JEWETT CAMERON TRADING CO LTD
For the period ended May 31, 2025. Filed Jul 14, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
May 31, 2025 · Filed Jul 14, 2025
JCTC$2.85-0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-02-28; filed 2025-04-14.
0001079973-25-000625
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-05-31; filed 2025-07-14.
0001079973-25-001140
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 150 previous paragraphs and 149 current paragraphs.
91 unchanged; 31 reworded; 26 added; 27 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 21 previous and 17 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (26)
Current report
Our results in the 3 rd quarter was challenging, as the turmoil over the higher tariffs and certain operational issues significantly reduced our revenues, and negatively impacted our margins and operating results. Sales for the current 3 rd quarter declined by 21% from the prior year’s 3 rd quarter, and we had a net loss of ($0.18) per share.
Current report
Currently, the most significant factor affecting our business is the new US tariffs, primarily on our imported metal products. The rapid and unpredictable changes to rates, products, and which countries are affected have caused immense turmoil in our markets including stressing key logistics lines and increasing costs. This has resulted in significantly higher pricing and uncertainty in deliveries to customers. Tariffs on Chinese goods were originally subject to a 25% tariff implemented in 2019. Additional China specific tariffs were added in February, March, and April, with further increases announced in May. The diversification of our suppliers to additional countries beyond China successfully allowed us to initially mitigate some of the recent tariff increases as those new suppliers outside of China were primarily subject only to the universal 10% baseline tariff rate as a floor. However, some nations have been notified of possible other country specific tariffs subject to negotiation. Steel and aluminum imports were originally assigned a global 25% tariff rate. Subsequently, that rate was doubled to 50% as of June 4 th, just five days after it was announced on May 30 th leaving us and other importers with no time to plan or adjust import shipments.
Current report
As a result of the frequent and unpredictable rate changes, and the indications of further significant increases, many retailers and consumers have deferred purchases of imported metal products until further clarity on prices is available. We have made strenuous efforts to adjust our selling prices to correctly reflect the new tariff rates, but the rapid and unpredictable announcements of new rates over the last 6 months have made that process extremely difficult. It takes time to compute the new prices, communicate that to the customer, and have them accept them for future shipments. Because the rates have changed frequently, many of our new prices have become obsolete before they were able to take effect. Therefore, it has caused our customers to pause their purchasing until they receive greater certainty on tariffs, as they are reluctant to make long-term purchases at contracted prices that may decline based on the rapidly changing tariff rates.
Current report
The current trade negotiations occurring between the US and multiple nations to set country specific tariff rates provides optimism that clarity on final rates may be forthcoming. We have consulted with experts and legal counsel to accurately interpret how to properly apply the rates to our products to ensure compliance and to make sure our prices remain cost competitive. Although consumers will eventually adjust their buying to accept higher prices over time, it will likely continue to dampen demand in the short-term until consumers and retailers become more accepting of the higher prices. These increased costs will likely continue to negatively affect our margins and demand for certain of our products in the short term.
Current report
Our rollout of Lifetime Steel Posts® (“LTP”) displayers continued in the 3 rd quarter, and sales of the product were up 85% compared to the third quarter of fiscal 2024. 55 new display units were deployed through the end of May. However, we have temporarily paused adding new display units to prioritize our existing inventory to support existing display replenishment demand. We are actively managing production capacity constraints and logistical issues from new factories outside of China which naturally impacted our previous schedule of deliveries designed to support continued displayer expansion efforts. The higher tariff rates on Chinese goods caused many US companies to quickly shift production to other nations, and the available logistic infrastructure in these other countries has been overtaxed by the rapid increase in production and shipping demands. Once the logistic issues have been corrected, we expect to resume the placement expansion of the in-store display units.
Current report
We experienced an interruption to our ability to fulfill our cedar fencing orders during the current 3 rd quarter. It is customary to purchase ample supply ahead of the increase in demand each Spring, but this year we failed to acquire an adequate supply to meet our actual demand. As a result, we were unable to fulfill all our customers’ orders, and our wood fencing sales were down 33% in the third quarter. We have now moved quickly to aggressively secure additional Western Red Cedar from our supply partners. We are on track to meet all demand in July and we are well positioned to support this program through the remainder of the calendar year. We have also implemented important process changes to prevent shortages like this in the future.
Current report
The pet market remains very soft. The anticipated rebound in consumer demand has not yet materialized and retailers remain burdened with high inventory levels. The one recent exception has been in our dog bowls, which have been selling well. We maintain available inventory in our warehouse of pre-tariff metal crates and kennels which may offer a price advantage to newly imported products. We are exploring ways to reduce our inventory levels of these larger pet products. This may involve short-term price reductions which could reduce our margins on these products but will help clear older inventory from our warehouse.
Current report
During the 3 rd quarter, we continued our strategy to analyze and implement operational efficiencies in all aspects of our business. We have shifted some employees to better align our workforce with our strategic direction, while adding some employees in specific roles, including sales. Overall, we have reduced our employee headcount by 33% year-to-date. We have also evaluated and commenced the planning andimplementation of upgraded technology in warehouse operations to expedite receiving, cycle counting and shipping activities. These changes will result in increased productivity and reduce our costs without compromising quality or service.
Current report
We anticipate that many of the challenges we experienced in the 3 rd quarter will extend into our 4 th quarter. The frequently changing tariff rates are continuing to cause hesitation and uncertainly among both retailers and consumers, and we expect this will continue until those rates are finalized and buyers can accurately estimate costs. Besides the tariff disruptions, consumer sentiment and economic conditions remain depressed due to stubborn inflation, high interest rates, and employment concerns. Our orders remain sluggish, and we expect to record a loss in the 4 th quarter and for the full year.
Current report
We intend to continue to work to improve our operational efficiencies, further develop our multi-sourcing strategy, and resolve the logistical impediments to reduce our costs and better serve our customers.
Current report
For the three months ended May 31, 2025, sales totaled $12,605,344 compared to sales of $15,896,017 for the three months ended May 31, 2024, which is a decrease of $3,290,673, or 21%. The uncertainty and cost increases due to the changing tariff rates and our shortage in fencing contributed to the decline.
Current report
Sales at JCC were $11,900,284 compared to sales of $14,957,204 for the quarter ended May 31, 2024, a decrease of $3,056,920, or 20%. Operating loss for JCC for the quarter ended May 31, 2025 was ($861,105) compared to a loss of ($67,000) for the quarter ended May 31, 2024. Pet sales remained weak, and shortages in our cedar supply resulted in lower fencing sales. Our metal products were severely affected by the uncertainty around the higher tariff rates, which caused customers to pause buying during the quarter.
Current report
Sales at Greenwood for the quarter were $705,059 compared to sales of $924,767 for the three months ended May 31, 2024, which was a decrease of $219,708 or 24%. In the current period, a seat supply issue slowed production across the bus industry, which especially impacted our largest customer. Sales in the prior year’s quarter were boosted by higher demand by municipalities and transit operators catching up on deferred vehicle maintenance post-pandemic. The seat supply issues are now resolving which is expected to strengthen bus construction in the months to come. For the three months ended May 31, 2025, Greenwood had an operating loss of ($20,283) compared to an operating loss of ($237) for the three months ended May 31, 2024.
Current report
Gross margin for the three months ended May 31, 2025 was 15.0% compared to 18.6% for the three months ended May 31, 2024. Current margins declined due to higher shipping costs, expenditures on the continued roll-out of in-store display units, and a shift towards lower margin products during the quarter.
Current report
Operating expenses for the three months ended May 31, 2025 were $2,576,788, which was a decrease of $318,693 from expenses of $2,895,481 in the three months ended May 31, 2024. Wages and employee benefits declined to $1,488,446 from $1,790,004 as we reduced our employee headcount by 20% in May 2025. Selling, General and Administrative expenses were down slightly at $1,008,334 compared to $1,026,071. Depreciation increased to $80,008 from $79,406. There was no gain on the sale of assets in the current quarter compared to $1,450 in the period ended May 31, 2024. Interest expense was ($74,147) compared to expense of ($1,437) due to borrowing against the line of credit in the current quarter.
Current report
Nine Months Ended May 31, 2025 and May 31, 2024
Current report
For the nine months ended May 31, 2025, sales totaled $30,927,295 compared to sales of $33,931,050 for the nine months ended May 31, 2024, which is a decrease of $3,003,755, or 9%. Consumers have continued to restrain their discretionary spending, particularly on home improvement and pet goods. For the first six months of the period, our sales were relatively flat year-over-year. However, during the third quarter, the rapid and unpredictable increases in tariff rates, particularly on imported steel and aluminum products, caused retailers and consumers to pause their purchases and impacted margins due to tariff driven product re-pricings and delayed customer acceptance.
Current report
Sales at JCC were $28,268,572 for the nine months ended May 31, 2025 compared to sales of $30,964,142 for the nine months ended May 31, 2024, which is a decrease of $2,695,570, or 9%. Revenue from our pet lines remains weak while shortages of our supply for cedar restrained our wood fencing revenues. Sales were also negatively impacted during the current 2 nd and 3 rd quarters by the increased tariff rates, particularly on imported steel and aluminum products. For the current nine-month period, JCC had an operating loss of ($2,615,470) compared to income of $384,102 for the nine months ended May 31, 2024.
Current report
We are dependent on our a limited number of customers for the majority of our sales of products and our ability to retain and expand our relationships with such clients.
Current report
We generally have to qualify, and are required to maintain our status, as a supplier for each of our larger retail home improvement customers. A significant failure or an inability to comply with customer specifications and manufacturing and import requirements or delays or other problems with existing or new products or inability to meet price requirements could result in cancelled orders, increased costs, loss of sales, market share shift, loss of customers or potential breaches of contracts, which could have an adverse effect on our profitability and results of operations. By virtue of certain customers’ size and the significant portion of revenue that we derive from them, they can exert significant influence in the negotiation of our commercial agreements and the conduct of our business with them which could adversely affect our profitability.
Current report
Our business, in large part, depends on relationships our teams develop with our customers so that we can understand their needs and deliver product solutions and processes that are tailored to those needs. If a large customer is not satisfied with our performance or the relationship becomes significantly damaged, we could incur additional costs to address the situation, our profitability might be impaired, and the customers dissatisfaction could damage our ability to continue to do business with that customer. Further, large retail customers have significant leverage over us and if they are not satisfied with our products or support might claim breach of existing contracts, seek to terminate existing contracts, or impose significant restrictions or conditions on our business relationship with them, which would have a material adverse effect on our business, profitability and financial condition.
Current report
We have no manufacturing capabilities for our products, and we are dependent upon third parties to supply the materials for, and to manufacture, our products, which creates risks relating to increased costs, manufacturing and shipping delays, and potential increased costs due to circumstances beyond our control.
Current report
We do not own or operate, and currently do not plan to own or operate, facilities for production and packaging of our products. We rely and expect to continue to rely on third parties for the production and packaging, of our products. While we are no longer dependent on a single source for our primary products, and we now have multiple sources of supply, the current geopolitical and economic environment has created significant uncertainty with regard to costs, particularly with respect to the fluid and volatile tariff situation relating to countries from which we source our products. Further, certain of our larger customers have unique criteria that must be adhered to with respect to the import of our products to their facilities. Any failure by us or our suppliers to satisfy our customers’ import requirements may result in decreased product sales and lower product revenue, which would harm our business. Similarly, if the foreign ports of embarkation of our products are not approved by our customers, we would have to locate alternative means of shipping through approved ports or our suppliers would be required to submit to a process in order to obtain such approval, which would add significant supply costs and reduce our product margins for such shipments.
Current report
Our reliance on third-party manufacturers and suppliers subjects us to risks associated with their businesses and operations. For example, even if we have agreements with third parties, they may not perform their obligations to us and/or they may be unable or unwilling to establish or increase production capacity commensurate with our needs. Also, third-party manufacturers and suppliers are subject to their own operational and financial risks that are outside of our control, and potentially their control also, that may cause them to suffer liquidity or operational problems and that could interfere with their business operations. For example, their operations and/or ability to source raw materials and other supplies may be interrupted by natural disasters, acts of war, terrorism, or disease outbreaks (such as the COVID-19 global pandemic), and other geopolitical and economic events.
Current report
If any of our third-party manufacturers or suppliers fails to perform their obligations to us or otherwise have an interruption in or discontinue supply to us, we may be forced to seek a different third-party manufacturer or supplier. In such event, we may experience significant delays associated with finding an alternative manufacturer or supplier that is both available on commercially acceptable terms and conditions, and also properly qualified in accordance with our specifications and any requisite regulatory requirements. This transition may require time consuming and complex operational, testing, and approval requirements, and the process could interfere with product sales because of inadequate supply or cause interruptions of, or delays in, providing products to customers.
Current report
Previously, we relied on a single source of supply in China for the bulk of our imported products. Following an 18 month process, we have been able to secure alternative sources of supply in multiple countries other than China. While this was expected to significantly improve our costs and margins, the current administration in Washington, D.C. has imposed worldwide tariffs on most countries, including those where our alternative sources of supply are located. Although the tariffs assigned to these countries are lower than those assigned to China, we have not been able to reap the expected benefit of significantly reduced tariffs due to U.S. trade policies, which continue to evolve and is discussed in more detail below.
Removed paragraphs (27)
Previous report
During the second quarter, we continued our focus on our core products while progressing in our efforts to lower our costs through multi-sourcing of our products and rationalizing our personnel assignments to improve operational efficiencies.
Previous report
Sales increased by 10% in the current fiscal second quarter compared to the second quarter of fiscal 2024. Strength in fencing, primarily in Lifetime Steel Posts® (“LTP”), offset declines in Industrial Wood due to difficult year over year comparisons, and lingering weakness in consumer spending on pet products. Margins were lower in the current quarter due to specific product mix and the costs involved with the LTP program, including the initial one-time costs of deploying new displayer units in additional stores. We have now taken steps to pare down the costs of these new displayer units which we expect will result in higher margins for LTP going forward.
Previous report
Fence products are our largest category, and we continue to focus on growing our sales in this segment. The ongoing rollout of our in-store displayers for our LTP product accelerated during the second quarter. By the end of February, our new in-store displayers were in 334 Home Depot and Lowe’s stores. This exceeded our original goal of 300 installations by the end of the second quarter ahead of the traditional fence installation season during the Spring and Summer months. These in-aisle display units are positioned adjacent to the lumber bays, which may result in additional sales of complementary wood products.
Previous report
The durability, strength, and easier installation of LTP makes it popular with both DIY consumers and professionals Traditional wood fence posts are prone to rot, decay, and fail over time. Lifetime Steel Posts® are engineered to last a lifetime, providing a maintenance-free, corrosion-resistant alternative for wood fence post construction. Installation is faster and less expensive than similar wood posts, which requires smaller diameter post holes and less concrete. In many areas of the country LTP can be driven directly into the ground using hydraulic post drivers in a matter of seconds with no concrete needed which saves both time and cost. We anticipate the need for replenishment orders for these displayers during the second half of fiscal 2025 as the initial supply is sold through.
Previous report
We have also added to our fencing gate line with the launch of our new Adjust-A-Gate® Unlimited in December. This product is a fully adjustable complete gate kit. It features a low profile, corner bracket solution that allows for fully adjustable gate designs customizable for each unique project yet is easy to install by both professionals and DIYers of all skill levels. The Adjust-A-Gate® Unlimited is sold as an all-in-one complete integrated system at a competitive price point compared to other gate kits that require purchasing additional parts such as latches, hinges and other components to complete a gate project. Our original full frame Adjust-A-Gate®kits have been featured in thousands of stores in their own in-aisle display units. Last summer we expanded into over 1,500 additional stores with these displayers and we continue to add stores for the upcoming fencing season.
Previous report
The availability of cedar fencing can be constrained by factors such as shortages in log material as well as labor challenges from time to time. This can tighten supply and result in increased costs of sourcing. In recent years we have mitigated some of the Western Red Cedar constraints by offering Japanese Cedar, or Sugi Cedar, as a high-quality alternative. Sugi fencing sells for a lower price than Western Red Cedar which can negatively affect our margins, but we are looking for ways to improve our margins on this product. As Sugi Cedar continues to be more available and consumers become more familiar with its similarities to Western Red Cedar for fence applications, we believe demand for this product at competitive pricing may shift consumer sentiment more towards it as a quality alternative. We are evaluating options to optimize our importing of Sugi Cedar from Asia to offer our customers competitive pricing and improve our margins where possible. We will continue to monitor the potential impact of new tariffs and any possible exemptions of product classes that may be applied to our wood fence imports.
Previous report
Sales of our pet products remain limited by continuing weak consumer demand in the sector which have restrained new orders from retailers continuing to be burdened by large product inventories. We continue to pursue new sales relationships in this sector, and our direct sales to consumers through our own online store have picked up. We have made significant progress in reducing our overall pet product inventory, which is down 17% year-over-year from February 2024 and nearly 60% from February 2023. With the significant increases in import tariffs, particularly in steel products, our inventory on hand in our US warehouse may become further price competitive against new imported products going forward.
Previous report
The current prevailing issue for industry and consumers alike is the recently announced higher US import tariffs. The diversification of our suppliers to additional countries beyond China is successfully allowing us to mitigate some of the recent tariff increases. China sourced products were already subject to a 25% tariff implemented in 2019, with additional tariffs added in February and March 2025, and further tariffs announced in April 2025. Our new supply agreements with factories in Bangladesh, Vietnam, Malaysia and Taiwan mitigate the higher China specific tariffs, but are variously affected by other new tariffs. Steel and aluminum products from all countries outside the US are subject to the 25% global tariff rate, while all imports not included on the exemption list from all countries were assigned a baseline 10% tariff in April 2025. Steel and aluminum imports which are assigned the 25% tariff are presently exempt from the 10% baseline and any reciprocal tariffs on top of the 25% rate.
Previous report
The new tariffs are a fluid and complicated situation that will become more clear over time due to ongoing negotiations as well as interpretations to exemptions being applied to various product categories. Initially, it appears the steel and aluminum products we import from Vietnam and Bangladesh will be subject to a lower tariff rates than those same products manufactured in China. Even with increased cost to produce our products in other countries and different freight costs, the landed costs are expected to be less than the costs associated with China-sourced products. Management began pursuing multiple suppliers in 2023 and as a result we are able to reduce to a certain extent the tariff impact to our customers. In fiscal 2024, more than 80% of our imported inventory purchases were from China-based suppliers. Our purchases for fiscal 2025 are currently expected to be less than 40% from China and likely to be significantly less in fiscal 2026.
Previous report
The higher tariffs, including the significantly higher tariffs on the products we continue to source from China, is requiring us to raise our prices to our customers to compensate. In March 2025, we sent a letter to all of our customers notifying them of an upcoming price increase to address these new costs. We are currently working with customers on the final pricing and the expected start date for the new prices. Although consumers will eventually adjust their buying to accept higher prices over time, it is likely to dampen demand in the short-term until consumers become more accepting of the higher prices. These increased costs will also likely negatively affect our margins in the short term and we are able to successfully mitigate some of the higher tariff costs through various pricing and other strategies. However, these tariffs do not just affect our products, but will impact all imported goods into the US, including many of those of our competitors as well.
Previous report
We continue to look for operational efficiencies and cost savings in all aspects of our business. We have realigned our employees as part of our strategic plans to increase sales in our core products while developing both new and improved products. We have added employees to Greenwood to support our growth initiatives in Industrial Wood, and hired new employees in other key areas, including sales, marketing, and product innovation. At the end of the second quarter, our full-time employee count was 11% lower than at the end of the second quarter of fiscal 2024.
Previous report
Our current inventory level and product mix has improved over prior periods, as we have continued to reduce the inventory of our pet products and increased the inventory of our core products, including LTP and Adjust-a-Gate. This enhanced product mix will allow us to more quickly and efficiently meet the anticipated restocking of the new in-store display units during the busy fencing season in the second half of our fiscal year.
Previous report
Consumer sentiment and economic conditions continue to be challenging due to the impact of inflation, high interest rates, and disruptions and uncertainty over higher import tariffs and trade policy. These circumstances are affecting the entire industry and are largely outside of any company’s control, but we are taking actions to limit their effect on our business and minimize disruptions to our operations and customers. The new higher tariff rates are increasing our costs for most of our products, both directly and indirectly. This will require us to increase our prices to our customers. Similar to what we experienced with the historically high inflation rates over the last several years, the higher prices caused by the new tariffs may result in lower short-term demand for our products from consumers until they become more accepting of higher prices across the entire economy. DIYers are particularly price sensitive in the short-term, but less so for Professionals. Further developing our engagement with Professionals, particularly in the fencing segment, will help us diversify and increase our end users. These professionals may also serve as Brand Ambassadors and influencer for our products, as well as providing important product input that helps us develop new product innovations that meet their needs.
Previous report
Although the current economic climate and tariff uncertainty provides significant short-term issues, our focus remains on designing quality, affordable, functional solutions than enrich outdoor spaces. Jewett-Cameron has withstood many economic challenges in our over 70 years in business by successfully adjusting to unpredictable markets. We will continue to lead with innovation to dependably provide quality products that improve the lives both professionals and DIYers at affordable prices.
Previous report
Sales for the three months ended February 28, 2025 were $9,054,951 compared to sales of $8,229,192 for the three months ended February 29, 2024, which was an increase of $825,759, or 10%. Sales in the current quarter were increased by the rollout of the LTP in-store displayers and higher sales at Greenwood.
Previous report
Sales at JCC were $7,943,319 in the three months ended February 28, 2025 compared to sales of $7,383,965 for the three months ended February 29, 2024. This represents an increase of $559,354, or 8%. The higher revenue was due to the stocking of the LTP in-store displayers, while pet sales remained weak. Operating loss for the current quarter was ($834,127) compared to an operating loss of ($934,557) for the quarter ended February 29, 2024. The operating results of JCC are historically seasonal with the first two quarters of the fiscal year being slower than the final two quarters of the fiscal year.
Previous report
Sales at Greenwood were $1,111,632 compared to sales of $824,073 for the three months ended February 29, 2024, which is an increase of $287,559, or 35%. We have added additional traders which have contributed to the increase in sales. For the three months ended February 28, 2025, Greenwood had an operating loss of ($24,035) compared to an operating loss of ($20,234) for the three months ended February 29, 2024.
Previous report
Active operations at JCSC ended as of December 31, 2023, and all storage activity ended in July 2024. There was no revenue or expenses from JCSC in the current quarter compared to revenue of $21,153 for the quarter ended February 29, 2024
Previous report
Gross margin for the three months ended February 28, 2025 was 20.1% compared to 25.1% as of February 29, 2024. The decrease was due to a less favorable mix of products sold during the quarter. Our margin for the current quarter was also negatively affected by higher logistics and ocean shipping costs and our investment in the new in-store fencing product display units.
Previous report
Operating expenses decreased by $205,008 to $2,586,195 compared to expenses of $2,791,203 for the three months ended February 29, 2024. The decline was primarily due to lower Wages and Employee Benefits, which fell to $1,564,799 from $1,732,738 which was related to a lower employee headcount in the current quarter. Selling, General and Administrative expenses declined to $940,168 from $967,426, and Depreciation and Amortization decreased to $81,228 from $91,039 Interest income was $9,096 compared to $19,819 for the quarter ended February 29, 2024. Other income in the current quarter was $306, and there was a Loss on the sale of assets of ($568) in the year-ago quarter.
Previous report
Six Months Ended February 28, 2025 and February 29, 2024
Previous report
Sales were $18,321,951 for the six months ended February 28, 2025 compared to sales $18,035,033 for the six months ended February 29, 2024, which is an increase of $286,918, or 2%.
Previous report
Sales at JCC rose to $16,368,287 for the six months ended February 28, 2025 from sales of $16,006,938 for the six months ended February 29, 2024, which was an increase of $361,349, or 2%. Current sales were positively affected by the roll-out of the new LTP in-store display units, which has grown to over 300 store installations by the close of the quarter. Operating loss at JCC for the six months ended February 28, 2025 was ($1,754,365) compared to operating loss of ($1,998,898) for the six months ended February 29, 2024. Overall, the operating results of JCC are seasonal with the first two quarters of the fiscal year being slower than the final two quarters of the fiscal year.
Previous report
If our top customers were lost, we could experience lower sales volumes.
Previous report
We are dependent upon third-party manufacturers and suppliers for substantially all our of products
Previous report
We do not have any manufacturing capabilities and rely on a limited number of contract manufacturers located outside the United States for the majority of our products. Our reliance on contract manufacturers involves certain risks, including:
Previous report
If our products are delayed or cannot be supplied in a timely manner, we risk losing revenue and customers. Developing alternate sources of supply for our products that meet our requirements may be time-consuming, difficult, and costly, and we may not be able to source our products on terms that are acceptable to us, or at all, which will have a negative effect on our revenue and financial condition.
Reworded paragraphs (31)
Previous wording
These unaudited financial statements are those of the Company and its wholly owned subsidiaries. In the opinion of management, the accompanying consolidated financial statements of Jewett-Cameron Trading Company Ltd., contain all adjustments, consisting only of normal recurring adjustments, necessary to fairly state its financial position as of February 28, 2025 and August 31, 2024 and its results of operations and cash flows for the three and six month periods ended February 28, 2025 and February 29, 2024 in accordance with U.S. GAAP. Operating results for the three and six month periods ended February 28, 2025 are not necessarily indicative of the results that may be experienced for the fiscal year ending August 31, 2024. Overall, the operating results of JCC are seasonal with the first two quarters of the fiscal year historically being slower than the final two quarters of the fiscal year.
Current wording
These unaudited financial statements are those of the Company and its wholly owned subsidiaries. In the opinion of management, the accompanying consolidated financial statements of Jewett-Cameron Trading Company Ltd., contain all adjustments, consisting only of normal recurring adjustments, necessary to fairly state its financial position as of May 31, 2025 and August 31, 2024 and its results of operations and cash flows for the three and nine month periods ended May 31, 2025 and 2024 in accordance with U.S. GAAP. Operating results for the three and nine month periods ended May 31, 2025 are not necessarily indicative of the results that may be experienced for the fiscal year ending August 31, 2025. Overall, the operating results of JCC are seasonal with the first two quarters of the fiscal year historically being slower than the final two quarters of the fiscal year.
Previous wording
We have concentrated on building a customer base for Pet, Fencing and our sustainable 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.
Current wording
We have concentrated on building a customer base for Pet, Fencing and our sustainable related products. Management believes these markets are 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.
Previous wording
Our wood products, distributed through JCC, are primarily cedar fencing and are not unique. However, Western Red Cedar, which historically has constituted the bulk of our wood fencing, can only be supplied in large volume from a limited number of suppliers and can experience supply shortages on occasion. Other cedar fencing, which serves as a substitute for Western Red Cedar, is more widely available from multiple suppliers. 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.
Current wording
Our wood products, distributed through JCC, are primarily cedar fencing and are not unique. However, Western Red Cedar, which historically has constituted the bulk of our wood fencing, can only be supplied in large volume from a limited number of suppliers and can experience supply shortages on occasion. Other cedar fencing, which serves as a substitute for Western Red Cedar, is more widely available from multiple suppliers. We are committed to find and secure these alternatives from other sources to compliment customer demand as well as offer consumers greater choice. 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.
Previous wording
MyEcoWorld® secured its first grocery store placement with the launch of Pet Waste Bags into 59 Tops Friendly Markets across the Northeast beginning in late February. Our MyEcoWorld® sustainable and Post-Consumer Recycled (PCR) bags continue to gain traction in the marketplace as consumers continue to look quality sustainable as alternatives to disposable traditional single-use plastics.
Current wording
MyEcoWorld® sales for the current nine months are up 265% over the comparative period in fiscal 2024 asconsumers continue to look for high quality sustainable products as alternatives to disposable traditional single-use plastics. Some of this increase is due to shifting our entire LuckyDog® compostable dog waste bag line to a new MyEcoWorld® product. One part of our growth strategy for this line has been entering the grocery store segment, and we secured our first placement with the launch of Pet Waste Bags into 59 Tops Friendly Markets across the Northeast beginning in late February. However, the recent increase in tariffs on these products have made growth in the grocery segment much more challenging. We will continue to focus on expanding upon our successful introductions into big box stores where we have existing strong supplier relationships, and into foreign markets that are unburdened by the new US tariffs. We have been receiving strong demand from big box stores in Mexico where the lack of US tariffs has made the product very competitive.
Previous wording
At Greenwood, sales for the current six-month period were down compared to the year-ago period. However, sales in the prior six months were buoyed by transit operators buying components to catch up on fleet maintenance they deferred during the pandemic. The continued push for workers to return to the office suggests that demand from the transit sector will continue to stabilize. Although the new tariffs on Canadian wood products could raise prices for our raw materials in future periods, Greenwood's materials currently appear to be exempt on the applicable schedule at this time. We have recently hired two new traders who are focusing both on growing our customer base in our primary transit sector and developing new markets for our industrial wood products.
Current wording
At Greenwood, sales for the current nine-month period were down slightly compared to the year-ago period as a seat shortage has slowed production across the bus industry. Sales in the prior nine months were buoyed by transit operators buying components to catch up on fleet maintenance they deferred during the pandemic. We believe this segment has significant growth potential in both our primary transit sector and in new markets, such as construction. However, possible new tariffs on Canadian wood products could raise prices for our raw materials in future periods.
Previous wording
The surplus Jewett-Cameron Seed property of 11.6 acres of land and 109,500 square feet of buildings is listed for sale at a price of $9,000,000, which we believe continues to be 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. A number of parties have reviewed the listing and the property, but no serious offers have been received to date. The land is currently zoned with a rural industrial classification but is well situated on a corner lot at a major interchange immediately adjacent to US Highway 26, which is one of the region’s busiest roadways. The Company is exploring the potential to expand the list of permitted uses for the property, including a possible re-zoning by the governing authority. A reclassification would provide interested parties with greater flexibility of development options.
Current wording
The surplus Jewett-Cameron Seed property of 11.6 acres of land and 109,500 square feet of buildings remains listed for sale at a price of $9,000,000. This is the current asking price and there is no guarantee the property will sell for this amount. The land is currently zoned with a rural industrial classification but is well situated on a corner lot at a major interchange immediately adjacent to US Highway 26, which is one of the region’s busiest roadways. We have explored the potential rezoning of the property to other permitted uses, including the inclusion within any expanded Urban Growth Boundaries (UGB). The current economic struggles of both the nearby cities and within greater Portland has reduced the previously perceived need among the nearby cities to quickly expand the UGB, including extending the boundary toward the area containing JCSC property. Therefore, any inclusion of the property in expanded UGBs or reclassification of the property from its limited rural industrial classification now appears unlikely among the prevailing economic and political environment. This could be discouraging potential buyers who may have been interested in the property for other uses and will likely impact our potential sale and sales price. We continue to have meaningful discussions with interested parties. Currently there is no firm agreement for a sale in place and the property remains on the market.
Previous wording
JC USA is a holding company for the wholly-owned operating subsidiaries, and thus the overall results of JC USA are eliminated on consolidation. For the quarter ended February 28, 2025, JC USA had an operating profit of $97,078 compared to an operating profit of $242,046 for the quarter ended February 29, 2024.
Current wording
JC USA is the holding company for the wholly-owned operating subsidiaries. For the quarter ended May 31, 2025, JC USA had income before income taxes of $119,460 compared to operating income of $128,995 for the quarter ended May 31, 2024. The results of JC USA are eliminated on consolidation.
Previous wording
Income tax recovery for the three-month period ended February 28, 2025 was $187,991 compared to a recovery of $173,291 in the three months ended February 29, 2024. The Company estimates income tax expense for the quarter based on combined federal and state rates that are currently in effect.
Current wording
Income tax recovery for the three months ended May 31, 2025 was $112,294 compared to recovery of $99,254 for the three-month period ended May 31, 2024. The Company estimates income tax expense for the quarter based on combined federal and state rates that are currently in effect.
Previous wording
Net loss for the quarter ended February 28, 2025 was ($573,094), or ($0.16) per basic and diluted share, compared to a net loss of ($534,145), or ($0.15) per basic and diluted share, for the quarter ended February 29, 2024.
Current wording
Net loss for the quarter ended May 31, 2025 was ($649,634), or ($0.18) per basic and diluted share, compared to net income of $154,862, or $0.04 per basic and diluted share, for the quarter ended May 31, 2024.
Previous wording
Sales at Greenwood were relatively flat at $1,953,665 in the current six months compared to sales of $1,958,424 for the six months ended February 29, 2024. We hired additional traders and reassigned some employees to Greenwood in the current six months to support our efforts to increase sales by opening new sales channels and adding new customers, both within the transit sector and in new sectors such as construction. Sales in the prior year’s period were boosted by higher demand by municipalities and transit operators catching up on deferred vehicle maintenance post-pandemic. For the six months ended February 28, 2025, Greenwood had an operating loss of ($47,865) compared to operating income of $41,383 for the six months ended February 29, 2024.
Current wording
Sales at Greenwood were $2,658,723 for the current nine months compared to sales of $2,883,190 for the nine months ended May 31, 2024. This represents a decrease of $224,467, or 8%. Sales in the current period were negatively impacted by a seat shortage which reduced new bus construction, while sales in the prior year’s period were boosted by higher demand by municipalities and transit operators catching up on deferred vehicle maintenance post-pandemic. We have realigned some personnel to Greenwood to support our efforts to increase sales by opening new sales channels and adding customers, both within the transit sector and in new sectors such as construction. For the nine months ended May 31, 2025, Greenwood had an operating loss of ($68,148) compared to operating income of $41,146 for the nine months ended May 31, 2024.
Previous wording
JCSC operations were permanently closed as of December 31, 2023, and storage activity ended in July 2024. Therefore, there was no revenue or income from JCSC in the current six-month period compared to revenue of $69,672 and an operating profit of $38,392 for the six months ended February 29, 2024.
Current wording
JCSC operations were permanently closed as of December 31, 2023, and storage activity ended in July 2024. Therefore, there was no revenue or income from JCSC in the current nine-month period compared to revenue of $83,718 and operating income of $32,242 for nine months ended May 31, 2024.
Previous wording
JC USA, the holding company that provides professional and administrative services for the wholly-owned operating subsidiaries had operating income of $205,798 for the six months ended February 28, 2025 compared to operating income of $505,263 for the six months ended February 29, 2024. The results of JC USA are eliminated on consolidation.
Current wording
JC USA, the holding company that provides professional and administrative services for the wholly-owned operating subsidiaries had operating income of $325,258 for the nine months ended May 31, 2025 compared to operating income of $634,257 for the nine months ended May 31, 2024. The results of JC USA are eliminated on consolidation.
Previous wording
Gross margin for the six-month period ended February 28, 2025 was 19.2% compared to 22.3% for the six months ended February 29, 2024. Our costs for the current quarter were negatively affected by higher logistics and ocean shipping costs and our investment in the new in-store fencing product display units.
Current wording
Gross margin for the nine-month period ended May 31, 2025 was 17.5% compared to 20.5% for the nine months ended May 31, 2024. Current margins were negatively affected by higher logistics and ocean shipping costs, our investment in the new in-store fencing product display units, and a shift to lower margin products.
Previous wording
Operating expenses for the six months ended February 28, 2025 declined by 7% to $5,138,242 from $5,536,508. Selling, General and Administrative Expenses fell to $1,749,380 from $1,915,907. Wages and Employee Benefits fell to $3,226,567 from $3,431,658 due to a lower employee headcount in the current period. Depreciation and Amortization decreased to $162,295from $188,943 for the six months ended February 29, 2024.
Current wording
Operating expenses declined to $7,715,030 from expenses of $8,431,989 for the nine months ended May 31, 2024. Selling, General and Administrative expenses fell to $2,757,714 from $2,941,978. Wages and Employee Benefits declined to $4,715,013 from $5,221,662 due to the lower headcount in the current period. Depreciation and amortization declined to $242,303 from $268,349.
Previous wording
Other items in the current six-month period included Other income of $306, Interest income of $31,094 and gain on sale of assets of $800. In the prior six-month period ended February 29, 2024, the Company settled its arbitration case against one of its former distributors for a cash payment of $2,450,000. This one-time gain was included in other income. Other items included a gain on sale of assets of $89,087 which was largely due to the sale of JCSC equipment, and net interest income of $12,964.
Current wording
Other items recorded in the current nine-month period include other income of $306, and a gain on sale of assets of $800. We also recorded interest expense of ($43,053) which was primarily due to interest on borrowings against our line of credit. In the prior nine months, the Company successfully settled its arbitration case against one of its former distributors for a cash payment of $2,450,000 which was accounted for as other income. The prior year’s period also had a gain on sale of assets of $90,537, which largely is due to the sale of JCSC equipment, and net interest income of $11,527.
Previous wording
Income tax recovery for the six months ended February 28, 2025 was $364,621 compared to income tax expense of ($278,745) for the six months ended February 29, 2024. The Company estimates income tax expense for the period based on combined federal and state rates that are currently in effect.
Current wording
Income tax recovery in the current nine-month period was $476,915 compared to income tax expense of ($179,491) in the prior nine-month period ended May 31, 2024. The Company estimates income tax expense for the period based on combined federal and state rates that are currently in effect.
Previous wording
Net loss for the six months ended February 28, 2025 was ($1,231,811), or ($0.35) per basic and diluted share, compared to net income for the six months ended February 29, 2024 of $757,395, or $0.22 per share which was positively affected by a one-time gain related to the arbitration settlement in October 2023.
Current wording
Net loss for the nine months ended May 31, 2025 was ($1,881,445), or ($0.54) per basic and diluted share, compared to net income of $912,257, or $0.26 per basic and diluted share, for the nine months ended May 31, 2024.
Previous wording
As of February 28, 2025, the Company had working capital of $19,086,483 compared to working capital of $20,548,093 as of August 31, 2024, a decrease of $1,461,610.
Current wording
As of May 31, 2025, the Company had working capital of $18,314,427 compared to working capital of $20,548,093 as of August 31, 2024, a decrease of $2,233,666.
Previous wording
Cash and cash equivalents totaled $435,635, a decrease of $4,417,732 from cash of $4,853,367. The decrease was due to the purchase of inventory for the busier Spring and Summer seasons, which rose to $14,881,766 from $13,157,243, the timing of collection of accounts receivable, which rose to $5,636,877 from $3,668,815, and prepaid expenses, which are largely related to down payments for future inventory purchases, which increased to $1,485,244 from $891,690. Prepaid income taxes fell to $27,075 from $50,326.
Current wording
Cash and cash equivalents totaled $1,204,719, a decrease of $3,648,648 from cash of $4,853,367 as of August 31, 2024. The decrease was due to the purchase of inventory for the busier Spring and Summer seasons, which rose to $15,257,917 from $13,157,243, the timing of collection of accounts receivable, which increased to $6,789,582 from $3,668,815, and prepaid expenses, which are largely related to down payments for future inventory purchases, which was $705,448 compared to $891,690. Prepaid income taxes was $Nil, which declined from $50,326 in the period ended May 31, 2024.
Previous wording
Asset held for sale was unchanged at $566,022. This asset is the 11.6 acres of land and 109,500 square feet of buildings which formerly housed JCSC operations. The property and buildings are listed for sale at a price of $9,000,000, though there is no guarantee the property will sell for this amount.
Current wording
Asset held for sale was unchanged at $566,022. This asset is the 11.6 acres of land and 109,500 square feet of buildings which formerly housed JCSC operations and is publicly listed for sale.
Previous wording
Current liabilities increased to $3,946,136 from $2,639,370. Accounts payable increased to $2,305,136 from $1,237,988, and accrued liabilities increased to $1,641,000 from $1,401,382.
Current wording
Current liabilities increased to $6,209,261 from $2,639,370. Accounts payable increased to $1,861,519 from $1,237,988, and accrued liabilities increased to $1,911,011 from $1,401,382. Bank indebtedness as of May 31, 2025 was $2,422,305 which was the amounts drawn against the Company’s line of credit.
Previous wording
For the three months ended February 28, 2025, the accounts receivable collection period, or DSO, was 55 compared to 52 for the three months ended February 29, 2024. For the six-month period ended February 28, 2025, the DSO was 55 compared to 47 for the six months ended February 29, 2024. Inventory turnover for the three months ended February 28, 2025 was 175 days compared to 258 days for the three months ended February 29, 2024. For the six months ended February 28, 2025, inventory turnover was 172 days compared to 232 days for the six months ended February 29, 2024.
Current wording
As of May 31, 2025, accounts receivable and inventory represented 90% of current assets and 75% of total assets compared to 73% of current assets and 61% of total assets as of August 31, 2024. For the three months ended May 31, 2025, the accounts receivable collection period, or DSO, was 50 compared to 43 for the three months ended May 31, 2024. For the nine-month period ended May 31, 2025, the DSO was 60 compared to 60 for the nine months ended May 31, 2024. Inventory turnover for the three months ended May 31, 2025 was 129 days compared to 110 days for the three months ended May 31, 2024. For the nine months ended May 31, 2025, inventory turnover was 152 days compared to 162 days for the nine months ended May 31, 2024.
Previous wording
External sources of liquidity include an asset-based line of credit agreement with Northrim Funding Services (“Northrim”) which we established in fiscal 2024. Under the terms of the agreement, Northrim will provide short-term operating capital by either purchasing the Company’s accounts receivable invoices (“AR invoices”) or as a loan against our inventory position. The maximum amount of AR invoices Northrim will purchase at one time is limited to an amount equal to 80% of the net eligible accounts but is not to exceed $6,000,000. Borrowing against our inventory is computed as an amount equal to 25% of all eligible inventory but is not to exceed $4,000,000. The maximum total draw the Company may borrow under the line is $6,000,000. Interest is computed at the prime rate plus 4.75% with floor of 11%, and is secured by certain or our assets. The line expires on June 30, 2025. There was no borrowing under this line as of February 28, 2025. Subsequent to the end of the six-month period, in March 2025 the Company drew its initial borrowings against this line. We have drawn approximately $3,000,000 to fund inventory purchases to meet expected demand ahead of our historically busy sales season of Spring and Summer. We have also begun discussions with the lender to renew the line, which is currently set to expire on June 30, 2025.
Current wording
External sources of liquidity include an asset-based line of credit agreement with Northrim Funding Services (“Northrim”) which we established in fiscal 2024. Under the terms of the agreement, Northrim will provide short-term operating capital by either purchasing the Company’s accounts receivable invoices (“AR invoices”) or as a loan against our inventory position. The maximum amount of AR invoices Northrim will purchase at one time is limited to an amount equal to 80% of the net eligible accounts but is not to exceed $6,000,000. Borrowing against our inventory is computed as an amount equal to 25% of all eligible inventory but is not to exceed $4,000,000. The maximum total draw the Company may borrow under the line is $6,000,000. Interest is computed at the prime rate plus 4.75% with floor of 11%, and is secured by certain of our assets. In March 2025 the Company drew its initial borrowings against this line. As of the end of the most recent fiscal quarter on May 31, 2025, the Company has drawn $2,422,305 against this line of credit at a current interest rate of 12.25% to fund inventory purchases to meet expected demand ahead of our historically busy sales season of Spring and Summer. In June 2025, we successfully renewed the line with Northrim and it now expires on June 30, 2026.
Previous wording
During the six months ended February 28, 2025, the Company issued 13,317 common shares to officers, directors and employees under the Restricted Share Plan. The value of these shares was $59,926.
Current wording
During the nine months ended May 31, 2025, the Company issued 13,317 common shares to officers, directors and employees under the Restricted Share Plan. The value of these shares was $59,926.
Previous wording
Beginning in January 2025, the new administration in the United States began to increase tariff rates on numerous products from a range of nations. Imported steel and aluminum products from all countries globally were assigned a new tariff rate of 25% on top of any country or product specific rates. In early April 2025, the US imposed a universal baseline 10% tariff rate on imports globally along with a list of product exemptions. The current schedules exempt steel and aluminum products which are subject to the 25% global steel and aluminum tariff from the 10% universal baseline tariff and from any reciprocal tariffs. Therefore, our steel products imported from countries other than China are subject to only the 25% rate. China, however, has been assigned special rates. Tariff rates on steel products imported from China were at 70% as of the end of March 2025, consisting of the 2019 tariff of 25%, February 2025 tariff of 10%, March 2025 tariff of 10%, with the additional 25% steel and aluminum tariff. Additional China specific tariffs announced in April 2025 could increase these rates even higher.
Current wording
Beginning in January 2025, the new Presidential administration in the United States began to increase tariff rates on numerous products from a range of nations. Imported steel and aluminum products from all countries globally were assigned a new tariff rate of 25% on top of any country or product specific rates. In early April 2025, the US imposed a universal baseline 10% tariff rate on imports globally along with a list of product exemptions. As of June 4, 2025, the tariff on steel and aluminum imports was raised to 50%. The current schedules exempt steel and aluminum products which are subject to the 50% global steel and aluminum tariff from the 10% universal baseline tariff and from any reciprocal tariffs. Therefore, our steel products imported from countries other than China are subject to only the 50% rate. China, however, has been assigned special rates. Tariff rates on steel products imported from China were at 95% as of the June 4, 2025, consisting of the 2019 tariff of 25%, February 2025 tariff of 10%, March 2025 tariff of 10%, with the additional 50% steel and aluminum tariff.
Previous wording
The increases in interest rates as a result of the higher level of inflation in the US economy experienced beginning in calendar 2021 and continuing through 2024 has also had a negative effect on our interest expense charged on any borrowing on our lines of credit. The interest rate on our current line of credit is computed using the Prime Interest Rate, which has risen from 3.25% in January 2022 to approximately 7.50% in February 2025. There were no amounts outstanding under this line of credit as of February 28, 2025. However, beginning on March 7, 2025, the Company began drawing against its asset-based line of credit to fund its usual seasonal build of inventory to meet its anticipated needs for the busy Spring and Summer seasons. The Company has drawn approximately $3,000,000 at a current interest rate of 12.25%.
Current wording
The increases in interest rates as a result of the higher level of inflation in the US economy experienced beginning in calendar 2021 and continuing through 2024 has also had a negative effect on our interest expense charged on any borrowing on our lines of credit. The interest rate on our current line of credit is computed using the Prime Interest Rate, which has risen from 3.25% in January 2022 to approximately 7.50% in February 2025. There were no amounts outstanding under this line of credit as of February 28, 2025. However, beginning on March 7, 2025, the Company began drawing against its asset-based line of credit to fund its usual seasonal build of inventory to meet its anticipated needs for the busier Spring and Summer seasons. As of the end of the most recent fiscal quarter on May 31, 2025, the Company has drawn $2,422,305 against this line of credit at a current interest rate of 12.25%.
Previous wording
For the six months ended February 28, 2025, our top ten customers represented 96% of our total sales, and our single largest customer was responsible for 36% of our total sales. We would experience a significant decrease in sales and profitability and would have to cut back our operations, if these customers were lost and could not be replaced. Our top ten customers are located in North America and are primarily in the retail home improvement and pet industries.
Current wording
Historically, a significant percentage of our revenue has come from a limited number of customers. For example, for the nine months ended May 31, 2025, our top ten customers represented 98% of our total sales, and our single largest customer was responsible for 38% of our total sales. We would experience a significant decrease in sales and profitability and would have to cut back our operations if any of these customers were lost and could not be replaced. Our top ten customers are located in North America and are primarily in the retail home improvement and pet industries.
Previous wording
Since the bulk of our products are supplied from other countries, political actions by either our trading country or our own domestic policy could impact both availability and cost of our products. Currently, we see this in regard to tariffs being levied on foreign sourced products entering into the United States, including from China. Beginning in January 2025, the new administration in the United States began to increase tariff rates on numerous products from a range of nations. Imported steel and aluminum products from all countries globally were assigned a new tariff rate of 25% on top of any country or product specific rates. In early April 2025, the U.S. imposed a universal baseline tariff rate of 10% on all imports globally, although steel and aluminum products tariffed at the 25% rate are exempted from the additional baseline 10% tariff. China, however, has been assigned special additional rates. For steel and aluminum products imported from China, the rates were at 70% at the end of March 2025, but additional China specific tariffs announced in April 2025 could result in even higher tariff rates for those products. We also face uncertainty in the interpretation of new tariffs and their applicability, including with respect to customs valuation, product classification and country-of-origin determinations. Although we and our suppliers seek to comply with applicable customs laws and regulations, the application of rules regarding new tariffs can be subject to varying interpretations or future re-interpretations. It is possible that U.S. or other relevant authorities could, upon review or audit, disagree with the valuation, rules of origin or classification methods applied to certain products. Any such disagreement could result in the retroactive assessment of additional duties with interest, the imposition of penalties, or other enforcement actions without the ability to mitigate such penalties, thereby adversely affecting our operations or financial results. Furthermore, certain of our competitors may be better positioned than us to withstand or react to border taxes, tariffs or other restrictions on global trade and as a result, we may lose market share to such competitors. We cannot control the duration or depth of such actions which may increase our product costs which would in turn reduce our margins and potentially decrease the competitiveness of our products. These actions could have a negative effect on our business, results of operations, or financial condition.
Current wording
Since the bulk of our products are supplied from other countries, political actions by either our trading country or our own domestic policy could impact both the availability and the cost of our products. Currently, we see this in regard to tariffs being levied on foreign sourced products entering into the United States, including from China. Beginning in January 2025, the new Presidential administration in the United States began to increase tariff rates on numerous products from a range of nations. Imported steel and aluminum products from all countries globally were assigned a new tariff rate of 25% on top of any country or product specific rates. In early April 2025, the U.S. imposed a universal baseline tariff rate of 10% on all imports globally, although steel and aluminum products tariffed at the 25% rate are exempted from the additional baseline 10% tariff. China, however, has been assigned special additional rates. For steel and aluminum products imported from China, the rates were at 70% at the end of March 2025. In June 2025, the tariff rates on steel and aluminum imports was raised to 50%. We also face uncertainty in the interpretation of new tariffs and their applicability, including with respect to customs valuation, product classification and country-of-origin determinations. Although we and our suppliers seek to comply with applicable customs laws and regulations, the application of rules regarding new tariffs can be subject to varying interpretations or future re-interpretations. It is possible that U.S. or other relevant authorities could, upon review or audit, disagree with the valuation, rules of origin or classification methods applied to certain products. Any such disagreement could result in the retroactive assessment of additional duties with interest, the imposition of penalties, or other enforcement actions without the ability to mitigate such penalties, thereby adversely affecting our operations or financial results. Furthermore, certain of our competitors may be better positioned than us to withstand or react to border taxes, tariffs or other restrictions on global trade and as a result, we may lose market share to such competitors. We cannot control the duration or depth of such actions which may increase our product costs which would in turn reduce our margins and potentially decrease the competitiveness of our products. These actions could have a negative effect on our business, results of operations, or financial condition.
Previous wording
We purchase our products from other vendors and a delay in shipment from these vendors to us could cause significant delays in our delivery to our customers. Such disruptions may include adjustments to ocean shipping schedules, labor strikes or other job-related actions by workers within the supply chain, geopolitical unrest, longshoreman or rail strikes, geopolitical unrest, or government actions. This could result in a decrease in sales orders to us and we would experience a loss in profitability.
Current wording
We purchase our products from other vendors and delay in shipment from these vendors to us could cause significant delays in our delivery to our customers. Such disruptions may include adjustments to ocean shipping schedules, labor strikes or other job-related actions by workers within the supply chain, geopolitical unrest, longshoreman or rail strikes, or government actions. This could result in a decrease in sales orders to us and we would experience a loss in profitability.
Previous wording
Inflation has many impacts on our business, including increasing our direct costs for raw materials, manufacturing, shipping and logistics, labor, and energy. Our ability to pass on these higher costs to our customers is limited. When we are able to increase our selling prices, it may be delayed several months after we first incur the higher costs and we may not be able to fully recoup the difference. In addition, high rates of inflation can reduce consumer’s discretionary spending and reduce demand for our products. These actions could have a negative effect on our business, results of operations, or financial condition. The increases in interest rates as a result of the higher level of inflation in the US economy experienced beginning in calendar 2021 and continuing through 2024 has also had a negative effect on our interest expense charged on any borrowing on our lines of credit. The interest rate on our current line of credit is computed using the Prime Interest Rate, which has risen from 3.25% in January 2022 to approximately 7.50% in February 2025. Beginning on March 7, 2025, the Company began drawing against its asset-based line of credit to fund its usual seasonal build of inventory to meet its anticipated needs for the busy Spring and Summer seasons. The Company has drawn approximately $3,000,000 at a current interest rate of 12.25%.
Current wording
Inflation has many impacts on our business, including increasing our direct costs for raw materials, manufacturing, shipping and logistics, labor, and energy. Our ability to pass on these higher costs to our customers is limited. When we are able to increase our selling prices, it may be delayed several months after we first incur the higher costs and we may not be able to fully recoup the difference. In addition, high rates of inflation can reduce consumer’s discretionary spending and reduce demand for our products. These actions could have a negative effect on our business, results of operations, or financial condition. The increases in interest rates as a result of the higher level of inflation in the US economy experienced beginning in calendar year 2021 and continuing through 2024 has also had a negative effect on our interest expense charged on any borrowing on our lines of credit. The interest rate on our current line of credit is computed using the Prime Interest Rate, which has risen from 3.25% in January 2022 to approximately 7.50% in February 2025. Beginning on March 7, 2025, the Company began drawing against its asset-based line of credit to fund its usual seasonal build of inventory to meet its anticipated needs for the busy Spring and Summer seasons. As of the end of the most recent fiscal quarter on May 31, 2025, the Company has drawn $2,362,760 against this line of credit at a current interest rate of 12.25%.
Previous wording
The Company’s common shares currently trade within the NASDAQ Capital Market in the United States. The average daily trading volume of our common stock was approximately 4,700 shares on NASDAQ for the fiscal year ended August 31, 2024 and 7,900 shares for the six months ended February 28, 2025. With this limited trading volume, investors could find it difficult to purchase or sell our common stock or experience significant volatility in the price of our common stock. In addition, if any of the risk factors set forth above are realized, it can have a negative impact on the trading price of our common stock.
Current wording
The Company’s common shares currently trade within the NASDAQ Capital Market in the United States. The average daily trading volume of our common stock was approximately 4,700 shares on NASDAQ for the fiscal year ended August 31, 2024 and 8,300 shares for the nine months ended May 31, 2025. With this limited trading volume, investors could find it difficult to purchase or sell our common stock or experience significant volatility in the price of our common stock. In addition, if any of the risk factors set forth above are realized, it can have a negative impact on the trading price of our common stock.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
JCSC operations were permanently closed as of December 31, 2023, and storage activity ended in July 2024. Therefore, there were no revenue from JCSC compared to sales of $14,046 for the three months ended May 31, 2024.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
As of February 28, 2025, accounts receivable and inventory represented 89% of current assets and 74% of total assets compared to 73% of current assets and 61% of total assets as of August 31, 2024.