Management Discussion
"We made progress on many of the actions outlined last quarter, including selling through substantial portions of the excess cedar fencing inventory accumulated before the consignment sales agreement was terminated, liquidating a significant portion of slow-moving pet inventory, and continuing to reduce overhead and administrative costs," commented Chad Summers, CEO of Jewett-Cameron. "Tariff uncertainty continues to create cost pressure and disrupt purchasing patterns, while soft consumer sentiment has weighed on discretionary spending creating broader impacts on the Company's do-it-yourself and home improvement professional customer base."
"We remain focused on completing the monetization of our remaining excess non-core inventory while evaluating strategic partnerships and collaborations, and exploring potential divestitures involving select businesses and real estate assets. We remain committed to executing a dual approach of unlocking value from non-core assets while exiting fiscal 2026 with a sustainable long-term business model," Summers concluded.
Financial Results
Revenue for Q2 2026 was $10.5 million compared to $9.1 million in Q2 2025, an increase of 16%. The growth in revenue was driven primarily by the liquidation of certain slow-moving pet inventory and excess cedar fencing which was acquired prior to the termination of a consignment sales agreement with a major retailer, and those sales will not be repeated in future periods. In certain cases, the Company sold inventory at, or below, carrying value to accelerate cash conversion, contributing to inventory reductions of 30% ($9.6 million vs.$13.5 million) from the prior quarter and down 36% ($9.6 million vs. $14.9 million) from a year ago. While the sales drove higher accounts receivable at period end, substantially all amounts due have since been collected and used to reduce borrowings under our credit facility since quarter end. The Company also experienced stronger sales at Greenwood as demand from transit customers continue to recover from workers returning to offices and the receipt of higher sales from non-transit customers. Within metal fencing, higher Lifetime Steel Post sales were offset by lower sales of Adjust-A-Gate and other metal fence products.
Gross profit margins during Q2 2026 were 15.7% compared to 20.1% in Q2 2025 and (12.5)% in Q1 2026. The decrease was primarily due to the liquidation of certain pet inventory and surplus cedar fencing at prices at or below cost. The Company also sold higher volumes of lower margin products in the current period. The Company's costs have continued to rise, due to higher raw material costs, higher shipping and logistic costs, and the new import tariffs which began in March 2025. While progress is being made to align costs with end-market pricing, it is still below historical levels.
Operating expenses during Q2 2026 were $2.8 million compared to $2.6 million in Q2 2025. Wages and employee benefits dropped to $1.3 million from $1.6 million as the Company continued its strategic realignment and reduced its headcount. Selling, General and Administrative (SG&A) expenses rose to $1.4 million from $940,000 primarily due to higher professional fees related to the engagement of additional consultants in the period and increases to the Company's lumber warehousing costs.
Net loss for Q2 2026 was $(1.2) million or $(0.35) per basic and diluted share compared to net loss of $(573,000) million or $(0.16) per basic and diluted share in Q2 2025.
Continual Strategic Review
As previously announced, the Company is in the process of implementing its strategic realignment to promote growth and profitability following a challenging second half of fiscal 2025 and first half of fiscal 2026, which was marked by significant volatility primarily due to the uncertain tariff and global economic situation.
Management and the Board have evaluated, and continue to evaluate, a variety of strategic options for the Company, as well as its individual operating segments and assets, that prioritize the Company's overall value.
This comprehensive strategy includes:
Concentrating on the Company's core metal fencing products, its largest and most successful product category, and optimizing sales of other product categories.
Significantly improving operational efficiencies and cost structure with a commitment to reduce annual operating expenses by $1 million to $3 million. It is the Company's intent to exit fiscal 2026 with a business model that is sustainable in the long term, leveraging the current value of non-core assets to fund its core growth strategy and deliver enhanced value to shareholders.
The Company is pursuing opportunities to sell excess inventory, and explore collaborative alliances and business partnerships to best monetize non-core assets and business lines which may include the Company's industrial lumber subsidiary, selective pet assets, its wood fencing business, and sale of certain real estate assets.
Strategic options under consideration may include mergers, acquisitions, divestitures, joint ventures and other business collaborations and partnerships that would potentially involve specific assets or business lines of the Company. The Company engages in preliminary discussions with third parties from time to time regarding a variety of potential transactions. There can be no assurance that these discussions will result in definitive agreements or the completion of any transaction. The Company does not intend to provide further updates on these discussions unless and until a definitive agreement is reached.
Conference Call Details
Date and Time: Monday, April 13, 2026, at 4:30 p.m. Eastern time
Webcast Information: The webcast will be accessible live and will be archived at https://app.webinar.net/6Ar1Wn78DGa and accessible on the Investors section of the Company's website at https://jewettcameron.com/pages/investor-relations. To submit questions, please send them to [email protected].
About Jewett-Cameron Trading Company Ltd. (JCTC)
Jewett-Cameron Trading Company Ltd. is a trusted provider of innovative, high-quality products that enrich outdoor spaces. Jewett-Cameron Company's business consists of the manufacturing and distribution of patented and patent-pending specialty metal and sustainable bag products and the wholesale distribution of wood products. The Company's brands include Lucky Dog® for pet products; Jewett Cameron Fence for brands such as Adjust-A-Gate®, Fit-Right®, Perimeter Patrol®, Euro Fence, Lifetime Steel Post®, and Jewett Cameron Lumber for gates and fencing; MyEcoWorld® for sustainable bag products; and Early Start, Spring Gardner, Greenline® and Weatherguard for greenhouses. Additional information about the Company and its products can be found on the Company's website at www.jewettcameron.com.
Forward-looking Statements
This press release contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words like "plans", "expects", "aims", "believes", "projects", "anticipates", "intends", "estimates", "will", "should", "could" and similar expressions in connection with any discussion, expectation, or projection of future operating or financial performance, events or trends. Forward-looking statements are based on management's current expectations and assumptions, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict, including but not limited to the fact that our business is highly competitive, we are continually seeking ways to expand our business, we may seek additional financing or other ways to expand operations and improve margins, the uncertainties of the Company's new product introductions, the risks of increased competition and technological change, customer concentration risk, supply chain delays, governmental and regulatory risks, and uncertain tariff and transport rates, as well as the other risk factors that are set forth in more detail in our Annual Report on Form 10-K and other documents filed with the Securities and Exchange Commission. Actual outcomes and results may differ materially from these expectations and assumptions due to changes in global political, economic, business, competitive, market, regulatory and other factors. We may not actually achieve the goals or plans described in our forward-looking statements, and investors should not place undue reliance on these statements. Any forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to publicly update or review any forward-looking information, whether as a result of new information, future developments or otherwise, except as required by law.
Investor Contact:Robert BlumLytham PartnersPhone: (602) 889-9700[email protected]
JEWETT-CAMERON TRADING COMPANY LTD. CONSOLIDATED BALANCE SHEETS (Expressed in U.S. Dollars) (Prepared by Management) (Unaudited)
February 28,2026
August 31,2025
ASSETS
Current assets
Cash and cash equivalents
$
546,614
$
226,213
Accounts receivable, net of allowance of $0 (August 31, 2025 - $0)
6,518,143
3,863,678
Inventory, net of allowance of $1,122,173 (August 31, 2025 - $1,200,000) (note 3)
9,595,876
15,885,589
Assets held for sale (note 4)
901,811
566,022
Prepaid expenses
1,012,351
1,000,439
Prepaid income taxes
167,401
180,151
Total current assets
18,742,196
21,722,092
Property, plant and equipment, net (note 4)
3,027,593
3,643,114
Intangible assets, net (note 5)
110,972
111,389
Deferred tax assets (Note 6)
-
3
Total assets
$
21,880,761
$
25,476,598
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable
$
963,050
$
1,510,173
Bank indebtedness (note 7)
4,275,261
2,101,835
Accrued liabilities
1,053,763
1,083,612
Total liabilities
6,292,074
4,695,620
Stockholders' equity
Capital stock (notes 8, 9)Authorized21,567,564 common shares, no par value10,000,000 preferred shares, no par valueIssued3,520,113 common shares (August 31, 2025, 3,518,119)
830,473
830,003
Additional paid-in capital
852,816
852,510
Retained earnings
13,905,398
19,098,465
Total stockholders' equity
