Core Viewpoint - Jewett-Cameron Trading Company Ltd. reported a challenging fiscal 2025, with a strategic realignment underway to enhance growth and profitability amid significant market volatility due to tariffs and global economic conditions [1][2]. Management Discussion - The company started fiscal 2025 with a positive outlook, achieving revenue growth in the first half driven by successful product lines and expanded retail placements [2]. - However, the introduction of new tariffs in February 2025 led to market disruptions, affecting sales and increasing costs, particularly in the lumber business [2][9]. - The company has engaged new resources to mitigate the financial impact of tariffs, including a 27% reduction in headcount and a focus on core strengths in metal fencing products [3][4]. Financial Results - Fiscal 2025 sales totaled $41.3 million, a 12% decrease from $47.1 million in fiscal 2024, with gross margins declining to 15.1% from 18.8% [9][10]. - Operating expenses were reduced to $10.0 million from $10.7 million, while the company reported a net loss of $4.1 million, or $1.18 per share, compared to a net income of $722,000, or $0.21 per share, in fiscal 2024 [11][14]. Recent Key Activities - The company is executing plans to reduce operating expenses by $1 to $3 million annually and is in discussions to sell excess lumber and pet inventory [8]. - The company has listed its seed processing and storage facility for sale at $7.223 million and its innovation studio property at $795,000 [8]. - As of August 31, 2025, the company had borrowed $2.1 million against its credit line, with ongoing discussions to increase borrowing capacity for financial flexibility [8]. Strategic Review - The management is evaluating various strategic options, including focusing on core metal fencing products, improving operational efficiencies, and monetizing non-core assets [4][5]. - The company aims to exit fiscal 2026 with a sustainable business model, leveraging non-core assets to fund core growth strategies [4].

Financial Performance & Guidance - Preliminary Q3 2023 surgical revenue is expected to be between $103.3 million and $103.9 million, representing a year-over-year (YoY) increase of 31% to 32%[4] - Preliminary Q3 2023 EOS revenue is expected to be between $14.3 million and $14.5 million, a YoY increase of 27% to 29%[4] - Total revenue for Q3 2023 is projected to be between $117.7 million and $118.5 million, reflecting a YoY growth of 31% to 32%[4] - Full-year 2023 surgical revenue guidance has been updated to $414 million, a 33% YoY increase[5] - Full-year 2023 EOS revenue guidance remains at $58 million, a 21% YoY increase[5] - Total revenue guidance for FY2023 has been increased by $10 million to $472 million, representing a 32% YoY increase[5] Strategic Focus & Innovation - ATEC is uniquely 100% spine focused, driving innovation from the operating room, not the board room[7, 9, 10] - ATEC aims to improve precision, predictability, and durability in spine surgery, addressing the 25-30% of surgeries that require revision[11, 12] - ATEC's innovation addresses the goals of spine surgery: decompression, stabilization, and alignment, strongly correlated to successful clinical outcomes[19, 25] - ATEC is positioning to capitalize on industry disruptions, adding 30 sales professionals from disrupted companies[32] Technology & Solutions - EOS imaging objectively answers essential clinical questions, providing full-body, standing, functional global alignment assessment with less radiation[52, 65] - The Catalyst system, expected to launch in 2024, will provide automated alignment reports, surgical planning, and patient-specific rods[68] - ATEC's lateral approach, including PTP (Prone Transpsoas) and LTP (Lateral Transpsoas), aims to address the hurdles of first-generation lateral surgery, with LTP designed for single-position surgery for L3 to S1[98, 122] - Valence, ATEC's navigation and robotics platform, is designed to be practical, economical, and ASC (Ambulatory Surgery Center) suitable[151]