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]
Jewett-Cameron Trading Co Ltd(JCTC) - 2025 Q3 - Earnings Call Transcript