JEWETT CAMERON TRADING CO LTD

Forward-Looking Statements

This Annual Report on Form 10-K for the fiscal year ended August 31, 2024 (“Annual Report”) contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words like “plans”, “expects”, “aims”, “believes”, “projects”, “anticipates”, “intends”, “estimates”, “will”, “should”, “could” and similar expressions in connection with any discussion, expectation, or projection of future operating or financial performance, events or trends. Forward-looking statements are based on management's current expectations and assumptions, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Actual outcomes and results may differ materially from these expectations and assumptions due to changes in global political, economic, business, competitive, market, regulatory and other factors. Any forward-looking statements speak only as of the date on which they are made and we undertake no obligation to publicly update or review any forward-looking information, whether as a result of new information, future developments or otherwise, except as required by law.

These factors include, but are not limited to, the fact that our business is highly competitive, we are continually seeking ways to expand our business, we may seek additional financing or other ways to expand operations and improve margins, as well as the other risk factors that are set forth in more detail elsewhere in this Annual Report, including in the sections, ITEM 1A, “Risk Factors”, and ITEM 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations.”

Introduction

Jewett-Cameron Trading Company Ltd. is organized under the laws of British Columbia, Canada. In this Annual Report, the “Company”, “Jewett-Cameron”, “we”, “our” and “us” refer to Jewett-Cameron Trading Company Ltd. and its subsidiaries.

Our operations are classified into three reportable operating segments and the parent corporate and administrative segment, which were determined based on the nature of the products we offer along with the markets being served. Consistent with our operational structure, our Chief Executive Officer (CEO), as the chief operating decision maker, manages our business based on segment financial information for purposes of evaluating performance, allocating resources, setting incentive compensation targets, as well as internal forecasting of future period financial results. Our segments are as follows:

Total Company sales were $47.1 million and $54.3 million during fiscal years ended August 31, 2024 and 2023, respectively. Sales, income before taxes, assets, depreciation and amortization, capital expenditures, and interest expense by segment are shown in the financial statements under Note 11 “Segment Information.”

Our principal office is located at 32275 NW Hillcrest Street, North Plains, Oregon; and our website address iswww.jewettcameron.com. Our primary mailing address is P.O. Box 1010, North Plains, OR 97133. Our phone number is (503) 647-0110. The contents of our website or any other website are not incorporated by reference into this Annual Report.

We file reports and other information with the Securities and Exchange Commission located at 100 F Street NE, Washington, D.C. 20549. Copies of these filings may be accessed through their website atwww.sec.gov. Reports are also filed under Canadian regulatory requirements on SEDAR, and these reports may be accessed atwww.sedar.com.

The contact person for the Company is Chad Summers, President and CEO.

Our authorized capital includes 21,567,564 common shares without par value; and 10,000,000 preferred shares without par value. As of August 31, 2024 and November 19, 2024, there were 3,504,802 common shares outstanding. Our common shares are listed on the NASDAQ Capital Market in the United States with the symbol “JCTC”. The common shares formerly traded under the symbol “JCTCF” until October 9, 2024.

Our fiscal year ends on August 31 st.

General Development of Business

Incorporation and Subsidiaries

Jewett-Cameron Trading Company Ltd. was incorporated under the Company Act of British Columbia on July 8, 1987 as a holding company for Jewett-Cameron Lumber Corporation (“JCLC”), which was incorporated in September 1953 in Oregon, USA. Jewett-Cameron Trading Company, Ltd. acquired all the shares of JCLC through a stock-for-stock exchange on July 13, 1987, and at that time JCLC became a wholly owned subsidiary. Effective September 1, 2013, the Company completed a reorganization of certain of its subsidiaries and JCLC’s name was changed to JC USA Inc. (“JC USA”). JC USA has the following wholly owned subsidiaries incorporated under the laws of the State of Oregon: Jewett-Cameron Seed Company, (“JCSC”), incorporated in October 2000, Greenwood Products, Inc. (“Greenwood”), incorporated in February 2002, and Jewett-Cameron Company (“JCC”) incorporated in September 2013. Jewett-Cameron Trading Company, Ltd. and its subsidiaries have no significant assets in Canada.

Corporate Development

Incorporated in 1953, JC USA initially operated as a small lumber wholesaler based in Portland, Oregon. In September 1984, the original stockholders sold their interest in the corporation to a new group of investors. Two members of that group remained active in the Company. These individuals are Donald Boone, who passed away in May 2019, and who was the previous Chairman and the former President, Chief Executive Officer, Treasurer, and Principal Financial Officer, transitioning to strictly the Board Chair in 2017; and Michael Nasser, who retired from day-to-day involvement in the business in December 2022, but remained engaged as a director until October 2023.

In 1987, we acquired JC USA and began to diversify into products beyond lumber trading. Lucky Dog® was acquired in 1995, and Adjust-A-Gate® was acquired in 2003.

In 2000, we acquired the operations and property that became our JCSC seed division.

In 2002, Greenwood acquired the business and certain assets of Greenwood Forest Products Inc., a company involved in the processing and distribution of specialty wood products.

In April 2023, as a result of lower quantities of seed for processing, and the demand for its marketing and sales services declining against rising costs, the Board of Directors decided to close the JCSC seed division. JCSC’s facilities and equipment were near the end of the expected useful life and would have required significant capital investment to remain operating. Regular operations at JCSC ended effective August 31, 2023, but some seed storage operations continued through July 2024 in order to provide customers time to obtain alternative storage arrangements. The entire seed inventory was sold in early October 2023, and the remaining equipment is in the process of being sold. Some of the JCSC personnel were moved to different positions within the Company as management has prioritized career development and retention whenever possible.

In September 2024, we announced the successful conclusion of an 18-month search and evaluation process to identify and evaluate potential new suppliers. We have historically sourced the majority of our metal products from a single factory in China. Under our new strategic sourcing program, we now have suppliers located in Canada, Bangladesh, Vietnam, Malaysia, and Taiwan in addition to our original sources in China. The products from our new suppliers meet our high-quality standards with competitive pricing, but also mitigate the current 25% tariff rates from China placed on various Chinese made steel products imported into the United States. We expect this program will help us to maintain competitive pricing while enhancing our margins.

Narrative Description of Business

We are committed to improving the lives of professionals and do-it-yourselfers with innovative products that enrich outdoor spaces in their quality, performance, and ease to work with.

The Company’s operations are classified into four segments: Pet, Fencing and Other; Industrial wood products; Seed processing and sales; and corporate and administrative services.

Pet, Fencing and Other Operating Segment

We have concentrated on building a customer base for lawn, garden, and pet related products. Management believes this market is less sensitive to downturns in the U.S. economy than the market for new home construction as its products serve both new and existing home and pet owners. However, the home improvement business is seasonal, with higher levels of sales occurring between February and August. Inventory buildup occurs until the start of the season in February and then gradually declines to seasonal low levels at the end of the summer.

Our wood products, distributed through JCC, are not unique and are available from multiple suppliers and retail outlets. However, the metal products that JCC manufactures and distributes may be somewhat differentiated from similar products available from other suppliers. We have been successful in garnering key patents and trademarks on multiple products that assist their ability to continue to differentiate based on design and functionality.

We own the patents and manufacturing rights connected with the Adjust-A-Gate® and Fit-Right™ products, which are the gate support systems for wood, vinyl, chain link, and composite fences, in addition to our trade secret industry practices and well-known trademarked brands. We believe the ownership of these patents and trademarks is an important competitive advantage for these and certain other products. We completed our purchase of the full global trademark rights for Adjust-A-Gate® and filed its registration with the US Patent and Trademark Office in February 2023. As of the close of fiscal 2024, the Company owns 7 US Patents and 1 patent application pending in the US, CA, and MX pertaining to its fencing products.

Backlog orders have typically not been a factor in this business as customers may place firm priced orders for products for shipments to take place three to four months in the future which gives us time to order, manufacture and receive the goods at our warehouse in time to fulfil the customer’s order.

Industrial Wood Products - Greenwood

Greenwood is a wholesale distributor of a variety of specialty wood products. Current products are focused on the transportation industry. Greenwood’s total sales for fiscal 2024 and 2023 were 8% and 5%, respectively, of total Company sales.

The primary market in which Greenwood competes has decreased in economic sensitivity as users are incorporating products into the municipal and mass transit transportation sectors. However, these markets sustained some contractions in recent years due to COVID-19 as work shifted from offices to homes, and many individuals utilized public transit less due to concerns over exposure. In addition, this segment is prone to disruption of supply chain support which can impact other commodities outside of those specific to the disruption.

Greenwood utilizes contract manufacturers to supply its products. Inventory is maintained at non-owned warehouses and wood treating facilities throughout the United States and is primarily shipped to customers on a just-in-time basis. Inventory is generally not purchased on a speculative basis in anticipation of price changes as we order the products from the manufacturers and warehouses once a customer places an order with us.

Greenwood has no significant backlog of orders.

Seed Processing and Sales - JCSC

JCSC operated out of a Company-owned 11.6 acre facility located adjacent to North Plains, Oregon. JCSC processed and distributed agricultural seed. Most of this segment’s sales came from selling seed to distributors with a lesser amount of sales derived from cleaning seed. Sales of seed has seasonality, but it is most affected by weather patterns in multiple parts of the United States that utilize cyclical planting. The annual weather plays an important part in year-to-year sales volatility and specific crop demand.

We ended regular operations at JCSC effective August 31, 2023 and have sold all of our remaining seed inventory and are working to sell the remaining JCSC equipment. Seed storage operations continued through July, 2024.

In July 2024, we listed the JCSC property for sale or lease. The combined size of the buildings is approximately 109,500 square feet. One of the buildings is specialized for the seed industry, while most are metal warehouse buildings with power, allowing a wide array of possible uses. The property is currently zoned “Rural Industrial” (RIND), which allows for use of the existing property, or development of the site, as approved by Washington County. We are exploring the potential to re-zone the property, or revise the existing code, to expand the list of permitted uses. The listed sale price of the property is $9,000,000. This is the current asking price, and there is no guarantee the property will sell for this amount. If we are able to complete a sale, the net proceeds will be reduced by brokers’ commissions, expenses related to the sale, and taxes.

Corporate and Administrative Services – JC USA

JC USA is the parent company for Greenwood, JCC and JCSC as described above. JC USA operates out of our offices in North Plains, Oregon and provides professional and administrative services, including warehousing, accounting and credit services, to JCTC’s subsidiary companies.

Company Products

The Company’s mission is to improve the lives of professionals and do-it-yourselfers with innovative products that enrich outdoor spaces. We design, source, commercialize and distribute our products. Many are patent protected and all are well crafted for their quality, performance, and ease to work with.

The Fencing, Pet and Sustainable Product businesses are conducted by JCC, which operates out of a 5.6 acre owned facility located in North Plains, Oregon that includes offices, a warehouse, and a paved yard. JCC uses contract manufacturers to make all products. Some of the products that JCC distributes flow through our distribution center located in North Plains, Oregon, and some are shipped direct to the customer from the manufacturer. Primary customers are home centers, eCommerce providers, other retailers, and direct sales to consumers.

The Industrial Wood Products segment is conducted by Greenwood, a processor and distributor that operates out of the same facilities in North Plains, Oregon. Greenwood contracts with custom manufacturers for its products. Inventory is maintained at non-owned warehouses and wood treating facilities throughout the United States and is primarily shipped to customers on a just-in-time basis.

Fencing Products

Our fencing business crafts durable, functional fencing solutions that bolster security, privacy, and beauty. Our primary products include:

Pet Products

Our Lucky Dog® brand is dedicated to keeping pets safe and happy with exceptional quality, long-lasting products that put your pet first. Our primary pet products are:

Sustainable Products

Our newest product category is Sustainable and Post-Consumer Recycled (“PCR”) bag products. Sold under the MyEcoWorld® brand, it is making a tangible, positive difference to the planet by working to reduce conventional single-use plastic in our daily lives.

We offer two types of bag products. The Compostable bags are made with 30% corn. The PCR Products are certified to the Global Recycled Standard (GRS) to contain recycled material that has been independently verified at each stage of the supply chain, from the source to the final product, and cost less than compostable bags.

Our primary Sustainable Products are:

Industrial Wood Products

Greenwood Products specializes in engineering advanced noise and vibration reduction panels for transit buses, motor coaches, light rail cars, and boats. Our dB-Ply® proprietary acoustical panel is a cost-effective product designed to reduce vibration and sound transmission to meet mandated interior noise requirements. Greenwood’s other products include durable, high-performance structural panels tailored for a wide range of industrial applications, and Jumbo Concrete Forms designed to reduce installation time and lower job-site labor costs.

Seed Segment

The Company formerly operated agricultural seed processing, distribution and sales through JCSC. Most of this segment’s sales were derived from selling seed to distributors with a lesser amount of sales derived from cleaning seed. During the fiscal year ended August 31, 2023, the Company decided to close its JCSC seed subsidiary effective August 31, 2023. JCSC has sold all of its seed inventory and is in the process of selling the segment’s remaining equipment.

Company Strategy

Management continues to focus on multiple strategies to lower costs, increase sales and improve profitability.

These strategies include:

Driving Sales Growth

In-Store Displayer Expansion

During the third quarter of fiscal 2024, we successfully trialed new in-store merchandiser displays for Lifetime Steel Post® for wood fences at major home improvement retailers in Southern California. The initial success of the program was then expanded into more stores throughout the summer of 2024 and totaled over 100 stores by the end of August 2024. The displayers are continuing to roll out into more stores across multiple regions. These displays are located in close proximity to the wood fencing materials and demonstrate the usefulness and durability of the product to those consumers shopping for wood fencing. These Lifetime Steel Post(R) displayers are in addition to our Adjust-A-Gate(R) merchandisers which are thousands of stores. Each Lifetime Steel Post® display contains 96 posts and each Adjust-A-Gate® display contains 20 units and 4 drop rods. A typical fence project may contain 1 or 2 gates and upwards of 24 or more posts. Each display unit will require replenishment throughout the year, which is expected to provide increased reorder demand for each product.

To manage the in-store displayer program, the company has partnered with Continental Sales & Marketing, Inc. (“CSM”). CSM is a nationally recognized, multifaceted, strategic business partner with over 49 years of experience with national and regional home improvement retailers. CSM has built strong relationships across a wide range of departments at the corporate level of major home centers, co-ops and independent dealers, and are talented at distribution, supply chain and SKU management issues. CSM will be working to place additional fencing display units with retailers across the country and facilitate the necessary replenishment of each unit as display product is sold. CSM will also work to increase the online presence of our other products through our retail partners, including key national and regional home improvement retailers, which will provide additional visibility and sales opportunities to expand distribution of our various product lines.

Appointment of New Vice-President of Sales and Marketing and Retail Ambassadors

In August 2024, we appointed a new Vice President of Sales and Marketing, who has a proven track record of successfully growing sales with productive marketing campaigns, innovative product enhancements and targeted engagement with customers. We believe this appointment will help grow our market share, including among the professionals served by our big box home center customers. We intend to increase our efforts to engage with professional contractors and fence installers. Besides increasing direct demand for our products, we also want to equip them to become ambassadors and influencers of our products. This will provide us with direct access to the most frequent users of these products to provide ongoing feedback to help with product innovation and solutions.

Grow Greenwood Products sales through both existing and new customers

The demand for Greenwood’s transit-oriented products has picked up post-pandemic and riders have returned to the office. Beyond transit, Greenwood’s specialty engineered lumber has multiple uses in multiple markets, including other types of transportation, construction, and industrial sectors. We believe we can grow our sales by expanding our sales efforts to both existing customers as well as to new potential customers in multiple industries outside of transit with the addition of new traders with sales experience across multiple industries.

Expand MyEcoWorld® Distribution

Our MyEcoWorld® sustainable and Post Consumer Recycled (PCR) bags have been well received by the marketplace with excellent consumer reviews. Our current sustainable products include compostable bin liners, yard debris bags, and pet waste bags. We also offer lower cost PCR bags. We believe all of these products have excellent performance and are priced competitively. Our strategy is to increase our market penetration through multiple channels. In addition to our relationships with home improvement retailers and large mass merchandise retailers, we have already placed our bags in certain grocery stores and are working to increase our placement in additional grocery chains and more stores within each chain. We are also offering a direct to consumer subscription service, where customers can purchase MyEcoWorld® products direct from the Company and have additional products shipped to them directly on a regular schedule. We believe this category has the potential to grow as the demand for high performing sustainable products grows along with the increasing plastic bans being legislated throughout the country. We relaunched the line in fiscal 2024 with our expanded product offerings. Our recent engagement of CSM for sales and marketing support will also include MyEcoWorld®, where their relationships with retailers across the country will help us introduce these products to new stores, including big box retailers.

Product Innovation and Development

We are committed to continuing to innovate by improving and expanding our existing product lines in addition to adding new products that solve problems, meet unmet needs, and enrich outdoor spaces.

We develop new products and improve our existing products through a number of methods. Many of our enhancements have originated from suggestions from our customers to improve their experience and to better meet their needs. Our suppliers also help us to improve our products based on their manufacturing experience. We also seek to acquire existing products that complement our current product lines.

We have 5 new and enhanced products set to launch over next 12 months, which include enhancements to our Original Adjust-A-Gate®, Lifetime Steel Post®, and Euro Fence products.

Operational Efficiency

Sourcing Diversification

The Company has historically sourced the majority of our metal products from a single factory in China. Over 18 months, management completed an extensive and thorough world-wide search and evaluation process to identify and evaluate potential new suppliers. These suppliers needed to meet the Company’s high-quality standards with competitive pricing, as well as offering innovative capabilities to collaborate with us to both continuously improve our products and also develop entirely new products. This process has successfully concluded with the implementation of a new multi-source, strategic sourcing program for fiscal 2025, which we publicly announced in September 2024. We now have suppliers located in Canada, Bangladesh, Vietnam, Malaysia, and Taiwan in addition to our original sources in China. These new supply agreements cover the Company’s fence products, dog containment products, as well as MyEcoWorld® products. The products from our new suppliers meet our high-quality standards with competitive pricing. They also mitigate the current 25% tariff rates from China placed on various Chinese made steel products imported into the United States which has led to a higher cost of goods on a number of our most popular products. By sourcing more of our products from outside of China, we expect that it will help us to maintain competitive pricing, enhance our margins, and reduce our supply chain risk.

Expansion of Distribution Locations

Currently, we distribute most of our products from our Oregon warehouse, with some of our bulkier products drop shipped directly to the customer. This single location distribution model made our products less competitive for certain customers in the Midwest and East Coast due to high shipping costs and longer times to delivery. Our plan is to add a distribution center in the Eastern US through a third-party logistics partner. This arrangement would utilize the partner’s existing infrastructure and “pick and pack” services and require us to make no significant capital expenditures. Although it would increase our warehousing costs, we believe those costs can be offset through lower delivery costs and shipping times for existing customers and make our products more competitive to potential new customers that are located farther from our Oregon base. Once this new eastern center is established, we will look to add additional distribution centers in other areas of the US under similar third-party logistic agreements that can benefit from being closer to customers in those regions.

Monetization of Surplus Assets

In July 2024, we listed the JCSC property for sale or lease at a listing price of $9,000,000 which is a competitive price based on comparable properties in the area. This is the current asking price, and there is no guarantee the property will sell for this amount. The net proceeds of any sale will be reduced by brokers’ commissions, expenses related to the sale, and taxes. If we are able to complete a sale, the disposal of this surplus property will enhance our working capital in a non-dilutive manner.

Tariffs

Our metal and other products have historically been mostly manufactured in China and are imported into the United States. The Office of the United States Trade Representative (“USTR”) instituted new tariffs on the importation of a number of products into the United States from China effective September 24, 2018. These new tariffs are a response to what the USTR considers to be certain unfair trade practices by China. The tariffs began at 10%, and subsequently were increased to 25% as of May 10, 2019. A number of our products manufactured in China remain subject to duties of 25% when imported into the United States.

During fiscal 2024, we engaged suppliers in countries outside of China, including Bangladesh, Vietnam, Malaysia, Taiwan, and Canada. Products manufactured in and imported from these countries are not subject to the China-specific tariffs, but may be subject to other duties and fees that are typically much lower than the current 25% tariff on Chinese manufactured metal products.

Customer Concentration

The top ten customers were responsible for 88% and 88% of total Company sales for the years ended August 31, 2024 and August 31, 2023, respectively. Also, the Company’s single largest customer was responsible for 36% and 35% of total Company sales for the years ended August 31, 2024 and August 31, 2023 respectively.

Employees

As of August 31, 2024 we had 62 full-time employees (August 31, 2023 – 68 full-time employees). By segment these employees were located as follows: JCC – 40 (2023 – 40) Greenwood – 2 (2023 – 1), JCSC – 0 (2023 – 8), and JC USA – 20 (2023 -19). At the end of fiscal 2023, we ceased regular operations at JCSC. Four of the JCSC employees were transferred to JCC, and the remainder were terminated and offered transition assistance. We continue to evaluate our ongoing staffing needs, and during 2024 we reduced our number of employees in conjunction with our improved business alignment, oversight of responsibilities, professional development opportunities, and more efficient operations. As of November 19, the number of our full-time employees is 53.

None of our employees are represented by unions. Jewett-Cameron Trading Company Ltd. has no direct employees, and our CEO and CFO are employed by JC USA.