Business Overview

Jewett-Cameron is a company committed to improving the lives of professionals and do-it-yourselfers with innovative products that enrich outdoor spaces. The company operates in three main business segments: Pet, Fencing and Other; Industrial Wood Products; and Seed Processing and Sales.

Pet, Fencing and Other Segment

This segment focuses on building a customer base for pet, fencing, and sustainable related products. The home improvement business is seasonal, with higher sales occurring between February and August. The company owns patents and trademarks on key products like Adjust-A-Gate® and Fit-Right® that provide a competitive advantage. Backlog orders are not a significant factor as customers place firm orders for future shipments.

Industrial Wood Products - Greenwood

Greenwood is a wholesale distributor of specialty wood products, primarily focused on the transportation industry. This segment has become less economically sensitive as products are incorporated into municipal and mass transit sectors. Greenwood utilizes contract manufacturers and maintains inventory at non-owned warehouses.

Seed Processing and Sales - JCSC

JCSC operated a seed processing and distribution facility but the company decided to end regular operations as of August 31, 2023. The property and remaining assets are being sold.

Corporate and Administration - JC USA

JC USA is the parent company that provides professional and administrative services to the subsidiary companies.

Key Products

The company designs, sources, commercializes and distributes a variety of innovative outdoor products, many of which are patent-protected. Key product categories include:

• Fencing Products: Adjust-A-Gate®, Fit-Right®, Lifetime Steel Post®, Euro Fence, Perimeter Patrol® Portable Security Panels, and cedar fencing
• Pet Products: Lucky Dog® kennels, crates, exercise pens
• Sustainable Products: MyEcoWorld® compostable and recycled plastic bags
• Industrial Wood Products: dB-Ply® acoustical panels, structural panels, Jumbo Concrete Forms

Financial Performance

• Sales increased 10% in Q2 FY2025 compared to Q2 FY2024, driven by strength in fencing products like Lifetime Steel Posts®.
• Margins were lower due to product mix and initial costs of new in-store fencing displays.
• The company continues to focus on growing the fencing segment, with the Lifetime Steel Posts® and Adjust-A-Gate® Unlimited products gaining traction.
• Pet product sales remain weak, but inventory has been reduced significantly.
• Greenwood sales were relatively flat, impacted by lower transit demand post-pandemic.
• The company is mitigating higher tariff costs by diversifying suppliers outside of China.
• Operating expenses declined due to lower headcount, but inflation and higher interest rates are pressuring margins.
• The company reported a net loss of $573,094 in Q2 FY2025 compared to a net loss of $534,145 in Q2 FY2024.

Liquidity and Capital Resources

• The company has an asset-based line of credit with Northrim Funding Services to provide short-term operating capital.
• Working capital decreased to $19.1 million as of February 28, 2025 from $20.5 million as of August 31, 2024.
• The company is exploring the sale of the former JCSC property, which is listed for $9 million.

Outlook and Risks

• The company faces risks from decreased product demand, loss of major customers, supply chain disruptions, competition, tariffs, inflation, and seasonality of the outdoor products business.
• Intellectual property protection, product liability, and information technology security are also key risks.
• The company is taking actions to mitigate these risks, such as diversifying suppliers, reducing costs, and developing innovative new products.
• Overall, the company is navigating a challenging economic environment but remains focused on its core strengths in outdoor, pet, and industrial wood products.