Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended |
Feb. 28, 2014 | |
Document and Entity Information: | ' |
Entity Registrant Name | 'Jewett Cameron Trading Co LTD |
Document Type | '10-Q |
Document Period End Date | 28-Feb-14 |
Amendment Flag | 'false |
Entity Central Index Key | '0000885307 |
Current Fiscal Year End Date | '--08-31 |
Entity Common Stock, Shares Outstanding | 2,821,443 |
Entity Filer Category | 'Smaller Reporting Company |
Entity Current Reporting Status | 'Yes |
Entity Voluntary Filers | 'No |
Entity Well-known Seasoned Issuer | 'No |
Document Fiscal Year Focus | '2014 |
Document Fiscal Period Focus | 'Q2 |
JEWETTCAMERON_TRADING_COMPANY_
JEWETT-CAMERON TRADING COMPANY LTD. CONSOLIDATED BALANCE SHEETS (Prepared by Management) (Unaudited) (USD $) | Feb. 28, 2014 | Aug. 31, 2013 | ||
Current assets | ' | ' | ||
Cash | $5,816,854 | $8,308,445 | ||
Accounts receivable, net of allowance of $Nil (August 31, 2013 - $Nil) | 4,256,286 | 3,344,777 | ||
Inventory, net of allowance of $134,259 (August 31, 2013 - $134,259) | 7,528,726 | [1] | 8,520,991 | [1] |
Note receivable | ' | 15,000 | ||
Prepaid expenses | 2,088,834 | 587,609 | ||
Prepaid income taxes | 492,032 | 270,423 | ||
Total current assets | 20,182,732 | 21,047,245 | ||
Property, plant and equipment, net | 2,213,436 | [2] | 2,241,950 | [2] |
Intangible assets, net | 332,310 | [3] | 368,662 | [3] |
Total assets | 22,728,478 | 23,657,857 | ||
Current liabilities | ' | ' | ||
Accounts payable | 1,190,980 | 1,715,458 | ||
Litigation reserve | 130,854 | [4] | 144,103 | [4] |
Accrued liabilities | 765,638 | 1,149,882 | ||
Total current liabilities | 2,087,472 | 3,009,443 | ||
Deferred tax liability | 42,027 | [5] | 50,393 | [5] |
Total liabilities | 2,129,499 | 3,059,836 | ||
Contingent liabilities and commitments | ' | [6] | ' | [6] |
Stockholders' equity | ' | ' | ||
Capital stock Authorized 21,567,564 common shares, without par value 10,000,000 preferred shares, without par value. Issued 3,076,756 common shares (August 31, 2013 - 3,134,936) | 1,451,791 | [7] | 1,479,246 | [7] |
Additional paid-in capital | 600,804 | 600,804 | ||
Retained earnings | 18,546,384 | 18,517,971 | ||
Total stockholders' equity | 20,598,979 | 20,598,021 | ||
Total liabilities and stockholders' equity | $22,728,478 | $23,657,857 | ||
[1] | Note 3 | |||
[2] | Note 4 | |||
[3] | Note 5 | |||
[4] | Note 13a | |||
[5] | Note 6 | |||
[6] | Note 13 | |||
[7] | Note 8 |
Statement_of_Financial_Positio
Statement of Financial Position - Parenthetical (USD $) | Feb. 28, 2014 | Aug. 31, 2013 |
Statement of financial position | ' | ' |
Preferred Stock, Par Value | $0 | $0 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par Value | $0 | $0 |
Common Stock, Shares Authorized | 21,567,564 | 21,567,564 |
Common Stock, Shares Issued | 3,076,756 | 3,134,936 |
Common Stock, Shares Outstanding | 3,076,756 | 3,134,936 |
Accounts Receivable allowance | $0 | $0 |
Inventory allowance | $134,259 | $134,259 |
JEWETTCAMERON_TRADING_COMPANY_1
JEWETT-CAMERON TRADING COMPANY LTD. CONSOLIDATED STATEMENTS OF OPERATIONS (Prepared by Management) (Unaudited) (USD $) | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2014 | Feb. 28, 2013 | Feb. 28, 2014 | Feb. 28, 2013 | |
Income statement | ' | ' | ' | ' |
SALES | $9,732,649 | $14,227,824 | $17,738,930 | $23,524,229 |
COST OF SALES | 7,974,979 | 11,788,155 | 14,131,481 | 19,093,554 |
GROSS PROFIT | 1,757,670 | 2,439,669 | 3,607,449 | 4,430,675 |
OPERATING EXPENSES | ' | ' | ' | ' |
Selling, general and administrative expenses | 446,900 | 468,162 | 838,786 | 803,982 |
Depreciation and amortization | 69,531 | 64,202 | 139,550 | 121,696 |
Wages and employee benefits | 832,421 | 928,246 | 1,676,371 | 1,753,553 |
Total operation expenses | 1,348,852 | 1,460,610 | 2,654,707 | 2,679,231 |
Income from operations | 408,818 | 979,059 | 952,742 | 1,751,444 |
OTHER ITEMS | ' | ' | ' | ' |
Gain on sale of property, plant and equipment | ' | 353,852 | 4,109 | 353,852 |
Interest and other income | 6,612 | 6,605 | 13,273 | 23,315 |
Interest expense | ' | -400 | ' | -400 |
Total other items | 6,612 | 360,057 | 17,382 | 376,767 |
Income before income taxes | 415,430 | 1,339,116 | 970,124 | 2,128,211 |
Income tax expense | -178,032 | -548,485 | -400,147 | -856,834 |
Net income | $237,398 | $790,631 | $569,977 | $1,271,377 |
Basic earnings per common share | $0.08 | $0.25 | $0.18 | $0.41 |
Diluted earnings per common share | $0.08 | $0.25 | $0.18 | $0.41 |
Weighted average number of common shares outstanding Basic | 3,129,764 | 3,135,860 | 3,132,365 | 3,135,902 |
Weighted average number of common shares outstanding Diluted | 3,129,764 | 3,135,860 | 3,132,365 | 3,135,902 |
JEWETTCAMERON_TRADING_COMPANY_2
JEWETT-CAMERON TRADING COMPANY LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Prepared by Management) (Unaudited) (USD $) | Number of Shares | Amount | Additional paid-in capital | Retained earnings | Total | |
Beginning balance at Aug. 31, 2011 | ' | $1,801,043 | $600,804 | $15,086,971 | $17,488,818 | |
Shares outstanding at Aug. 31, 2011 | 3,816,914 | ' | ' | ' | ' | |
Shares repurchased and cancelled, value | [1] | 0 | -321,322 | 0 | -2,754,237 | -3,075,559 |
Shares repurchased and cancelled, shares | -680,972 | ' | ' | ' | ' | |
Net income | ' | ' | ' | 3,059,931 | 3,059,931 | |
Ending balance at Aug. 31, 2012 | ' | 1,479,721 | 600,804 | 15,392,665 | 17,473,190 | |
Shares outstanding at Aug. 31, 2012 | 3,135,942 | ' | ' | ' | ' | |
Shares repurchased and cancelled, value | [1] | 0 | -475 | 0 | -6,713 | -7,188 |
Shares repurchased and cancelled, shares | -1,006 | ' | ' | ' | ' | |
Net income | ' | ' | ' | 3,132,019 | 3,132,019 | |
Ending balance at Aug. 31, 2013 | ' | 1,479,246 | 600,804 | 18,517,971 | 20,598,021 | |
Shares outstanding at Aug. 31, 2013 | 3,134,936 | ' | ' | ' | ' | |
Shares repurchased and cancelled, value | ' | -27,455 | ' | -541,564 | -569,019 | |
Shares repurchased and cancelled, shares | -58,180 | ' | ' | ' | ' | |
Net income | ' | ' | ' | 569,977 | 569,977 | |
Ending balance at Feb. 28, 2014 | ' | $1,451,791 | $600,804 | $18,546,384 | $20,598,979 | |
Shares outstanding at Feb. 28, 2014 | 3,076,756 | ' | ' | ' | ' | |
[1] | Note 9 |
JEWETTCAMERON_TRADING_COMPANY_3
JEWETT-CAMERON TRADING COMPANY LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS (Prepared by Management) (Unaudited) (USD $) | 3 Months Ended | 6 Months Ended | ||||||
Feb. 28, 2014 | Feb. 28, 2013 | Feb. 28, 2014 | Feb. 28, 2013 | |||||
CASH FLOWS FROM OPERATING ACTIVITIES | ' | ' | ' | ' | ||||
Net income | $237,398 | $790,631 | $569,977 | $1,271,377 | ||||
Items not involving an outlay of cash: | ' | ' | ' | ' | ||||
Depreciation and amortization | 69,531 | 64,202 | 139,550 | 121,696 | ||||
Gain on sale of property, plant and equipment | ' | -353,852 | -4,109 | -353,852 | ||||
Deferred income taxes | -3,802 | 137,100 | -8,366 | 151,423 | ||||
Interest income on litigation | -6,588 | -6,588 | -13,249 | -13,249 | ||||
Changes in non-cash working capital items: | ' | ' | ' | ' | ||||
Increase in accounts receivable | -2,018,552 | -4,628,402 | -911,509 | -4,202,382 | ||||
Decrease in inventory | 846,025 | 68,731 | 992,265 | 1,393,096 | ||||
Decrease in note receivable | ' | ' | 15,000 | 20,000 | ||||
(Increase) decrease in prepaid expenses | -1,205,662 | 537,657 | -1,501,225 | -1,041,955 | ||||
Increase in prepaid income taxes | -448,288 | -253,952 | -221,609 | -253,952 | ||||
Increase (decrease) in accounts payable and accrued liabilities | 837,196 | 675,104 | -908,722 | -296,125 | ||||
Decrease in accrued income taxes | ' | -330,957 | ' | -37,203 | ||||
Net cash used in operating activities | -1,692,742 | -3,300,326 | -1,851,997 | -3,241,126 | ||||
CASH FLOWS FROM INVESTING ACTIVITIES | ' | ' | ' | ' | ||||
Purchase of property, plant and equipment | -17,457 | -18,657 | -75,375 | -130,790 | ||||
Proceeds from sale of property, plant and equipment | ' | 410,000 | 4,800 | 410,000 | ||||
Net cash provided by (used in) investing activities | -17,457 | 391,343 | -70,575 | 279,210 | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ' | ' | ' | ' | ||||
Redemption of common stock | -569,019 | -4,884 | -569,019 | -4,884 | ||||
Net cash used in financing activities | -569,019 | -4,884 | -569,019 | -4,884 | ||||
Net decrease in cash | -2,279,218 | -2,913,867 | -2,491,591 | -2,966,800 | ||||
Cash, beginning of period | 8,096,072 | 7,256,455 | 8,308,445 | 7,309,388 | ||||
Cash, end of period | $5,816,854 | [1] | $4,342,588 | [1] | $5,816,854 | [1] | $4,342,588 | [1] |
[1] | Supplemental disclosure with respect to cash flows Note 16. |
1_Nature_of_Operations
1. Nature of Operations | 6 Months Ended |
Feb. 28, 2014 | |
Notes | ' |
1. Nature of Operations | ' |
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: MSI-PRO Co. (“MSI”), incorporated April 1996, Jewett-Cameron Seed Company, (“JCSC”), incorporated October 2000, Greenwood Products, Inc. (“Greenwood”), incorporated February 2002, and Jewett-Cameron Company, incorporated September 2013. Jewett-Cameron Trading Company Ltd. and its subsidiaries (the “Company”) have no significant assets in Canada. | |
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. MSI is an importer and distributor of pneumatic air tools and industrial clamps in the United States. JCSC is a processor and distributor of agricultural seeds in the United States. JC USA provides professional and administrative services, including accounting and credit services, to its subsidiary companies. | |
These unaudited financial statements are those of the Company and its wholly owned subsidiaries. In the opinion of management, the accompanying Consolidated Financial Statements of Jewett-Cameron Trading Company Ltd., contain all adjustments, consisting only of normal recurring adjustments, necessary to fairly state its financial position as of February 28, 2014 and August 31, 2013 and its results of operations and cash flows for the three and six month periods ended February 28, 2014 and February 28, 2013 in accordance with generally accepted accounting principles of the United States of America (“U.S. GAAP”). Operating results for the three and six month periods ended February 28, 2014 are not necessarily indicative of the results that may be experienced for the fiscal year ending August 31, 2014. |
2_Significant_Accounting_Polic
2. Significant Accounting Policies | 6 Months Ended | |||||||||||||
Feb. 28, 2014 | ||||||||||||||
Notes | ' | |||||||||||||
2. Significant Accounting Policies | ' | |||||||||||||
2. SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||
Generally accepted accounting principles | ||||||||||||||
These consolidated financial statements have been prepared in conformity with U.S. GAAP. | ||||||||||||||
Principles of consolidation | ||||||||||||||
These consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, JC USA, JCC, MSI, JCSC, and Greenwood, all of which are incorporated under the laws of Oregon, U.S.A. | ||||||||||||||
All inter-company balances and transactions have been eliminated upon consolidation. | ||||||||||||||
Estimates | ||||||||||||||
The preparation of consolidated financial statements in conformity with U.S. GAAP 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 liability and possible product returns, and litigation contingencies and claims. Actual results could differ from those estimates. | ||||||||||||||
Cash and cash equivalents | ||||||||||||||
The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. At February 28, 2014, cash was $5,816,854 compared to $8,308,445 at August 31, 2013. At February 28, 2014 and August 31, 2013, there were no cash equivalents. | ||||||||||||||
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 | 5 years | 7 years | ||||||||||||
Warehouse equipment | 2 years | 10 years | ||||||||||||
Buildings | 5 years | 30 years | ||||||||||||
Intangibles | ||||||||||||||
The Company’s intangible assets have a finite life and are recorded at cost. The most significant intangible assets are two patents related to gate support systems. Amortization is calculated using the straight-line method over the remaining lives of 48 months and 60 months, respectively, and are reviewed annually for impairment. | ||||||||||||||
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 based only 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 income statement 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. | ||||||||||||||
The earnings per share data for the three and six month period ended February 28, 2014 and February 28, 2013 are as follows: | ||||||||||||||
Three Month Period | Six Month Period | |||||||||||||
Ended February 28, | Ended February 28, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Net income | $ 237,398 | $ 790,631 | $ 569,977 | $1,271,377 | ||||||||||
Basic weighted average number of | ||||||||||||||
common shares outstanding | 3,129,764 | 3,135,860 | 3,132,365 | 3,135,902 | ||||||||||
Effect of dilutive securities | ||||||||||||||
Stock options | 0 | 0 | 0 | 0 | ||||||||||
Diluted weighted average number | ||||||||||||||
of common shares outstanding | 3,129,764 | 3,135,860 | 3,132,365 | 3,135,902 | ||||||||||
Comprehensive income | ||||||||||||||
The Company has no items of other comprehensive income in any period 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 six month period ended February 28, 2014, and there were no options outstanding on February 28, 2014. | ||||||||||||||
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 receivable - the carrying amounts approximate fair value due to the short-term nature of the amount. | ||||||||||||||
Accounts payable and accrued liabilities - the carrying amount approximates fair value due to the short-term nature of the obligations. | ||||||||||||||
The estimated fair values of the Company's financial instruments as of February 28, 2014 and August 31, 2013 follows: | ||||||||||||||
February 28, | August 31, | |||||||||||||
2014 | 2013 | |||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||
Amount | Value | Amount | Value | |||||||||||
Cash | $5,816,854 | $5,816,854 | $8,308,445 | $8,308,445 | ||||||||||
Accounts receivable, net of allowance | 4,256,286 | 4,256,286 | 3,344,777 | 3,344,777 | ||||||||||
Note receivable | - | - | 15,000 | 15,000 | ||||||||||
Accounts payable and accrued liabilities | 1,956,618 | 1,956,618 | 2,865,340 | 2,865,340 | ||||||||||
The following table presents information about the assets that are measured at fair value on a recurring basis as of February 28, 2014, 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: | ||||||||||||||
February 28, | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||
2014 | ||||||||||||||
Assets: | ||||||||||||||
Cash | $ | 5,816,854 | $ | 5,816,854 | $ | — | $ | — | ||||||
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 period 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 goods sold in the consolidated statement of operations. All costs billed to the customer are included as revenue in the consolidated statement of operations. | ||||||||||||||
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. | ||||||||||||||
Reclassifications | ||||||||||||||
Certain reclassifications have been made to prior years’ financial statements to conform to the classifications used in the current period. These reclassifications include adjustments to reflect the reorganization of the corporate structure and reporting segments effective September 1, 2013. | ||||||||||||||
Recent Accounting Pronouncements | ||||||||||||||
Management has reviewed the new accounting guidance and determined that there is not a material impact on our financial statements. | ||||||||||||||
3_Inventory
3. Inventory | 6 Months Ended | ||||
Feb. 28, 2014 | |||||
Notes | ' | ||||
3. Inventory | ' | ||||
3. INVENTORY | |||||
A summary of inventory is as follows: | |||||
February 28, | August 31, | ||||
2014 | 2013 | ||||
Wood products and metal products | $ 6,766,962 | $ 7,984,678 | |||
Industrial tools | 529,579 | 482,949 | |||
Agricultural seed products | 232,185 | 53,364 | |||
$ 7,528,726 | $ 8,520,991 | ||||
4_Property_Plant_and_Equipment
4. Property, Plant and Equipment | 6 Months Ended | ||||
Feb. 28, 2014 | |||||
Notes | ' | ||||
4. Property, Plant and Equipment | ' | ||||
4. PROPERTY, PLANT AND EQUIPMENT | |||||
A summary of property, plant, and equipment is as follows: | |||||
February 28, | August 31, | ||||
2014 | 2013 | ||||
Office equipment | $ 560,956 | $ 565,575 | |||
Warehouse equipment | 1,468,902 | 1,431,707 | |||
Buildings | 2,688,616 | 2,681,989 | |||
Land | 761,924 | 761,924 | |||
5,480,398 | 5,441,195 | ||||
Accumulated depreciation | -3,266,962 | -3,199,245 | |||
Net book value | $ 2,213,436 | $ 2,241,950 | |||
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
5. Intangible Assets | 6 Months Ended | ||||
Feb. 28, 2014 | |||||
Notes | ' | ||||
5. Intangible Assets | ' | ||||
5. INTANGIBLE ASSETS | |||||
A summary of intangible assets is as follows: | |||||
February 28, | August 31, | ||||
2014 | 2013 | ||||
Patent | $ 850,000 | $ 850,000 | |||
Other | 43,655 | 43,655 | |||
893,655 | 893,655 | ||||
Accumulated amortization | -561,345 | -524,993 | |||
Net book value | $ 332,310 | $ 368,662 | |||
6_Deferred_Income_Taxes
6. Deferred Income Taxes | 6 Months Ended |
Feb. 28, 2014 | |
Notes | ' |
6. Deferred Income Taxes | ' |
6. DEFERRED INCOME TAXES | |
Deferred income tax liability as of February 28, 2014 of $42,027 (August 31, 2013 – $50,393) reflect 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. |
7_Bank_Indebtedness
7. Bank Indebtedness | 6 Months Ended |
Feb. 28, 2014 | |
Notes | ' |
7. Bank Indebtedness | ' |
7. BANK INDEBTEDNESS | |
There was no bank indebtedness under the Company’s line of credit as of February 28, 2014 or August 31, 2013. | |
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 200 basis points. |
8_Capital_Stock
8. Capital Stock | 6 Months Ended |
Feb. 28, 2014 | |
Notes | ' |
8. Capital Stock | ' |
8. 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. | |
Common Stock Split | |
The Company declared a two for one stock split of its common stock with a record date at the close of business on April 25, 2013. Shareholders received one additional common share for each common share held as of the record date. The stock split was effective as of May 2, 2013. Share and per share data have been retroactively adjusted to reflect the effects of the stock split. | |
9_Cancellation_of_Capital_Stoc
9. Cancellation of Capital Stock | 6 Months Ended |
Feb. 28, 2014 | |
Notes | ' |
9. Cancellation of Capital Stock | ' |
9. 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 2014 ended February 28, 2014, the Company repurchased and cancelled a total of 58,180 common shares under a 10b5-1 share repurchase plan. The total cost was $569,019 at an average price of $9.78 per share. The premium paid to acquire these shares over their per share book value in the amount of $541,564 was recorded as a decrease to retained earnings. | |
During the 4th quarter of fiscal 2013 ended August 31, 2013, the Company repurchased and cancelled a total of 192 common shares under a 10b5-1 share repurchase plan. The total cost was $2,304 at an average price of $12.00 per share. The premium paid to acquire these shares over their per share book value in the amount of $2,213 was recorded as a decrease to retained earnings. | |
During the 2nd quarter of fiscal 2013 ended February 28, 2013, the Company repurchased and cancelled a total of 814 common shares common shares of its common stock under a 10b5-1 share repurchase plan. The total cost was $4,884 at an average price of $6.00 per share. The premium paid to acquire these shares over their per share book value in the amount of $4,500 was recorded as a decrease to retained earnings. | |
During the 3rd quarter of fiscal 2012 ended May 31, 2012, the Company repurchased and cancelled a total of 83,798 common shares of its common stock under a 10b5-1 share repurchase plan. The total cost was $382,510 at an average price of $4.56 per share. The premium paid to acquire these shares over their per share book value in the amount of $342,969 was recorded as a decrease to retained earnings. | |
During the 2nd quarter of fiscal 2012 ended February 29, 2012, the Company repurchased and cancelled a total of 497,174 shares of its common stock under a 10b5-1 share repurchase plan. The total cost was $2,238,929 at an average share price of $4.50 per share. The premium paid to acquire these shares over their per share book value in the amount of $2,004,334 was recorded as a decrease to retained earnings. | |
During the 1st quarter of fiscal 2012 ended November 30, 2011, the Company repurchased and cancelled a total of 100,000 shares of its common stock under a 10b5-1 share repurchase plan. The total cost was $454,120 at an average share price of $4.54 per share. The premium paid to acquire these shares over their per share book value in the amount of $406,934 was recorded as a decrease to retained earnings. | |
10_Stock_Options
10. Stock Options | 6 Months Ended |
Feb. 28, 2014 | |
Notes | ' |
10. Stock Options | ' |
10. STOCK OPTIONS | |
The Company has a stock option program under which stock options to purchase securities from the Company can 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 may 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 vest at the discretion of the Board of Directors. | |
The Company had no stock options outstanding as of February 28, 2014 and August 31, 2013. | |
11_Employee_Stock_Ownership_Pl
11. Employee Stock Ownership Plan ("esop") | 6 Months Ended |
Feb. 28, 2014 | |
Notes | ' |
11. Employee Stock Ownership Plan ("esop") | ' |
11. EMPLOYEE STOCK OWNERSHIP PLAN (“ESOP”) | |
The Company sponsors an ESOP that covers all U.S. employees who are employed by the Company on August 31 of each year and who have at least one thousand hours with the Company in the twelve months preceding that date. The ESOP formerly held common shares of the Company and granted to participants in the plan certain ownership rights in, but not possession of, or voting control of, any common stock of the Company held by the Trustee of the Plan. Shares of common stock were allocated annually to participants in the ESOP pursuant to a prescribed formula. The Company records compensation expense based on the market price of the Company's shares when they were allocated. Any dividends on allocated ESOP shares are recorded as a reduction of retained earnings. Beginning in fiscal 2010, the ESOP began its investment in diversified mutual funds. During fiscal 2011 and 2012, all of the Company’s shares held by the ESOP were sold, with the majority repurchased by the Company and cancelled under the 10b5-1 share repurchase plans. Effective June 30, 2012, the ESOP was terminated, subject to the approval of the Internal Revenue Service. No further contributions shall be made to the ESOP. On October 18, 2013, the Internal Revenue Service issued a favorable determination letter for the termination of the ESOP, and the Plan is in process of distributing the remaining assets to participants. | |
ESOP compensation expense was $Nil and $Nil for the fiscal years ended August 31, 2013 and 2012, respectively, and is included in wages and employee benefits. No shares were owned by the ESOP at August 31, 2013 or 2012. |
12_Pension_and_Profitsharing_P
12. Pension and Profit-sharing Plans | 6 Months Ended |
Feb. 28, 2014 | |
Notes | ' |
12. Pension and Profit-sharing Plans | ' |
12. PENSION AND PROFIT-SHARING PLANS | |
The Company has a deferred compensation 401(k) plan for all employees with at least 12 months of service pending a semi-annual enrolment time. The plan allows for a non-elective discretionary contribution based on the first $60,000 of eligible compensation. For the six month periods ended February 28, 2014 and 2013, the 401(k) compensation expense was $94,392 and $109,413, respectively. |
13_Contingent_Liabilities_and_
13. Contingent Liabilities and Commitments | 6 Months Ended | ||||
Feb. 28, 2014 | |||||
Notes | ' | ||||
13. Contingent Liabilities and Commitments | ' | ||||
13. CONTINGENT LIABILITIES AND COMMITMENTS | |||||
a) A subsidiary was a plaintiff in a lawsuit filed in Portland, Oregon, entitled, Greenwood Products, Inc. et al v. Greenwood Forest Products, Inc. et al., Case No. 05-02553 (Multnomah County Circuit Court). | |||||
During fiscal 2002 the Company entered into a purchase agreement to acquire inventory over a 15 month period with an initial estimated value of $7,000,000 from Greenwood Forest Products, Inc. During the year ended August 31, 2003, the Company completed the final phase of the inventory acquisition. As partial consideration for the purchase of the inventory the Company issued two promissory notes, based on its understanding of the value of the inventory purchased. The Company believes it overpaid the obligation by approximately $820,000. The holder counterclaimed for approximately $2,400,000. | |||||
Litigation was completed on March 5, 2007, with the court’s general judgment and money award. The net effect was money judgment in favor of Greenwood Forest Products, Inc. for $242,604. The Company accrued reserves to cover the money judgment related to this dispute. Both parties filed appeals for review of the court’s opinion. | |||||
During the 1st quarter of fiscal 2011, the Oregon Court of Appeals ruled that the judgment in favor of Jewett Cameron as plaintiffs should be reversed and the judgment in favor of the defendants should stand. The judgment in favor of the Company was for $819,000 plus attorneys fees. The judgment against the plaintiffs is for $1,187,137. The Company appealed the decision to the Oregon Supreme Court. During the 1st quarter of fiscal 2011, the Company recorded a litigation loss of $962,137 and interest of $391,988 in addition to the existing litigation reserve of $225,000. Additional interest of $48,790 was recorded during the remainder of fiscal 2011. During the 1st quarter of fiscal 2012 ended November 30, 2011, additional interest of $16,204 was accrued. | |||||
In February 2012, the Company received the decision from the Oregon Supreme Court which was favorable to Jewett Cameron as plaintiff. As a result, the Company has reversed $1,459,832 of the litigation reserve and accrued interest during the 2nd quarter of fiscal 2012 ended February 29, 2012. The reversal was treated as a one-time gain during the quarter. | |||||
During the year ended August 31, 2013, the Company recorded $26,716 of interest income due to the favorable difference in interest rates between the judgments. During the six months ended February 28, 2014, the Company recorded $13,249 of interest income. | |||||
A summary of the litigation reserve is as follows: | |||||
February 28, | August 31, | ||||
2014 | 2013 | ||||
Litigation loss | $ - | $ - | |||
Litigation reserve | 144,103 | 170,819 | |||
Interest expense | - | - | |||
Interest income | -13,249 | -26,716 | |||
Total | $ 130,854 | $ 144,103 | |||
b) At February 28, 2014 and August 31, 2013 the Company had an un-utilized line-of-credit of $5,000,000 (note 7). The line-of-credit has certain financial covenants. The Company is in compliance with these covenants. | |||||
14_Segment_Information
14. Segment Information | 6 Months Ended | ||||
Feb. 28, 2014 | |||||
Notes | ' | ||||
14. Segment Information | ' | ||||
14. SEGMENT INFORMATION | |||||
The Company has four principal reportable segments. 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. | |||||
Effective September 1, 2013, the Company reorganized certain of its subsidiaries. The majority of fixed and intangible assets, and certain Corporate and administrative functions which were formerly contained within the “Lawn, garden, pet and other” reporting segment are now classified as “Corporate and administrative.” The segment information for the six months ended February 28, 2013 has been restated for comparability purposes. | |||||
Following is a summary of segmented information for the six month periods ended February 28: | |||||
2014 | 2013 | ||||
Sales to unaffiliated customers: | |||||
Industrial wood products | $ 3,404,951 | $ 4,072,527 | |||
Lawn, garden, pet and other | 11,929,856 | 15,004,943 | |||
Seed processing and sales | 1,678,862 | 3,501,011 | |||
Industrial tools and clamps | 725,261 | 945,748 | |||
$ 17,738,930 | $ 23,524,229 | ||||
Income (loss) before income taxes: | |||||
Industrial wood products | $ (32,349) | $ 10,326 | |||
Lawn, garden, pet and other | 499,003 | 1,251,180 | |||
Seed processing and sales | 108,661 | 174,894 | |||
Industrial tools and clamps | 45,225 | 62,649 | |||
Corporate and administrative | 349,584 | 275,310 | |||
$ 970,124 | $ 1,774,359 | ||||
Identifiable assets: | |||||
Industrial wood products | $ 1,366,293 | $ 1,495,878 | |||
Lawn, garden, pet and other | 10,989,146 | 10,637,480 | |||
Seed processing and sales | 632,061 | 924,364 | |||
Industrial tools and clamps | 669,639 | 685,864 | |||
Corporate and administrative | 9,071,339 | 7,665,641 | |||
$ 22,728,478 | $ 21,409,227 | ||||
Depreciation and amortization: | |||||
Industrial wood products | $ 490 | $ 403 | |||
Lawn, garden, pet and other | 21,194 | 9,767 | |||
Seed processing and sales | 6,508 | 7,740 | |||
Industrial tools and clamps | 2,974 | 2,853 | |||
Corporate and administrative | 108,384 | 100,933 | |||
$ 139,550 | $ 121,696 | ||||
Capital expenditures: | |||||
Industrial wood products | $ - | $ - | |||
Lawn, garden, pet and other | - | - | |||
Seed processing and sales | - | - | |||
Industrial tools and clamps | 1,300 | - | |||
Corporate and administrative | 74,075 | 130,790 | |||
$ 75,375 | $ 130,790 | ||||
Interest expense: | |||||
Lawn, garden, pet and other | $ - | $ 400 | |||
* For comparability purposes, the 2013 amount excludes gain on sale of property, plant and equipment of $353,852. | |||||
The following table lists sales made by the Company to customers which were in excess of 10% of total sales for the six months ended February 28, 2014 and 2013: | |||||
2014 | 2013 | ||||
Sales | 7,604,958 | 7,338,811 | |||
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 six months ended February 28, 2014 and 2013: | |||||
2014 | 2013 | ||||
United States | 16,275,299 | 20,450,160 | |||
Canada | 349,275 | 1,243,522 | |||
Mexico / Latin America | 987,524 | 1,732,181 | |||
Europe | 126,832 | 43,961 | |||
Asia/Pacific | 0 | 54,405 | |||
All of the Company’s significant identifiable assets were located in the United States as of February 28, 2014 and 2013. | |||||
15_Concentrations
15. Concentrations | 6 Months Ended |
Feb. 28, 2014 | |
Notes | ' |
15. Concentrations | ' |
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 February 28, 2014, three customers accounted for accounts receivable greater than 10% of total accounts receivable at 57%. At February 28, 2013, three customers accounted for accounts receivable greater than 10% of total accounts receivable at 60%. The Company controls credit risk through credit approvals, credit limits, credit insurance and monitoring procedures. The Company performs credit evaluations of its commercial customers but generally does not require collateral to support accounts receivable. | |
Volume of business | |
The Company has concentrations in the volume of purchases it conducts with its suppliers. For the six months ended February 28, 2014, there were two suppliers that each accounted for greater than 10% of total purchases, and the aggregate purchases amounted to $5,871,611. For the six months ended February 28, 2013, there were two suppliers that each accounted for greater than 10% of total purchases, and the aggregate purchases amounted to $8,262,691. | |
16_Supplemental_Disclosure_Wit
16. Supplemental Disclosure With Respect To Cash Flows | 6 Months Ended | ||||
Feb. 28, 2014 | |||||
Notes | ' | ||||
16. Supplemental Disclosure With Respect To Cash Flows | ' | ||||
16. SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS | |||||
Certain cash payments for the six months ended February 28, 2014 and 2013 are summarized as follows: | |||||
2014 | 2013 | ||||
Cash paid during the periods for: | |||||
Interest | $ - | $ 400 | |||
Income taxes | $ 630,122 | $ 984,812 | |||
There were no non-cash investing or financing activities during the periods presented. | |||||
17_Subsequent_Events
17. Subsequent Events | 6 Months Ended |
Feb. 28, 2014 | |
Notes | ' |
17. Subsequent Events | ' |
17. SUBSEQUENT EVENTS | |
During the month of March 2014, the Company re-purchased and is in the process of cancelling a total of 255,313 shares of its common stock pursuant to the Company’s 10b5-1 share re-purchase plan. The total cost was $2,486,571 at an average share price of $9.74 per share. The Company has successfully completed and terminated the current 10b5-1 repurchase plan previously announced on January 13, 2014. |
2_Significant_Accounting_Polic1
2. Significant Accounting Policies: Generally Accepted Accounting Principles (Policies) | 6 Months Ended |
Feb. 28, 2014 | |
Policies | ' |
Generally Accepted Accounting Principles | ' |
Generally accepted accounting principles | |
These consolidated financial statements have been prepared in conformity with U.S. GAAP. |
2_Significant_Accounting_Polic2
2. Significant Accounting Policies: Principles of Consolidation (Policies) | 6 Months Ended |
Feb. 28, 2014 | |
Policies | ' |
Principles of Consolidation | ' |
Principles of consolidation | |
These consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, JC USA, JCC, MSI, JCSC, and Greenwood, all of which are incorporated under the laws of Oregon, U.S.A. | |
All inter-company balances and transactions have been eliminated upon consolidation. |
2_Significant_Accounting_Polic3
2. Significant Accounting Policies: Estimates (Policies) | 6 Months Ended |
Feb. 28, 2014 | |
Policies | ' |
Estimates | ' |
Estimates | |
The preparation of consolidated financial statements in conformity with U.S. GAAP 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 liability and possible product returns, and litigation contingencies and claims. Actual results could differ from those estimates. |
2_Significant_Accounting_Polic4
2. Significant Accounting Policies: Cash and Cash Equivalents (Policies) | 6 Months Ended |
Feb. 28, 2014 | |
Policies | ' |
Cash and Cash Equivalents | ' |
Cash and cash equivalents | |
The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. At February 28, 2014, cash was $5,816,854 compared to $8,308,445 at August 31, 2013. At February 28, 2014 and August 31, 2013, there were no cash equivalents. |
2_Significant_Accounting_Polic5
2. Significant Accounting Policies: Accounts Receivable (Policies) | 6 Months Ended |
Feb. 28, 2014 | |
Policies | ' |
Accounts Receivable | ' |
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. |
2_Significant_Accounting_Polic6
2. Significant Accounting Policies: Inventory (Policies) | 6 Months Ended |
Feb. 28, 2014 | |
Policies | ' |
Inventory | ' |
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. |
2_Significant_Accounting_Polic7
2. Significant Accounting Policies: Property, Plant and Equipment (Policies) | 6 Months Ended | |||
Feb. 28, 2014 | ||||
Policies | ' | |||
Property, Plant and Equipment | ' | |||
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 | 5 years | 7 years | ||
Warehouse equipment | 2 years | 10 years | ||
Buildings | 5 years | 30 years | ||
2_Significant_Accounting_Polic8
2. Significant Accounting Policies: Intangibles (Policies) | 6 Months Ended |
Feb. 28, 2014 | |
Policies | ' |
Intangibles | ' |
Intangibles | |
The Company’s intangible assets have a finite life and are recorded at cost. The most significant intangible assets are two patents related to gate support systems. Amortization is calculated using the straight-line method over the remaining lives of 48 months and 60 months, respectively, and are reviewed annually for impairment. |
2_Significant_Accounting_Polic9
2. Significant Accounting Policies: Asset Retirement Obligations (Policies) | 6 Months Ended |
Feb. 28, 2014 | |
Policies | ' |
Asset Retirement Obligations | ' |
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. |
Recovered_Sheet1
2. Significant Accounting Policies: Impairment of Long-lived Assets and Long-lived Assets To Be Disposed of (Policies) | 6 Months Ended |
Feb. 28, 2014 | |
Policies | ' |
Impairment of Long-lived Assets and Long-lived Assets To Be Disposed of | ' |
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. |
Recovered_Sheet2
2. Significant Accounting Policies: Currency and Foreign Exchange (Policies) | 6 Months Ended |
Feb. 28, 2014 | |
Policies | ' |
Currency and Foreign Exchange | ' |
Currency and foreign exchange | |
These financial statements are expressed in U.S. dollars as the Company's operations are based only 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 income statement 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. |
Recovered_Sheet3
2. Significant Accounting Policies: Earnings Per Share (Policies) | 6 Months Ended | ||||||||
Feb. 28, 2014 | |||||||||
Policies | ' | ||||||||
Earnings Per Share | ' | ||||||||
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. | |||||||||
The earnings per share data for the three and six month period ended February 28, 2014 and February 28, 2013 are as follows: | |||||||||
Three Month Period | Six Month Period | ||||||||
Ended February 28, | Ended February 28, | ||||||||
2014 | 2013 | 2014 | 2013 | ||||||
Net income | $ 237,398 | $ 790,631 | $ 569,977 | $1,271,377 | |||||
Basic weighted average number of | |||||||||
common shares outstanding | 3,129,764 | 3,135,860 | 3,132,365 | 3,135,902 | |||||
Effect of dilutive securities | |||||||||
Stock options | 0 | 0 | 0 | 0 | |||||
Diluted weighted average number | |||||||||
of common shares outstanding | 3,129,764 | 3,135,860 | 3,132,365 | 3,135,902 | |||||
Recovered_Sheet4
2. Significant Accounting Policies: Comprehensive Income (Policies) | 6 Months Ended |
Feb. 28, 2014 | |
Policies | ' |
Comprehensive Income | ' |
Comprehensive income | |
The Company has no items of other comprehensive income in any period presented. Therefore, net income presented in the consolidated statements of operations equals comprehensive income. |
Recovered_Sheet5
2. Significant Accounting Policies: Stock-based Compensation (Policies) | 6 Months Ended |
Feb. 28, 2014 | |
Policies | ' |
Stock-based Compensation | ' |
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 six month period ended February 28, 2014, and there were no options outstanding on February 28, 2014. |
Recovered_Sheet6
2. Significant Accounting Policies: Financial Instruments (Policies) | 6 Months Ended | |||||||||||||
Feb. 28, 2014 | ||||||||||||||
Policies | ' | |||||||||||||
Financial Instruments | ' | |||||||||||||
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 receivable - the carrying amounts approximate fair value due to the short-term nature of the amount. | ||||||||||||||
Accounts payable and accrued liabilities - the carrying amount approximates fair value due to the short-term nature of the obligations. | ||||||||||||||
The estimated fair values of the Company's financial instruments as of February 28, 2014 and August 31, 2013 follows: | ||||||||||||||
February 28, | August 31, | |||||||||||||
2014 | 2013 | |||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||
Amount | Value | Amount | Value | |||||||||||
Cash | $5,816,854 | $5,816,854 | $8,308,445 | $8,308,445 | ||||||||||
Accounts receivable, net of allowance | 4,256,286 | 4,256,286 | 3,344,777 | 3,344,777 | ||||||||||
Note receivable | - | - | 15,000 | 15,000 | ||||||||||
Accounts payable and accrued liabilities | 1,956,618 | 1,956,618 | 2,865,340 | 2,865,340 | ||||||||||
The following table presents information about the assets that are measured at fair value on a recurring basis as of February 28, 2014, 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: | ||||||||||||||
February 28, | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||
2014 | ||||||||||||||
Assets: | ||||||||||||||
Cash | $ | 5,816,854 | $ | 5,816,854 | $ | — | $ | — | ||||||
The fair values of cash are determined through market, observable and corroborated sources. |
Recovered_Sheet7
2. Significant Accounting Policies: Income Taxes (Policies) | 6 Months Ended |
Feb. 28, 2014 | |
Policies | ' |
Income Taxes | ' |
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 period 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. |
Recovered_Sheet8
2. Significant Accounting Policies: Shipping and Handling Costs (Policies) | 6 Months Ended |
Feb. 28, 2014 | |
Policies | ' |
Shipping and Handling Costs | ' |
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 goods sold in the consolidated statement of operations. All costs billed to the customer are included as revenue in the consolidated statement of operations. |
Recovered_Sheet9
2. Significant Accounting Policies: Revenue Recognition (Policies) | 6 Months Ended |
Feb. 28, 2014 | |
Policies | ' |
Revenue Recognition | ' |
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. |
Recovered_Sheet10
2. Significant Accounting Policies: Reclassifications (Policies) | 6 Months Ended |
Feb. 28, 2014 | |
Policies | ' |
Reclassifications | ' |
Reclassifications | |
Certain reclassifications have been made to prior years’ financial statements to conform to the classifications used in the current period. These reclassifications include adjustments to reflect the reorganization of the corporate structure and reporting segments effective September 1, 2013. |
Recovered_Sheet11
2. Significant Accounting Policies: Recent Accounting Pronouncements (Policies) | 6 Months Ended |
Feb. 28, 2014 | |
Policies | ' |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | |
Management has reviewed the new accounting guidance and determined that there is not a material impact on our financial statements. |
Recovered_Sheet12
2. Significant Accounting Policies: Property, Plant and Equipment: Property, Plant and Equipment, Estimated Useful Lives (Tables) | 6 Months Ended | |||
Feb. 28, 2014 | ||||
Tables/Schedules | ' | |||
Property, Plant and Equipment, Estimated Useful Lives | ' | |||
Office equipment | 5 years | 7 years | ||
Warehouse equipment | 2 years | 10 years | ||
Buildings | 5 years | 30 years |
Recovered_Sheet13
2. Significant Accounting Policies: Earnings Per Share: Schedule of Earnings Per Share, Basic and Diluted (Tables) | 6 Months Ended | ||||||||
Feb. 28, 2014 | |||||||||
Tables/Schedules | ' | ||||||||
Schedule of Earnings Per Share, Basic and Diluted | ' | ||||||||
Three Month Period | Six Month Period | ||||||||
Ended February 28, | Ended February 28, | ||||||||
2014 | 2013 | 2014 | 2013 | ||||||
Net income | $ 237,398 | $ 790,631 | $ 569,977 | $1,271,377 | |||||
Basic weighted average number of | |||||||||
common shares outstanding | 3,129,764 | 3,135,860 | 3,132,365 | 3,135,902 | |||||
Effect of dilutive securities | |||||||||
Stock options | 0 | 0 | 0 | 0 | |||||
Diluted weighted average number | |||||||||
of common shares outstanding | 3,129,764 | 3,135,860 | 3,132,365 | 3,135,902 | |||||
Recovered_Sheet14
2. Significant Accounting Policies: Financial Instruments: Fair Value, Option, Quantitative Disclosures (Tables) | 6 Months Ended | ||||||
Feb. 28, 2014 | |||||||
Tables/Schedules | ' | ||||||
Fair Value, Option, Quantitative Disclosures | ' | ||||||
February 28, | August 31, | ||||||
2014 | 2013 | ||||||
Carrying | Fair | Carrying | Fair | ||||
Amount | Value | Amount | Value | ||||
Cash | $5,816,854 | $5,816,854 | $8,308,445 | $8,308,445 | |||
Accounts receivable, net of allowance | 4,256,286 | 4,256,286 | 3,344,777 | 3,344,777 | |||
Note receivable | - | - | 15,000 | 15,000 | |||
Accounts payable and accrued liabilities | 1,956,618 | 1,956,618 | 2,865,340 | 2,865,340 |
Recovered_Sheet15
2. Significant Accounting Policies: Financial Instruments: Fair Value, Assets Measured on Recurring Basis (Tables) | 6 Months Ended | |||||||||||||
Feb. 28, 2014 | ||||||||||||||
Tables/Schedules | ' | |||||||||||||
Fair Value, Assets Measured on Recurring Basis | ' | |||||||||||||
February 28, | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||
2014 | ||||||||||||||
Assets: | ||||||||||||||
Cash | $ | 5,816,854 | $ | 5,816,854 | $ | — | $ | — |
3_Inventory_Schedule_of_Invent
3. Inventory: Schedule of Inventory, Current (Tables) | 6 Months Ended | ||||
Feb. 28, 2014 | |||||
Tables/Schedules | ' | ||||
Schedule of Inventory, Current | ' | ||||
February 28, | August 31, | ||||
2014 | 2013 | ||||
Wood products and metal products | $ 6,766,962 | $ 7,984,678 | |||
Industrial tools | 529,579 | 482,949 | |||
Agricultural seed products | 232,185 | 53,364 | |||
$ 7,528,726 | $ 8,520,991 |
4_Property_Plant_and_Equipment1
4. Property, Plant and Equipment: Property, Plant and Equipment (Tables) | 6 Months Ended | ||||
Feb. 28, 2014 | |||||
Tables/Schedules | ' | ||||
Property, Plant and Equipment | ' | ||||
February 28, | August 31, | ||||
2014 | 2013 | ||||
Office equipment | $ 560,956 | $ 565,575 | |||
Warehouse equipment | 1,468,902 | 1,431,707 | |||
Buildings | 2,688,616 | 2,681,989 | |||
Land | 761,924 | 761,924 | |||
5,480,398 | 5,441,195 | ||||
Accumulated depreciation | -3,266,962 | -3,199,245 | |||
Net book value | $ 2,213,436 | $ 2,241,950 |
5_Intangible_Assets_Schedule_o
5. Intangible Assets: Schedule of Finite-Lived Intangible Assets (Tables) | 6 Months Ended | ||||
Feb. 28, 2014 | |||||
Tables/Schedules | ' | ||||
Schedule of Finite-Lived Intangible Assets | ' | ||||
February 28, | August 31, | ||||
2014 | 2013 | ||||
Patent | $ 850,000 | $ 850,000 | |||
Other | 43,655 | 43,655 | |||
893,655 | 893,655 | ||||
Accumulated amortization | -561,345 | -524,993 | |||
Net book value | $ 332,310 | $ 368,662 |
13_Contingent_Liabilities_and_1
13. Contingent Liabilities and Commitments: Legal Matters and Contingencies (Tables) | 6 Months Ended | ||||
Feb. 28, 2014 | |||||
Tables/Schedules | ' | ||||
Legal Matters and Contingencies | ' | ||||
February 28, | August 31, | ||||
2014 | 2013 | ||||
Litigation loss | $ - | $ - | |||
Litigation reserve | 144,103 | 170,819 | |||
Interest expense | - | - | |||
Interest income | -13,249 | -26,716 | |||
Total | $ 130,854 | $ 144,103 |
14_Segment_Information_Schedul
14. Segment Information: Schedule of Segment Reporting Information, by Segment (Tables) | 6 Months Ended | ||||
Feb. 28, 2014 | |||||
Tables/Schedules | ' | ||||
Schedule of Segment Reporting Information, by Segment | ' | ||||
2014 | 2013 | ||||
Sales to unaffiliated customers: | |||||
Industrial wood products | $ 3,404,951 | $ 4,072,527 | |||
Lawn, garden, pet and other | 11,929,856 | 15,004,943 | |||
Seed processing and sales | 1,678,862 | 3,501,011 | |||
Industrial tools and clamps | 725,261 | 945,748 | |||
$ 17,738,930 | $ 23,524,229 | ||||
Income (loss) before income taxes: | |||||
Industrial wood products | $ (32,349) | $ 10,326 | |||
Lawn, garden, pet and other | 499,003 | 1,251,180 | |||
Seed processing and sales | 108,661 | 174,894 | |||
Industrial tools and clamps | 45,225 | 62,649 | |||
Corporate and administrative | 349,584 | 275,310 | |||
$ 970,124 | $ 1,774,359 | ||||
Identifiable assets: | |||||
Industrial wood products | $ 1,366,293 | $ 1,495,878 | |||
Lawn, garden, pet and other | 10,989,146 | 10,637,480 | |||
Seed processing and sales | 632,061 | 924,364 | |||
Industrial tools and clamps | 669,639 | 685,864 | |||
Corporate and administrative | 9,071,339 | 7,665,641 | |||
$ 22,728,478 | $ 21,409,227 | ||||
Depreciation and amortization: | |||||
Industrial wood products | $ 490 | $ 403 | |||
Lawn, garden, pet and other | 21,194 | 9,767 | |||
Seed processing and sales | 6,508 | 7,740 | |||
Industrial tools and clamps | 2,974 | 2,853 | |||
Corporate and administrative | 108,384 | 100,933 | |||
$ 139,550 | $ 121,696 | ||||
Capital expenditures: | |||||
Industrial wood products | $ - | $ - | |||
Lawn, garden, pet and other | - | - | |||
Seed processing and sales | - | - | |||
Industrial tools and clamps | 1,300 | - | |||
Corporate and administrative | 74,075 | 130,790 | |||
$ 75,375 | $ 130,790 | ||||
Interest expense: | |||||
Lawn, garden, pet and other | $ - | $ 400 |
14_Segment_Information_Schedul1
14. Segment Information: Schedule of sales in excess of ten percent (Tables) | 6 Months Ended | ||||
Feb. 28, 2014 | |||||
Tables/Schedules | ' | ||||
Schedule of sales in excess of ten percent | ' | ||||
2014 | 2013 | ||||
Sales | 7,604,958 | 7,338,811 |
14_Segment_Information_Schedul2
14. Segment Information: Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area (Tables) | 6 Months Ended | ||||
Feb. 28, 2014 | |||||
Tables/Schedules | ' | ||||
Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area | ' | ||||
2014 | 2013 | ||||
United States | 16,275,299 | 20,450,160 | |||
Canada | 349,275 | 1,243,522 | |||
Mexico / Latin America | 987,524 | 1,732,181 | |||
Europe | 126,832 | 43,961 | |||
Asia/Pacific | 0 | 54,405 |
16_Supplemental_Disclosure_Wit1
16. Supplemental Disclosure With Respect To Cash Flows: Schedule of Cash Flow, Supplemental Disclosures (Tables) | 6 Months Ended | ||||
Feb. 28, 2014 | |||||
Tables/Schedules | ' | ||||
Schedule of Cash Flow, Supplemental Disclosures | ' | ||||
2014 | 2013 | ||||
Cash paid during the periods for: | |||||
Interest | $ - | $ 400 | |||
Income taxes | $ 630,122 | $ 984,812 |
Recovered_Sheet16
2. Significant Accounting Policies: Cash and Cash Equivalents (Details) (USD $) | Feb. 28, 2014 | Aug. 31, 2013 |
Details | ' | ' |
Cash | $5,816,854 | $8,308,445 |
Recovered_Sheet17
2. Significant Accounting Policies: Earnings Per Share: Schedule of Earnings Per Share, Basic and Diluted (Details) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Feb. 28, 2014 | Feb. 28, 2013 | Feb. 28, 2014 | Feb. 28, 2013 | Aug. 31, 2013 | Aug. 31, 2012 | |
Details | ' | ' | ' | ' | ' | ' |
Net income | $237,398 | $790,631 | $569,977 | $1,271,377 | $3,132,019 | $3,059,931 |
Weighted Average Number of Shares Issued, Basic | 3,129,764 | 3,135,860 | 3,132,365 | 3,135,902 | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 0 | 0 | 0 | 0 | ' | ' |
Weighted average number of common shares outstanding Diluted | 3,129,764 | 3,135,860 | 3,132,365 | 3,135,902 | ' | ' |
Recovered_Sheet18
2. Significant Accounting Policies: Financial Instruments: Fair Value, Option, Quantitative Disclosures (Details) (USD $) | Feb. 28, 2014 | Aug. 31, 2013 |
Details | ' | ' |
Cash | $5,816,854 | $8,308,445 |
Accounts receivable, net of allowance of $Nil (August 31, 2013 - $Nil) | 4,256,286 | 3,344,777 |
Note receivable | ' | 15,000 |
Accounts Payable and Accrued Liabilities, Current | $1,956,618 | $2,865,340 |
Recovered_Sheet19
2. Significant Accounting Policies: Financial Instruments: Fair Value, Assets Measured on Recurring Basis (Details) (USD $) | Feb. 28, 2014 | Aug. 31, 2013 |
Details | ' | ' |
Cash | $5,816,854 | $8,308,445 |
3_Inventory_Schedule_of_Invent1
3. Inventory: Schedule of Inventory, Current (Details) (USD $) | Feb. 28, 2014 | Aug. 31, 2013 | ||
Details | ' | ' | ||
Wood products and metal products | $6,766,962 | $7,984,678 | ||
Industrial tools | 529,579 | 482,949 | ||
Agricultural seed products | 232,185 | 53,364 | ||
Inventory, net of allowance of $134,259 (August 31, 2013 - $134,259) | $7,528,726 | [1] | $8,520,991 | [1] |
[1] | Note 3 |
4_Property_Plant_and_Equipment2
4. Property, Plant and Equipment: Property, Plant and Equipment (Details) (USD $) | Feb. 28, 2014 | Aug. 31, 2013 | ||
Details | ' | ' | ||
Office equipment | $560,956 | $565,575 | ||
Warehouse equipment | 1,468,902 | 1,431,707 | ||
Buildings and Improvements, Gross | 2,688,616 | 2,681,989 | ||
Land | 761,924 | 761,924 | ||
Property, Plant and Equipment, Gross | 5,480,398 | 5,441,195 | ||
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | -3,266,962 | -3,199,245 | ||
Property, plant and equipment, net | $2,213,436 | [1] | $2,241,950 | [1] |
[1] | Note 4 |
5_Intangible_Assets_Schedule_o1
5. Intangible Assets: Schedule of Finite-Lived Intangible Assets (Details) (USD $) | 6 Months Ended | 12 Months Ended |
Feb. 28, 2014 | Aug. 31, 2013 | |
Details | ' | ' |
Finite-Lived Patents, Gross | $850,000 | $850,000 |
Other Finite-Lived Intangible Assets, Gross | 43,655 | 43,655 |
Finite-Lived Intangible Assets, Gross, Total | 893,655 | 893,655 |
Amortization of Intangible Assets | -561,345 | -524,993 |
Intangible Assets, Current, Total | $332,310 | $368,662 |
6_Deferred_Income_Taxes_Detail
6. Deferred Income Taxes (Details) (USD $) | Feb. 28, 2014 | Aug. 31, 2013 |
Details | ' | ' |
Deferred Tax Liabilities, Gross | $42,027 | $50,393 |
12_Pension_and_Profitsharing_P1
12. Pension and Profit-sharing Plans (Details) (USD $) | 6 Months Ended | |
Feb. 28, 2014 | Feb. 28, 2013 | |
Details | ' | ' |
Pension Contributions | $94,392 | $109,413 |
13_Contingent_Liabilities_and_2
13. Contingent Liabilities and Commitments: Legal Matters and Contingencies (Details) (USD $) | 6 Months Ended | 12 Months Ended | ||
Feb. 28, 2014 | Aug. 31, 2013 | |||
Details | ' | ' | ||
Litigation reserve, beginning balance | $144,103 | $170,819 | ||
Interest income from litigation | -13,249 | -26,716 | ||
Litigation reserve | $130,854 | [1] | $144,103 | [1] |
[1] | Note 13a |
14_Segment_Information_Schedul3
14. Segment Information: Schedule of sales in excess of ten percent (Details) (USD $) | Feb. 28, 2014 | Feb. 28, 2013 |
Details | ' | ' |
Sales in excess of 10% of total sales | $7,604,958 | $7,338,811 |
14_Segment_Information_Schedul4
14. Segment Information: Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area (Details) (USD $) | Feb. 28, 2014 | Feb. 28, 2013 |
Details | ' | ' |
United States sales | $16,275,299 | $20,450,160 |
Canada sales | 349,275 | 1,243,522 |
Mexico/Latin America sales | 987,524 | 1,732,181 |
Europe sales | 126,832 | 43,961 |
Asia Pacific sales | $0 | $54,405 |
15_Concentrations_Details
15. Concentrations (Details) (USD $) | 6 Months Ended | |
Feb. 28, 2014 | Feb. 28, 2013 | |
Details | ' | ' |
Concentration Risk, Customer | '57 | '60 |
Concentration, volume of purchases | $5,871,611 | $8,262,691 |
16_Supplemental_Disclosure_Wit2
16. Supplemental Disclosure With Respect To Cash Flows: Schedule of Cash Flow, Supplemental Disclosures (Details) (USD $) | 6 Months Ended | |
Feb. 28, 2014 | Feb. 28, 2013 | |
Details | ' | ' |
Interest Paid | ' | $400 |
Income Taxes Paid | $630,122 | $984,812 |