JEWETT CAMERON TRADING CO LTD

Current report

Our fiscal 2025 results were disappointing, as we are challenged by the increasing import tariffs, continued negative consumer sentiment, and certain operational matters discussed below. These issues significantly reduced our revenues, and negatively impacted our margins and operating results. Sales for fiscal 2025 declined by $5,847,036, or 12%, to $41,298,140. Our net loss for fiscal 2025 was ($4,130,092), or ($1.18) per share.

Current report

The most serious issue currently affecting our business operations remains the new worldwide import tariffs, primarily on our imported metal products. Since the imposition of these new tariffs began in February 2025, they have caused immense turmoil in our markets, both directly and indirectly. In addition to eroding consumer confidence, the impacts include increases to our supply chain and logistics costs. These higher costs resulted in a double-digit negative impact on our overall gross margins across the majority of our product lines. We have been able to somewhat mitigate a portion of these new tariff costs through our multi-country sourcing initiative. We recently began production of our Lifetime Steel Posts® in lower-tariffed Vietnam which should help us reduce our direct tariff costs and meet the higher demand for the product from the continuing roll-out of our in-store displayers.

Current report

These rapid and unpredictable changes to the tariff rates required significant attention from our management and financial teams, which diverted time and effort from our other operational requirements. As an example, the global rate on steel and tariff imports from all countries was set at 25% in March 2025. On May 30 th, it was announced that the rate would double to 50% and take effect in just 5 days. This left us with no time to plan or adjust import shipments, some of which were already in transit. When they left our suppliers, they were budgeted for one rate, but when they arrived on U.S. soil that rate had since doubled.

Current report

Although these higher tariff rates were announced and took effect very quickly, our ability to pass on the new tariff costs to our customers was limited. Our customer relationships are such that any of our price increases must be consented to by the customer. The customer may not agree to any increases or negotiate lower price increases, and any changes may only be accepted after 30 to 90 days, or longer, if at all. Many of our customers did not immediately accept higher prices for our products, which we adjusted in response to the increased costs associated with the tariffs and global trade disruption. By September, those remaining customers agreed to accept shipments with the higher prices which were implemented in the following weeks.

Current report

The frequent changes to tariff rates since February also caused some of the price changes we instituted in response to become obsolete before we could pass them on to our customers. This forced us to spend time to recalculate the new prices and begin the process of presenting them to, and negotiating with, our customers again, which further affected our ability to recapture our higher costs through increasing our sale prices. This resulted in an overall decrease in sales and forced us to temporarily absorb much of these higher tariff-related costs.

Current report

Although we consult with experts and legal counsel to accurately interpret how to properly apply the new tariff rates to our products to ensure compliance and to make sure our prices remain cost competitive, many of our customers paused their purchasing because of the general uncertainty about the tariffs and their costs. They have been reluctant to make long-term purchases at contracted prices that may decline based on rapidly changing tariff rates. Although both retailers and consumers will eventually adjust their buying to accept higher prices over time, it dampens demand in the short-term. These increased costs and the ongoing uncertainty over tariff assignments and rates will likely continue to negatively affect our margins and demand for certain of our products from our customers into fiscal 2026.

Current report

While the Company took actions to attempt to mitigate these unforeseen events, such as pivoting to alternative suppliers outside of China through an intensive search process which began two years ago, and reducing headcount by nearly 30%, these measures were not sufficient to withstand the headwinds we faced in 2025. However, we believe that the global economic environment is stabilizing and that customers and supply chain partners are employing reasonable and innovative policies to maintain equilibrium and continuity of commerce. Accordingly, we intend to focus on improving margins on our core fencing products through these reestablished partnerships, new sales channels, and by more controlled purchasing management.

Current report

During fiscal 2025, we also experienced operational issues with our agreement to supply cedar fencing to one of our larger consignment customers. Jewett-Cameron was originally founded as a lumber brokerage business, and we have maintained this segment as our product offerings have evolved over time. In 2023, we helped a major customer with their lumber supply after they lost their primary source of western red cedar fencing. At that point, we entered into a consignment program with this customer which provided them with a ready source of cedar fencing and provided us with a steadier flow of orders that stabilized the year-over-year lumber sale fluctuations that we commonly experienced as a secondary supplier to multiple big box retailers. It is customary to purchase ample supply ahead of the increase in demand each Spring, but in fiscal 2025 we failed to acquire an adequate supply to meet our actual demand. As a result, we were unable to fulfill all our customers’ orders during the third quarter, and our wood fencing sales were down 33% compared to the prior year’s third quarter. To ensure we could meet their needs for the remainder of the busy summer season, we quickly moved to secure additional Western Red Cedar from our supply partners. Unfortunately, much of the additional cedar fencing inventory was not needed by the customer. Under the consignment agreement, we are required to maintain enough inventory on hand to satisfy a maximum capacity requirement (“max cap”). This max cap, which is substantially higher than our average weekly sales, was not utilized and extended into September, which is past the fencing high demand season in these stores’ region. Therefore, we ended the 2025 fencing season with substantial excess cedar fencing inventory on hand. We have implemented important process changes to prevent other inventory shortages. However, we were informed by this customer in November 2025 of their intention to transition away from the consignment agreement in calendar year 2026. Although the consignment program provided us with meaningful revenue, it eroded the margin and profitability we were accustomed to in our cedar sales prior this consignment arrangement as it required us to purchase and hold higher levels of inventory, and the added length of time to invoice greatly reduced the profitability of these sales. We are currently in discussions with this customer, as well as other third parties, regarding the purchase of our excess lumber inventory leading up to the 2026 fence building season.

Current report

The rollout of our Lifetime Steel Posts® (“LTP”) in-store displayers continues to show successful results. The replenishment requirements for the displayers have been steady and meeting expectations. During the third quarter, we temporarily paused deploying new display units to prioritize replenishing existing display units. Capacity constraints on both production and logistics at the factories outside of China temporarily led to a limited supply of new posts. The higher tariff rates on Chinese goods caused many U.S. 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. Therefore, we prioritized replenishing existing display units with our temporarily limited supply of new posts.

Current report

With the success of our in-store display units for both LTP and our established Adjust-A-Gate® products, we are developing new versions of displayers for both products. Our current display units are optimized for big box retailers but many other home improvement retailers may not have the shelf or floor space to fully deploy the existing displayers. We are working on new, smaller format displays for these smaller retailers. We are also exploring developing similar units for additional products in our core product lines.

Current report

The pet market continues to suffer from low consumer demand, and we remain burdened with high inventory levels, particularly in metal crates and kennels. The market has been slow to recover, and our on-hand inventory of price-advantaged pre-tariff inventory has not received the interest from retailers we anticipated. We are now engaging with non-traditional purchasers with the intent to clear a substantial amount of this older inventory from our warehouse and recapture some of our costs. Because we expect to sell this inventory at lower prices, we increased our allowance for obsolete inventory by $650,000 in fiscal 2025 over our allowance in fiscal 2024. We are also reducing our costs, including refining our development efforts to concentrate on improving our existing products, both in design and packaging, that can potentially provide market advantages.

Current report

Our MyEcoWorld® sales increased in fiscal 2025 over 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 was to enter the grocery store segment. During fiscal 2025, 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 imposition of the new tariffs beginning in February 2025 made our products less price competitive and growth in the grocery segment much more challenging. Instead, we will be focusing 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 U.S. tariffs. We have been receiving strong demand from big box stores in Mexico where the absence of U.S. tariffs has made the product very competitive.

Current report

At Greenwood, sales in fiscal 2025 rose by 2% over our sales in fiscal 2024. Although demand for transit focused products continues to rebound from the pandemic lows as more workers return to the office, a transit seat shortage during fiscal 2025 restricted new bus construction and orders for our transit products. Demand for these transit products improved as the seat shortage was largely resolved by the fourth quarter of fiscal 2025. We have recently realigned some personnel’s duties to provide support to Greenwood by working to open new sales channels and adding new customers. We still believe this segment has growth potential in both our primary transit sector and in new industrial markets. However, as we intend to concentrate our operations on the fence and outdoor segment, we are evaluating strategic alternatives for Greenwood and its industrial wood operations.

Current report

The surplus Jewett-Cameron Seed property of 11.6 acres of land and 109,500 square feet of buildings remains listed for sale. 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 in Hillsboro, Oregon, which is one of the region’s busiest roadways. We explored the potential rezoning of the property to other higher value permitted uses, including the inclusion within any expanded Urban Growth Boundaries (UGB). The current sluggish economic conditions within both the nearby cities and in 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 in the short-term among the prevailing economic and political environment in the surrounding area. We have relisted the property at a price of $7.223 million. We have also recently listed for sale our innovation lab property which is now surplus to our current needs, as we have moved the operations formerly housed in the building to our nearby headquarters and warehouse in North Plains. This property contains a renovated building of 2,000 square feet of flex space, and is listed for $795,000. For both the JCSC and innovation lab properties, these are the current asking prices and there is no guarantee the properties will sell for this amount, if at all.

Current report

In October 2025, we experienced a cybersecurity incident. We learned that a threat actor had gained unauthorized access to portions of the Company’s information technology (“IT”) environment. We immediately activated our cyber incident response process to contain the intrusion, assess and investigate the incident and implement remedial measures, including retaining external cybersecurity experts and notifying law enforcement, including the Federal Bureau of Investigation. Based on the investigation to date, we believe the cybersecurity incident consisted of unauthorized access and deployment of encryption and monitoring software by a third party to a portion of the Company’s internal corporate IT systems. The incident caused disruptions and limitation of access to portions of our business applications. We believe the unauthorized activity was contained and our IT systems and individual computer devices were brought back online. As a result of the intrusion, we have taken additional cybersecurity measures. We believe that the costs associated with these activities will not be material and that the costs related to the services provided by experts and the disruption to our business will be largely covered by the Company’s insurance policies, although there can be no assurance that the insurance carriers will accept liability for these costs, in which event our costs would increase and have a material adverse effect on our future financial performance in the period in which we are required to absorb these costs.

Current report

We began fiscal 2025 with a positive outlook with a focus on continuing to lower costs, increase sales, improve margins, introduce innovative products and monetize surplus assets. However, due primarily to the volatility and uncertainty created by the introduction of various tariffs since February 2025 and the large purchases of lumber inventory in support of one of our larger customers, our goals to grow and return to profitability in fiscal 2025 were not achieved. Accordingly, management and the Board have reformulated our strategic plan to combat the challenges encountered during fiscal 2025, and focus on our core strengths during this difficult period. We intend to concentrate our resources on our successful fencing product lines while monetizing non-core assets and disposing of excess inventory. Management and the Board are also evaluating strategic alternatives for the Company as well as its individual operating segments and assets that prioritize the Company’s overall value.

Current report

We have continued our efforts to optimize our operations and reduce our costs. During fiscal 2025, we shifted some employees to better align our workforce with our strategic objectives, and have reduced our employee headcount by 27% year-over-year. We believe these changes will result in increased productivity and reduce our costs without compromising quality or service.

Current report

As of August 31, 2025, we had borrowed $2,101,835 against our credit line with Northrim Funding Services (“Northrim”). Under the current terms of the agreement, Northrim provides short-term operating capital by either purchasing the Company’s accounts receivable invoices or as a loan against our inventory position. The maximum we may borrow against the line is $6,000,000. As of November 28, 2025, our borrowings under this line is $4,304,853. We are currently discussing with Northrim to adjust the credit line to increase the maximum borrowing computation which would provide us with additional financial flexibility and to raise the maximum amount available to us. There is no assurance that we will be able to obtain the desired increases in our credit line, which could have a material adverse impact on our business and financial condition.

Current report

Due to the continued uncertainty and higher costs stemming from the high global tariff levels, we expect fiscal 2026 to remain challenging. We will continue to focus on our operational strengths while reducing costs where possible in our efforts to increase our sales and margins and return to profitability.

Current report

In addition, we are currently evaluating several different strategies to strengthen our liquidity position. These strategies may include, but are not limited to, disposition of certain non-core assets and unused real property, renegotiation of our credit line with Northrim and seeking additional financing from both the public and private markets through the issuance of equity or debt securities. There can be no assurance that we will be successful in achieving these strategies. See “Management’s Discussion and Analysis – Liquidity and Capital Resources” for additional information.

Current report

Fiscal 2025 sales totaled $41,298,140 compared to sales of $47,145,176 in fiscal 2024, which was a decrease of $5,847,036, or 12%. Our sales during the first two quarters of fiscal 2025 were flat compared to the same quarters of fiscal 2024. Beginning in February 2025, the implementation of new import tariffs, particularly on steel and aluminum products, disrupted the markets and caused both consumers and retailers to pause or suspend their purchases of affected products. The tariffs have also caused rapid price changes to reflect the higher product costs, which further caused market disruptions by delaying customer and consumer acceptance.

Current report

The tariff-driven increases in our product costs and our lower sales volumes resulted in a decline in our gross margins, which fell overall to 15.1% in fiscal 2025 from 18.8% in fiscal 2024. Our 2025 margins were also negatively affected by an increase in our obsolete inventory reserve of $650,000 to $1,200,000 from $550,000 in fiscal 2024.

Current report

Sales for JCC in fiscal 2025 were $37,495,349 compared to sales of $43,330,737 for fiscal 2024, which represents a decline of $5,835,388, or 13%. Orders for our metal products were negatively affected tariff driven price increases and lower consumer confidence. Our wood fencing sales were down year-over-year as we were temporarily unable to fulfill all our orders early in the Spring and Summer season. Demand for our pet products remains weak, which is in line with broader trends in the pet product industry.

Current report

Sales in fiscal 2025 were $3,802,791 compared to sales of $3,728,165 in fiscal 2024, which is an increase of $74,626, or 2%. Sales in fiscal 2025 were negatively impacted by a seat shortage which reduced new bus construction and demand for our products, but demand for transit focused products improved as the seat shortage was largely resolved by the fourth quarter of fiscal 2025. We have recently realigned some personnel to support Greenwood by working to open new sales channels and adding new customers, both within the transit sector and in new industrial market sectors. For fiscal 2025, Greenwood had an operating loss of ($8,857) compared to operating income of $19,563 for fiscal 2024.

Current report

Liquidity and Capital Resources

Current report

The recent volatile tariff and global trade situation created many challenges for our ability to effectively manage our supply chain, product costs, customer pricing, and overall operations. Failure to manage our cash inflows and outflows effectively can have a material adverse impact on our operations, ability to order products in a timely manner, and serve our customers effectively. Considering these developments, we believe that it is essential that we take immediate steps to strengthen our liquidity position to enable us to continue to weather the uncertainties that still exist in the global markets.

Current report

Although the Company will continue as a going concern as at August 31, 2025, our management and Board have reformulated our near-term and long-term strategies, which now focus on strengthening our liquidity position. We need additional funding to shield us from the continuing challenges that have severely impacted us and other companies as a result of the recent tariff and global economic situation in order to execute our business plan and continue operations in the normal course. Management is evaluating different strategies for reducing expenses, as well as pursuing financing strategies which include raising additional funds through the issuance of equity or debt securities, asset sales, and through arrangements with strategic partners. These strategies may involve selling our real estate assets and excess inventory, as well as increasing our borrowing capacity under our credit line with Northrim or securing alternative financing. We are dependent on our credit line which permits us to borrow funds against accounts receivable and inventory. However, our present borrowing is approaching the maximum allowed under the credit line’s current funding calculations. Although we are in discussions with Northrim to increase the amount of credit available to us, we are still in need of additional funding to bolster our cash availability for the near and long term. There can be no assurance that these discussions will result in an increase in borrowing capacity, which, if it does not, would have a material adverse effect on our ability to operate our business in the normal course and significantly impact our ability to order product for the upcoming Spring selling season, which would in turn negatively impact our operations, our ability to develop and execute our business plan, our financial condition, our liquidity and our continuation as a going concern will be subject to a high degree of risk and uncertainty.

Current report

If capital is not available to us when, and in the amounts needed, we could be required to liquidate our inventory and assets at below market prices, delay purchasing of products, or cease or curtail operations, which could materially harm our business, financial condition and results of operations. There can be no assurance that the Company will be able to sell its real estate, inventory or other assets in a timely manner or raise the capital it needs to continue operations.

Current report

We have historically funded our operations with cash flow from operations, and institutional loans or credit facility arrangements. Our principal uses of cash have been debt service, capital expenditures and working capital, and funding operations. For the year ended August 31, 2025, we incurred an operating loss of $4,130,092 and used cash in operations of $4,627,154. As of August 31, 2025, we had $2,101,835 of indebtedness and working capital of $17,026,472. As of November 28, 2025, we had approximately $4,304,853 million borrowed under our credit facility arrangement, which is near the current maximum amount we are permitted to borrow. We are currently in discussions with our lender to enhance our ability to borrow additional funds and increase the maximum borrowing capacity.

Current report

We have experienced a slower than expected sell-through of our pet inventory due to many factors, including an overall weakness in consumer demand across the entire sector and a surplus of goods in the channels commonly used to sell off this type of slow-moving, or obsolete inventory. We believe we will continue to reduce our inventory levels significantly through scaled back production, ordinary course sales of inventory, or accelerated liquidation sales. Accordingly, we have increased our inventory allowance by $650,000 for fiscal 2025 over the allowance for fiscal 2024.

Current report

In fiscal 2026, we will refocus our efforts to maximize value-enhancing business lines. However, to do this we will likely have to make investments in our working capital to support distribution with new and existing retailers coming online throughout the year. This investment in inventory ahead of sales has and may continue to put pressure on our liquidity position given the structure and terms of our credit facility, and arrangements with our customers. There can be no assurance that we will be successful in executing this strategy or that our liquidity position will not deteriorate further despite our efforts.

Previous report

Fiscal 2024 was a year of transition for the Company. Although our business continued to be negatively affected by stubbornly high inflation and negative consumer sentiment, we successfully completed several important projects to optimize our operations and focus on our core products, broaden our customer base, and improve our financial position.

Previous report

The overall business climate remains challenging. Inflation has pushed our costs higher, particularly in raw materials and shipping, while simultaneously squeezing consumers who have cut back on discretionary spending. These issues are particularly acute in the home improvement and pet product sectors. Wet and unseasonably cold weather across much of the US also shortened our traditional Spring and Summer selling season which reduced our expected sales in our important outdoor product lines.The Company’s revenues and cash flow continue to be seasonal and highly variable, with the 3 rd and 4 th quarters of the fiscal year being much busier than the 1 st and 2 nd quarters due to the Company’s current product offerings.

Previous report

Our margins and financial results in fiscal 2024 were also hurt by the clearance of some older higher cost lumber, and a one-time inventory write-down of $110,293 for the liquidation of all of our remaining pet inventory located in Europe. We also increased our obsolete inventory reserve by $459,464. We are continuing to sell through some of the higher cost pet inventory we purchased during the prior high-cost logistics period.

Previous report

Supply chain issues also worsened in the third and fourth quarters. Besides increasing our shipping costs, it also has affected our inventory availability. Multiple issues, including conflict in the Red Sea and low water levels in the Panama Canal led to ship diversions and cancelations that caused significant shipping disruptions and delays and reduced container availability. A number of our supply orders beginning during the 4 th quarter of fiscal 2024 were delayed by these late and cancelled sailings from Asia. This led to some inventory shortages and unavailability of certain products which caused some missed sales and back orders awaiting container arrivals that have extended into the first quarter of fiscal 2025. In addition to the significant delays, the costs of ocean shipping have soared since Mid-May 2024. We notified our customers of the shipping delays and higher costs which we cannot fully absorb. Therefore, we temporarily increased certain of our product prices. These price increases may ultimately reduce our sales as some of our customers may be unwilling to purchase the full amount of their usual orders at these higher prices and instead may wait to see if shipping costs fall later in calendar 2024. These supply chain issues and the higher shipping costs negatively affected our sales and margins during the fourth quarter and are continuing into fiscal 2025.

Previous report

In fencing, which is our largest product category, we rolled out new in-store displays for our Lifetime Steel Posts® and continue to deploy additional in-store Adjust-A-Gate® displayers. These in-aisle display units are positioned directly beside the wood racks for greater visibility of key products which increases sales of the items and improves the choices for consumers. The Lifetime Steel Posts® displayers began in just one region and expanded to 100 stores by the close of the fiscal year in August. Since then, we have ramped up our roll out and displayers are now being installed in stores in multiple regions. In October 2024, we announced the engagement of Continental Sales & Marketing, Inc. (“CSM”) to help us expand these display units to more retailers across the US. CSM will also help us manage the installed units and the expected product reorders to ensure they are well-stocked and inventory is available for consumers. We expect this program will increase our visibility and brand recognition with consumers and will be a valuable contributor to our revenue in 2025.

Previous report

Although our lumber supply agreement with a major customer is performing well, supply issues are causing a significant shortage of Western Red Cedar. To ensure the supply of fence boards for this customer, we successfully shifted some of our product supply to high-quality alternatives, including Sugi Cedar, beginning in the 3 rd quarter of fiscal 2024. Sugi fencing sells for a lower price than Western Red Cedar which negatively affects our margins. Because consumers are not as familiar with Sugi Cedar, we believe demand for the product was diminished in the second half of fiscal 2024 which hurt our revenue.

Previous report

JCSC’s active operations ended as of December 31, 2023. The seed operations were located on 11.6 acres of land and 105,000 square feet of buildings owned by the Company which is now surplus to the Company’s needs. Therefore, the land and buildings were listed for sale or lease in July 2024 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. If we are able to complete a sale, the net proceeds will be reduced by brokers’ commissions, expenses related to the sale, and taxes. The land is on a corner lot situated at a major interchange immediately adjacent to US Highway 26, which is one of the region’s busiest roadways. The land is currently zoned with a rural industrial classification, but the Company is exploring the potential to re-zone the property, or revise the existing code, to expand the list of permitted uses. A reclassification would provide interested parties with greater flexibility of development options. There is also a high level of interest from the cities immediately adjacent to the property in the potential expansion of their urban growth boundaries and those communities are investigating those potential options. Due to its strategic location, this property would potentially be included within the expanded area. Should such an expansion be approved and/or a rezoning occur, it would likely increase the land’s value and potentially maximize any return we receive for the sale of this surplus asset.

Previous report

Diversifying our suppliers has been a primary focus of management for several years. The majority of our metal products have been sourced from a single supplier manufacturing in a single factory in China. Beginning in fiscal 2022, the Company initiated an extensive world-wide evaluation process to find suppliers who could manufacture many of our metal products that met our high-quality standards with competitive pricing. After 18 months, the Company completed its search and engaged several new suppliers with factories in Canada, Bangladesh, Vietnam, Malaysia, and Taiwan. We are now receiving products from these new suppliers in addition to our original supplier in China which we also continue to use. These new supply agreements cover the Company’s fence products, dog containment products, as well as MyEcoWorld® products. In addition to reducing the systematic risk of the reliance of a single supplier from a single factory, products from these new suppliers are not subject to the current 25% tariff rate on Chinese made steel products imported into the United States. Avoiding this high tariff on many of our products will improve our margins and help us to maintain competitive pricing.

Previous report

Our balance sheet remains strong, with a current ratio (current assets divided by current liabilities) of 8.57 as of August 31, 2024, including cash of $4.85 million. Our inventory position was approximately $13.16 million compared to $18.34 million as of the end of fiscal 2023. Although this current level is near our desired inventory level for many of our core products, the ocean shipping issues which began during the 4 th quarter have delayed the arrival of new shipments of metal products from the manufacturers. This may lead to some shortages in the short term until the worldwide shipping situation improves. Although our pet product inventory levels remain higher than usual, we remain committed to maintaining our list prices on our primary pet products. There is no urgency to move this inventory as it will not degrade or spoil over time. For our slower moving pet products, we continue to explore opportunities to accelerate sales in those items.

Previous report

During the first quarter of fiscal 2024, we successfully settled the arbitration we filed against one of our former distributors in 2021 for breach of a distribution agreement. We received a one-time cash payment of $2,450,000 in October 2023 under the settlement agreement. This payment covered our substantial legal fees and some of our losses due to the breach. We are pleased to have settled the case and that we will no longer have to expend time and resources pursuing this case. Although the costs of such litigation may be significant, we believe it is critical to defend our valuable intellectual property and will take action against any future infringements of our patents, trademarks and contractual agreements.

Previous report

We are continuing to sharpen our focus on our core product lines of fencing, Lucky Dog® brand pet containment products, and sustainable bags under the MyEcoWorld® brand. Our efforts are directed to growing our sales of both existing and new complementary products to our primary customers. We are also expanding our sales channels through the addition of new customers in our primary home improvement markets while increasing our marketing and sales efforts in several additional sectors in North America that we have identified as favorable fits for our core products. During fiscal 2024, we added a number of new customers in Canada and more than doubled our sales there compared to fiscal 2023.

Previous report

To increase awareness of Jewett-Cameron and our brands with both our customers and consumers, we began a strategic refresh of our branding in fiscal 2024 to emphasize our combination of product quality, innovation and value. We have rebranded Jewett-Cameron as “a company committed to innovative products that enrich outdoor spaces” and unveiled our new mission statement of “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”. Subsequent to the end of the fiscal year, we engaged Lytham Partners to lead a strategic investor relations and shareholder communication program, and presented our story to investors and institutions at the Lytham Fall 2024 Investor Conference in October. We have also changed our NASDAQ trading symbol from “JCTCF” to “JCTC” which we believe will help investors to gain a better understanding of Jewett-Cameron as a US-based company.

Previous report

The challenging economic climate is expected to continue in fiscal 2025, although the recent trend towards lower interest rates and moderating inflation provide optimism going forward. We are continuing our efforts to improve our operations, manage customer relationships, and sharpen our operational strengths. We intend to increase our focus on innovation, both in-house and through outside parties. This includes ongoing discussions with industry and financial professionals regarding possible strategic alliances and other possible arrangements that could add to our product offerings and provide additional financial and operational support that would benefit all of our stakeholders. We regularly evaluate potential merger, acquisition, partnering and in-license opportunities that we expect will expand our product offerings. Supporting our growth strategy is likely to require significant capital expenditures and management resources. The development or expansion of our business, any acquired business or any acquired, or in-licensed products may require a substantial capital investment by us. We may not have these necessary funds or they might not be available to us on acceptable terms or at all. There can be no assurance that any of our efforts will result in completion of a strategic transaction or that any such transaction, if consummated, will be ultimately beneficial to our operations or financial condition.

Previous report

Fiscal 2024 sales totaled $47,145,176 compared to sales of $54,289,303 in fiscal 2023, which was a decrease of $7,144,127, or 13%. Consumers continue to moderate their discretionary spending, particularly in the home improvement and pet product sectors. Our sales comparisons were also negatively affected by the shut-down of JCSC, as seed revenue was $2,464,153 in fiscal 2023 but only $86,274 in fiscal 2024 as the remaining seed inventory was sold and limited seed storage occurred until closure as of July 2024.

Previous report

Gross margin declined in fiscal 2024 to 18.8% from 22.6% in fiscal 2023. Our margin was negatively affected by a sharp rise in ocean shipping costs, the clearance of some older higher cost lumber inventory, and the liquidation of our remaining pet inventory located in Europe. We also increased our obsolete inventory reserve in fiscal 2024 by $459,464.

Previous report

Sales for JCC in fiscal 2024 were $43,330,737 compared to sales of $49,219,224, which represents a decline of $5,888,487, or 12%. Demand for our pet products remains weak, which reflects the current trend in the entire pet product industry. Sales comparisons between the current year and the prior year were also affected by a large one-time order for kennels in fiscal 2023.

Previous report

Sales in fiscal 2024 were $3,728,165 compared to sales of $2,605,926 in fiscal 2023, which is an increase of $1,122,239, or 43%. As more workers return to offices and increase their use of transit systems, transit operators are spending more on their equipment, which is reflected in the higher sales of our transit focused products. Management believes that Greenwood can grow by opening new sales channels and broadening its customer base, particularly in sectors outside of transit such as housing and construction.

Previous report

For fiscal 2023, Greenwood had operating income of $19,563 compared to a loss of ($46,307) for fiscal 2023 which is consistent with the higher level of revenue.

Previous report

Current Working Capital Requirements

Previous report

In October 2023, we received the cash payment under the arbitration settlement agreement from our former distributor. A portion of this payment was used to repay some of the amount borrowed under the former line of credit, with the remainder held as working capital.

Previous report

Based on our current working capital position, the anticipated reduction in cash needs due to the closure of JCSC, and the unused borrowing capacity under our current line of credit, we expect to have sufficient liquidity available to meet our working capital requirements for the next twelve months.

Previous report — wording carried elsewhere

We have no current borrowing against our line of credit. During the year, our prior bank line of credit expired on June 30, 2024 and a new asset-based line has been established with Northrim Funding Services (“Northrim”). 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 amount we may draw against the line is $6,000,000 total. We do not anticipate a regular need to utilize this new line of credit, but may need to draw against the line to purchase inventory in advance of the spring and summer seasons. If we are able to complete the sale of the JCSC property, the proceeds will supply additional capital and provide us with greater financial flexibility.