Jerash Holdings (US), Inc.

As part of our ongoing strategy, we continue to successfully diversify both our customer base and product mix. This effort was aimed at enhancing year-round production stability and reducing the impact of seasonality on our business. While we anticipate these changes will strengthen our long-term growth we do expect a slightly lower average gross margin in the near term. As order volumes for our expanded product offerings continue to scale in the coming years, our goal is to gradually improve gross profit margins to approximately 20%. We expect to achieve this through increased production automation and the benefits of economies of scale. During this important period of progress for the company, we remain vigilant about the potential impact of regional geopolitical uncertainties and involving terrorist developments. These factors are being closely monitored as we advance our growth strategy to ensure resilience and long-term success. With that, I will now turn the call over to Eric, who is in charge of our operations in Jordan. Thank you, Sam.

As we have noted previously, we believe the recent shift in US tariff policy has accelerated the urgency with which businesses are looking to diversify their manufacturing footprint. and we are seeking ways to accommodate growing capacity demands. We have successfully completed shipping the initial phase of the major collaboration order of more than 3 million pairs of girl shorts from our strategic partnership with Hanseo Textile, a leading South Korea-based global apparel group that supplies a wide range of garments to major international retail and fashion brands. Shipment of second phase is now scheduled to be completed by end of November. Production and shipments for the rest of the order are scheduled to continue through February of 2026. We are actively collaborating with both Hansel and its customer, a leading US-based multinational and omni-channel retail cooperation to discuss additional synergies and foster continued collaboration and growth together. Shipping logistics in the region have returned to normal. Both the Haifa and Aqaba ports are fully operational for shipping finished goods and receiving raw materials. We are optimistic that the nearly two-year period of transportation challenges is behind us, allowing us to resume uninterrupted logistics support for our global customers. We continue to receive new business inquiries, and buyers from our major customers have submitted increased order projections for 2026. We are currently awaiting confirmation of purchase orders to begin planning production schedules beyond our current capacity, which is fully booked through February. These new opportunities reinforce our growth outlook and validate our strategy, focusing on diversifying both our customer base and product mix. This approach enables us to optimize production capacity and drive stronger top-line performance and margins throughout the year. As Sam mentioned earlier, we are looking at different ways to expand our production capacity. The current collaboration expansion with the Jordanian Ministry of Labor to develop an extension adjacent to our existing facility in Al-Hasr is in progress. Upon completion, which is now expected in the second half of calendar year 2026, should add another 5 to 10% in total production capacity. Additionally, we are seeking other factory acquisition possibilities, as well as development of our own land. We look forward to keeping you updated of our progress. With that, I will now turn the call over to Gilbert to discuss our financial results. Gilbert, please.

Thank you, Eric. Revenue for the fiscal 2026 second quarter grew 4.3% to $42 million, compared to $40.2 million in the same quarter last year. The increase was primarily driven by higher shipment volumes to the company's U.S. customers, supported by a more diversified customer base starting this fiscal year. Gross profit was $6.3 million for the fiscal 2026 second quarter, compared with $7.1 million in the same quarter last year. Gross profit margin for the quarter declined to 15.0% from 17.5% in the same quarter last year, which benefited from catch-up production of some outerwear that carried higher margins originally scheduled for the first quarter of fiscal 2025. The decrease was primarily driven by the diversification of broader customer base and a shift in product mix, which resulted in a lower average gross margin. Operating expenses decreased to $5.2 million in the fiscal 2026 second quarter from $5.9 million in the same quarter last year. The decrease was primarily due to better control of export costs and lower stock-based compensation expenses. Operating income was $1.09 million in the fiscal 2026 second quarter, slightly lower than $1.13 million in the same quarter last year. Total audit expenses were $456,000 in the fiscal 2026 second quarter compared with $364,000 in the same quarter last year, primarily reflecting the increase in financing needs to support business growth. Income tax expenses were $154,000 in the fiscal 2026 second quarter, compared with $106,000 in the prior year quarter. The effective tax rate increased to 24.3% for the three months ended September 30, 2025, compared with 13.7% in the same quarter last year. Net income was $479,000, or $0.04 per diluted share, in the fiscal 2026 second quarter, compared with $665,000, or $0.05 per diluted share, in the same quarter last year. Comprehensive income attributable to the company's common stockholder totaled $440,000 in the fiscal 2026 second quarter, compared with $663,000 in the same quarter last year. As of September 30th, 2025, Jirash had cash and restricted cash totaled $13.7 million. and net working capital of $35.2 million. Inventory was $26.3 million, and accounts receivable amounted to $5.8 million. Net cash provided by operating activities was approximately $318,000 for the six months end of September 30 of 2025, compared with cash provided by operating activities of approximately $2.4 million for the same period in fiscal 2025. The decrease in net cash provided by operating activities was primarily driven by an increase in accounts receivable as a larger volume of goods was shipped toward the end of September, as well as advance payments to suppliers for orders scheduled to be completed in the fiscal third quarter. On November 7, 2025, Jurasch's Board of Directors approved a regular quarterly dividend of $0.05 per share on its common stock, payable on November 26, 2025, to stockholders of record as of November 19. We're enthusiastic about our business prospects and performance ahead as we look at the near-term and implement our long-term expansion plans. At the same time, we're staying focused on cost controls and enhancing operating efficiencies. Looking ahead, we expect revenue for the fiscal 2026 third quarter to increase by 19 to 21% over the same quarter last year. And our growth margin for the fiscal 2026 third quarter is expected to be approximately 13 to 15%. We will now open up the call for questions, and I will turn the call back to the author either.