The Company's operations are classified into four reportable segments as follows:

•

Industrial wood products (Greenwood) - Distribution of specialty wood products.

•

Lawn, garden, pet and other (JCLC) - Wholesaling of wood products and manufacturing and distribution of specialty metal products.

•

Seed processing and sales (JCSC) - Processing and distribution of agricultural seed.

•

Industrial tools and clamps (MSI) - Importing and distribution of products including pneumatic air tools, industrial clamps, and saw blades.

Quarterly Results


The following table summarizes quarterly financial results in fiscal 2008 and
fiscal 2007.  (Figures are thousands of dollars except per share amounts.)


                             For the Year Ended August 31, 2008
                             First  Second   Third  Fourth    Full
                           Quarter Quarter Quarter Quarter    Year

Sales                      $14,006 $14,774 $18,231 $17,310 $64,321
Gross profit                 2,489   2,640   3,253   3,007  11,389
Net income                     374     513     960     763   2,610
Basic earnings per share     $0.16   $0.21   $0.40    $.32   $1.09
Diluted earnings per share   $0.16   $0.21   $0.40    $.32   $1.09



                             For the Year Ended August 31, 2007
                             First  Second   Third  Fourth    Full
                           Quarter Quarter Quarter Quarter    Year

Sales                      $15,338 $16,067 $20,473 $17,160 $69,038
Gross profit                 2,375   2,384   3,034   3,325  11,118
Net income                     288     321     757     929   2,295
Basic earnings per share     $0.12   $0.13   $0.32   $0.39   $0.96
Diluted earnings per share   $0.12   $0.13   $0.32   $0.39   $0.96

RESULTS OF OPERATIONS

Fiscal Years Ended August 31, 2008 and August 31, 2007

Sales were $64,321,034 for 2008, which was a decrease of $4,717,430 or 7% compared to sales of $69,038,464 for 2007. Primarily this reflects a relatively large decrease in sales at Greenwood, which was only partially offset by a relatively large increase in sales at JCLC.

Gross margin for 2008 was 17.7% compared with 16.1% in 2007. The margin improvement primarily reflects the fact that specialty metal products, which are manufactured and sold by JCLC, have a much higher gross margin than the other products that the Company sells, and metal products sales were a larger part of total sales than in the prior year. These metal products represented approximately 30% of total Company sales in 2008 compared with about 21% in the prior year. Also, there were some unusual items that favorably affected gross margin in 2007. These unusual items were an inventory reserve reversal in the first quarter of the year of $150,000 and the booking of rebates from a supplier for a total of $222,448 in the second and third quarters. Gross margin in 2007 excluding these unusual items was 15.6%.

Operating expenses decreased by $77,281 from $7,093,200 in 2007 to $7,015,919 in 2008. Most of this change resulted from a $64,620 decrease in selling, general and administrative expenses. Depreciation and amortization expense and wages and benefits were relatively unchanged.

Interest expense decreased by $44,962 from $234,589 in 2007 to $189,627 in 2008.
The decrease mainly resulted from a lower level of borrowing.

The effective income tax rate for 2008 was 38.0% compared with a rate of 39.6% in 2007. The Company calculates income tax expense based on combined federal and state rates that are currently in effect, and the rate in 2008 is close to the statutory rate.

Net income for 2008 was $2,610,134 or $1.09 per diluted share compared with $2,294,855 or $.96 per diluted share in 2007. However, net income in 2007 included several unusual items. These included the reversal of an inventory reserve, rebates from a supplier, and the reversal of another sizable accrued expense that had been accrued in the prior year and was subsequently determined to not be needed. The effect of these items was an increase in earnings of $.11 per diluted share in 2007, and earnings without these items were $.85 per diluted share. Earnings per share of $1.09 for 2008 were a 28% increase over the comparable figure for 2007.

Industrial Wood Products - Greenwood

Sales at Greenwood were $27,988,051 for 2008, which was a decrease of $12,730,231 or 31% compared to sales of $40,718,282 for 2007. Sales of plywood to boat manufacturers represented approximately 59% and 67% of Greenwood's total sales during 2008 and 2007 respectively, and demand from these kind of customers has been severely affected by weak economic conditions. Furthermore, Greenwood lost a major group of boat manufacturing customers, when a two year contract came up for renewal at June 30, 2008. Also contributing to the decline in sales was the departure of some traders. New traders have been hired, but the net effect has been a reduction in sales.

Operating income at Greenwood was $1,017,534 in 2008, which was a decrease of $119,414 or 11% compared to operating income of $1,136,948 in 2007. The decline in operating income reflects the decrease in sales coupled with a sizable inventory write-down, but the percentage decline in operating income is significantly less than the percentage decline in sales. This is based on margin improvement and operating expense control.

In the coming year depressed conditions in the overall economy and in the boating industry in particular will likely be a significant challenge for all suppliers in the industry including Greenwood.

Lawn, Garden, Pet and Other - JCLC

Sales at JCLC were $27,840,099 for 2008, which was an increase of $7,568,227 or 37% compared to sales of $20,271,872 for 2007. This reflects a sizable increase in the sales of both metal products and wood products. The following table shows a breakdown between these two product categories in this segment.

Sales in Millions of Dollars

Percent of Total Sales

Fiscal Year

Metal

Wood

Total

Metal

Wood

Total

2008

19.2

8.6

27.8

69%

31%

100%

2007

14.8

5.5

20.3

73%

27%

100%

Operating income at JCLC was $3,081,984 in 2008, which was an increase of $339,999 compared to operating income of $2,741,985 in 2007. However, operating income in 2007 included unusual items totaling $437,448. These items were an inventory reserve of $150,000 that was booked in 2006 and reversed in 2007, rebates from a supplier for $222,448, and an expense accrual for $65,000 in 2006 that was reversed in 2007, based on a determination that no liability exists.
Operating income in 2007 excluding these items was $2,304,537. Therefore, operating income actually increased by $777,447 or 34% in 2008 compared to 2007.
This improvement in operating income reflects the higher level of overall segment sales and particularly the increase in metal products sales, which have a higher gross margin than wood products sales.

The outlook in the coming year appears favorable for JCLC particularly for metal products sales.

Seed Processing and Sales - JCSC

Sales at JCSC were $7,357,195 for 2008 compared to $6,984,412 for 2007, which was an increase of $372,783 or 5%.

Operating income at JCSC was $265,670 in 2008 compared to $183,991, which was an increase of $81,679 or 44%.

Industrial Tools and Clamps - MSI

Sales at MSI were $1,135,689 for 2008 compared to $1,063,898 for 2007, which was an increase of $71,791 or 7%.

Operating income at MSI was $113,346 in 2008 compared with $78,896 in 2007, which was an increase of $34,450 or 44%.

LIQUIDITY AND CAPITAL RESOURCES

Fiscal Year Ended August 31, 2008

As of August 31, 2008 the Company had working capital of $16,186,529, which represented an increase of $2,472,789 compared to working capital of $13,713,740 as of August 31, 2007. The largest changes affecting working capital were an increase in cash of $5,501,348, a decrease in accounts receivable of $1,039,423, a decrease in inventory of $2,810,259, and a decrease in accounts payable of $520,207. Changes in other current assets and current liabilities increased working capital by $300,916. The ratio of current assets to current liabilities or current ratio was 6.06 reflecting a very high degree of liquidity.

The relatively large increase in cash was primarily based on good profitability, the reduction in accounts receivable and inventory, and the necessity for only minimal capital spending.

For the year ended August 31, 2008 the accounts receivable collection period or DSO was 36.0 days compared with 34.3 days for the year ended August 31, 2007.
Inventory turnover for the year ended August 31, 2008 was 67.8 days compared with 59.9 days for the year ended August 31, 2007.

Based on the Company's current working capital position, its policy of retaining earnings, and the line of credit available, the Company has adequate working capital to meet its needs for the coming fiscal year.

Short-term and Long-term Debt

External sources of liquidity include a line of credit from U.S. Bank of $5,000,000 of which $300,000 is presently dedicated to standby letters of credit to support international transactions. At August 31, 2008 the company had no borrowing balance leaving $4,700,000 available. At August 31, 2007 the borrowing balance was $1,059. Borrowing under the line of credit is secured by an assignment of accounts receivable and inventory. Prior to January 31, 2008 interest was calculated at either prime or the one month LIBOR rate plus 190 basis points. However, starting on January 31, 2008 the borrowing mechanism was simplified, and the interest rate is calculated solely on the one month LIBOR rate plus 190 basis points. As of August 31, 2008 the one month LIBOR rate plus 190 basis points was 4.39% (2.49% + 1.90%).

The Company has a promissory note payable to U.S. Bank with a balance of $2,018,811 as of August 31, 2008. This loan is secured by the property at the Company's headquarters location in North Plains, Oregon. The interest rate on this loan is 6.52%, and monthly payments including principal and interest are $16,601. The unpaid principal on the loan is due on June 15, 2010.

The line of credit and the promissory note have certain financial covenants.
The Company is in compliance with these covenants.

The Company has a note payable of $300,000 bearing interest of 5% per year, which was part of the consideration connected with the purchase of patents and manufacturing rights for fence gate support systems. This note plus accrued interest is due on January 15, 2009.

OTHER MATTERS


Contractual Obligations and Commercial Commitments



                                                                     More Than
                                 Total   1 Year  2-3 Years 4-5 Years   5 Years

Long-term debt obligations  $2,318,811 $367,810 $1,951,001         -         -
Operating lease obligations    $49,896  $46,250     $3,646         -         -
Purchase obligations                 -        -          -         -         -
Other long-term liabilities          -        -          -         -         -

Inflation

The Company does not believe that inflation had a material impact during fiscal 2008 or 2007. 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.

During the year ended August 31, 2008, the Company did not adopt any new accounting policy 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

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements". SFAS No. 157 establishes a framework for measuring the fair value of assets and liabilities. This framework is intended to provide increased consistency in how fair value determinations are made under various existing accounting

standards which permit, or in some cases require, estimates of fair market value.

FASB Staff Position 157-2 ("FSP FAS 157-2") delayed the effective date of FAS 157 until fiscal years beginning after November 15, 2008, and interim periods within those fiscal years, for all nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The adoption of FAS 157 did not have a material impact on the Company's consolidated financial statements.

In February, 2007, the FASB issued SFAS No. 159 "The Fair Value Option for Financial Assets and Financial Liabilities". SFAS No. 159 permits entities to choose to measure many financial assets and financial liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. We are currently assessing the impact of SFAS No. 159 on our financial position and results of operations, but do not anticipate a material impact.

In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments and Hedging Activities". SFAS 161 changes the disclosure requirements for derivative instruments and hedging activities by requiring enhanced disclosures about how and why an entity uses derivative instruments, how derivative instruments and related hedged items are accounted for under SFAS 133, and how derivative instruments and related hedged items affect an entity's operating results, financial position, and cash flows. SFAS 161 is effective for fiscal years beginning after November 15, 2008. Earlier adoption is permitted. The Company is currently reviewing the provisions of FAS 161 and has not yet adopted the statement. However, as the provisions of SFAS 161 are only related to disclosure of derivative and hedging activities, the Company does not believe the adoption of SFAS 161 will have a material impact on its consolidated operating results, financial position, or cash flows.

In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements-an amendment of ARB No. 51," (SFAS 160). SFAS 160 amends Accounting Research Bulletin No. 51, "Consolidated Financial Statements," to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. This standard defines a noncontrolling interest, sometimes called a minority interest, as the portion of equity in a subsidiary not attributable, directly or indirectly, to a parent. SFAS 160 requires, among other items, that a noncontrolling interest be included in the consolidated statement of financial position within equity separate from the parent's equity; consolidated net income to be reported at amounts inclusive of both the parent's and noncontrolling interest's shares and, separately, the amounts of consolidated net income attributable to the parent and noncontrolling interest all on the consolidated statement of income; and if a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary be measured at fair value and a gain or loss be recognized in net income based on such fair value. SFAS No. 160 is effective for fiscal years beginning on or after December 15, 2008. Management has determined that the adoption of SFAS 160 will not have an impact on the Financial Statements.

In December 2007, the FASB issued SFAS 141(R), which replaces SFAS 141 and retains the fundamental requirements in SFAS 141, including that the purchase method be used for all business combinations and for an acquirer to be identified for each business combination. This standard defines the acquirer as the entity that obtains control of one or more businesses in the business combination and establishes the acquisition date as the date that the acquirer achieves control instead of the date that the consideration is transferred. SFAS 141(R) requires an acquirer in a business combination, including business combinations achieved in stages (step acquisition), to recognize the assets acquired, liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date, with limited exceptions. It also requires the recognition of assets acquired and liabilities assumed arising from certain contractual contingencies as of the acquisition date, measured at their acquisition-date fair values. SFAS 141(R) becomes effective for the first annual reporting period beginning on or after December 15, 2008. Management has determined that the adoption of SFAS 141(R) will not have a material impact on the Financial Statements.

In April 2008, the FASB issued FSP No. FAS 142-3, "Determination of the Useful Life of Intangible Assets," (FSP FAS 142-3). FSP FAS 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No. 142, "Goodwill and Other Intangible Assets," (SFAS 142) in order to improve the consistency between the useful life of a recognized intangible asset under SFAS 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS 141(R) and other GAAP. FSP FAS 142-3 is effective for fiscal years beginning after December 15, 2008. Management has determined that the adoption of FSP FAS 142-3 will not have an impact on the Financial Statements.

In June 2008, the FASB issued FSP No. EITF 03-6-1, "Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities," (FSP EITF 03-6-1). FSP EITF 03-6-1 states that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. FSP EITF 03-6-1 is effective for fiscal years beginning after December 15, 2008. Management has determined that the adoption of FSP EITF 03-6-1 will not have an impact on the Financial Statements.