Core Insights - The company aims to enhance visibility in the investment community and drive shareholder value through strategic initiatives focused on profitability and growth [2][37] - The first quarter of fiscal 2025 saw a revenue of $9.3 million, a slight decrease from $9.8 million in the same quarter of 2024, with metal fencing products showing a 19% increase in sales [29][31] Financial Performance - Revenue for Q1 2025 was $9.3 million compared to $9.8 million in Q1 2024, with metal fencing products up 19% and wood fencing products up 4% [29] - Gross profit margins for Q1 2025 were 18.3%, down from 19.9% in Q1 2024, primarily due to increased shipping costs and higher production costs for in-store display units [31] - Operating expenses decreased to $2.6 million in Q1 2025 from $2.7 million in Q1 2024, attributed to reduced professional fees and operational efficiencies [32] Strategic Initiatives - The company has focused on innovative in-aisle displayers in major home centers like Home Depot and Lowe's to drive profitable sales growth [6][8] - The Adjust-A-Gate Unlimited product was launched, designed for adaptability and simplicity in gate construction, supporting various gate designs [17][18] - The company is working on diversifying its customer base for sustainable products and has plans for load-ins in multiple regional grocery chains in 2025 [22][23] Market Dynamics - The company is experiencing a seasonal demand pattern, with higher sales expected in the second half of the fiscal year [28] - The demand for pet products has declined by 31% compared to Q1 2024, indicating a need for strategic marketing adjustments [29][21] - The company is also addressing the softness in the retail channel for pet containment products following a pandemic-related surge in pet ownership [21] Asset Management - The company is in the process of selling its seed processing facility, listed for $9 million, which is expected to enhance shareholder value significantly [26][27] - The facility is currently on the market, and discussions with potential buyers are ongoing [26]

Core Viewpoint - The company is facing significant challenges due to the impact of tariffs on imported products, which has led to deferred purchases by retailers and consumers, negatively affecting third-quarter results. However, proactive measures have been implemented to mitigate these impacts and improve operational efficiency. Group 1: Tariff Impact - The uncertainty surrounding tariffs has negatively impacted third-quarter results, with many retailers and consumers deferring purchases of imported metal products until clarity on prices is available [1] - Tariffs on Chinese goods were initially set at 25% in 2019, with additional increases announced in early 2025, leading to a doubling of the tariff rate to 50% [12][14] - The rapid and unpredictable changes in tariff rates have caused customers to pause their purchasing decisions, leading to a significant decline in sales [15][16] Group 2: Financial Performance - Revenue for Q3 2025 was $12.6 million, down from $15.9 million in Q3 2024, reflecting a 21% decline overall, although the metal fence business only saw a 4% decrease [7][34] - Gross profit margins for Q3 2025 were 15%, down from 18.6% in Q3 2024, primarily due to higher tariff and shipping costs [36] - The net loss for Q3 2025 was $600,000, compared to a net income of $200,000 in Q3 2024, attributed to deferred purchases and lower gross margins [39] Group 3: Strategic Initiatives - The company has implemented a multi-sourcing strategy to reduce dependence on high-tariff countries, expanding sourcing to Vietnam, Malaysia, and Bangladesh [19][20] - Price adjustments are being made to align with increased costs due to tariffs, although the rapid changes in rates have complicated this process [21] - Operational efficiency initiatives have included a 20% reduction in personnel to better align with new business processes [22] Group 4: Product Performance - The metal fence business showed resilience with an 85% increase in product sales of lifetime steel posts compared to Q3 2024 [24] - The pet business experienced a 44% decline compared to last year's Q3, continuing to be affected by supply chain issues [9] - Sales of the MyEcoWorld product line increased by 265% over the comparative period in fiscal 2024, indicating strong demand for sustainable products [26] Group 5: Future Outlook - The company expects that resolution of ongoing tariff negotiations will lead to more normalized customer purchasing patterns in the future [6][17] - Demand for metal goods has begun to pick up as customers adjust to new pricing, although it is not expected to return to normalized levels immediately [32] - The company remains committed to enhancing operational efficiencies and leveraging technology to navigate the evolving tariff environment [20][32]

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]

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]