JEWETT CAMERON TRADING CO LTDJCTC财报

While the original listed sale price of the property was based on both the perceived value of the property and the potential for a rezoning of the property for higher value uses, over the last year, the local economy has weakened and lessened the short-term needs for the local municipalities to create new housing and industrial land.

Company Strategy We began fiscal 2025 with a positive outlook and a focus on continuing to lower costs, increase sales, improve margins, introduce innovative products and monetize surplus assets.

However, due primarily to the volatility and uncertainty created by the introduction of various tariffs since February 2025 and the large purchases of lumber inventory in support of one of our larger customers, our goals to grow and return to profitability in fiscal 2025 were not achieved.

Accordingly, management and the Board have reformulated our strategic plan to combat the challenges encountered during fiscal 2025, and focus on our core strengths during this difficult period. We intend to concentrate our resources on our successful fencing product lines while monetizing non-core assets and disposing of excess inventory.

Management and the Board are also evaluating strategic alternatives for the Company as well as its individual operating segments and assets that prioritize the Company’s overall value. 5 Our current strategy includes: · Focus on our fencing products and increase sales and improve margins; · Dispose of excess inventory; · Monetize non-core assets; · Improve operational efficiencies and cost structures; and · Seek collaborative alliances and business partnerships where appropriate.

Focus on Fencing Fencing remains our largest and most successful product category and will be the primary focus of our operations and expenditure of resources in the near term.

Building on our success with the thousands of deployed in-store display units for our Adjust-A-Gate® products, which have continued to increase visibility of our products in stores and have led to higher sales volumes, we are continuing to roll out additional in-store display units for our Lifetime Steel Post® (LTP) product at major home improvement retailers.

The LTP displayers are now in 422 stores, which represents a small fraction of the potential market, both with our existing big box customers and potential new customers in the home improvement and professional market.

We are also working to create new in-store displayers for our other fencing products, and tailor these new displayers to better fit in other home improvement retailers that may not have the space available for our current full-size display units. We are also continuing our innovation in this segment as we launched our low-profile Adjust-A-Gate® Unlimited product in 2025.

Significant growth opportunities remain in the fencing sector, both through the expansion of our existing products into more stores, new sales channels, and through new and improved products. We are developing improvements and enhancements to our existing products, and evaluating outside products from third parties that complement our current product lines and broaden our product offerings.

The imposition of worldwide tariffs during 2025 significantly eroded our margins on many products and increased supply chain and logistics costs across the majority of our product lines. The tariffs directly impacted operating costs and had a significant negative impact on overall gross margins.

In addition, many customers altered their usual purchases and deferred their orders during this period of tariff-related volatility. Many of our customers also refused to immediately accept higher prices for our products which we adjusted in response to the increased costs associated with the tariffs and global trade disruption. This resulted in an overall decrease in sales.

While the Company took actions to attempt to mitigate these unforeseen events, such as pivoting to alternative suppliers outside of China through an intensive search, evaluation and onboarding process that began two years ago, and reducing headcount by nearly 30%, these measures were not sufficient to withstand the headwinds we faced in 2025.

However, we believe that the global economic environment is stabilizing and that customers and supply chain partners are employing reasonable and innovative policies to maintain equilibrium and continuity of commerce. Accordingly, we intend to focus on improving margins on our core fencing products through these reestablished partnerships, new sales channels and by more controlled purchasing management.

Dispose of excess inventory Demand for certain of our pet products remains slow as the pet market continues its overall weakness. As a result, we have excess pet inventory at our warehouse. We are working with third-party liquidators to sell this high-quality but slow-moving inventory which will provide us with cash and clear our warehousing costs for these products.

We also currently have about $5 million in excess lumber inventory which we acquired to meet the terms of our contractual obligations under our consignment agreement with a major customer which they did not need before the end of last season.

Additionally, this customer has since given notice of their intention to transition away from the consignment agreement in calendar 2026. Although the consignment agreement provided us with meaningful revenue, it was of very low margin and profitability. We are currently in negotiations with this customer, as well as other third parties, regarding the purchase of our excess lumber inventory.

Monetize non-core assets Our surplus seed company property remains on the market at a list price of $7.223 million. We have also recently listed our creative laboratory building for sale at a list price of $795,000.

As we intend to concentrate our business on fencing and outdoor products, we are presently evaluating all of our non-fence-related products and if they fit within our sharper focus on higher margin products. As a lower margin segment, management and the Board are currently evaluating Greenwood’s industrial wood business and considering strategic alternatives.

We are also reviewing potential changes to our pet business, as the overall pet industry is expected to remain weak for the foreseeable future. Improve operations and cost structure Over the last several years, we have made significant investments in improving and streamlining our operational capabilities.

We also realigned our workforce within our strategic objectives through the reassignment of some employees to new roles and an overall headcount reduction in 2025 of 27% year-over-year. We will continue to look for cost savings that improve our operations and increase productivity.

Since February 2025, the unprecedented rise in tariffs, especially for steel and aluminum products, have substantially increased our product costs and compressed our margins. We have been able to somewhat mitigate a portion of these new tariff costs through our multi-country sourcing initiative.

As retailers and consumers are becoming acclimated to the tariff-related costs, our customers are increasingly accepting the new prices which will help alleviate a portion of this cost pressure going forward.

We will continue to work with our suppliers and customers to find solutions to these tariff challenges while reducing our costs as much as possible. 6 Seek collaborative alliances and business partnerships As part of management’s and the Board’s strategic plan, the Company will continue to explore potential strategic options to enhance shareholder value.

This may include mergers, acquisitions, divestitures, joint ventures and other business collaborations and partnerships. The Company engages from time to time in preliminary discussions with third parties regarding a variety of potential transactions. There can be no assurance that these discussions will result in definitive agreements or the completion of any transaction.