Sales Performance - For the three months ended May 31, 2019, total sales were $16,692,241, a decrease of $3,242,468, or 16% compared to $19,934,709 for the same period in 2018[108]. - Sales at Jewett-Cameron Company (JCC) were $14,983,164 for the three months ended May 31, 2019, down 18% from $18,191,284 in the prior year, primarily due to unseasonably cold and wet weather[109]. - For the nine months ended May 31, 2019, total sales were $33,615,516, a decrease of $9,074,501, or 21% compared to $42,690,017 for the same period in 2018[119]. - Sales at JCC for the nine months ended May 31, 2019, were $28,435,820, down 24% from $37,514,801 in the previous year, largely due to lower specialty lumber sales[120]. - JCSC reported sales of $1,551,427 for the nine months ended May 31, 2019, a decrease of $360,161, or 19%, from $1,911,588 in the same period of 2018[122]. - MSI's sales decreased by $118,249, or 16%, to $634,616 for the nine months ended May 31, 2019, compared to $752,865 in 2018[123]. Financial Performance - Gross margin improved to 21.8% for the three months ended May 31, 2019, compared to 20.0% for the same period in 2018, attributed to stocking additional pre-tariff inventory[115]. - Operating income for JCC decreased to $1,286,352 for the three months ended May 31, 2019, down from $1,707,128 in the same quarter of 2018[109]. - JC USA's operating income increased to $1,027,455 for the nine months ended May 31, 2019, up from $687,698 in the prior year[124]. - Gross margin improved to 22.9% for the nine months ended May 31, 2019, compared to 20.6% in the same period of 2018[125]. - Net income for the nine months ended May 31, 2019, was $1,567,534, or $0.36 per share, down from $2,219,940, or $0.50 per share in 2018[129]. - Operating expenses rose by $151,979 to $5,664,856 for the nine months ended May 31, 2019, with selling, general, and administrative expenses increasing to $1,721,743[126]. Strategic Initiatives - The company debuted a new patented steel fence post, LIFETIME POST™, which has been well received and is expected to strengthen its position in the fencing market[103]. - The company sold its Manning property for $324,674, resulting in a gain of $105,365 over the original purchase price, as part of a strategic review of secondary operations[106]. - Management is focusing on expanding product lines and international sales opportunities, particularly in the lawn, garden, and pet segments, while reviewing stagnant growth in industrial tools and seed segments[106]. Liquidity and Capital Management - The company repurchased 195,142 common shares under its current share repurchase plan, with a strong cash position of $3,437,995 as of May 31, 2019[107]. - The company has a line of credit of $3,000,000 with no borrowing balance as of May 31, 2019, indicating strong liquidity[132]. - The company repurchased 195,142 common shares at an average price of $8.73 per share during the third quarter ended May 31, 2019[137]. Working Capital and Accounts Receivable - As of May 31, 2019, working capital decreased by $735,708 to $17,610,706 compared to August 31, 2018[130]. - Accounts receivable increased to $7,125,024 from $4,152,492, reflecting higher seasonal sales[130]. Interest Rate and Foreign Exchange Risk - The Company does not have any derivative financial instruments as of May 31, 2019, but is exposed to interest rate risk[152]. - The Company's interest income and expense are sensitive to changes in the general level of U.S. interest rates, affecting the interest earned on cash[152]. - The Company has a line of credit with an interest rate that may fluctuate based on economic changes, potentially increasing interest payments[153]. - The Company does not expect changes in interest rates to materially affect its results from operations[153]. - The Company primarily operates in the U.S., with a small amount of business in currencies other than U.S. dollars, increasing foreign exchange risk as international sales expand[154]. - Currency exchange rates can influence the Company's purchasing costs, especially when using contract manufacturers in China[154].
Jewett-Cameron Trading pany .(JCTCF) - 2019 Q3 - Quarterly Report