) - Accounts receivable and inventory represented **90%** of current assets and **75%** of total assets as of May 31, 2025[132](index=132&type=chunk) - The company expects to have sufficient liquidity for the next twelve months based on its working capital, accounts receivable timing, and available line of credit[135](index=135&type=chunk) [Other Matters](index=27&type=section&id=OTHER%20MATTERS) This section discusses external factors impacting the business, including the significant and evolving US tariffs on imported products, inflationary pressures leading to increased costs and interest rates, the company's commitment to Environmental, Social, and Corporate Governance (ESG) initiatives, and compliance with the Uyghur Forced Labor Prevention Act [Tariffs](index=27&type=section&id=Tariffs) New US tariffs, particularly on steel and aluminum products, have significantly increased costs and created uncertainty. While the company diversified suppliers outside China, these new sources are now subject to global tariffs, impacting expected cost benefits. Tariffs on Chinese steel products reached 95% as of June 4, 2025 - Imported steel and aluminum products from all countries globally were assigned a new tariff rate of **25%**, which was doubled to **50%** as of June 4, 2025[138](index=138&type=chunk) - Tariff rates on steel products imported from China were at **95%** as of June 4, 2025, combining various tariffs[138](index=138&type=chunk) - The company is shifting to suppliers outside of China to mitigate higher tariff rates, but faces uncertainty in tariff interpretation and applicability[139](index=139&type=chunk) [Inflation](index=28&type=section&id=Inflation) Inflation has substantially increased product costs (raw materials, energy, transportation, labor), negatively affecting gross margins. The company's ability to pass these costs to customers is limited and often delayed. High inflation has also led to increased interest rates, impacting borrowing costs on the line of credit - Product costs have increased substantially due to inflation, negatively affecting gross margins, with limited ability to pass on costs quickly to price-sensitive customers[140](index=140&type=chunk) - The interest rate on the company's line of credit, computed using the Prime Interest Rate, has risen from **3.25%** in January 2022 to approximately **7.50%** in February 2025[141](index=141&type=chunk) - As of May 31, 2025, the company had drawn **$2,422,305** against its line of credit at a current interest rate of **12.25%**[141](index=141&type=chunk) [Environmental, Social and Corporate Governance (ESG)](index=28&type=section&id=Environmental%2C%20Social%20and%20Corporate%20Governance%20%28ESG%29) Jewett-Cameron is committed to ESG principles, aiming for 90% recyclable product materials, auditing suppliers for fair practices and environmental awareness, and designing packaging for maximum recyclability. Socially, it supports employee engagement, educational programs, and local community initiatives. Governance includes adherence to Sarbanes-Oxley, robust financial controls, and an IT Governance Committee - Environmental goals include **90%** recyclable materials, audited suppliers, maximized packaging recyclability, and energy-efficient facilities[143](index=143&type=chunk) - Social responsibilities involve employee engagement surveys, support for educational programs (CTE/STEM), and active local community participation[145](index=145&type=chunk) - Governance adheres to Sarbanes-Oxley, with self-audited and externally audited financial controls, risk mitigations, and an IT Governance Committee[146](index=146&type=chunk) [Uyghur Forced Labor Prevention Act](index=29&type=section&id=Uyghur%20Forced%20Labor%20Prevention%20Act) The company ensures full compliance with the Uyghur Forced Labor Prevention Act (UFLPA), which prohibits imports from China's Xinjiang Uyghur Autonomous Region presumed to be made with forced labor. All suppliers are verified to ensure no products fall under the prohibited goods clause - The UFLPA prohibits imports from China's Xinjiang Uyghur Autonomous Region due to presumed forced labor[147](index=147&type=chunk) - The company has ensured all its suppliers are in full compliance with the UFLPA, and none of its products are prohibited[147](index=147&type=chunk) [Business Risks](index=29&type=section&id=Business%20Risks) The company faces various business risks, including decreased product demand due to competition and economic conditions, high dependence on a limited number of customers and third-party manufacturers, and vulnerability to governmental actions like tariffs. Other risks include supply chain delays, intense competition, seasonality of outdoor product sales, intellectual property infringement, product liability claims, inflation, loss of credit agreements, cybersecurity breaches, and the failure to maintain effective internal controls [Risks Related to Our Business](index=29&type=section&id=Risks%20Related%20to%20Our%20Business) Key business risks include potential decreases in product demand, significant reliance on a limited number of customers (top ten customers represent 98% of sales), and dependence on third-party manufacturers and suppliers, which exposes the company to increased costs, delays, and supply chain disruptions. Governmental actions like tariffs, competition, seasonality, product liability, and inflation also pose significant threats - The top ten customers represented **98%** of total sales for the nine months ended May 31, 2025, with the single largest customer accounting for **38%**[150](index=150&type=chunk) - Reliance on third-party manufacturers creates risks of increased costs, manufacturing/shipping delays, and supply interruptions due to geopolitical events or operational issues[153](index=153&type=chunk)[154](index=154&type=chunk) - Governmental actions, such as tariffs (e.g., **95%** on Chinese steel products), can adversely impact product availability and cost, reducing margins and competitiveness[157](index=157&type=chunk) - Outdoor product sales are highly seasonal, with the majority of revenues and income occurring during the third and fourth fiscal quarters, making them vulnerable to adverse weather[160](index=160&type=chunk) [Risks Related to Our Common Shares](index=34&type=section&id=Risks%20Related%20to%20Our%20Common%20Shares) Risks related to common shares include potential dilution from future asset acquisitions or business combinations paid with common shares, and the possibility of new stock distributions causing dilution or a change in control. The limited trading volume of common stock (average daily volume of 8,300 shares for the nine months ended May 31, 2025) can lead to difficulty in trading and price volatility - Future acquisitions or business combinations paid with common shares could dilute current shareholders' ownership percentage[169](index=169&type=chunk) - New stock distributions could have rights, preferences, or privileges senior to existing shares, or cause a change in control[170](index=170&type=chunk) - The limited average daily trading volume of **8,300** shares for the nine months ended May 31, 2025, could make it difficult for investors to trade common stock and lead to price volatility[171](index=171&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is exposed to interest rate risk due to its asset-based line of credit, where interest rates fluctuate based on the prime rate. It also faces foreign currency risk, although currently small, which may increase with international sales expansion and foreign contract manufacturers - The company's interest expense is sensitive to changes in U.S. interest rates, as its line of credit interest rate is computed at prime rate plus **4.75%** (**12.25%** as of May 31, 2025)[173](index=173&type=chunk) - As of May 31, 2025, the company had borrowed **$2,422,305** under its line of credit, exposing it to increased interest payments with rising rates[173](index=173&type=chunk) - Foreign currency risk is currently small but may increase with expansion of international sales and use of foreign contract manufacturers[174](index=174&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the Principal Executive Officer and Principal Financial Officer, concluded that the company's disclosure controls and procedures were effective as of May 31, 2025. There were no material changes in internal control over financial reporting during the most recently completed fiscal quarter - Disclosure controls and procedures were evaluated and deemed effective as of May 31, 2025, ensuring timely and accurate reporting[175](index=175&type=chunk) - No material changes in internal control over financial reporting occurred during the most recent fiscal quarter[176](index=176&type=chunk) [Part II](index=35&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) The company settled an arbitration case against a former distributor in September 2023, receiving a $2,450,000 cash payment. There are no other known material active or pending legal proceedings against the company - The company settled an arbitration for **$2,450,000** in October 2023, ruling in its favor on most claims[177](index=177&type=chunk) - No other material active or pending legal proceedings are known against the company[178](index=178&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=35&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No disclosure is required for this item [Item 3. Defaults Upon Senior Securities](index=35&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No disclosure is required for this item [Item 4. Mine Safety Disclosures](index=35&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) No disclosure is required for this item [Item 5. Other Information](index=35&type=section&id=Item%205.%20Other%20Information) During the quarter ended May 31, 2025, no director or officer adopted or terminated a Rule 10b5-1 trading arrangement or plan for the purchase or sale of company securities - No Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers during the quarter ended May 31, 2025[179](index=179&type=chunk) [Item 6. Exhibits](index=35&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications from the Chief Executive Officer and Chief Financial Officer, and XBRL taxonomy documents - Exhibits include certifications from the CEO and CFO pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act[180](index=180&type=chunk) - XBRL Instance Document and Taxonomy Extension documents are also filed[180](index=180&type=chunk)

Core Insights - Jewett-Cameron Trading Company Ltd. reported a significant decline in revenue and net loss for Q3 2025, primarily due to the impact of tariffs on imported metal products and supply chain disruptions [1][9][12]. Operational Highlights - The company experienced a 21% decrease in total revenue for Q3 2025, amounting to $12.6 million compared to $15.9 million in Q3 2024, largely due to deferred purchases by retailers amid tariff uncertainties [6][9]. - Sales of Lifetime Steel Posts® products grew by 85% compared to Q3 2024, driven by the rollout of displayers, which increased by approximately 88% since November 2024 [6][9]. Tariff Impact and Response - The company faced increased tariffs on Chinese goods, with a 25% tariff implemented in 2019 and further increases announced in 2025, leading to a 50% global tariff on steel and aluminum imports as of June 2025 [3][4]. - Retailers have deferred purchases of imported metal products due to tariff volatility, causing significant turmoil in the company's markets and stressing logistics [4][5]. - The company is diversifying suppliers to mitigate tariff impacts and is implementing price increases across its product portfolio to align with rising costs [7][8]. Financial Results - Gross profit margins decreased to 15.0% in Q3 2025 from 18.6% in Q3 2024, attributed to higher tariff and shipping costs, as well as a shift towards lower-margin products [10]. - Operating expenses decreased to $2.6 million in Q3 2025 from $2.9 million in Q3 2024, due to operational efficiency initiatives and a 20% workforce reduction [11]. - The net loss for Q3 2025 was $(0.6) million, or $(0.18) per share, compared to a net income of $0.2 million, or $0.04 per share, in Q3 2024 [12][20]. Strategic Initiatives - The company is developing multi-source, multi-country strategic sourcing partnerships to reduce dependence on high-tariff countries and enhance production flexibility [7]. - Initiatives to improve operational efficiency and customer satisfaction are being enacted, including process improvements and technology enhancements [7][8].

Company Overview - Jewett-Cameron Trading Company Ltd. is a holding company based in North Plains, Oregon, focusing on innovative products that enhance outdoor spaces [3] - The company operates through subsidiaries, manufacturing and distributing specialty metal and sustainable bag products, as well as wholesale distribution of wood products [3] - Key brands include Lucky Dog for pet products, Jewett Cameron Fence for fencing solutions, MyEcoWorld for sustainable bags, and various brands for greenhouse products [3] Financial Reporting - Jewett-Cameron will report its operational and financial results for the fiscal 2025 third quarter on July 14, 2025, after market close [1] - A webcast is scheduled for the same day at 4:30 p.m. Eastern time to review the results and conduct a Q&A session [1][2] Investor Relations - The webcast will be accessible live and archived on the company's investor relations webpage [2] - For further inquiries, investors can contact Robert Blum at Lytham Partners [4]

Summary of Jewett-Cameron Trading Company (JCTC) Conference Call Company Overview - Jewett-Cameron Trading Company (JCTC) is a small-cap company with significant growth potential, focusing on durable markets and functional products [3][4] - The company has a 70-year history and is listed on NASDAQ, primarily offering fencing, pet containment, and sustainable home products [4] Core Business and Product Offerings - JCTC is undergoing a strategic transformation, evolving from a lean operation to a growth-oriented platform with product leadership in outdoor living and home improvement [5] - Key product categories include: - **Fencing Products**: Includes fence boards, pickets, steel access accessories, and composite EuroFence products [8] - **Pet Containment**: Focuses on durable solutions like welded wire and chain link dog kennels [8] - **Sustainable Products**: Compostable and post-consumer recycled products, including bags for waste [8] - **Greenwood**: A subsidiary specializing in industrial wood products, particularly proprietary plywood for transit buses [8] Market Position and Growth Strategy - JCTC has established strong retail relationships with major retailers like Home Depot, Lowe's, and Costco, enhancing shelf presence and growth momentum [6] - The company is actively transitioning to growth mode by optimizing pricing, expanding distribution, and reducing overhead [8] - The introduction of innovative products, such as the lifetime steel post and adjustable gates, has driven significant sales growth [10][12] Financial Position - JCTC is trading at a steep discount to book value, has no long-term debt, and possesses a valuable 11.6-acre property that could enhance equity upon sale [7] - The company has reduced inventory levels to align with growth plans, improving cash flow and operational efficiency [16][17] Supply Chain and Tariff Mitigation - JCTC has diversified its supply chain to include sourcing from countries like Vietnam, Bangladesh, Malaysia, and Indonesia, reducing dependency on China [21][22] - The company has implemented a comprehensive multisourcing strategy to mitigate tariff impacts, particularly the 25% global steel tariff [21][22] - Ongoing landed cost comparisons and dual tooling strategies are in place to maintain competitive pricing and ensure supply continuity [25][26] Customer Response and Pricing Strategy - Customers have responded positively to recent price adjustments, which have been modest due to proactive sourcing strategies [27][28] - JCTC aims to maintain competitive pricing while ensuring product quality and reliability, reinforcing its position as a trusted supplier [28] Property Sale and Future Outlook - The company is selling an 11-acre property in Oregon, which has faced a slower sales timeline due to market uncertainties and zoning constraints [30][31] - The property is valued at $9 million, with significant potential upside upon sale [32] - JCTC envisions a dominant presence in the fencing market and plans to expand its product range and distribution channels over the next five to ten years [33][34] Final Takeaways - JCTC is executing a focused strategy with strong momentum in key product categories and strategic sourcing initiatives [36] - The management team is committed to creating value for shareholders, making it an opportune time for investors to consider the company [36]

Company Overview - Jewett-Cameron Trading Company Ltd. is a holding company based in North Plains, Oregon, focusing on innovative products for outdoor spaces [4] - The company operates through subsidiaries, manufacturing and distributing specialty metal and sustainable bag products, as well as wholesale distribution of wood products [4] - Key brands include Lucky Dog for pet products, Jewett Cameron Fence for fencing solutions, MyEcoWorld for sustainable bags, and various brands for greenhouse products [4] Upcoming Events - Jewett-Cameron will participate in the Lytham Partners Spring 2025 Investor Conference, with a webcast presentation scheduled for May 29, 2025, at 12:30 p.m. ET [1][2] - The webcast will be accessible via the conference home page and will be available for replay after the event [2] - Management will also hold virtual one-on-one meetings with investors during the conference [3]

Core Viewpoint - Jewett-Cameron Trading Company Ltd. is enhancing operational efficiency through organizational changes, process improvements, and global sourcing expansion to adapt to global tariff uncertainties and reduce costs [1][6]. Operational Efficiency - The company has reduced staffing by approximately 20% in the third fiscal quarter of 2025 [2]. - Upgraded technology is being implemented in warehouse operations to improve receiving, cycle counting, and shipping activities, utilizing scanners and QR codes for enhanced accuracy [3]. - The integration of Artificial Intelligence (AI) will improve forecasting, demand planning, and stocking strategies, leading to better cash flow and customer satisfaction [3]. Sourcing Strategy - Jewett-Cameron has added Indonesia to its international manufacturing sources, expanding its multi-sourcing strategy initiated in 2023, which now includes suppliers from Vietnam, Malaysia, Bangladesh, Taiwan, and Indonesia [5][6]. - This sourcing expansion aims to mitigate tariff impacts and enhance supply chain flexibility and resilience [5][6]. Leadership Insights - CEO Chad Summers emphasized the proactive measures taken to increase productivity and reduce costs without compromising quality or service [4]. - The company is committed to building a resilient and cost-effective supply chain to navigate evolving tariff environments while maintaining high-quality products [6]. Long-term Growth Strategy - The combination of operational improvements and continued investment in innovation and channel expansion is expected to lay a stronger foundation for profitable growth in the long term [7].

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $9.1 million, an increase from $8.2 million in Q2 2024, reflecting a growth in metal fencing products and other categories [28][30] - Gross margins for Q2 2025 were 20.1%, down from 25.1% in Q2 2024, primarily due to a shift in sales mix and higher costs associated with in-store display units [33] - Net loss for Q2 2025 was $0.6 million or $0.16 per share, compared to a net income of $0.5 million or $0.15 per share in Q2 2024 [35] Business Line Data and Key Metrics Changes - Sales of metal fencing products increased due to the ongoing load-in of new Lifetime Steel Post displayers [29] - Wood fencing product sales decreased due to material constraints, while pet product sales continued to decline [20][31] - Sales at Greenwood increased by 31% to $1.1 million compared to $0.8 million in Q2 2024 [24] Market Data and Key Metrics Changes - Online sales for several pet products have started to pick up recently, indicating a potential recovery in that segment [21] - The company has seen a reduction in pet inventory by over 17% from a year ago, which may improve sales dynamics [22] Company Strategy and Development Direction - The company is focused on four key areas: growth drivers, product innovation, supply chain and operational efficiency, and asset monetization [41] - The successful growth in the metal fence category and traction of MyEcoWorld products validate the execution of the strategic focus [41] - The company is enhancing systems and processes to improve profitability and has initiated multi-sourcing strategies to mitigate tariff impacts [18][19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by the evolving tariff landscape but expressed confidence in the company's positioning due to prior supply chain initiatives [19] - The company is optimistic about future growth driven by new product launches and improved marketing efforts [32] Other Important Information - The company has reduced inventory balances by 23% to $14.9 million as of February 28, 2025 [36] - The carrying balance of the seed facility is less than $600,000, with a listing price of $9 million, which could significantly enhance shareholder value upon sale [38][25] Q&A Session Summary Question: Why haven't executives purchased shares in the open market? - Management indicated that they are often restricted from purchasing shares due to material information and will review the situation further [46] Question: Are there any additional questions? - No further questions were raised during the session, and the call concluded with closing remarks from management [47]

Sales Performance - Sales increased by 10% in the current fiscal second quarter compared to the second quarter of fiscal 2024, driven by strength in fencing products, particularly Lifetime Steel Posts®[104] - Sales for the three months ended February 28, 2025, were $9,054,951, an increase of $825,759, or 10% compared to the same period last year[120] - Sales at JCC rose to $7,943,319 for the three months ended February 28, 2025, representing an increase of $559,354, or 8%[121] - Sales at Greenwood increased by $287,559, or 35%, to $1,111,632 for the three months ended February 28, 2025[122] - Sales for the six months ended February 28, 2025, were $18,321,951, an increase of $286,918, or 2% compared to the prior year[128] Product Development and Launches - The Adjust-A-Gate® Unlimited, a fully adjustable complete gate kit, was launched in December, enhancing the fencing product line[107] - MyEcoWorld® secured its first grocery store placement with the launch of Pet Waste Bags into 59 Tops Friendly Markets across the Northeast[110] - The company has successfully installed new in-store displayers for Lifetime Steel Posts® in 334 Home Depot and Lowe's stores, exceeding the original goal of 300 installations[105] - The company anticipates replenishment orders for in-store displayers during the second half of fiscal 2025 as initial supplies are sold through[106] Financial Performance - Gross margin for the three months ended February 28, 2025, was 20.1%, down from 25.1% in the prior year due to a less favorable product mix and higher logistics costs[124] - Operating expenses decreased by $205,008 to $2,586,195 compared to the same quarter last year, primarily due to lower wages and employee benefits[125] - Net loss for the quarter ended February 28, 2025, was ($573,094), or ($0.16) per share, compared to a net loss of ($534,145), or ($0.15) per share, for the same period last year[127] - Gross margin for the six-month period ended February 28, 2025, was 19.2%, down from 22.3% in the prior year[133] - Net loss for the six months ended February 28, 2025, was ($1,231,811), or ($0.35) per share, compared to net income of $757,395, or $0.22 per share, for the same period last year[137] Inventory and Working Capital - Pet product inventory has decreased by 17% year-over-year from February 2024 and nearly 60% from February 2023, reflecting efforts to reduce overall inventory levels[109] - As of February 28, 2025, the company had working capital of $19,086,483, a decrease of $1,461,610 from the previous period[138] - As of February 28, 2025, accounts receivable and inventory represented 89% of current assets and 74% of total assets, up from 73% and 61% respectively as of August 31, 2024[141] - The accounts receivable collection period (DSO) increased to 55 days for the three months ended February 28, 2025, compared to 52 days for the same period in 2024; inventory turnover improved to 175 days from 258 days[142] Competition and Market Conditions - The company is facing significant competition, which could reduce demand for its products and impact revenue and profitability[163] - Tariff rates on steel products imported from China reached 70% as of March 2025, due to a combination of existing tariffs and new rates imposed by the U.S. government[148] - The company is shifting to suppliers outside of China to mitigate tariff impacts, but faces uncertainty regarding the interpretation and applicability of new tariffs[149] - Inflation has led to increased costs for raw materials, energy, and logistics, negatively affecting gross margins; the company expects continued pressure on margins in fiscal 2025[150] Financing and Credit - The company has drawn approximately $3,000,000 against its asset-based line of credit to fund inventory purchases ahead of the busy Spring and Summer sales season[143] - The interest rate on the current line of credit rose to approximately 12.25% as of March 2025, following an increase in the Prime Interest Rate from 3.25% in January 2022 to about 7.50% in February 2025[151] - The company has a line of credit with a maximum draw amount of $6,000,000, which is set to expire on June 30, 2025[171] - The company is exposed to interest rate risk as its interest expense is computed at the prime rate plus 4.75%, with a floor of 11%[179] Compliance and Risk Management - The company has committed to ensuring compliance with the Uyghur Forced Labor Prevention Act, ensuring that none of its products are sourced from regions associated with forced labor[157] - The company faces risks related to product liability claims, which could have a material negative effect on its financial condition[170] - The company operates primarily in the U.S., but may experience foreign currency risk as it expands international sales[181] - The company relies on its intellectual property rights, and any infringement could lead to significant litigation costs[169] - The company has completed a management assessment of internal controls and did not identify any material weaknesses or significant deficiencies[173] Operational Changes - The company ended regular operations at JCSC effective August 31, 2023, and is currently working to sell the remaining equipment and property[91] - The company is exploring options to optimize importing Sugi Cedar from Asia to improve margins and offer competitive pricing[108] - The company's outdoor product sales are highly seasonal, with the majority of revenues occurring during the third and fourth quarters of the fiscal year[168]

Core Viewpoint - Jewett-Cameron Trading Company Ltd. reported a 10% increase in total revenue for Q2 2025 compared to Q2 2024, driven by growth in metal fence products and strategic initiatives to enhance visibility and accessibility of its products in retail stores [4][6]. Operational Highlights - The company achieved a 65% sequential growth in the installation of Lifetime Steel Post (LTP) displayers in The Home Depot and Lowe's stores, enhancing product visibility for consumers [3][4]. - New product offerings were introduced, including the Adjust-A-Gate Unlimited, which emphasizes adaptability and customization for gate construction [4]. - The expansion of MyEcoWorld products into 59 Tops Friendly Markets marks a significant step towards sustainability [4]. - Strategic sourcing initiatives have reduced dependence on a single supplier in China, potentially mitigating tariff impacts [3][4]. Financial Results - Revenue for Q2 2025 was $9.1 million, up from $8.2 million in Q2 2024, with notable sales growth in metal fencing products [6][18]. - Gross profit margins decreased to 20.1% in Q2 2025 from 25.1% in Q2 2024, attributed to a less favorable product mix and increased logistics costs [7]. - Operating expenses decreased to $2.6 million in Q2 2025 from $2.8 million in Q2 2024 due to operational efficiencies [8]. - The net loss for Q2 2025 was $(0.6) million, or $(0.16) per share, compared to a net loss of $(0.5) million, or $(0.15) per share in Q2 2024 [8][19]. Asset Management - The company listed an 11.6-acre property in Hillsboro, Oregon for sale or lease at a price of $9 million, with a book value of $566,022 [10][16]. Investor Relations - The company has initiated quarterly conference calls and updated its NASDAQ trading symbol to enhance investor communication and awareness [4][11].