Sales Performance - For the three months ended February 29, 2020, sales decreased by $235,248 to $7,621,927 from $7,857,175, representing a decrease of 3%[97] - Sales at Jewett-Cameron Company (JCC) were $6,425,339 for the three months ended February 29, 2020, compared to $6,459,228 for the same period in 2019, a slight decrease of $33,889[98] - Sales at Jewett-Cameron Seed Company (JCSC) increased by $109,080, or 33%, to $441,650 compared to $332,570 for the three months ended February 28, 2019[100] - Sales at Greenwood declined by $166,007, or 20%, to $685,123 from $851,130 for the three months ended February 28, 2019[99] - For the six months ended February 29, 2020, sales decreased by $2,246,170, or 13%, to $14,677,105 from $16,923,275 for the same period in 2019[106] - Sales at JCC decreased by $1,449,823, or 11%, to $12,002,833 for the six months ended February 29, 2020 compared to $13,452,656 for the same period in 2019[107] - Sales at Greenwood decreased by $492,827, or 25%, to $1,469,991 for the six months ended February 29, 2020 compared to $1,962,818 for the same period in 2019[108] Financial Metrics - The gross margin for the three months ended February 29, 2020, was 26.3%, compared to 22.4% for the same period in 2019, supported by higher sales of metal and pet products[102] - Gross margin for the six months ended February 29, 2020 was 27.6%, an increase from 24.0% for the same period in 2019[112] - Operating expenses increased by $464,612 to $2,168,275 from $1,703,663 for the three months ended February 28, 2019[103] - Operating expenses for the six months ended February 29, 2020 were $4,227,492, up from $3,533,740 for the same period in 2019[113] - Net loss for the six months ended February 29, 2020 was ($180,884), or ($0.05) per basic and diluted share, compared to net income of $469,323, or $0.11 per basic and diluted share for the same period in 2019[114] Cash and Working Capital - Cash and cash equivalents totaled $3,875,531, a decrease of $5,776,779 from $9,652,310 as of August 31, 2019[115] - As of February 29, 2020, working capital was $13,692,086, down from $17,761,616 as of August 31, 2019, a decrease of $4,069,530[115] - Accounts receivable and inventory represented 66% of current assets and 56% of total assets as of February 29, 2020[117] Strategic Decisions - The company repurchased a total of 490,120 common shares at a price of $7.89 per share, totaling $3,867,046 during the second fiscal quarter[96] - The company decided to exit the industrial tools segment, with the remaining inventory liquidated and the division's closure expected to be completed in the third quarter[90] - The company launched a new compostable dog waste bag, which is fully compostable and has been well-accepted by retailers and consumers[89] Risks and Outlook - The outlook for the remainder of the fiscal year remains uncertain due to the COVID-19 situation, which may reduce overall consumer spending in the typically strong Spring and Summer quarters[92] - The company faces risks related to information technology systems, including cyber security threats, which could negatively impact operations and financial condition[137] - A management assessment of internal controls was completed, with no material weaknesses identified, but future risks remain[138] - The company is exposed to interest rate risk, as changes in U.S. interest rates affect interest income and expense[139] - The company's line of credit interest rate may fluctuate based on economic changes, but no material adverse effect on operations is expected[140] - The company operates primarily in the U.S., with a small amount of business in foreign currencies, which may increase foreign exchange risk as international sales expand[141]
Jewett-Cameron Trading pany .(JCTCF) - 2020 Q2 - Quarterly Report