Armlogi Holding Corp.

Thank you for standing by, and welcome to the Armlogy Holding Corp. Third Quarter 2024 Earnings Call. Please note that today's call is being recorded. I will now turn the meeting over to Matthew Abnonte, Investor Relations for Armlogy Holding Corp.

Thank you, and thanks to everyone for joining us today for Armlogy's inaugural earnings call. to discuss the third quarter of 2024. Please note that our earnings press release was issued earlier today, and our quarterly report on Form 10-Q was filed with the Securities and Exchange Commission. Both are available on the investor relations section of our website at ir.armlogy.com. Joining us on the call today are Heidi Chow, Chairman and Chief Executive Officer of Armlogy, and Ian Zhao, Chief Financial Officer. The format of our call will consist of comments provided by management, followed by a question and answer session addressing the questions that were submitted by investors. We thank everyone for submitting these questions. Before we get started, I am going to review the Safe Harbor Statement. Please note that today's discussion will contain forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future operating performance, including our financial performance and projections, our growth in revenue and earnings and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as may, should, expect, anticipate, contemplate, estimate, intends, believes, plans, projected, predict, potential, or hopes, or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including our ability to change the direction of the company, our ability to keep pace with new technologies and changing market needs, and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. We're not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions. The forward-looking events discussed on this call and other statements made from time to time by us or our representatives may not occur, and actual events and results may differ materially and are subject to risks, uncertainties, and assumptions about us. And with that, I would like to hand the call to our first speaker, I.D. Chow, Chairman and CEO of Armlogy. Good afternoon, I.D.

Yeah, good afternoon, Matt. And thank you all for joining us for our first earnings call as a public company following the closing of our initial public offering and the listing of a share on the NASDAQ in May. Our public listing was a significant milestone, but it was just one step in our vision to establish Amlogic as a leader in the global cross-border logistics and warehousing space. At Amlogic, our comprehensive warehousing and logistics service backed by cutting-edge technology and specializing equipment ensure that every delivery is happening in the expectation of our global clientele. Founders of our principles are innovation, dependability, and scalability. We are a globally expanding US-based provider offering a complete suite of supply chain solutions in compensation, warehousing management and order development. The surge in e-commerce and digital technologies couples with the evolution of a global supply chain. has led to growing demand from merchants to expanding their rich international platforms like Amazon and eBay. However, navigating the logistic complexities of cross-border shipping has been a challenging challenge, including limited delivery time, high damage rates, and congestion, especially during peak season. One solution to address this issue is to establish an overseas warehouse that's typically located in foreign markets where there is market-selling goods. By pre-stocking inventory in these facilities, cross-border e-commerce merchants can expect an fulfillment and a reduced delivery time, thereby enhancing the overall customer experience. We specialize in providing comprehensive warehousing and logistics support to cross-border e-commerce merchants targeting in the U.S. market. With a network of 11 warehouses spanning the country and a total of more than 2.5 million square feet of space, we offer state-of-the-art safety equipment with a scoring system heavy-duty machinery, and specializing storage solution killing for handling lodged and buggy items. Our service comprises customer break, transportation for U.S. warehouse, and efficient warehousing management and order fulfillment. Moreover, we extended our warehousing and logistics spaces to domestic e-commerce merchants with the U.S. Our offering of domestic customers narrowed those provided to international clients unable to deliver similar integrated solutions regarding the scope. The market we're offering is significantly large and is really growing. To put it into perspective, it is estimated that the market size for the global cross-border e-commerce is 2 trillion in 2022, and it's expected to reach over 4.3 trillion in 2027, a compound annual growth of 17% more. Moreover, our business is supported by newest interior tailoring, including increased online shopping. There is breaking more in shopping covers. And more business shifting to online platform as a way to increase delivery value. Amlogic, our quality warehousing and logistics service, our ability to charge reasonable service and a delivery fee, and using advanced warehouse and management technology set up as part of a broader competition. This strategic advantage paved the way for our continued business growth. Our success would not be possible without our hardworking employer and a very stable holder. I would like to thank you. partners and customers, as well as loyal shareholders for your continued support and a brief in our vision. We're looking forward to updating you on our business during the future earnings call. Now, I will turn it over to Ian Chao, Chief Financial Officer of Armlogic, for providing our overview of our operational and financial performance.

Perfect. Thank you, Aidee, and good afternoon, everyone. For further information regarding our third quarter 2024 financial resource and disclosures, please refer to our earnings release and our quarterly report on Form 10-Q that we filed with the SEC. Total revenue for the three months ended March 31, 2024, worth $38.4 million. up 28% from $30.1 million in the same period in 2023. Our transportation service segment reported revenue of $25 million, an increase of 18.2% from $21.2 million in the same period in 2023. This increase was driven by the rapid expansion of our business in 2023 as we expanded our warehouses operation capacity in California and New Jersey. Our warehousing service segment generates $13.4 million, a 50.5% increase from the $8.9 million over the same period in 2023. This growth was driven largely by the growth in our transportation service. This segment compressed inventory management and storage offerings. Our other service segment generated revenue of $43,000 compared to the $82,000 in the same period in 2023. This segment is primarily comprised of the customer brokerage service. Our net income was $0.4 million and $2.2 million for the three months and ended March 31, 2024 and 2023, respectively. Turning to our nine-month results, Total revenue for the nine months ended March 31, 2024, were $121.7 million, up 39.9% from $87 million in the same period in 2023. Our transportation service segment reported revenue of $84.7 million, an increase of 36.6% from $62 million in the same period in 2023. The increase was driven by the rapid expansion of our business in 2023 and as we expand our warehouse operational capacity in California and New Jersey. Our warehouse service segment generates $36.6 million, a 49.2% increase from $24.5 million over the same period in 2023. This increase was driven by the significant growth in our transportation service. Our other service segments generate revenue of $0.4 million, which were in line with those in the same period in 2023. Our net income was $7.2 million and $9 million for the nine months ending March 31st, 2024 and 2023, respectively. Turning to our material development, occurring sequentially to the end of third quarter of 2024. As Idy mentioned, We closed our initial public offering on the NASDAQ global market in May. That process for the offering allowed us to expand our warehouse network and develop warehousing and logistics services, develop international ocean freight service, and develop port trucking service, among other things. We recently announced the expansion of our operation in the port of Savannah in Georgia, a critical hub for logistics and supply chain solution in the United States, by signing a list for a new 733,000 square foot warehouse located close to the port. The Port of Savannah is the home to the largest single terminal container facility of its kind in North America and is the third busiest container port gateway in the nation, serving 33 weekly services. The most in the U.S., this new warehouse will significantly enhance our capacity to serve new clients with even greater efficiency and speed. We expect this strategy location of the port of Savannah will allow us to connect seamlessly with the global market and provide unparalleled assets to the large portion of the U.S. population with two-day transits. Our continuous expansion is intended to meet growing demand and foster the delivery of expectational service to our clients. Even more, earlier this month, we announced that we have become an authorized warehouse provider for sellers on the Timu marketplace. A major development for Omnology, this agreement will enable the seller to access Omnology's advanced order management technology and warehouse services, designed to optimize the supply chain process from warehouse to the doorstep. This enhancement will allow team of sellers to leverage Omnology's logistics expertise to improve the delivery speed, reduce the operational cost, and enhance the overall customer experience. We anticipate that this collaboration with a major e-commerce platform will further expand our capacity to serve more e-commerce sellers, offering reduced support system on the global platform, helping them excel in this competitive e-commerce marketplace. It aligns well with our mission and empower the e-commerce business through the cutting-edge logistics and warehousing solution and should positively impact our near-term growth success while strengthening our position as an emerging leader in the logistics industry. Well, in conclusion, the third quarter of 2024 marked a period of notable advancement and expansion for Omnology. Positioned favorably, we are poised in the substantial of our moment and capacity on the opportunity in front of us. We will now transition to the question and answer portion of the call. Thank you to everyone who has submitted questions.

Our first question is, can you discuss what makes your customers choose Armlogy over your competitors?

Definitely. That's a really good question. Our customers continue to work with us due to our longstanding relationship with them. which include our ability to meet their needs and earn their trust. While it's a highly competitive marketplace, this customer relationship has stood the rest of the time, pandemic and global supply chain issue, and we continue to deliver it for them.

Our next question, with your recent announcement of the warehouse in Savannah, Georgia, Are you looking at further warehouse expansion in the region and throughout the United States?

Yes, definitely. We eventually want to have more warehouse locations in all the major ports of the entries throughout the U.S. And we believe that over time, we will get there. We will expand as our customers grow and volume grows.

Thank you. And our last question. Do you expect to continue to see growth in the transportation services segment leading to revenue growth in warehousing services?

Yes, that's a for-sure question. As our transportation service segment, which is mostly in Thai FedEx, OceanFridge, and Kati Luri continue to grow, they should lead to expanding our warehouse services, which include the inventory management, order fulfillment, and storage services.

Thank you, Ian, and thanks to everyone for participating on today's call. We look forward to providing additional updates in the near future. And in the meantime, we can be reached at info at armlogy.com, or you can contact me directly at Matthew at strategic-ir.com.

Ladies and gentlemen, that concludes our conference for today. Thank you for your participation. You may now disconnect.