UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended AUGUST 31, 2020
Or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Transition period from _________ to _________________
Commission File Number: 000-19954
JEWETT-CAMERON TRADING COMPANY LTD.
(Name of registrant as specified in its charter)
_________British Columbia, Canada_______
(State or Incorporation or Organization)
_________N/A________
(IRS Employer ID No.)
32275 NW Hillcrest, North Plains, Oregon, USA 97133
(Address of principal executive offices)
Registrant’s Telephone Number 503-647-0110
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Common Stock, no par value
Trading Symbol(s)
JCTCF
Name of Each Exchange on Which Registered
NASDAQ Capital Market
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act
Yes No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any,
every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of
this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and
post such files).
No
Yes
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated fi ler, a
smaller reporting company, or an emerging growth company. See the definitions of “large accelerated fi ler,”
“accelerated filer,” “smaller reporting company,”and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Non-accelerated filer
Accelerated filer
Smaller Reporting Company
Emerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition
period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the
Exchange Act..
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of
the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15
U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes
No
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by
reference to the price at which the common equity was last sold, or the average bid and asked price of such common
equity, as of the last business day of the registrant’s most recently completed second fiscal quarter:
February 28, 2020 = $17,543,960
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of November 10,
2020: 3,481,162
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Jewett-Cameron Trading Company Ltd.
Form 10-K Annual Report
Fiscal Year Ended August 31, 2020
TABLE OF CONTENTS
Business
Risk Factors
Unresolved Staff Comments
Properties
Legal Proceedings
Mine Safety Disclosures
PART I
PART II
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases
of Equity Securities
Selected Financial Data
Management's Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures About Market Risk
Financial Statements and Supplemental Data
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Controls and Procedures
Other Information
PART III
Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accounting Fees and Services
Item 1.
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
Item 9B.
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
Item 15.
Exhibits, Financial Statement Schedules
PART IV
Page
4
8
10
10
11
11
11
12
12
20
21
44
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48
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51
51
52
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ITEM 1. BUSINESS
Forward-Looking Statements
PART I
This Annual Report on Form 10-K contains forward-looking statements, within the meaning of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words like “plans”,
“expects”, “aims”, “believes”, “projects”, “anticipates”, “intends”, “estimates”, “will”, “should”, “could” and similar
expressions in connection with any discussion, expectation, or projection of future operating or financial performance,
events or trends. Forward-looking statements are based on management's current expectations and assumptions, which
are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Actual outcomes
and results may differ materially from these expectations and assumptions due to changes in global political, economic,
business, competitive, market, regulatory and other factors. We undertake no obligation to publicly update or review
any forward-looking information, whether as a result of new information, future developments or otherwise.
These factors include, but are not limited to the fact that the Company is in a highly competitive business and may seek
additional financing to expand its business, and are set forth in more detail elsewhere in this Annual Report, including
in the sections, ITEM 1A, “Risk Factors”, and ITEM 7, “Management's Discussion and Analysis of Financial
Condition and Results of Operations”.
Introduction
Jewett-Cameron Trading Company Ltd. is organized under the laws of British Columbia, Canada.
Report, the “Company”, “we”, “our” and “us” refer to Jewett-Cameron Trading Company Ltd. and its subsidiaries.
In this Annual
The Company’s operations are classified into three reportable operating segments, one discontinued segment
(Industrial Tools) and the parent corporate and administrative segment, which were determined based on the nature of
the products offered along with the markets being served. The segments are as follows:
Industrial wood products
Lawn, garden, pet and other
Seed processing and sales
Corporate and administration
Effective September 1, 2013,
its subsidiaries. Jewett-Cameron Lumber
Corporation (“JCLC”) was changed to JC USA Inc. (“JC USA”), which has the following three wholly-owned
subsidiaries.
the Company reorganized certain of
The industrial wood products segment reflects the business conducted by Greenwood Products, Inc. (“Greenwood”).
Greenwood is a processor and distributor of industrial wood products. A major product category is treated plywood
that is sold to the transportation industry.
The lawn, garden, pet and other segment reflects the business of the newly incorporated Jewett-Cameron Company
(“JCC”). JCC is a wholesaler of wood products and a manufacturer and distributor of specialty metal products formerly
conducted by JCLC. Wood products include fencing and landscape timbers, while metal products include dog kennels,
proprietary gate support systems, perimeter fencing, and greenhouses. JCC uses contract manufacturers to make the
specialty metal products. Some of the products that JCC distributes flow through the Company’s distribution center
located in North Plains, Oregon, and some are shipped direct to the customer from the manufacturer. Primary
customers are home centers, eCommerce providers, and other retailers.
The seed processing and sales segment reflects the business of Jewett-Cameron Seed Company (“JCSC”). JCSC
processes and distributes agricultural seed. Most of this segment’s sales come from selling seed to distributors with a
lesser amount of sales derived from cleaning seed.
The Company also formerly operated in the industrial tools and clamps segment through MSI-PRO (“MSI”). MSI
imported and distributed products including pneumatic air tools, industrial clamps, and saw blades. These products
were primarily sold to wholesalers that in turn sold to contractors and end users. During fiscal 2020, the Company
decided to exit this segment. The remaining inventory was liquidated, and MSI was wound-up and closed.
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JC USA provides professional and administrative services, including accounting and credit services, to each of its
wholly-owned subsidiary companies.
Total Company sales were approximately $44.9 million and $45.4 million during fiscal years ended August 31, 2020
and 2019, respectively.
The Company's principal office is located at 32275 NW Hillcrest Street, North Plains, Oregon; and the Company’s
website address is www.jewettcameron.com. Mail is not delivered to the street address. The Company’s primary
mailing address is P.O. Box 1010, North Plains, OR 97133. The Company’s phone number is (503) 647-0110, and the
fax number is (503) 647-2272.
The Company files reports and other information with the Securities and Exchange Commission located at 100 F.
Street NE, Washington, D.C. 20549. Copies of these filings may be accessed through their website at www.sec.gov.
Reports are also filed under Canadian regulatory requirements on SEDAR, and these reports may be accessed at
www.sedar.com.
The contact person for the Company is Charles Hopewell, President, Chief Executive Officer, Director, Board Chair,
and Principal Financial Officer.
The Company’s authorized capital includes 21,567,564 common shares without par value; and 10,000,000 preferred
shares without par value. As of August 31, 2020 and November 10, 2020, there were 3,481,162 common shares
outstanding. The Company's common shares are listed on the NASDAQ Capital Market in the United States with the
symbol “JCTCF”.
The Company's fiscal year ends on August 31st.
General Development of Business
Incorporation and Subsidiaries
Jewett-Cameron Trading Company Ltd. was incorporated under the Company Act of British Columbia on July 8, 1987
as a holding company for Jewett-Cameron Lumber Corporation (“JCLC”), which was incorporated in September 1953.
Jewett-Cameron Trading Company, Ltd. acquired all the shares of JCLC through a stock-for-stock exchange on July
13, 1987, and at that time JCLC became a wholly owned subsidiary. Effective September 1, 2013, the Company
completed a reorganization of certain of its subsidiaries and JCLC’s name was changed to JC USA Inc. (“JC USA”).
JC USA has the following wholly owned subsidiaries. MSI-PRO Co. (“MSI”), incorporated in April 1996, Jewett-
incorporated in October 2000, Greenwood Products, Inc. (“Greenwood”),
Cameron Seed Company, (“JCSC”),
incorporated in February 2002, and Jewett-Cameron Company (“JCC”) incorporated in September 2013.
Jewett-
Cameron Trading Company, Ltd. and its subsidiaries have no significant assets in Canada.
Corporate Development
Incorporated in 1953, JC USA operated as a small lumber wholesaler based in Portland, Oregon. In September 1984,
the original stockholders sold their interest in the corporation to a new group of investors. Two members of that group
remained active in the Company. These individuals are Donald Boone, who passed away in May, 2019, and who was
the previous Chairman and Director and the former President, Chief Executive Officer, Treasurer, and Principal
Financial Officer, transitioning to strictly the Board Chair in 2017; and Michael Nasser, who remains active in the
business and is both a Director and the Corporate Secretary.
In July 1987, the Company acquired JC USA in what was not an arms-length transaction.
In early 1986, prior to JC USA being acquired by the Company, JC USA acquired Material Supply International
(“Material Supply”). Material Supply was engaged in the importation and distribution of pneumatic air tools and
industrial clamps. The product line was re-branded as “MSI-PRO” and MSI was incorporated in 1996 to carry-on the
business of Material Supply.
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In October 2000, JCSC was incorporated in anticipation of JC USA acquiring the business and certain assets of a firm
called Agrobiotech Inc. JCSC operates as a seed storage, processing and sales business.
In February 2002, Greenwood was incorporated in anticipation of JC USA acquiring the business and certain assets of
Greenwood Forest Products Inc. Greenwood is involved in the processing and distribution of specialty wood products.
In June 2012, the Company acquired land and fixed assets located in Manning, Oregon for $250,000 cash. The property
was sold in an arms-length transaction in the second quarter of fiscal 2019 for $325,000 cash.
In May 2019 Chairman and Co-Founder of the Company Donald M. Boone passed away. Mr. Boone served as
President and CEO from 1984 until 2017 when he voluntarily retired from his officer positions and oversaw the
addition and successful integration of new management and directors.
In September 2019 the Board of Directors decided to permanently close the Company’s MSI-Pro division. Efforts to
drive further sales and margin growth were unsuccessful due to a lack of market differentiation and changing customer
patterns. The remaining inventory has been liquidated, and the personnel were moved into different positions with the
Company. As of August 31, 2020, MSI was wound-up and the division closed.
Narrative Description of Business
The Company’s operations are classified into four segments: Industrial wood products; Lawn, garden, pet and other;
Seed processing and sales; and corporate and administration. Sales, income before taxes, assets, depreciation and
amortization, capital expenditures, and interest expense by segment are shown in the financial statements under Note 14
“Segment Information”.
Lawn, Garden, Pet and Other – JCC
The lawn, garden, pet and other segment reflects the business of Jewett-Cameron Company (JCC), which is a
manufacturer and distributor of specialty metal products and a wholesaler of wood products formerly conducted by
JCLC.
JCC operates out of a 5.6 acre owned facility located in North Plains, Oregon that includes an office, a warehouse, and
a paved yard. This business is a wholesaler of wood products and a manufacturer and distributor of specialty metal
products. Wood products are primarily fencing, while metal products include an array of pet enclosures, kennels, and
pet welfare and comfort products, proprietary gate support systems, perimeter fencing, greenhouses, canopies and
umbrellas. Examples of the Company’s brands include Lucky Dog, Animal House and AKC (used under license from
the American Kennel Club) for pet enclosures and kennels; Adjust-A-Gate, Fit-Right, Perimeter Patrol, and Lifetime
Post for gates and fencing; Early Start, Spring Gardner, and Weatherguard for greenhouses; and TrueShade for patio
JCC uses contract manufacturers to make the specialty metal products.
umbrellas, furniture covers and canopies.
Some of the products that JCC distributes flow through the Company’s facility in North Plains, Oregon, and some are
shipped direct to the customer from the manufacturer. Primary customers are home centers, eCommerce partners, and
other retailers.
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.
JCC has concentrated on building a customer base for lawn, garden, and pet related products. Management believes
this market is less sensitive to downturns in the U.S. economy than is the market for new home construction as its
products serve both new and existing home and pet owners.
The wood products that JCC distributes are not unique and are available from multiple suppliers. However, the metal
products that JCC manufactures and distributes may be somewhat differentiated from similar products available from
other suppliers. The company has been successful garnering key patents and trademarks on multiple products that assist
their ability to continue to differentiate based on design and functionality.
- 6 -
JCC owns the patents and manufacturing rights connected with the Adjust-A-Gate and Fit-Right products, which are
the gate support systems for wood, vinyl, chain link, and composite fences. Management believes the ownership of
these patents results in an important competitive advantage for these and certain other products. During fiscal 2020, the
Company applied for Nil new patents (fiscal 2019 – Nil), while Nil other patents were granted (fiscal 2019 – 1). A
patent granted in 2018 was an update of the Adjust-a-Gate, which will extend the protection on the Adjust-a-Gate
products for an additional 15 years. In addition to the patents, JCC also has two licensing agreements to market pet
products.
Backlog orders are a factor in this business as customers may place firm priced orders for both wood and metal
products for shipments to take place three to four months in the future.
Industrial Wood Products - Greenwood
Greenwood is a wholesale distributor of a variety of specialty wood products. Operations are co-located in the building
utilized by JCC.
Historically, a major product category has been treated plywood that is sold to the transportation industry. In February
2014, the Company sold its remaining and excess inventory related to the marine industry. Greenwood’s total sales for
fiscal 2020 and 2019 were 5% and 9% respectively of total Company sales.
The primary markets in which Greenwood competes has decreased in economic sensitivity as users are incorporating
products into the municipal and mass transit transportations sectors. However, these markets may sustain some
contractions due to COVID-19 related patterns of individuals utilizing transit and mass transit less due to concerns over
exposure.
Inventory is maintained at non-owned warehouse and wood treating facilities throughout the United States and is
primarily shipped to customers on a just-in-time basis. Inventory is generally not purchased on a speculative basis in
anticipation of price changes.
Greenwood has no significant backlog of orders.
Seed Processing and Sales - JCSC
JCSC operates out of an approximately 12 acre owned facility located adjacent to North Plains, Oregon. JCSC
processes and distributes agricultural seed. Most of this segment’s sales come from selling seed to distributors with a
lesser amount of sales derived from cleaning seed. Sales of seed has some seasonality, but it is most affected by
weather patterns in multiple parts of the United States that utilize cyclical planting. The annual weather plays an
important part in year-to-year sales volatility and specific crop demand. However, profitability around the month of
August may be unusually high based on a seasonal surge in cleaning sales, which are much more profitable than
product sales.
JCSC may periodically have a backlog of sales orders based on the market’s need for specific crops due to seasonal
patterns.
Industrial Tools and Clamps - MSI
MSI is a former division of the Company that imported and distributed products including pneumatic air tools,
industrial clamps, and saw blades. These products were primarily sold to wholesalers that in turn sold to contractors
and end users. This business operated from the same owned facilities as JCC.
The MSI division was permanently closed and all remaining inventory was liquidated during fiscal 2020.
Administrative Services – JC USA
JC USA Inc. is the parent company for the Company’s wholly-owned subsidiaries as described above.
provides professional and administrative services,
subsidiary companies.
including warehousing, accounting and credit services,
JC USA
to its
- 7 -
Tariffs
The Company’s metal products are manufactured in China and are imported into the United States. The Office of the
United States Trade Representative (“USTR”) instituted new tariffs on the importation of a number of products into the
United States from China effective September 24, 2018. These new tariffs are a response to what the USTR considers
to be certain unfair trade practices by China. The tariffs began at 10%, and subsequently were increased to 25% as of
May 10, 2019. A number of the Company’s products manufactured in China have been subject to duties of 25% when
imported into the United States.
These new tariffs were temporarily reduced on many of the Company’s imported products in September 2019 under a
deemed one-year exemption. The 25% tariff rate was restored on the Company’s products in September 2020 when the
exemption expired.
Customer Concentration
The top ten customers were responsible for 76% and 77% of total Company sales for the years ended August 31, 2020
and August 31, 2019, respectively. Also, the Company’s single largest customer was responsible for 30% and 33% of
total Company sales for the years ended August 31, 2020 and August 31, 2019 respectively.
Employees
As of August 31, 2020 the Company had 63 full-time employees (August 31, 2019 – 58 full-time employees). By
segment these employees were located as follows: Greenwood 1, JCC 38, JCSC 8, and JC USA 16. None of these
employees are represented by unions at the Company.
Jewett-Cameron Trading Company Ltd. has no direct
employees, and the CEO of the Company is employed by JC USA.
ITEM 1A. RISK FACTORS
Investors should carefully consider the following risk factors and all other information contained in this Annual Report.
There is a great deal of risk involved. Any of the following risks could affect our business, its financial condition, its
potential profits or losses, and could result in you losing your entire investment if our business became insolvent. The
risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties, including
those not presently known to us or that we currently deem immaterial, also may result in decreased revenues, increased
expenses or other events which could result in a decline in the price of our common stock.
Risks Related to Our Common Stock
We may decide to acquire assets or enter into business combinations, which could be paid for, either wholly or
partially with our common stock and if we decide to do this our current shareholders would experience dilution in
their percentage of ownership.
Our Articles of Incorporation give our Board of Directors the right to enter into any contract without the approval of
our shareholders. Therefore, our management could decide to make an investment (buy shares, loan money, etc.)
without shareholder approval.
If we acquire an asset or enter into a business combination, this could include
exchanging a large amount of our common stock, which could dilute the ownership interest of present stockholders.
Future stock distributions could be structured in such a way as to be 1) diluting to our current shareholders or 2)
could cause a change in control to new investors.
If we raise additional funds by selling more of our stock, the new stock may have rights, preferences or privileges
senior to those of the rights of our existing stock. If common stock is issued in return for additional funds, the price per
share could be lower than that paid by our current stockholders. The result of this would be a lessening of each present
stockholder’s relative percentage interest in our company.
The Company’s common shares currently trade within the NASDAQ Capital Market in the United States. The common
shares also formerly traded on the Toronto Stock Exchange in Canada until the Company voluntarily delisted from the
Toronto Stock Exchange on October 11, 2012. The average daily trading volume of our common stock was
approximately 1,765 shares on NASDAQ for the fiscal year ended August 31, 2020. With this limited trading volume,
investors could find it difficult to purchase or sell our common stock.
- 8 -
Risks Related to Our Business
A contagious disease outbreak, such as the recent COVID-19 pandemic emergency, could have an adverse effect on
our operations and financial condition
Our business could be negatively affected by an outbreak of an infectious disease due to the consequences of the
actions taken by companies and governments to contain and control the virus. These consequences include:
The inability of our third-party manufacturers in China and elsewhere to manufacture or deliver products to us
in a timely manner, if it all.
Isolation requirements may prevent our employees from being able to report to work or being required to work
from home or other off-site location which may prevent us from accomplishing certain functions, including
receiving products from our suppliers and fulfilling orders for our customers, which may result in an inability
to meet our obligations.
Our new products may be delayed or require unexpected changes to be made to our new or existing products.
The effect of the outbreak on the economy may be severe, including an economic downturn and decrease in
employment levels which could result in a decrease in consumer demand for our products.
The financial impact of such an outbreak are outside our control and are not reasonable to estimate but may be
significant. The costs associated with any outbreak may have an adverse impact on our operations and financial
condition and not be fully recoverable or adequately covered by insurance.
We could experience a decrease in the demand for our products resulting in lower sales volumes.
In the past we have at times experienced decreasing products sales with certain customers. The reasons for this can be
generally attributed to: increased competition; general economic conditions; demand for products; and consumer
interest rates. If economic conditions deteriorate or if consumer preferences change, we could experience a significant
decrease in profitability.
If our top customers were lost, we could experience lower sales volumes.
For the fiscal year ended August 31, 2020 our top ten customers represented 76% of our total sales, and our single
largest customer was responsible for 30% 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 industries.
We could experience delays in the delivery of our products to our customers causing us to lose business.
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. This could result in a decrease in sales orders to us and we would experience a
loss in profitability.
Governmental actions, such as tariffs, and/or foreign policy actions could adversely and unexpectedly impact our
business.
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. The continuing tariffs
by the United States on certain Chinese goods include some of our products that we purchase from suppliers in China.
The company has multiple options to assist in mitigating the cost impacts of these government actions. However, we
cannot control the duration or depth of such actions which may increase our product costs which would 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.
- 9 -
We could lose our credit agreement and could result in our not being able to pay our creditors.
We have a line of credit with U.S. Bank in the amount of $3 million, of which $3 million is available. We are currently
in compliance with the requirements of our existing line of credit. If we lost this credit it could become impossible to
pay some of our creditors on a timely basis.
Our information technology systems are susceptible to certain risks, including cyber security breaches, which could
adversely impact our operations and financial condition.
Our operations involve information technology systems that process,
transmit and store information about our
suppliers, customers, employees, and financial information. These systems face threats including telecommunication
failures, natural disasters, and cyber security threats, including computer viruses, unauthorized access to our systems,
and other security issues. While we have taken aggressive steps to implement security measures to protect our systems
and initiated an ongoing training program to address many of the primary causes of cyber threat with all our
employees, such threats change and morph almost daily. There is no guarantee our actions will secure our information
systems against all threats and vulnerabilities. The compromise or failure of our information systems could have a
negative effect on our business, results of operations, or financial condition.
If we fail to maintain an effective system of internal controls, we may not be able to detect fraud or report our
financial results accurately, which could harm our business and we could be subject to regulatory scrutiny.
We have completed a management assessment of internal controls as prescribed by Section 404 of the Sarbanes-Oxley
Act, which we were required to do in connection with our year ended August 31, 2020. Based on this process we did
not identify any material weaknesses. Although we believe our internal controls are operating effectively, we cannot
guarantee that in the future we will not identify any material weaknesses in connection with this ongoing process.
ITEM 1B. UNRESOLVED STAFF COMMENTS
--- No Disclosure Necessary ---
ITEM 2. PROPERTIES
The Company’s executive offices are located at 32275 NW Hillcrest Street, North Plains, OR 97133. The 5.6 acre
facility, which is owned, consists of 55,250 square feet of covered space (6,000 office and 49,250 warehouse), a little
over three acres of paved yard space, and was originally completed in October 1995. A 12,000 square foot warehouse
expansion was completed in fiscal 2017 which the Company is using for several new product lines. The facility
provides office space for JC USA, including all of the Company’s executive offices, and is used as a distribution center
to service the Company’s customer base for JCC and Greenwood.
The property associated with JCSC, which is owned, consists of 11.7 acres of land, 105,000 square feet of buildings,
rolling stock, and equipment. It is currently used for seed processing and storage. It is located at 31345 NW Beach
Road, Hillsboro, OR 97124, which is adjacent to North Plains, OR.
During fiscal 2010, the Company purchased a 2,000 square foot building that previously housed a seed testing lab
located at 31895 NW Hillcrest Street, North Plains, OR 97133. The Company formerly leased the property for $729
per month until the expiration of the lease on January 4, 2010. At that time, the Company exercised its option to buy
the land and building for a total cost of $150,946. In fiscal 2020, the Company began a renovation of this building into
its new innovation center which will focus on new product development for the Company’s subsidiaries. The
renovation is expected to be completed by the end of the first quarter of fiscal 2021.
In June 2012, the Company acquired land and fixed assets located in Manning, Oregon for $250,000 cash. The land
consists of 7.5 acres and the fixed assets included 12,000 square feet of buildings. During the second quarter of fiscal
2019, the Company sold the property for $325,000 cash.
The company is currently finalizing its plans to renovate a portion of its older existing warehouse space into 2 floors of
office space as employee growth has exceeded existing capacity. Construction is expected to begin during the second
quarter of fiscal 2021.
- 10 -
ITEM 3. LEGAL PROCEEDINGS
The Company is a named party in a Civil Action in Pennsylvania. The matter is an action seeking compensation for
personal injuries and is based on theories of product liability as to Jewett-Cameron. The matter arises out of a dog
allegedly escaping from a Jewett-Cameron kennel product and causing personal injuries to three individuals. Jewett-
Cameron is currently one of three named Defendants. As of this date, no formal responses have been made and no
dates have been established governing the litigation proceedings. This matter is in its early stages making it speculative
to predict as to its outcome. It is the Company’s intention to vigorously defend the lawsuit. Jewett Cameron’s
applicable liability insurer is providing a defense covering Jewett-Cameron’s legal fees and costs.
ITEM 4. MINE SAFETY DISCLOSURES
--- No Disclosure Necessary ---
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Our common shares trade on the NASDAQ Capital Market (formerly the NASDAQ Small Cap Market) in the United
States. The trading symbol for our common stock is “JCTCF” and the CUSIP number for the stock is 47733C-20-7.
Our common stock began trading on the NASDAQ Small Cap Stock Market in April 1996.
The Company declared a two for one stock split of its common stock with a record date of the close of business on May
22, 2018. Shareholders received one additional common share for each common share held as of the record date. The
stock split was effective as of May 29, 2018.
Table No. 1 lists the volume of trading along with the high, low, and closing sales prices on the NASDAQ Capital
Market for the Company's common shares. Prices are adjusted to reflect the common stock split effective May 29,
2018.
- 11 -
Table No. 1
NASDAQ Capital Market
Common Shares Trading Activity
(US Dollars)
Volume
High
Low
Closing
37,200
$ 8.05
$ 7.25
$ 7.71
138,800
106,900
112,200
97,700
234,800
592,900
190,700
299,800
455,600
1,318,200
1,252,600
1,237,400
1,791,200
$ 8.78
$ 7.09
$ 8.14
$ 8.10
$ 9.10
$ 9.32
$ 8.99
$10.00
$ 8.78
$10.00
$ 8.96
$ 7.23
$ 7.48
$ 5.95
$ 5.00
$ 7.00
$ 7.18
$ 7.00
$ 6.95
$ 6.23
$ 7.25
$ 5.00
$ 6.23
$ 6.50
$ 5.30
$ 3.85
$ 7.55
$ 6.00
$ 7.00
$ 7.96
$ 8.04
$ 7.69
$ 7.23
$ 7.32
$ 7.55
$ 8.04
$ 8.68
$ 6.98
$ 6.21
Period
Ended
Monthly
9/30/20
Quarterly
8/31/20
5/31/20
2/29/20
11/30/19
8/31/19
5/31/19
2/28/19
11/30/18
Annually
8/31/20
8/31/19
8/31/18
8/31/17
8/31/16
Holders
Computershare Investor Services Inc. which is located in Vancouver, British Columbia, Canada is the registrar and
transfer agent for the common shares.
On October 21, 2020 there were 14 registered shareholders and 3,481,162 shares of the Company’s common shares
outstanding.
Dividends
The Company has not declared any dividends since incorporation and does not anticipate that it will do so in the
foreseeable future. The present policy of the Company is to retain earnings for use in its operations, expansion of its
business, and the possible repurchase of Company shares. There are no restrictions that limit the ability of the
Company to pay dividends on common equity or that are likely to do so in the future. Any dividends paid by the
Company to U.S. shareholders would be subject to Canadian withholding tax.
Recent Sales of Securities: Use of Proceeds from Securities
The Company has sold no securities in the last 3 fiscal years.
Purchases of equity securities by the issuer and affiliated purchasers
During the fiscal years ended August 31, 2019 and 2018, the Company has repurchased common shares through share
repurchase plans approved by the Board of Directors in accordance with Rule 10b-18 under the U.S. Securities
Exchange Act of 1934.
- 12 -
On June 6, 2018, the Company announced the Board of Directors had authorized a new share repurchase plan to
purchase for cancellation up to 250,000 common shares through the facilities of NASDAQ. Transactions may involve
Jewett-Cameron insiders or their affiliates executed in compliance with Jewett-Cameron's Insider Trading Policy. The
share repurchase plan was effected in accordance with Rule 10b-18 under the U.S. Securities Exchange Act of 1934,
which contains restrictions on the number of shares that may be purchased on a single day, subject to certain exceptions
for block purchases, based on the average daily trading volumes ("ADTV") of Jewett-Cameron's shares on NASDAQ.
Purchases shall be limited to one “Block” purchase per week in lieu of the 25% of ADTV limitation for compliance
with Rule 10b-18(b)(4). A “block” as defined under Rule 10b-18(a)(5) means a quantity of stock that, among other
things, is at least 5,000 shares and has a purchase price of at least US$50,000. The Plan commenced on June 11, 2018
and terminated upon the completion of the 250,000 share repurchase on October 25, 2018. Under the Plan, the
Company repurchased and cancelled a total of 250,000 common shares at a total cost of $2,164,975 which was an
average price of $8.66 per share.
On February 7, 2019, the Company announced the Board of Directors had authorized a new share repurchase plan to
purchase for cancellation up to 250,000 common shares through the facilities of NASDAQ under similar terms to the
June 2018 plan. The Plan commenced on February 18th and terminated upon the completion of the 250,000 repurchase
on July 22, 2019. A total of 250,000 shares of common stock was repurchased at a total cost of $2,168,065 which
represents an average share price of $8.67 per share.
During the 2nd quarter of fiscal 2020 ended February 29, 2020, the Company repurchased for cancelation a total of
490,120 common shares from two large shareholders, including an officer and director of the Company. The shares
were repurchased privately at a price of $7.89 per share, calculated as the Volume Weighted Average Price (VWAP) of
all the shares traded on NASDAQ during the first quarter of fiscal 2020. The total cost of the share repurchases was
$3,867,046.
ITEM 6. SELECTED FINANCIAL DATA
--- No Disclosure Necessary for Smaller Reporting Companies ---
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION
The Company’s operations are classified into three reportable operating segments, one discontinued segment
(Industrial Tools) and the parent corporate and administrative segment, which were determined based on the nature of
the products offered along with the markets being served. The segments are as follows:
Industrial wood products
Lawn, garden, pet and other
Seed processing and sales
Corporate and administration
During fiscal 2020, the Company closed its Industrial Tools segment operated by MSI and liquidated the remaining
inventory.
Quarterly Results
The following table summarizes quarterly financial results in fiscal 2020 and fiscal 2019.
dollars except per share amounts).
(Figures are thousands of
- 13 -
Sales
Gross profit
Net income (loss)
Basic earnings (loss) per share
Diluted earnings (loss) per share
Sales
Gross profit
Net income
Basic earnings per share
Diluted earnings per share
First
Quarter
$ 7,055
2,048
(7)
0.00)
0.00)
($
($
First
Quarter
$ 9,066
2,309
350
0.08
0.08
$
$
For the Year Ended August 31, 2020
Fourth
Quarter
Third
Quarter
Second
Quarter
$ 7,622
2,005
(174)
0.05)
0.05)
($
($
$ 16,241
4,309
1,397
0.39
0.39
$
$
$ 14,027
4,111
1,569
0.43
0.43
$
$
For the Year Ended August 31, 2019
Fourth
Quarter
Third
Quarter
Second
Quarter
$ 7,857
1,761
120
0.03
0.03
$
$
$ 16,692
3,638
1,098
0.26
0.26
$
$
$ 11,831
2,256
532
0.13
0.13
$
$
Full
Year
$ 44,945
12,473
2,785
0.77
0.77
$
$
Full
Year
$ 45,446
9,964
2,100
0.50
0.50
$
$
Fiscal 2020 quarterly per share earnings were calculated using weighted average number of common shares
outstanding as of August 31, 2020 of 3,623,413 (2019 – 4,233,304).
RESULTS OF OPERATIONS
Management and the Board planned for Fiscal 2020 to be a strategic “investment” year. This plan included exiting the
underperforming industrial tools segment and increasing the focus on the remaining three operational segments through
the development of new products, important capital investments, key staff additions, and rebranding of product lines
across both existing and new sales channels. Although the Company was successful in executing its strategic
investment plan for the fiscal year, the Company’s sales and operations were heavily affected by outside forces, namely
tariffs and the COVID-19 Coronavirus pandemic.
The COVID-19 pandemic significantly impacted the Company and its customers throughout calendar 2020, but the
first part of fiscal 2020 was negatively affected by uncertainty over tariffs on the Company’s products manufactured in
China. During the first quarter, the Company received notice that a number of the Company’s metal products
manufactured in China would be reclassified and receive lower tariffs. Several of the Company’s major customers
delayed their expected first quarter purchases into the second quarter in order to receive better pricing due to the
reduced tariffs.
Although sales of the previously tariffed products began to improve in the second quarter, demand for a number of the
Company’s seasonal products were negatively affected by the Coronavirus in China beginning in January. Extended
factory shut-downs after the Chinese New Year holiday to reduce the spread of the virus resulted in interruptions to the
Company’s supply chain and delayed the Company’s ability to receive and deliver goods during the period. The lower
sales recorded during the first and second quarters due to these events, combined with the costs of the MSI closure,
contributed to the Company recording a net loss during the first six months of fiscal 2020.
The impact of the COVID-19 control measures taken by governments and the public began to affect the Company’s
product sales and operations early in the third fiscal quarter, which is the beginning of the Company’s historically
busiest period. With the shutdown of businesses and imposition of stay-at-home orders across the United States,
consumers shifted much of their buying patterns to online shopping. As people spent more time in their homes, DIY
home improvement projects became more popular. Pet adoptions also increased tremendously during the quarantine
period. This led to higher sales volumes in certain of the Company’s categories, including fencing and pet products,
beginning in March and continuing through the fourth fiscal quarter.
- 14 -
A campaign to re-brand both the primary enterprise and each business unit and products was launched in the second
fiscal quarter. The overall goal is to connect the consumer across all retail and eCommerce platforms with a consistent
look and statement of value. This will expand the Company’s touch in more sales channels and greater integration with
retailers and e-commerce providers. The intent is to make the consumer more aware of Jewett-Cameron and drive more
cross-over business to each segment and product line. This focus involves social media, other online communications,
and omnichannel branding. The Company also intends to increase its product presence in more channels, including
retailers and e-commerce, both in the US and internationally.
New product development is being emphasized to expand both existing and new product lines. Several new products
were released in fiscal 2020, including the new Lucky Dog® Zero Plastic Poop Bags. These 100% compostable dog
waste bags, which were launched at the Global Pet Show in Orlando in February, are made from a vegetable-based
product and contain no traditional polymers, dyes or chemicals. It is strong, leak-proof and easy to open while
being certified compostable. When used to pick up dog waste, the entire bag breaks down in aerobic environments and
returns to the earth in 90-180 days while leaving no micro-plastic residue like many other pet waste bags currently on
the market. The new product has been well-accepted by both retailers and consumers and has strengthened our
conversations with existing sales channels about complementary products. We have also added a significant pet market
partner with a strong reach who has rapidly advanced to being one of our stronger customers. In August 2020, the
Company announced a new supply agreement with SECOS Group of Australia to produce the Zero Plastic Poop Bags
from SECOS’ proprietary biopolymer resins. This agreement is expected to provide us with the capacity to meet
demand for the Bags from our retail channel partners and online, in both domestic and international markets. We have
joined with new European distributors for the Poop Bags and several other products, with the initial shipments
scheduled to arrive in Europe in November 2020.
The new patented steel fence post, LIFETIME POST™, continues to position the company firmly in the fencing
market. The product was specifically designed to complement Jewett Cameron’s already long running, successful
Adjust-A-Gate™ products, thus building a stronger branding in this market segment. The Company has other products
in development, primarily in the fencing and pet segments. Besides its internal new product development process,
management may also seek to acquire products that will provide complementary benefits to its existing products and
product lines.
During the year, the Company continued to add to its infrastructure and staff to support its current and future business
initiatives. Additional employees have been hired, particularly in the areas of sales and marketing, and business and
new product development. A new Enterprise Resource Planning (ERP) software system which will support the sales
and marketing programs and streamline reporting functions has been installed and tested during fiscal 2020. However,
due to the COVID-19 situation and the strong product demand during the 3rd and 4th quarters, management decided to
delay the full implementation date until the 2nd quarter of fiscal 2021. This is typically one of the Company’s slowest
sales periods which will limit possible business disruptions. Other current capital projects include the renovation of the
former seed laboratory into a new Creative Center for new product development. Completion is expected at the end of
the first quarter of fiscal 2021. The Company has also been planning an extensive renovation of a portion of the older
warehouse space into a two-story office structure as the existing office space is older and cramped due to the new hires.
The construction of the new space could begin prior to the end of calendar 2020.
In response to the COVID-19 pandemic, the Company has instituted strong protocols within its facility consistent with
the State of Oregon’s requirements and CDC guidelines. This includes appropriate social distancing and cleaning
protocols. The entire workforce has been retained without any lay-offs or reductions in shifts or work hours, and there
have been no adverse costs related to remote work or the implementation of the new processes needed for the home-
the facility,
based workers. Although some employees previously working remotely have returned to work at
approximately 40% of the workforce continues to work from home. This arrangement of 60/40 work at
the
facility/work from home will continue where appropriate to the functions of each employee’s role and responsibilities.
It is critical to our continuing operations that we do all we can to protect and retain our workforce if and when they
might experience exposure to the virus. If any employees working at headquarters or in the warehouse facilities
contract the virus, the Company would be forced to curtail those operations, including product shipments, for the
required period to thoroughly clean and sanitize the facility without human exposure, which would result in delayed or
lost revenue, and increased costs. For this reason, we will continue to be aggressive in ways to protect our operations
and cash flows against the virus and take all precautions for any potential shut-downs or adjustments to our operations.
Any change to the current State of Oregon orders regarding workplaces and travel restrictions could result in the
Company having to temporarily close its facilities altogether. Our suppliers and many of our customers are subject to
the same risks.
- 15 -
Specific COVID-19 protocols are in place for all of the Company’s facilities and for all personnel which are designed
to minimize potential exposure and maintain safety. There have been a limited number of instances of probable virus
exposure to some of our personnel that have occurred outside our facilities. Those potentially exposed individuals were
sent home with continuing compensation and were not permitted to return to work until they received a negative
COVID-19 test. To date, there have been no cases of COVID-19 virus among any of the Company’s employees, which
demonstrates employees have been following the procedures and protocols.
In order to mitigate the tremendous impact of COVID-19, the Company received two loans under the Paycheck
Protection Program (the “PPP”) as part of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES
Act”). This program was designed to help smaller American companies with retaining their employees and maintaining
their business during the economic slowdown caused by the pandemic, and to better position these businesses to
ultimately recover from the crisis more quickly. The PPP funds were essential in supporting the Company’s ability to
continue to operate without interruption during the COVID-19 crisis and retain 100% of its workforce, which was
integral to the Company’s recovery in the 3rd and 4th quarters. All of the borrowed funds were spent on qualifying
employee salaries and costs, and no employees were laid-off.
The rebound in business shown in the 3rd and 4th quarters is encouraging, but due to the ongoing COVID-19 situation
and its severe effects on the overall economy, the outlook for fiscal 2021 is uncertain. We have increased our inventory
levels going into fiscal 2021 in order to minimize any potential supply disruptions caused by new COVID-19
outbreaks. We remain committed to grow our business, add new sales channels and widening our marketing base. This
requires the continued investment in multiple areas to achieve these goals, including our facilities, equipment, and
personnel. The development and introduction of new products is a key component of our strategic plan. This will
broaden our product selection for both our distribution partners and consumers. For 2021, we plan to continue to
strengthen and broaden our product offerings. Our goal is to begin to counter the historic seasonality of our sales
through new promotional programs and launch of new products which are more tuned to year-round sales cycles.
Fiscal Years Ended August 31, 2020 and August 31, 2019
Fiscal 2020 sales totaled $44,945,263 compared to sales of $45,446,362 in fiscal 2019, which was a decrease of
$501,099, or 1%. The decrease in sales was primarily due to lower sales at Greenwood and the closure of MSI.
Gross margin rose slightly to 27.8% from 21.9% in fiscal 2019 primarily due to a more favorable mix of product sales
away from lower margin lumber sales in the current year.
Operating expenses increased by $1,388,166 to $8,615,047 from $7,226,881 in fiscal 2019. The increase was due to
higher selling, general and administrative expenses of $2,502,989 compared to $2,127,296 and an increase in wages
and employee benefits, which rose to $5,894,346 from $4,907,766. Both increases are related to the Company’s
investment efforts to support the Company’s growth initiatives. Depreciation and amortization increased to $217,712
from $191,819. Income from operations increased to $3,858,136 in fiscal 2020 from $2,737,550 in fiscal 2019.
Including other items, income before income taxes was $3,889,156 in fiscal 2020 compared to $2,888,144 in fiscal
2019. Other items included gain on sale of property, plant and equipment of $6,600 compared to a gain of $105,366,
which was largely due to the sale of the Manning property, in fiscal 2019. Interest and other income declined to
$24,420 in fiscal 2020 from $45,228 in fiscal 2019 due to lower rates of interest on cash balances from short-term
investments. Income tax expense was $1,104,631 compared to $787,692 in fiscal 2019. The Company calculates
income tax expense based on combined federal and state rates that are currently in effect.
Net income for fiscal 2020 was $2,784,525, or $0.77 per basic and diluted share, compared to net income for fiscal
2019 of $2,100,452, or $0.50 per basic and diluted shares. The income per share was positively affected by the
repurchase and cancellation of common shares during both fiscal 2020 and 2019, and the increased profitability in
2020. The weighted number of shares outstanding were 3,623,413 in fiscal 2020 and 4,233,304 in fiscal 2019.
- 16 -
Lawn, Garden, Pet and Other - JCC
Sales at JCC were $40,348,660 in fiscal 2020 compared to sales of $38,510,213 in fiscal 2019.
Operating income at JCC for 2020 was $3,936,491 compared to $2,040,631 in 2019, which was an increase of
$1,895,860, or 93%. Demand was weak during the first two quarters of fiscal 2020 as many customers had stocked up
on metal products prior to the imposition of tariffs. During the second half of fiscal 2020, the COVID-19 pandemic’s
stay-at-home orders drove strong demand for certain of JCC’s DIY product lines, particularly in the Pet and Fencing
segments. In fiscal 2019, extended wet and cold weather across much of North America during the Spring significantly
delayed, and ultimately reduced, demand for the Company’s lawn and garden products during the year. Overall, the
operating results of JCC are seasonal with the first two quarters of the fiscal year being much slower than the final two
quarters of the fiscal year.
The following table shows a breakdown between the metal and wood categories in this segment.
Fiscal Year
2020
2019
Sales in Millions of Dollars
Metal Wood Total
$40.3
$ 8.1
$32.2
$38.5
$12.1
$26.4
Percent of Total Sales
Metal Wood Total
20% 100%
80%
31% 100%
69%
The Company’s metal products are manufactured in China and are imported into the United States. Many of the
Company’s metal products have been subject to additional USTR tariffs on the importation of Chinese manufactured
products in the United States. These new tariffs went into effect on September 24, 2018 at an initial 10% rate but later
rose to a 25% rate. Uncertainty over the tariffs began to negatively affect the Company’s business in the fourth quarter
of fiscal 2018 as customers were attempting to formulate their approach to the tariffs and stalled or delayed acceptance
of initial price increases. The implementation of these additional tariffs reduced the Company’s margins and overall
demand for metal products during all of fiscal 2019. During 2019, the Company’s supplier appealed to USTR the
classification of many of its metal products as subject to specific tariff classes. In September 2019, the Company was
notified that certain of its products in both the fencing and pet categories would not be subject to these tariffs going
forward. Unfortunately, those tariff reductions were temporary, and the additional tariff rates on the Company’s
imported metal products were raised back to the 25% rate in September 2020.
Industrial Wood Products - Greenwood
Sales at Greenwood in fiscal 2020 were $2,285,250, which was a decrease of $1,624,867, or 42% from sales of
$3,910,117 in fiscal 2019. Greenwood’s sales were heavily impacted by the COVID-19 shutdowns, as many of their
products are sold to municipalities and larger transit operators. Greenwood is currently exploring several new product
offerings, particularly in the housing and construction sectors, which would open new sales channels and broaden its
customer base. Greenwood recorded an operating loss of ($122,088) in fiscal 2020 compared to an operating income of
$71,192 in fiscal 2019.
Seed Processing and Sales - JCSC
Sales at JCSC were $2,071,157 in fiscal 2020 compared to sales of $2,233,406 in fiscal 2019, which represents a
decrease of $162,249, or 7%. Wet weather resulted in poor planting seasons across North America in late 2018 and in
2019 which reduced the demand for the Company’s clover seed as a cover crop during both fiscal 2020 and 2019.
Management’s recent efforts to focus JCSC on service and to more closely align with the needs of growers has led to
significantly greater cleaning volumes in early fiscal 2021 compared to the prior years. JCSC will continue to work
with growers on both cleaning and marketing seed which management believes will better position JCSC for higher
revenues going forward. JCSC had an operating loss of ($181,712) in fiscal 2020 compared to an operating loss of
($222,191) in fiscal 2019.
- 17 -
Industrial Tools and Clamps - MSI
During fiscal 2018, management initiated a review of the segment to improve margins, which includes reducing
inventory holding costs of slower selling items. This review led to the write-offs of obsolete inventory of $66,000 in
fiscal 2019. Unfortunately, management’s efforts were ultimately unsuccessful in increasing sales or margins due to a
lack of market differentiation and changing customer patterns. Therefore,
the Board of Directors decided to
permanently close MSI effective September 2019. All of the fiscal 2020 sales for MSI represent the liquidation of the
entire remaining inventory.
Sales at MSI were $240,196 in fiscal 2020 compared to $792,626 in fiscal 2019. Operating loss at MSI in fiscal 2020
was ($237,133) compared to an operating loss of ($159,914) in fiscal 2019. With the disposal of the remaining
inventory, MSI has now been closed, and the subsidiary wound-up and dissolved.
Corporate – JC USA
JC USA, the holding company that provides professional and administrative services for the wholly-owned operating
subsidiaries had operating income of $493,598 for fiscal 2020 compared to operating income of $1,158,426 for fiscal
2019. The decrease is due to lower rental and administrative fees charged to its subsidiaries related to the inventory
levels maintained throughout the year. The results of JC USA are inter-company transactions and are eliminated on
consolidation.
LIQUIDITY AND CAPITAL RESOURCES
Fiscal Year Ended August 31, 2020
As of August 31, 2020, the Company had working capital of $16,477,073 compared to working capital of $17,761,616
as of August 31, 2019, which is a decrease of $1,284,543. The largest changes affecting working capital include a
decrease in cash of $5,851,273, an increase in accounts receivable of $3,438,474, an increase in inventory of
$2,820,341, a decrease in note receivable of $1,197, an increase in prepaid expenses of $642,589, and a decrease in
prepaid income taxes of $223,420. The decrease in cash is related to the increases in inventory and accounts receivable
as the COVID-19 pandemic adjusted the product mix and usual sale cycle from prior years.
Accounts payable rose to $1,095,061 from $410,027 which is related to the timing of payments due to suppliers.
Accrued liabilities increased to $2,016,300 from $1,312,580, an increase of $703,720. Income taxes payable totaled
$40,596 compared to $Nil in fiscal 2019. Current portion of notes payable, which are the promissory notes PPP loans
received in the 3rd quarter, is $342,326, and the remainder of the PPP loans have been classified as long-term liabilities
totaling $338,381. The ratio of current assets to current liabilities, or current ratio, was 5.8 as of August 31, 2020
(August 31, 2019 – 11.3).
For the fiscal year ended August 31, 2020, the accounts receivable collection period or DSO was 51 days compared to
23 days for the year ended August 31, 2019. Inventory turnover for the year ended August 31, 2020 was 88 days
compared to 83 days for the year ended August 31, 2019.
The Company has been utilizing its cash position to repurchase common shares under formal repurchase plans in order
to increase shareholder value.
During the 2nd quarter of fiscal 2020 ended February 29, 2020, the Company repurchased for cancelation a total of
490,120 common shares from two large shareholders, including an officer and director of the Company. The shares
were repurchased privately at a price of $7.89 per share, calculated as the Volume Weighted Average Price (VWAP) of
all the shares traded on NASDAQ during the first quarter of fiscal 2020. The total cost of the share repurchases was
$3,867,046.
During fiscal 2019 ended August 31, 2019, the Company repurchased for cancelation 345,671 common shares through
a share repurchase plan approved by the Board of Directors in accordance with Rule 10b-18 under the U.S. Securities
Exchange Act of 1934. The shares were purchased at a cost of $3,061,441. The Company also issued 2,294 common
shares to its President and CEO in fiscal 2019 pursuant to the Company’s Restricted Share Plan as consideration for a
portion of his fiscal 2018 bonus.
- 18 -
Based on the Company’s current working capital position, its policy of retaining earnings, and the line of credit
available, the Company believes it has adequate working capital to meet its needs for fiscal 2021.
Short-term and Long-term Debt
External sources of liquidity include a line of credit from U.S. Bank of $3 million, of which $3 million is available.
Borrowing under the line of credit is secured by an assignment of accounts receivable and inventory. The interest rate
is calculated solely on the one month LIBOR rate plus 175 basis points. As of August 31, 2020 the one month LIBOR
rate plus 175 basis points was 3.32% (1.57% + 1.75%). With the expected phase-out of LIBOR, the Company expects
the calculated rate on the line of credit will be changed to another published reference standard before the planned
cessation of LIBOR quotations in 2021. However, the Company does not anticipate this change will have any
significant effect on the terms and conditions, and ability to access, the line of credit, or on its financial condition. The
line of credit also has certain financial covenants. The Company is in compliance with these covenants.
During the 3rd quarter of fiscal 2020, the Company applied for and received two loans under the Paycheck Protection
Program (the “PPP”) as part of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”)
administered by the U.S. Small Business Administration (“SBA”). The Company felt the PPP funds were necessary
because the Company was quickly depleting its available cash in April due to inventory purchases to fulfil customer
orders ahead of its busiest selling season, some delays in receiving inventory from China due to reduced availability of
ocean shipping, and the danger of potential COVID-19 infections. If any of the Company’s employees on site were to
contract the virus during this time, the Company would be required to shut down the facility for a minimum of 14 days
to clean and disinfect, and no product would be shipped to customers. Without the cash flow from product sales, the
Company would have likely had to immediately layoff or furlough many of its employees, which would further delay
the Company’s ability to recover after the shutdown.
The principal amount of the PPP loans totals $680,707. They have a term of 2 years with a 1% annual interest rate.
There is no prepayment penalty. If proceeds are used for qualifying expenses as defined by the CARES Act and the
modifying PPP Flexibility Act, including payroll costs, health care benefits, rent and utilities, the Company can apply
for forgiveness within 10 months of the end of their “covered period” of 24 weeks from the date of the loan for all or
any portion of the promissory note used for such qualifying expenses. Once an application for forgiveness is submitted,
all repayments are deferred until the lender receives a decision from the SBA, which can take as long as 150 days from
submission date.
OTHER MATTERS
Contractual Obligations and Commercial Commitments
The Company currently has no contractual obligations or commercial commitments.
Inflation
The Company does not believe that inflation had a material impact during fiscal 2020 or 2019. Typically, the
Company passes price increases on to the customer.
Critical Accounting Policies
Management is required to make judgments, estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the consolidated financial statements, the disclosure of contingent assets and liabilities as of the
date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On a
regular basis, we evaluate our estimates and assumptions. We base our estimates on historical experience and on
various other assumptions that are believed to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these
estimates under different assumptions or conditions.
- 19 -
During the year ended August 31, 2020, the Company adopted Topic 842, Leases, which was issued to replace the
leases requirements in Topic 840, Leases. The main difference between previous GAAP and Topic 842 is the
recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous
GAAP. A lessee should recognize in the balance sheet a liability to make lease payments (the lease liability) and a
right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12
months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize
lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases
generally on a straight-line basis over the lease term. The accounting applied by a lessor is largely unchanged from that
applied under previous GAAP. Topic 842 will be effective for annual reporting periods beginning after December 15,
2021, including interim periods within those annual periods and is to be retrospectively applied. Earlier application is
permitted. The Company adopted this ASU on September 1, 2019. There was no material impact on the Company’s
financial statements on adoption.
Other than Topic 842, the Company did not adopt any new accounting policies that would have a material impact on
the consolidated financial statements, nor did it make changes to accounting policies. Senior Management has
discussed with the Audit Committee the development, selection and disclosure of accounting estimates used in the
preparation of the consolidated financial statements.
Recent Accounting Pronouncements
Management has reviewed the new accounting guidance and determined that there is not a material impact on our
financial statements.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest Rate Risk
The Company did not have any derivative financial instruments as of August 31, 2020, and the Company does not use
derivative instruments for trading purposes.
Changes in U.S. interest rates affect the interest earned on the Company’s cash as well as interest paid on debt. The
Company has a line of credit with an interest rate based on published rates that may fluctuate over time based on
economic changes in the environment. The Company is subject to interest rate risk and could be subject to increased
interest payments if market interest rates fluctuate. The Company does not expect any change in the interest rates to
have a material adverse effect on the Company’s results from operations.
Foreign Currency Risk
The Company operates primarily in the United States. However, a relatively small amount of business is conducted in
currencies other than U.S. dollars. Also, to the extent that the Company uses contract manufacturers in China, currency
exchange rates can influence the Company’s purchasing costs.
- 20 -
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA
The financial statements and notes thereto are attached hereto. The audit report of Davidson & Company, LLP
Chartered Accountants is included herein immediately preceding the audited consolidated financial statements.
Audited Consolidated Financial Statements: fiscal 2020 and 2019
Report of Independent Registered Accounting Firm dated November 10, 2020
Consolidated Balance Sheets
Balance Sheets at August 31, 2020 and August 31, 2019
Consolidated Statements of Operations
For the years ended August 31, 2020 and August 31, 2019
Consolidated Statements of Stockholders’ Equity
For the years ended August 31, 2020 and August 31, 2019
Consolidated Statements of Cash Flows
For the years ended August 31, 2020 and August 31, 2019
Notes to Financial Statements
Report of Independent Registered Accounting Firm dated November 10, 2020
Schedule II: Valuation and Qualifying Accounts
- 21 -
JEWETT-CAMERON TRADING COMPANY LTD. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars)
AUGUST 31, 2020
- 22 -
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Directors of
Jewett-Cameron Trading Company Ltd.
Opinion on the consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Jewett-Cameron Trading Company Ltd. (the
“Company”), as of August 31, 2020 and 2019, and the related consolidated statements of operations, changes in
stockholders’ equity, and cash flows for the years ended August 31, 2020 and 2019, and the related notes (collectively
In our opinion, the consolidated financial statements present fairly, in all
referred to as the “financial statements”).
material respects, the financial position of Jewett-Cameron Trading Company Ltd. as of August 31, 2020 and 2019, and
the results of its operations and its cash flows for the years ended August 31, 2020 and 2019 in conformity with
accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to
express an opinion on the Company’s consolidated financial statements based on our audits. We are a public
accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of
material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an
understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatements of the financial statements,
whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as
well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a
reasonable basis for our opinion.
Vancouver, Canada
Accountants
November 10, 2020
“DAVIDSON & COMPANY LLP”
Chartered Professional
- 23 -
JEWETT-CAMERON TRADING COMPANY LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Expressed in U.S. Dollars)
AS OF AUGUST 31
ASSETS
Current assets
Cash and cash equivalents
Accounts receivable, net of allowance
of $Nil (August 31, 2019 - $Nil)
Inventory, net of allowance
of $65,000 (August 31, 2019 - $119,357) (note 3)
Note receivable
Prepaid expenses
Prepaid income taxes
Total current assets
2020
2019
$
3,801,037
$
9,652,310
6,274,426
9,198,146
-
1,036,128
-
2,835,952
6,377,805
1,197
393,539
223,420
20,309,737
19,484,223
Property, plant and equipment, net (note 4)
2,967,565
2,727,406
Intangible assets, net (note 5)
659
3,048
Total assets
$
23,277,961
$
22,214,677
- Continued -
The accompanying notes are an integral part of these consolidated financial statements.
- 24 -
JEWETT-CAMERON TRADING COMPANY LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Expressed in U.S. Dollars)
AS OF AUGUST 31
Continued
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable
Current portion of notes payable (note 8)
Income taxes payable
Accrued liabilities
Total current liabilities
Long-term liabilities
Notes payable (note 8)
Deferred tax liability (note 6)
Total liabilities
Stockholders’ equity
Capital stock (note 9, 10)
Authorized
2020
2019
$
1,095,061
342,326
40,596
2,016,300
3,494,283
338,381
96,952
$
410,027
-
-
1,312,580
1,722,607
-
61,204
3,929,616
1,783,811
21,567,564 common shares, without par value
10,000,000 preferred shares, without par value
Issued
3,481,162 common shares (August 31, 2019 – 3,971,282)
Additional paid-in capital
Retained earnings
Total stockholders’ equity
821,284
618,707
17,908,354
936,903
618,707
18,875,256
19,348,345
20,430,866
Total liabilities and stockholders’ equity
$
23,277,961
$
22,214,677
Contingency (Note 17)
The accompanying notes are an integral part of these consolidated financial statements.
- 25 -
JEWETT-CAMERON TRADING COMPANY LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Expressed in U.S. Dollars)
YEARS ENDED AUGUST 31
SALES
COST OF SALES
GROSS PROFIT
OPERATING EXPENSES
Selling, general and administrative
Depreciation and amortization
Wages and employee benefits
Income from operations
OTHER ITEMS
Gain on sale of property, plant and equipment
Interest and other income
2020
2019
$
44,945,263
$
45,446,362
32,472,080
35,481,931
12,473,183
9,964,431
2,502,989
217,712
5,894,346
8,615,047
2,127,296
191,819
4,907,766
7,226,881
3,858,136
2,737,550
6,600
24,420
31,020
105,366
45,228
150,594
Income before income taxes
3,889,156
2,888,144
Income taxes (note 6)
Current
Deferred (recovery)
Net income for the year
Basic earnings per common share
Diluted earnings per common share
Weighted average number of common shares outstanding:
Basic
Diluted
$
$
$
1,068,883
35,748
2,784,525
0.77
0.77
3,623,413
3,623,413
$
$
$
808,341
(20,649)
2,100,452
0.50
0.50
4,233,304
4,233,304
The accompanying notes are an integral part of these consolidated financial statements.
- 26 -
JEWETT-CAMERON TRADING COMPANY LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Expressed in U.S. Dollars)
YEARS ENDED AUGUST 31
Capital Stock
Number
of Shares
Amount
Additional
paid-in
capital
Retained
earnings
Total
August 31, 2018
4,314,659
$ 1,017,908
$ 600,804
$ 19,754,699
$ 21,373,411
Shares repurchased and cancelled (note 10)
Shares issued pursuant to compensation plans
(note 11)
Net income
(345,671)
(81,546)
-
(2,979,895)
(3,061,441)
2,294
-
541
-
17,903
-
-
2,100,452
18,444
2,100,452
August 31, 2019
3,971,282
$ 936,903
$ 618,707
$ 18,875,256
$ 20,430,866
Shares repurchased and cancelled (note 10)
Net Income
(490,120)
-
(115,619)
-
-
-
(3,751,427)
2,784,525
(3,867,046)
2,784,525
August 31, 2020
3,481,162
$ 821,284
$ 618,707
$ 17,908,354
$ 19,348,345
The accompanying notes are an integral part of these consolidated financial statements.
- 27 -
JEWETT-CAMERON TRADING COMPANY LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in U.S. Dollars)
YEARS ENDED AUGUST 31
CASH FLOWS FROM OPERATING ACTIVITIES
Net income for the year
Items not affecting cash:
Depreciation and amortization
(Gain) on sale of property, plant and equipment
Deferred income taxes
Changes in non-cash working capital items:
(Increase) decrease in accounts receivable
Decrease in note receivable
(Increase) decrease in inventory
(Increase) in prepaid expenses
Decrease (increase) in prepaid income taxes
Increase (decrease) in accounts payable and accrued liabilities
Increase in income taxes payable
2020
2019
$
2,784,525
$
2,100,452
217,712
(6,600)
35,748
(3,438,474)
1,197
(2,820,341)
(642,589)
223,420
1,388,754
40,596
191,819
(105,366)
(20,649)
1,316,540
2,803
3,425,392
(46,288)
(109,110)
(449,692)
-
Net cash (used by) provided by operating activities
(2,216,052)
6,305,901
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds on sale of property, plant and equipment
Purchase of property, plant and equipment
Net cash (used in) provided by investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in notes payable
Issuance of common stock
Redemption of common stock
400
(449,282)
(448,882)
680,707
-
(3,867,046)
324,675
(32,732)
291,943
-
18,444
(3,061,441)
Net cash used in financing activities
(3,186,339)
(3,042,997)
Net (decrease) increase in cash
Cash, beginning of year
Cash, end of year
(5,851,273)
9,652,310
3,554,847
6,097,463
$
3,801,037
$
9,652,310
Supplemental disclosure with respect to cash flows (note 16)
The accompanying notes are an integral part of these consolidated financial statements.
- 28 -
JEWETT-CAMERON TRADING COMPANY LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars)
1.
NATURE OF OPERATIONS
Jewett-Cameron Trading Company Ltd. was incorporated in British Columbia on July 8, 1987 as a holding
company for Jewett-Cameron Lumber Corporation (“JCLC”), incorporated September 1953. Jewett-Cameron
Trading Company, Ltd. acquired all the shares of JCLC through a stock-for-stock exchange on July 13, 1987,
and at that time JCLC became a wholly owned subsidiary. Effective September 1, 2013, the Company
reorganized certain of its subsidiaries. JCLC’s name was changed to JC USA Inc. (“JC USA”), and a new
subsidiary, Jewett-Cameron Company (“JCC”), was incorporated.
JC USA has the following wholly owned subsidiaries incorporated under the laws of the State of Oregon:
Jewett-Cameron Seed Company,
Inc.
(“Greenwood”), incorporated February 2002, and Jewett-Cameron Company, incorporated September 2013.
Former wholly owned subsidiary MSI-PRO was wound-up and dissolved in fiscal 2020. Jewett-Cameron
Trading Company Ltd. and its subsidiaries (the “Company”) have no significant assets in Canada.
incorporated October 2000, Greenwood Products,
(“JCSC”),
The Company, through its subsidiaries, operates out of facilities located in North Plains, Oregon. JCC’s
business consists of the manufacturing and distribution of specialty metal products and wholesale distribution
of wood products to home centers and other retailers located primarily in the United States. Greenwood is a
processor and distributor of industrial wood and other specialty building products principally to customers in
the marine and transportation industries in the United States. JCSC is a processor and distributor of
agricultural seeds in the United States. MSI was an importer and distributor of pneumatic air tools and
industrial clamps in the United States. JC USA provides professional and administrative services, including
accounting and credit services, to its subsidiary companies.
In March 2020, the World Health Organization declared the outbreak of COVID-19 a global pandemic.
Government measures to limit the spread of COVID-19, including the closure of non-essential businesses,
affected the Company’s operations including delays in inventory production and shipping, a change of product
mix based on customer demand to fencing, pet and DIY products, an increase in demand from online sales
channels, and costs associated with compliance with COVID-19 control protocols. The Company’s operations,
including inventory production and sales, have been excluded from business restrictions within the
jurisdictions that the Company operates. However, due to the rapid developments and uncertainty surrounding
COVID-19, it is not possible to predict the impact that COVID19 will have on the Company’s business,
financial position, and operating results in the future. In addition,
it is possible that estimates in the
Company’s consolidated financial statements will change in the near term as a result of COVID-19 and the
effect of any such changes could be material, which could result in, among other things valuation of inventory
and collectability of accounts receivable. The Company is closely monitoring the impact of the pandemic on
all aspects of its business.
2.
SIGNIFICANT ACCOUNTING POLICIES
Generally accepted accounting principles
These consolidated financial statements have been prepared in conformity with generally accepted accounting
principles of the United States of America.
Principles of consolidation
These consolidated financial statements include the accounts of the Company and its current wholly owned
subsidiaries, JC USA, JCC, JCSC, and Greenwood, and its former wholly owned subsidiary MSI, all of which
are incorporated under the laws of Oregon, U.S.A.
All inter-company balances and transactions have been eliminated upon consolidation.
- 29 -
JEWETT-CAMERON TRADING COMPANY LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars)
2.
SIGNIFICANT ACCOUNTING POLICIES (cont’d…)
Estimates
The preparation of consolidated financial statements in conformity with generally accepted accounting
principles in the United States of America requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses during the reporting period.
Significant estimates incorporated into the Company’s consolidated financial statements include the estimated
useful lives for depreciable and amortizable assets, the estimated allowances for doubtful accounts receivable
and inventory obsolescence, possible product
returns, and litigation
contingencies and claims. Actual results could differ from those estimates.
liability and possible product
Cash and cash equivalents
The Company considers all highly liquid instruments with a maturity of three months or less at the time of
issuance to be cash equivalents. At August 31, 2020, cash and cash equivalents were $3,801,037 compared to
$9,652,310 at August 31, 2019.
Accounts receivable
Trade and other accounts receivable are reported at face value less any provisions for uncollectible accounts
considered necessary. Accounts receivable primarily includes trade receivables from customers. The Company
estimates doubtful accounts on an item-by-item basis and includes over aged accounts as part of allowance for
doubtful accounts, which are generally ones that are ninety days or greater overdue.
The Company extends credit to domestic customers and offers discounts for early payment. When extension
of credit is not advisable, the Company relies on either prepayment or a letter of credit.
Inventory
Inventory, which consists primarily of finished goods, is recorded at the lower of cost, based on the average
cost method, and market. Market is defined as net realizable value. An allowance for potential non-saleable
inventory due to excess stock or obsolescence is based upon a review of inventory components.
Property, plant and equipment
Property, plant and equipment are recorded at cost less accumulated depreciation. The Company provides for
depreciation over the estimated life of each asset on a straight-line basis over the following periods:
Office equipment
Warehouse equipment
Buildings
Intangibles
3-7 years
2-10 years
5-30 years
The Company’s intangible assets have a finite life and are recorded at cost. Amortization is calculated using
the straight-line method over the remaining life of the asset. The intangible assets are reviewed annually for
impairment.
- 30 -
JEWETT-CAMERON TRADING COMPANY LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars)
2.
SIGNIFICANT ACCOUNTING POLICIES (cont’d…)
Asset retirement obligations
The Company records the fair value of an asset retirement obligation as a liability in the period in which it
incurs a legal obligation associated with the retirement of tangible long-lived assets that result from the
acquisition, construction, development, and normal use of the long-lived assets. The Company also records a
corresponding asset which is amortized over the life of the asset. Subsequent to the initial measurement of the
asset retirement obligation, the obligation is adjusted at the end of each period to reflect the passage of time
(accretion expense) and changes in the estimated future cash flows underlying the obligation (asset retirement
cost). The Company does not have any significant asset retirement obligations.
Impairment of long-lived assets and long-lived assets to be disposed of
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured
by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the
asset.
If such assets are considered to be impaired, the impairment to be recognized is measured by the
amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed
of are reported at the lower of the carrying amount and the fair value less costs to sell.
Currency and foreign exchange
These financial statements are expressed in U.S. dollars as the Company's operations are primarily based in
the United States.
The Company does not have non-monetary or monetary assets and liabilities that are in a currency other than
the U.S. dollar. Any statement of operations transactions in a foreign currency are translated at rates that
approximate those in effect at the time of translation. Gains and losses from translation of foreign currency
transactions into U.S. dollars are included in current results of operations.
Earnings per share
Basic earnings per common share is computed by dividing net income available to common shareholders by
the weighted average number of common shares outstanding in the period. Diluted earnings per common
share takes into consideration common shares outstanding (computed under basic earnings per share) and
potentially dilutive common shares.
- 31 -
JEWETT-CAMERON TRADING COMPANY LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars)
2.
SIGNIFICANT ACCOUNTING POLICIES (cont’d…)
Earnings per share (cont’d…)
The earnings per share data for the fiscal years ended August 31, 2020 and 2019 are as follows:
Net income
$
2,784,525
$
2,100,452
2020
2019
Basic weighted average number of
common shares outstanding
Effect of dilutive securities
Stock options
Diluted weighted average number
of common shares outstanding
3,623,413
4,233,304
-
-
3,623,413
4,233,304
Basic and diluted earnings per common share
$
0.77
$
0.50
Comprehensive income
The Company has no items of other comprehensive income in any year presented. Therefore, net income
presented in the consolidated statements of operations equals comprehensive income.
Stock-based compensation
All stock-based compensation is recognized as an expense in the financial statements and such costs are
measured at the fair value of the award.
No options were granted during the years ended August 31, 2020 and 2019 and there were no options
outstanding on August 31, 2020 or 2019.
Financial instruments
The Company uses the following methods and assumptions to estimate the fair value of each class of financial
instruments for which it is practicable to estimate such values:
Cash - the carrying amount approximates fair value because the amounts consist of cash held at a bank and
cash held in short term investment accounts.
Accounts receivable - the carrying amounts approximate fair value due to the short-term nature and historical
collectability.
Notes payable - the carrying amount approximates fair value due to the short-term nature of the obligations.
Accounts payable and accrued liabilities - the carrying amount approximates fair value due to the short-term
nature of the obligations.
- 32 -
JEWETT-CAMERON TRADING COMPANY LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars)
2.
SIGNIFICANT ACCOUNTING POLICIES (cont’d…)
Financial instruments (cont’d…)
The estimated fair values of the Company's financial instruments as of August 31, 2020 and 2019 follows:
Cash and cash equivalents
Accounts receivable, net of allowance
Notes Payable
Accounts payable and accrued liabilities
2020
Carrying
Amount
$3,801,037
6,274,426
680,707
3,111,361
Fair
Value
$3,801,037
6,274,426
680,707
3,111,361
2019
Carrying
Amount
$9,652,310
2,835,952
-
1,722,607
Fair
Value
$9,652,310
2,835,952
-
1,722,607
The following table presents information about the assets that are measured at fair value on a recurring basis
as of August 31, 2020 and indicates the fair value hierarchy of the valuation techniques the Company utilized
to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices
(unadjusted) in active markets for identical assets. Fair values determined by Level 2 inputs utilize data points
that are observable such as quoted prices, interest rates and yield curves. Fair values determined by Level 3
inputs are unobservable data points for the asset or liability, and included situations where there is little, if any,
market activity for the asset:
Quoted
Prices
in Active
Markets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
August 31,
2020
$ 3,801,037
$ 3,801,037
$
—
$
—
Assets:
Cash and cash equivalents
The fair values of cash are determined through market, observable and corroborated sources.
Income taxes
A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting
and net operating loss carryforwards. Deferred tax expense (benefit) results from the net change during the
year of deferred tax assets and liabilities.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more
likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and
liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Shipping and handling costs
The Company incurs certain expenses related to preparing, packaging and shipping its products to its
customers, mainly third-party transportation fees. All costs related to these activities are included as a
component of cost of sales in the consolidated statements of operations. All costs billed to the customer are
included as sales in the consolidated statements of operations.
- 33 -
JEWETT-CAMERON TRADING COMPANY LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars)
2.
SIGNIFICANT ACCOUNTING POLICIES (cont’d…)
Financial instruments (cont’d…)
Revenue recognition
The Company recognizes revenue from the sales of lumber, building supply products, industrial wood
products, specialty metal products, and other specialty products and tools, when the products are shipped, title
passes, and the ultimate collection is reasonably assured. Revenue from the Company's seed operations is
generated from seed processing, handling and storage services provided to seed growers, and by the sales of
seed products. Revenue from the provision of these services and products is recognized when the services
have been performed, products sold and collection of the amounts is reasonably assured.
Recent Accounting Pronouncements
In February 2016, Topic 842, Leases was issued to replace the leases requirements in Topic 840, Leases. The
main difference between previous GAAP and Topic 842 is the recognition of lease assets and lease liabilities
by lessees for those leases classified as operating leases under previous GAAP. A lessee should recognize in
the balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its
right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is
permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and
lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a
straight-line basis over the lease term. The accounting applied by a lessor is largely unchanged from that
applied under previous GAAP. Topic 842 will be effective for annual reporting periods beginning after
December 15, 2021, including interim periods within those annual periods and is to be retrospectively applied.
Earlier application is permitted. The Company adopted this ASU on September 1, 2019. There was no
material impact on the Company’s financial statements on adoption.
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326):
Measurement of Credit Losses on Financial Instruments. The accounting standard changes the methodology
for measuring credit losses on financial instruments and the timing when such losses are recorded. ASU No.
2016-14 is effective for fiscal years, and interim periods within those years, beginning after December 15,
2019. The Company is currently evaluating the impact of ASU No. 2016-13 on its financial position, results of
operations and liquidity.
3.
INVENTORY
A summary of inventory as of August 31, 2020 and 2019 is as follows:
Wood products and metal products
Industrial tools
Agricultural seed products
2020
9,017,349
-
180,797
9,198,146
$
$
$
$
2019
5,833,047
239,280
305,478
6,377,805
- 34 -
JEWETT-CAMERON TRADING COMPANY LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars)
4.
PROPERTY, PLANT AND EQUIPMENT
A summary of property, plant, and equipment as of August 31, 2020 and 2019 is as follows:
Office equipment
Warehouse equipment
Buildings
Land
Accumulated depreciation
Net book value
2020
2019
$
654,739
1,293,331
4,182,332
559,065
6,689,467
$
486,038
1,265,532
4,072,741
559,065
6,383,376
(3,721,902)
(3,655,970)
$
2,967,565
$
2,727,406
In the event that facts and circumstances indicate that the carrying amount of an asset may not be recoverable
and an estimate of future discounted cash flows is less than the carrying amount of the asset, an impairment
loss will be recognized. Management's estimates of revenues, operating expenses, and operating capital are
subject to certain risks and uncertainties which may affect the recoverability of the Company's investments in
its assets. Although management has made its best estimate of these factors based on current conditions, it is
possible that changes could occur which could adversely affect management's estimate of the net cash flow
expected to be generated from its operations.
5.
INTANGIBLE ASSETS
A summary of intangible assets as of August 31, 2020 and 2019 follows:
Intangible assets
Accumulated amortization
Net book value
2020
16,405
2019
43,655
(15,746)
(40,607)
$
659
$
3,048
During fiscal 2020, the Company wrote-off the intangible assets related to the wound-up and dissolved MSI-
PRO subsidiary.
- 35 -
JEWETT-CAMERON TRADING COMPANY LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars)
6.
INCOME TAXES
A reconciliation of the provision for income taxes with amounts determined by applying the statutory U.S.
federal income tax rate to income before income taxes is as follows:
Computed tax at the federal statutory rate
State taxes, net of federal benefit
Depreciation
Inventory reserve
Other
Provision for income taxes
Current income taxes
Deferred income taxes
2020
807, 223
218,611
(33,518)
7,587
68,980
1,068,883
1,068,883
35,748
1,104,631
$
$
$
$
$
$
$
$
2019
605,466
173,114
920
20,458
8,383
808,341
808,341
(20,649)
787,692
Deferred income tax liability as of August 31, 2020 of $96,952 (August 31, 2019 – $61,204) reflects the net
tax effects of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. 63854
Deferred tax assets:
Allowance for inventory
Allowance for bad debts
Difference between book and tax depreciation
$
Total deferred tax assets
Valuation allowance
Net deferred tax assets
Net deferred tax liability
2020
2019
$
92,999
-
(51,892)
41,107
-
41,107
83,243
-
(6,388)
76,855
-
76,855
(138,059)
(138,059)
Combined net deferred tax liability
$
(96,952)
$
(61,204)
7.
BANK INDEBTEDNESS
There was no bank indebtedness under the Company’s line-of-credit as of August 31, 2020 or August 31,
2019. At August 31, 2020, the line of credit borrowing limit was $3,000,000.
Bank indebtedness, when it exists, is secured by an assignment of accounts receivable and inventory. Interest
is calculated solely on the one month LIBOR rate plus 175 basis points.
- 36 -
JEWETT-CAMERON TRADING COMPANY LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars)
8.
NOTES PAYABLE
On May 4, 2020, the Company entered into loan agreements with U.S. Bank (the “Lender”) for two unsecured
loans represented by promissory notes (the “Notes”). The loans were made pursuant to the Paycheck
Protection Program (the “PPP”) as part of the Coronavirus Aid, Relief, and Economic Security Act (the
“CARES Act”) administered by the U.S. Small Business Administration (“SBA”).
The first loan was made to JCC for $487,127 and the second loan was made to JC USA for $193,580. The
total principal amount of the two notes is $680,707. They have a term of 2 years with a 1% annual interest
rate. Payments are deferred for 6 months, after which the repayment of principal and interest is required to be
made in equal monthly payments over 18 months beginning December 4, 2020. There is no prepayment
penalty. If proceeds are used for qualifying expenses as defined by the CARES Act, including payroll costs,
health care benefits, rent and utilities, the Company can apply for forgiveness after 60 days of all or any
portion of the promissory note used for such qualifying expenses. Although the Company intends to use the
proceeds for qualifying expenses, there is no assurance that the Company will obtain forgiveness of the loan.
to additional
The terms of the promissory note,
requirements adopted by the SBA.
including eligibility and forgiveness, may be subject
The Company has chosen to account for the loans under FASB ASC 470. Repayment amounts due within 1
year have been recorded as current liabilities, and the remaining amounts due in more than 1 year as long-term
liabilities. If the Company is successful in receiving forgiveness for those portions of the loan used for
qualifying expenses, those amounts will be recorded as a gain upon extinguishment.
9.
CAPITAL STOCK
Common stock
Holders of common stock are entitled to one vote for each share held. There are no restrictions that limit the
Company's ability to pay dividends on its common stock. The Company has not declared any dividends since
incorporation.
10.
CANCELLATION OF CAPITAL STOCK
Treasury stock may be kept based on an acceptable inventory method such as the average cost basis. Upon
disposition or cancellation, the treasury stock account is credited for an amount equal to the number of shares
cancelled, multiplied by the cost per share and the difference is treated as additional paid-in-capital in excess
of stated value.
During the 2nd quarter of fiscal 2020 ended February 29, 2020, the Company repurchased for cancelation a
total of 490,120 common shares from two large shareholders, including an officer and director of the
Company. The shares were repurchased privately at a price of $7.89 per share, calculated as the Volume
Weighted Average Price (VWAP) of all the shares traded on NASDAQ during the first quarter of fiscal 2020.
The total cost of the share repurchases was $3,867,046. The premium paid to acquire those shares over their
per share book value in the amount of $3,751,427 was recorded as a decrease to retained earnings
During the 4th quarter of fiscal 2019 ended August 31, 2019, the Company repurchased a total of 46,408
common shares under a 10b-18 share repurchase plan originally announced on February 7, 2019. The total
cost was $399,593 at an average share price of $8.61 per share. The premium paid to acquire those shares over
their per share book value in the amount of $388,645 was recorded as a decrease to retained earnings.
During the 3rd quarter of fiscal 2019 ended May 31, 2019, the Company repurchased a total of 195,142 shares
under a 10b-18 share repurchase plan originally announced on February 7, 2019. The total cost was
$1,704,543 at an average share price of $8.73 per share. The premium paid to acquire those shares over their
per share book value in the amount of $1,658,509 was recorded as a decrease to retained earnings.
- 37 -
JEWETT-CAMERON TRADING COMPANY LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars)
10.
CANCELLATION OF CAPITAL STOCK (cont’d…)
During the 2nd quarter of fiscal 2019 ended February 28, 2019, the Company repurchased a total of 8,450
shares under the February 2019 10b-18 share repurchase plan. The total cost was $63,929 at an average share
price of $7.57 per share. The premium paid to acquire those shares over their per share book value in the
amount of $61,936 was recorded as a decrease to retained earnings.
During the 1st quarter of fiscal 2019 ended November 30, 2018, the Company repurchased and cancelled a
total of 95,671 shares under a 10b-18 share repurchase plan originally announced on June 6, 2018. The total
cost was $893,376 at an average share price of $9.34 per share. The premium paid to acquire those shares over
their per share book value in the amount of $870,805 was recorded as a decrease to retained earnings.
11.
SHARE-BASED INCENTIVE PLANS
Stock Options
The Company formerly had a stock option program under which stock options to purchase securities from the
Company could be granted to directors and employees of the Company on terms and conditions acceptable to
the regulatory authorities of Canada, notably the Ontario Securities Commission and the British Columbia
Securities Commission.
Under the stock option program, stock options for up to 10% of the number of issued and outstanding
common shares could be granted from time to time, provided that stock options in favor of any one individual
may not exceed 5% of the issued and outstanding common shares. No stock option granted under the stock
option program is transferable by the optionee other than by will or the laws of descent and distribution, and
each stock option is exercisable during the lifetime of the optionee only by such optionee. Generally, no
option can be for a term of more than 10 years from the date of the grant.
The exercise price of all stock options, granted under the stock option program, must be at least equal to the
fair market value (subject to regulated discounts) of such common shares on the date of grant. Options vested
at the discretion of the Board of Directors.
During the year ended August 31, 2020, the Company’s Board of Directors approved the termination of the
stock option program. The Company had no stock options outstanding as of August 31, 2020 and August 31,
2019.
Restricted Share Plan
The Company has a Restricted Share Plan (the “Plan”) as approved by shareholders on February 8, 2019. The
Plan allows the Company to grant, from time to time, restricted shares as compensation to directors, officers,
employees and consultants of the Company. The Restricted Shares are subject to restrictions, including the
period under which the shares will be restricted (the “Restricted Period”) and subject to forfeiture which is
determined by the Board at the time of the grant. The recipient of Restricted Shares is entitled to all of the
rights of a shareholder, including the right to vote such shares and the right to receive any dividends, except
that the shares granted under the Plan are nontransferable during the Restricted Period.
The maximum number of Common Shares reserved for issuance under the Plan will not exceed 1% of the then
issued and outstanding number of Common Shares at the time of the grant. As of August 31, 2020, the
maximum number of shares available to be issued under the Plan was 39,712.
During the year ended August 31, 2019, the Company issued 2,294 common shares under the Plan to the
Company’s CEO as a portion of his earned fiscal 2018 bonus as approved by the Board. The value of this
award was $18,444, with the number of shares issued determined by the closing price of the stock on the day
of the grant.
- 38 -
JEWETT-CAMERON TRADING COMPANY LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars)
12.
PENSION AND PROFIT-SHARING PLANS
The Company has a deferred compensation 401(k) plan for all employees with at least 6 months of service
pending a monthly enrollment time. The plan allows for a non-elective discretionary contribution plus
matching employee contributions up to a specific limit. The percentages of contribution remain the discretion
of the Board and are reviewed with management annually. For the years ended August 31, 2020 and 2019 the
401(k) compensation expense was $439,368 and $295,557, respectively.
13.
DISCONTINUED OPERATIONS
Effective September 1, 2019, the Board of Directors decided to permanently close the MSI division and exit
the industrial tools business. As of August 31, 2020, the remaining inventory has been liquidated, the division
has been wound-up, and the subsidiary has been voluntarily dissolved. The operations and assets of MSI were
significantly immaterial to the Company’s overall performance. As such, separate disclosure of MSI’s
operations as discontinued operations within the Company’s statement of operations was not considered
necessary.
14.
SEGMENT INFORMATION
The Company has four principal reportable segments. Three segments are continuing operations and one,
Industrial Tools and Clamps, is considered as a discontinued operation. These reportable segments were
determined based on the nature of the products offered. Reportable segments are defined as components of an
enterprise about which separate financial information is available that is evaluated regularly by the chief
operating decision maker in deciding how to allocate resources and in assessing performance.
The Company evaluates performance based on several factors, of which the primary financial measure is
business segment income before taxes. The following tables show the operations of the Company's reportable
segments.
Following is a summary of segmented information for the years ended August 31:
Sales to unaffiliated customers:
Industrial wood products
Lawn, garden, pet and other
Seed processing and sales
Industrial tools and clamps
Income (loss) before income taxes:
Industrial wood products
Lawn, garden, pet and other
Seed processing and sales
Industrial tools and clamps
Corporate and administrative
2020
2019
$
$
$
$
2,285,250
40,348,660
2,071,157
240,196
44,945,263
(122,088)
3,936,491
(181,712)
(237,133)
493,598
3,889,156
$
$
$
$
3,910,117
38,510,213
2,233,406
792,626
45,446,362
71,192
2,040,631
(222,191)
(159,914)
1,158,426
2,888,144
- 39 -
JEWETT-CAMERON TRADING COMPANY LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars)
14.
SEGMENT INFORMATION (cont’d…)
Identifiable assets:
Industrial wood products
Lawn, garden, pet and other
Seed processing and sales
Industrial tools and clamps
Corporate and administrative
Depreciation and amortization:
Industrial wood products
Lawn, garden, pet and other
Seed processing and sales
Industrial tools and clamps
Corporate and administrative
Capital expenditures:
Industrial wood products
Lawn, garden, pet and other
Seed processing and sales
Industrial tools and clamps
Corporate and administrative
Interest expense:
2020
2019
$
$
$
$
$
$
$
819,585
14,984,480
544,161
-
6,929,735
23,277,961
-
29,774
6,347
2,242
179,349
217,712
-
-
-
-
449,282
449,282
-
$
$
$
$
$
$
$
977,117
7,590,487
471,888
279,591
12,895,595
22,214,677
-
23,021
8,007
489
160,302
191,819
-
-
-
-
32,732
32,732
-
The following table lists sales made by the Company to customers which were in excess of 10% of total sales
for the years ended August 31:
2020
2019
Sales
$
19,679,274
$
20,544,268
The Company conducts business primarily in the United States, but also has limited amounts of sales in
foreign countries. The following table lists sales by country for the fiscal years ended August 31:
United States
Canada
Mexico/Latin America/Caribbean
Europe
Asia/Pacific
2020
2019
$
$
43,914,053
735,547
162,404
35,730
97,529
44,945,263
$
$
43,894,726
1,243,239
180,664
43,851
83,882
45,446,362
All of the Company’s significant identifiable assets were located in the United States as of August 31, 2020
and 2019.
- 40 -
JEWETT-CAMERON TRADING COMPANY LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars)
15.
CONCENTRATIONS
Credit risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of
cash and accounts receivable. The Company places its cash with a high quality financial institution. The
Company has concentrations of credit risk with respect to accounts receivable as large amounts of its accounts
receivable are concentrated geographically in the United States amongst a small number of customers. At
August 31, 2020, two customers accounted for accounts receivable greater than 10% of total accounts
receivable for a total of 48%. At August 31, 2019, two customers accounted for accounts receivable greater
than 10% of total accounts receivable for a total of 56%. The Company controls credit risk through credit
insurance and monitoring procedures. The Company performs credit
approvals, credit
evaluations of its commercial customers but generally does not require collateral
to support accounts
receivable.
limits, credit
Volume of business
The Company has concentrations in the volume of purchases it conducts with its suppliers. For the fiscal year
ended August 31, 2020, there were two suppliers which each accounted for greater than 10% of total
purchases, and the aggregate purchases amounted to $22,249,043. For the fiscal year ended August 31, 2019,
there were two suppliers which each accounted for greater than 10% of total purchases, and the aggregate
purchases amounted to $17,745,475.
16.
SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS
Certain cash payments for the years ended August 31, 2020 and 2019 are summarized as follows:
Cash paid during the year for:
Interest
Income taxes
2020
2019
$
$
-
741,406
$
$
-
917,000
There were no non-cash investing or financing activities during the years presented.
17.
CONTINGENCY
The Company is a named party in a Civil Action in Pennsylvania. The matter is an action seeking
compensation for personal injuries and is based on theories of product liability as to Jewett-Cameron. The
matter arises out of a dog allegedly escaping from a Jewett-Cameron kennel product and causing personal
injuries to three individuals. Jewett-Cameron is currently one of three named Defendants. As of this date, no
formal responses have been made and no dates have been established governing the litigation proceedings.
This matter is in its early stages making it speculative to predict as to its outcome. It is the Company’s
intention to vigorously defend the lawsuit. Jewett- Cameron’s applicable liability insurer is providing a
defense covering Jewett-Cameron’s legal fees and costs.
- 41 -
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of
Jewett-Cameron Trading Company Ltd. and Subsidiaries
Our report on the consolidated financial statements of Jewett-Cameron Trading Company Ltd. and Subsidiaries as at
August 31, 2020 and 2019 and for the years then ended is included on Page 21 of this Form 10-K. In connection with
our audits of such consolidated financial statements, we have also audited the related consolidated financial statement
Schedule II for the years ended August 31, 2020 and 2019 included in this Form 10-K.
In our opinion, the consolidated financial statement schedule referred to above for the years ended August 31, 2020 and
2019, when considered in relation to the consolidated financial statements taken as a whole, presents fairly in all
material respects the information required to be included therein.
Vancouver, Canada
November 10, 2020
“DAVIDSON & COMPANY LLP”
Chartered Professional Accountants
- 42 -
JEWETT-CAMERON TRADING COMPANY LTD. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENT SCHEDULE
SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS
AUGUST 31, 2020
Balance at
Beginning
of Year
Additions
Charged to
Costs and
Expenses
Deductions
Credited to
Costs and
Expenses
Deductions
From
Reserves
Balance at
End of Year
August 31, 2020
Allowance deducted from related
Balance sheet account:
Inventory
Accounts Receivable
August 31, 2019
Allowance deducted from related
Balance sheet account:
Inventory
Accounts Receivable
$
$
$
$
119,357
-
$
$
78,105
-
$
$
75,336
-
$
$
164,229
-
$
$
-
-
-
-
$
$
$
$
132,462
-
$
$
65,000
-
120,208
-
$
$
119,357
-
- 43 -
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
--- No Disclosure Necessary ---
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Management has evaluated, under the supervision and with the participation of our Chief Executive Officer and
Principal Financial Officer, the effectiveness of our disclosure controls and procedures as of the end of the period
covered by this report as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Securities Exchange Act of 1934 (the
“Exchange Act”). Based on that evaluation our Chief Executive Officer and Principal Financial Officer have
concluded that as of the end of the period covered by this report our disclosure controls and procedures are effective in
ensuring that information required to be disclosed in our Exchange Act reports is (1) recorded, processed, summarized,
and reported in a timely manner, and (2) accumulated and communicated to our management including our Chief
Executive Officer and Principal Financial Officer as appropriate to allow timely decisions regarding required
disclosure.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as
such term is defined in Exchange Act Rules 13a-15(f). Under supervision and with the participation of our
management including our Chief Executive Officer and Principal Financial Officer we conducted an evaluation of the
effectiveness of our internal control over financial reporting based on the framework in Internal Control – Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our
evaluation our management concluded that our internal control over financial reporting was effective as of August 31,
2020.
This Annual Report on Form 10-K does not include an attestation report of our registered public accounting firm
regarding internal control over financial reporting. Management’s report was not subject to attestation by our
registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit us to
provide only management’s report in this Annual Report on Form 10-K.
Changes in Internal Controls
There has been no change in our internal control over financial reporting that occurred during our most recent fiscal
year that has materially affected, or is reasonably likely to materially affect, our internal control over financial
reporting.
ITEM 9B. OTHER INFORMATION
--- No Disclosure Necessary ---
- 44 -
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Table No. 4 lists as of November 1, 2020 the names of the Directors of the Company. The Directors will serve until
the next Annual Shareholders’ Meeting or until a successor is duly elected, unless the office is vacated in accordance
with the Articles/By-Laws of the Company. All of the Directors are citizens of the United States.
Table No. 4
Directors
Age
70
64
41
59
73
73
Date First
Elected
Or Appointed
August 2019
February 2017
July 2017
December 2018
January 2013
May 2019
Name
Geoff Guilfoy (1) (2)
Charles Hopewell
Sarah Johnson (1) (2)
Chris Karlin (1) (2)
Frank G. Magdlen (1) (2)
Michael C. Nasser
(1) Member of Audit Committee.
(2) Member of Compensation Committee.
Table No. 5 lists, as of November 1, 2020, the names of the executive officers of the Company. The executive officers
serve at the pleasure of the Board of Directors. All executive officers are residents and citizens of the United States
and spend 100% of their time on the affairs of the Company.
Table No. 5
Executive Officers
Name
Charles Hopewell
Michael C. Nasser
Position
President and Chief Executive Officer
Corporate Secretary
Age
64
73
Family Relationships/Other Relationships/Arrangements
Date of
Board Approval
February 2017
July 1987
There are no arrangements or understandings between any two or more directors or executive officers, pursuant to
which he/she was selected as a director or executive officer. There are no family relationships, material arrangements
or understandings between any two or more directors or executive officers.
Written Management Agreements
--- No Disclosure Necessary ---
Business Experience
Charles E. Hopewell has over 35 years of experience in senior management positions with manufacturing companies,
including serving as CEO of Sunset Manufacturing Inc, Neilsen Manufacturing Inc, and COO of Aluminite
Corporation. In his past positions as COO or CEO, he has been involved in all organizational aspects, including sales
and marketing, plant and equipment, personnel, and finance. He received a degree in Finance from the University of
Oregon and an MBA from Willamette University’s Atkinson Graduate School of Management. Mr. Hopewell has also
worked extensively in local and statewide workforce policy and K-12 CTE education at a Board level.
Michael C. Nasser has over 40 years of experience in sales and sales management and has worked in this capacity for
the Company since its inception. Prior to this he worked for companies including Sunrise Forest Products and Oregon
Pacific Industries. Mr. Nasser is a graduate of Portland State University.
- 45 -
Geoff Guilfoy is a management consultant with over 40 years of experience, including over 20 years in management
consulting, 17 years in State Government management, and an additional 4 years in the private and non-profit sectors.
Prior to founding Lumen Leaders LLC in 2013, he was the partner in charge of the management consulting group at
AKT LLP, a regional CPA and business consulting firm. For 28 years, he was an Executive Professor at Willamette
University’s Atkinson Graduate School of Management teaching courses on management consulting, nonprofit
management, and government. He currently serves on the Board of Directors of Medical Teams International and is a
former National Board Member of the Institute of Management Consultants USA. He has a Bachelor of Science,
Management (Accounting) from San Jose State University and an MBA from Willamette University.
Sarah Johnson has significant experience in supply chain management and best practices, including the planning and
implementation of improvements to both the manufacturing and supply processes. She is currently Global Raw
Materials Planning Manager at Columbia Sportswear. Previously, she served as the Global Buying Manager and as a
Business Process Analyst and Senior Global Buyer at Columbia, which included working with International vendors,
principally in Asia and Canada. Ms. Johnson is a graduate of Gonzaga University in Spokane, Washington.
Chris Karlin is a retired banker who began his banking career in 1980. He served as the Senior Vice President and
Manager of U.S. Bank’s National Government Banking Division from 2005 to 2014 and was responsible for the
strategic vision of the group. He joined U.S. Bank in 1993 as a Relationship Manager in the National Corporate
Division. He has also served as a Regional Manager for the Treasury Management Division in Minneapolis. Prior to
joining U.S. Bank, Chris was with Mitsubishi Bank, serving as Group Manager in its Chicago and Columbus offices,
focusing on public finance and large corporate markets. Chris is a past Chair of the Oregon Bankers Association
(OBA), serves as the Adviser for its Leadership Program and serves on the Board of the OBA's Education Foundation.
Chris has degrees in Economics and Finance from Fort Hays State University (Kansas) and a Master of International
Management from the Thunderbird School of International Management (Arizona).
Frank G. Magdlen is a Chartered Financial Analyst and Chairman of the Audit Committee. He has over 40 years of
business experience during which he held various financial services positions specializing in investment banking,
research on small capitalization companies and portfolio management. Since 1999, he has been managing investment
banking activities at GarWood Securities, LLC and The Robins Group, LLC / Crown Point Group Ltd. Mr. Magdlen
has an MBA from University of Southern California, and an undergraduate degree from University of Portland.
Involvement in Certain Legal Proceedings
There have been no events during the last five years that are material to an evaluation of the ability or integrity of any
director, person nominated to become a director, executive officer, or control person including:
1)
2)
3)
4)
Any bankruptcy petition filed by or against any business of which such person was a general partner or
executive officer either at the time of the bankruptcy or within two years prior to that time;
Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding
traffic violations/other minor offenses);
Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any
court of competent jurisdiction, permanently enjoining, barring, suspending or otherwise limiting his/her
involvement in any type of business, securities or banking activities; and
Being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity
Futures Trading Commission to have violated a federal or state securities or commodities law, and the
judgment has not been reversed, suspended, or vacated.
Audit Committee Financial Expert
Our Board of Directors has determined that Frank G. Magdlen is the “audit committee financial expert”, as defined in
Item 401(h) of Regulation S-K. Mr. Magdlen is independent as that term is used in Section 240.14a-101 under the
Exchange Act and as defined under NASDAQ Rule 4200(a)(15).
- 46 -
Audit Committees
The Company has an Audit Committee, which recommends to the board of directors the engagement of the
independent auditors of the Company and reviews with the independent auditors the scope and results of the
Company’s audits,
the Company’s internal accounting controls, and the professional services furnished by the
independent auditors to the Company. The board of directors, in light of the increased responsibilities placed on the
Audit Committee during 2002 by the Sarbanes-Oxley Act and the SEC, adopted an Amended and Restated Charter in
late 2002.
The Audit Committee is directly responsible for the appointment, compensation and oversight of auditors; and
concerns about accounting and auditing matters; and has the authority to engage independent counsel and other outside
advisors.
The Audit Committee may delegate to one or more designated members of the Audit Committee the authority to grant
pre-approvals required by this policy / procedure. The decisions of any Audit Committee member to whom authority is
delegated to pre-approve a service shall be presented to the Audit Committee at its next scheduled meeting.
In accordance with the requirements of the U.S. Sarbanes-Oxley Act of 2002 and rules issued by the Securities and
Exchange Commission,
the Company introduced a procedure for the review and pre-approval of any services
performed by Davidson & Company, LLP Chartered Accountants, including audit services, audit related services, tax
services and other services. The procedure requires that all proposed engagements of Davidson & Company, LLP
Chartered Accountants for audit and permitted non-audit services are submitted to the Audit Committee for approval
prior to the beginning of any such services.
The current members of the Audit Committee are Frank Magdlen (Chairman), Geoff Guilfoy, Sarah Johnson, and Chris
Karlin. All current members of the Audit Committee are “independent” within the meaning of the new regulations
from the SEC regarding audit committee membership. The Audit Committee met six times in fiscal 2019 and four
times in fiscal 2020.
Compensation Committee
The Company has a Compensation Committee which recommends to the Board of Directors on compensation matters
for the Company, including compensation plans and benefits of executive officers and directors. This includes
determining the compensation for senior management, the form and amounts of Director compensation, the size and
recipients of bonuses, and equity incentive plans, including the grant of options and other awards. The Committee will
also recommend executive appointments and complete annual performance evaluations of the Chief Executive Officer
and Chief Financial Officer. The Committee also advises on succession plan matters and has the authority to retain
outside advisors or consultants.
The Committee operates under a written charter, which requires the Committee to consist of at least three members
appointed by the Board. The members shall be independent directors, and the Board will designate one member as
Chairman of the Committee. The Committee shall meet a minimum of one time per year.
Current members of the Compensation Committee are Sarah Johnson (Chair), Geoff Guilfoy, Chris Karlin, and Frank
Magdlen. The Committee met two times in fiscal 2019 and three times in fiscal 2020.
Compliance with Section 16(a) of the Exchange Act
The Company has reviewed the Forms 3 and 4 furnished to the Company under Rule 16a-3(e) of the Securities Exchange
Act during the most recent fiscal year and the Forms 5 furnished to the Company with respect to its most recent fiscal year,
as well as any written representations received by the Company from persons required to file such forms. Management has
determined there was one report that failed to be filed on a timely basis as required by Section 16(a) of the Securities
Exchange Act during the most recent fiscal year, as a Form 4 for Charles Hopewell was filed late.
- 47 -
Code of Ethics
The Company has a written “code of ethics” that meets the United States' Sarbanes-Oxley standards. The code is
posted on the Company’s website.
Limitation of Liability and Indemnification
Our certificate of incorporation limits the personal liability of our board members for breaches by them of their
fiduciary duties. Our bylaws also require us to indemnify our directors and officers to the fullest extent permitted by
British Columbia law. British Columbia law provides that directors of a corporation will not be personally liable for
monetary damages for breach of their fiduciary duties as directors, except liability for any of the following acts:
a.
b.
c.
d.
any breach of their duty of loyalty to the Company or its stockholders;
acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;
unlawful payments of dividends or unlawful stock repurchases, redemptions or other distributions; and
any transaction from which the director derived an improper personal benefit.
Such limitation of liability may not apply to liabilities arising under the federal securities laws and does not affect the
availability of equitable remedies such as injunctive relief or rescission. In addition, British Columbia laws also permit
us to secure insurance on behalf of any officer, director, employee or other agent for any liability arising out of his or
her actions in such capacity, regardless of whether indemnification would be permitted under British Columbia law.
We currently maintain liability insurance for our directors and executive officers.
Among other things, this will provide for indemnification of our directors and executive officers for certain expenses
(including attorneys’ fees), judgments, fines and settlement amounts incurred by any such person in any action or
proceeding, including any action by or in the right of the Company, arising out of such person’s services as a director
or executive officer of ours, any subsidiary of ours or any other company or enterprise to which the person provided
services at our request. We believe that these provisions and agreements are necessary to attract and retain qualified
persons as directors and executive officers.
ITEM 11. EXECUTIVE COMPENSATION
Table No. 6 details compensation paid or accrued for fiscal 2020, 2019 and 2018 for the Company’s chief executive
officer, each of the Company’s most highly compensated executive officers who were serving as executive officers at
the end of the most recently completed financial year and whose total salary and bonus exceeds $100,000 per year.
Name and
Principal
Position
Annual Compensation
Fiscal
Year
Salary
Bonus
Other
Annual
Comp.
Restricted
Stock
Awards
Securities
Underlying
Options/
SARS (#)
All
Other
Payouts Comp. (1)
LTIP
Long-term Compensation
Awards
Payouts
Charles Hopewell,
President, Chief Executive Officer,
Principal Financial Officer
Michael Nasser,
Corporate Secretary
2020
2019
2018
$250,000
$190,000
$178,333
$ 70,000
$ 20,000
$112,221
2020
2019
2018
$187,500
$177,000
$177,000
$ 75,000
$ 70,000
$ 50,000
$
$
$
$
$
$
-
-
-
-
-
-
$
$
$
$
$
$
-
-
-
-
-
-
$
$
$
$
$
$
-
-
-
-
-
-
$
$
$
$
$
$
-
-
-
-
-
-
$ 28,600
$ 9,000
$ 5,167
$ 14,850
$ 9,000
$ 10,000
(1)
“All Other Compensation” relates to the Company’s 401K contributions for each individual.
- 48 -
The Company has a 401(k) Plan for executives is a dollar-for-dollar match on the first 10% of eligible compensation,
which was changed for 2020 from a non-elective discretionary contribution based on the first $45,000 of eligible
compensation.
Other than participation in the Company’s Restricted Share Plan and 401(k), no funds were set aside or accrued during
fiscal 2020 to provide pension, retirement or similar benefits for directors or executive officers.
The Company has no plans or arrangements with respect to remuneration received or that may be received by executive
officers of the Company to compensate such executive officers in the event of termination of employment (as a result
of resignation, retirement, change of control) or a change of responsibilities following a change of control.
No executive officer or director received other compensation in excess of the lesser of $25,000 or 10% of such officer's
cash compensation, and all executive officers or directors as a group did not receive other compensation, which
exceeded $25,000 times the number of persons in the group or 10% of the compensation.
Except for our Restricted Stock Plan and 401(k) Plan, we have no material stock option plan, bonus or profit sharing
plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers.
Michael Nasser and Charles Hopewell received bonuses, which were determined and approved by the Board of
Directors.
The Board approved a non-qualified Profit Sharing plan for employees who did not receive any other form of
commission or bonus. The plan is formula based proportionately balancing years of service and compensation. The
Board has year-to-year responsibility to review the amount funded to the program and the overall program will be
based on a percentage of operating or pre-tax profit.
Restricted Share Plan
The Company has a Restricted Share Plan which allows the Company to grant restricted shares as compensation to
directors, officers, employees and consultants of the Company. The Restricted Shares are subject to restrictions,
including the period under which the shares will be restricted and subject to forfeiture which is determined by the
Board at the time of the grant. The recipient of Restricted Shares is entitled to all of the rights of a shareholder,
including the right to vote such shares and the right to receive any dividends, except that the shares granted under the
Plan are nontransferable during the Restricted Period.
The maximum number of Common Shares reserved for issuance under the Plan will not exceed 1% of the then issued
and outstanding number of Common Shares at the time of the grant. During the year ended August 31, 2020, the
Company issued Nil common shares (fiscal 2019 – 2,294) under the Restricted Share Plan.
401(k) Plan
The Company has a 401(k) Plan which allows for a non-elective discretionary contribution based on the first $45,000
of eligible compensation. Beginning in fiscal 2019, the Company reduced the percentage amount of the discretionary
contribution while adding a matching contribution, which is designed to encourage employees to participate with their
own contributions. For the years ended August 31, 2020 and 2019 the 401(k) compensation expense was $439,368 and
$295,557, respectively. The contributions for Charles Hopewell were $28,600 and $9,000 for the fiscal years ended
August 31, 2020 and 2019 respectively. The contributions for Michael Nasser were $14,850 and $9,000 for the fiscal
years ended August 31, 2020 and 2019 respectively. There are no un-funded liabilities.
Stock Options
The Company formerly had a stock option program under which stock options to purchase securities from the
Company could be granted to directors and employees of the Company on terms and conditions acceptable to the
regulatory authorities of Canada, notably the Ontario Securities Commission and the British Columbia Securities
Commission.
During the year ended August 31, 2020, the Company’s Board of Directors approved the termination of the stock
option program. No options were granted in fiscal 2019 or 2020, and the Company had no stock options outstanding as
of August 31, 2020 and August 31, 2019.
- 49 -
Long-Term Incentive Plan / Defined Benefit or Actuarial Plan
During fiscal 2020 the Company had no Long-Term Incentive Plan (“LTIP”) and no LTIP awards were made. Also,
during fiscal 2020 the Company had no Defined Benefit or Actuarial Plan.
Compensation Committee Interlocks and Insider Participation
The Company’s Compensation Committee consists of 4 independent directors. None of the members of the
Compensation Committee served as an officer or employee of the Company in the prior fiscal year.
No board of director member and none of our executive officers have a relationship that would constitute an
interlocking relationship with executive officers and directors of another entity.
Employment Contracts
Termination of Employment and Change-in-Control Arrangements
--- No Disclosure Necessary ---
Director Compensation
The Company is compensating directors at the rate of $1,000 per month as of January 1, 2019. Directors are also
entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with
attendance at meetings of the Board of Directors. The Board of Directors may award special remuneration to any
director undertaking any special services on behalf of the Company other than services ordinarily required of a director.
During fiscal 2020 the following cash payments were paid to directors to compensate them for board meetings
attended: Charles Hopewell $Nil (2019 - $Nil); Frank Magdlen $12,000 (fiscal 2019 - $10,600), Geoff Guilfoy
$12,000 (fiscal 2019 - $3,600); Sarah Johnson $12,000 (fiscal 2019 -$10,600); and Chris Karlin $12,000 (fiscal 2019 -
$8,800).
Executive Officer Compensation
The Company’s Compensation Committee provides advice and recommendations to the Board of Directors on
compensation and benefits for executive officers. As in prior years all judgments regarding executive compensation for
fiscal 2019 and 2020 were based primarily upon our assessment of each executive officer’s performance and
contribution towards enhancing long-term shareowner value. We rely upon judgment and not upon rigid guidelines or
formulas or short-term changes in our stock price in determining the amount and mix of compensation for each
executive officer.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The Company is a publicly owned corporation. It is not controlled directly or indirectly by another corporation or any
foreign government.
Table No. 7 shows directors, executive officers, and 5% shareholders who beneficially owned the Company’s common
stock and the amount of the Company’s voting stock owned as of October 23, 2020.
- 50 -
Table No. 7.
Shareholdings of Directors, Executive Officers,
and 5% Shareholders
Class
Common
Common
Common
Common
Common
Common
Common
Common
Name
and Address of
of Beneficial Owner
Oregon Community Foundation
Donald Boone Irrev Trust
Michael C. Nasser
Charles E. Hopewell
Geoff Guilfoy
Sarah Johnson
Chris Karlin
Frank Magdlen
Amount of Beneficial
and Voting
Ownership
Percent of
Class (1)
568,836
512,168
31,888
12,294
Nil
Nil
Nil
Nil
16.3%
14.7%
0.9%
0.4%
-
-
-
-
32.3%
Total Directors, Executive Officers, and 5% Shareholders
1,125,186
(1)
Based on 3,481,162 shares outstanding as of October 23, 2020.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
There have been no transactions or proposed transactions, which have materially affected or will materially affect the
Company in which any director, executive officer, or beneficial holder of more than 5% of the outstanding common
stock, or any of their respective relatives, spouses, associates or affiliates has had or will have any direct or material
indirect interest.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The audit committee is directly responsible for the appointment, compensation and oversight of auditors; and has the
authority and the funding to engage independent counsel and other outside advisors.
The audit committee may delegate to one or more designated members of the audit committee the authority to grant
pre-approvals required by this policy and procedure. The decisions of any audit committee member to whom authority
is delegated to pre-approve a service shall be presented to the audit committee at its next meeting.
In accordance with the requirements of the U.S. Sarbanes-Oxley Act of 2002 and rules issued by the Securities and
Exchange Commission, we introduced a procedure for the review and pre-approval of any services performed by
Davidson & Company, LLP Chartered Accountants, including audit services, audit related services, tax services and
other services. The procedure requires that all proposed engagements of Davidson & Company, LLP Chartered
Accountants for audit and permitted non-audit services are submitted to the finance and audit committee for approval
prior to the beginning of any such services.
Fees, including reimbursements for expenses and for professional services rendered by Davidson & Company, LLP
Chartered Accountants to the Company were:
- 51 -
Fiscal Year
2020
2019
$
$
$
90,000
10,250
24,750
90,000
5,000
24,750
125,000
$
119,750
Principal Accountant
Fees and Services
Audit fees
Tax fees
All other fees (1)
Total
(1) FY2020:
$8,250 to review the Q1 Form 10Q
$8,250 to review the Q2 Form 10Q
$8,250 to review the Q3 Form 10Q
FY2019:
$8,250 to review the Q1 Form 10Q
$8,250 to review the Q2 Form 10Q
$8,250 to review the Q3 Form 10Q
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(A) Financial Statements and Schedules:
(B) Exhibits:
2.
3.
3.1
3.2
4.
9.
10.
11.
12.
13.
14.
16.
18.
21.
22.
23.
24.
31.1
32.1
99.
Plan of acquisition, reorganization, arrangement, liquidation or succession:
No Disclosure Necessary
Articles of Incorporation/By-Laws:
Incorporated by reference to Form 10 Registration Statement, as amended.
Amended and Restated Articles of Incorporation of Jewett-Cameron Lumber Corporation
(filed as an exhibit to the 10-Q Quarterly Report filed on January 13, 2014)
Articles of Incorporation of Jewett-Cameron Company.
(filed as an exhibit to the 10-Q Quarterly Report filed on January 13, 2014)
Instruments defining the rights of holders, including indentures
--- Refer to Exhibit #3 ---
Voting Trust Agreements: No Disclosure Necessary.
Material Contracts:
Incorporated by reference to Form 10 Registration Statement, as amended.
Statement re Computation of Per Share Earnings: No Disclosure Necessary
Statements re computation of ratios: No Disclosure Necessary
Annual Report to security holders, Form 10-Q or quarterly report to security holders:
No Disclosure Necessary
Code of Ethics: No Disclosure Necessary
Letter on Change of Certifying Accountant: No Disclosure Necessary
Letter on change in accounting principles: No Disclosure Necessary
Subsidiaries of the Registrant: Refer to page 4 of this Form 10-K
Published report regarding matters submitted to vote
No Disclosure Necessary
Consent of Experts and Counsel: No Disclosure Necessary
Power of Attorney: No Disclosure Necessary
Certification of Chief Executive Officer and Principal Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act, Charles Hopewell
Certification of Chief Executive Officer and Principal Financial Officer pursuant to 18 U.S.C., 1350
(Section 906 of the Sarbanes-Oxley Act), Charles Hopewell
Additional Exhibits: No Disclosure Necessary
- 52 -
101.INS
101.SCH
101.CAL
101.DEF
101.LAB
101.PRE
XBRL Instance Document
XBRL Taxonomy Extension Schema Document
XBRL Taxonomy Extension Calculation Linkbase Document
XBRL Taxonomy Extension Definition Linkbase Document
XBRL Taxonomy Extension Label Linkbase Document
XBRL Taxonomy Extension Presentation Linkbase Document
- 53 -
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURE PAGE
Dated: November 10, 2020
Jewett-Cameron Trading Company Ltd.
Registrant
By: /s/ “Charles E. Hopewell”
Charles E. Hopewell,
President, CEO, Principal
Financial Officer and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the dates indicated.
Dated: November 10, 2020
Dated: November 10, 2020
Dated: November 10, 2020
Dated: November 10, 2020
Dated: November 10, 2020
Dated: November 10, 2020
By: /s/ “Charles E. Hopewell”
Charles E. Hopewell,
President, CEO, Principal
Financial Officer and Director
By: /s/ “Michael C. Nasser”
Michael C. Nasser,
Corporate Secretary and Director
By: /s/ “Geoff Guilfoy”
Geoff Guilfoy,
Director
By:
/s/ “Sarah Johnson”
Sarah Johnson,
Director
By: /s/ “Chris Karlin”
Chris Karlin,
Director
By:
/s/ “Frank Magdlen”
Frank Magdlen,
Director
- 54 -