JCTCF released their Q2 10Q report yesterday. Earnings per share increased 177% from last fiscal year Q2 resulting in a per share value of 0.25$ for the second quarter compared to 0.09$ per share in the previous year.
This inscrease is the result of major actions from JCTCF management. Here are some of the actions:
- Major share buybacks (15%) (discussed here)
- Reduction of losses in many divisions
- Incredible increase in sales of JCLC division (Land, pet and Garden).
Sales at JCLC were $7,809,322 for the second quarter of 2011 compared to sales of $3,762,306 for the previous year second quarter, an increase of $4,047,016, or 108%!!! JCTCF management expressed that it was acheived throught the growth of current customer relationship. This improved relationship helped JCLC push the full range of products to the same customers and embelish presentation of the same products.
This also resulted in a major increase in accounts payables (2.5M more than previous year).
At February 28, 2011, three customers accounted for accounts receivable greater than 10% of total accounts receivable at a combined total of 62%. At February 28, 2010 two customers accounted for accounts receivable greater than 10% of total accounts receivable at 27%. Customer concentration could now be an issue. It needs to be tracked seriously.
Interesting fact, historically, the operating results of JCLC are seasonal with the first two quarters of the fiscal year typically being much slower than the final two quarters of the fiscal year. The historical discrepency is around 20-25% between Q1-Q2 and Q3-Q4 for this division. So we could see another increase in sales of around 2M in this division alone for the next 2 quarters resulting in sales of around 10M per quarter for JCLC alone! 20M is the equivalent of half 2010 revenues.
The current TTM is at 0.96$ including one time charge of 1.7M. Without this extraordinary charge, the TTM would be at 1.05$. If push forward the increase in profit of JCLC, you would get an EPS of 1.37$ for the current fiscal year (conservative). The current P/E ratio on the 1.37$ estimate would then be 7.6. At a P/E of 10 excluding cash balance of 4.5M, would be between 15 and 16$!
Disclosure : Author has a position in JCTCF / JCT.