Lakeside Holding Limited

Thank you for standing by and welcome to Lakeside Holding Corp second quarter and first half of fiscal 2025 earnings call. Please note that today's call is being recorded. I will now turn the meeting over to Matthew Abinanti, Investor Relations for Lakeside Holding Corp.

Thank you and thanks to everyone for joining us today for Lakeside's earnings conference call. the second quarter and first half of 2025 results. Please note that our earnings press release was issued last Friday and our quarterly report on Form 10Q was filed with the Securities and Exchange Commission. Both are available in the investor relations section of our website at lakeside-holding.com. Joining us on the call today is Henry Liu, Chairman and Chief Executive Officer of Lakeside Holding Limited. Before we get started, I'm going to review the Safe Harbor Statement. Please note that today's discussion will contain forward-looking statements that reflect our current expectations and views of future events. Known and unknown risks, uncertainties, and other factors may cause our actual results, performance, or achievements to be materially different from those expressed or implied by the forward-looking statements. You can identify some of these forward-looking statements by words or phrases such as may, will, expect, anticipate, aim, estimate, intend, plan, believe, is, are likely to, potential, continue, or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events that we believe may affect our financial condition, results of operations, business strategy, and financial needs. These forward-looking statements involve various risks and uncertainties. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. We qualify all of our forward-looking statements by these cautionary statements. And with that, I would like to turn the call over to Henry Liu, Chairman and Chief Executive Officer of Lakeside. Good afternoon, Henry.

Good afternoon, Matt, and thank you, everyone, for joining us today. I appreciate your joining us today as we discuss Lakeside's second quarter and the first half results for fiscal year 2025. The past six months has been transformative for Lakeside. marked by our initial public offering, our strategic expansion, incentive, and important new partnerships. Even as we navigated some industry-wide challenges, I would like to take this opportunity to share our progress over the past six months and outline our strategic vision moving forward. Let's begin by acknowledging that, well, we face some industry-wide headwinds that impact our financial performance. We have made significant strategic progress in positioning Lakeside for long-term growth and success. Our revenue for the first half was $7.7 million. And while this represents a 15.3% decrease, from the same period of last year, I want to highlight several important developments that demonstrate our strategic evolution. First, we have successfully executed our strategic shift towards serving Asian-based customers, particularly in the rapidly expanding cross-border e-commerce market. This pivot has shown strong results With our Asian-based customers revenue growing by 29.4% in the first half, this growth validates our strategic direction and positions as well in this dynamic market segment. In July, we secured a significant one-year agreement with a leading Asian-based e-commerce platform that generates $18 billion in gross market volume last year. This was quickly followed in August by a partnership with one of world's leading social media and e-commerce platforms for customers' brokerage services. These partnerships demonstrate the strength of our cross-border logistics compatibilities and our growing reputation in the industry. We have also made a substantial progress in expanding our operational footprint. In September, we more than doubled our Dallas-Fort Worth warehouse capacity from 20,000 square feet to 47,000 square feet. This expansion, along with additional staffing and enhanced compatibilities, strengthens our multi a multi-hub strategy that now spans Chicago O'Hare, Dallas, Fort Worth, and Los Angeles. In the same month, we launched our new pick and pack fulfillment service, showcasing our ability to innovate and adapt to market needs. Perhaps most significantly, we have made a strategic entry into the medical logistics sector through our acquisition of Hupan Farmer Sacrico in Hubei, China. This $0.6 million investment is expanded to contribute approximately $7 million in annual revenue. This acquisition brings with its valuable license for drug wholesale, retail, and medical device distribution. along with partnerships with 15 major Wuhan hospitals. We have already begun to see the benefits of this acquisition through our new relationship with Sinopharm of Sinopharm Group. We have established a partnership for essential medicine storage and a logistic service, and it just last month secured a 1.5 1.5 million dollar sales agreement with their subsidiary for critical medicines effective january 2025. looking at our financial performance more specifically well our total revenues decreased to 3.6 million quarter two we maintain strong growth in our asia based customer segments which now represents 76.5% of our total revenues. This shift while impacting short-term results aligns with our strategic vision and positions for sustainable growth. Our growth margin was impacted by higher fixed overhead costs and an industry-wide decline in the revenue. However, I'm pleased to note our new pharmaceutical distribution business is showing promising margins of 44.2% in its essential quarter of operations. As we look ahead, our strategic priorities are clear and focused. We will continue to expand our e-commerce logistics partnerships and capabilities while optimizing our multi-hub infrastructure to improve operational efficiency. We are commitment to growing our pharmaceutical logistics business and depending our relationship with Sano Pharma. All while maintaining strong cost discipline and we invest in our growth opportunities. While the current market environment presents challenges and remains confident in our strategic direction and our ability to create a long-term model for our customers, shareholders. The foundational pieces we have put in place from our expanded facilities to our new pharmaceutical business position as well for future growth. I want to thank our employees for their dedication, our partners for their trust, our shareholders for their continued support. We look forward to updating you on our progress in the quarter ahead. Thank you, Matt.

Thank you, Henry, and thank you everyone for participating on today's call. We look forward to providing additional updates in the near future. In the meantime, we can be reached at 347-947-2093, or you can contact me at Matthew at strategic-ir.com.

Thank you. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.