Greystone Logistics Inc

Good day, everyone, and welcome to today's Greystone Annual Results Conference Call. At this time, all participants are in a listen-only mode. Later, you'll have the opportunity to ask questions during the question-and-answer session. You may register to ask a question at any time by pressing star 1 on your phone. Please note this call is being recorded, and I'll be standing by should you need assistance. Now it's my pleasure to turn the conference over to Brendan Hopkins. Please go ahead.

Thank you, Elvis. Thank you everyone for joining us today. We have a brief safe harbor, and then we'll get started. Except for historical information contained herein, the statements in this conference call are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties that may cause our actual results in future periods to differ materially from forecasted results. With that said, I would like to turn the call over to Warren Krueger, CEO of Greystone.

Thank you, Brendan, very much. I appreciate that. Welcome, everyone, to the call today. I have with me today Marilyn Carter, who is our general manager at the plant. She'll just be here in case there's any operational questions that people have later that I can't specifically address. I want to first start with a big, again, thank you. Thank you very much for being shareholders, or thank you very much for looking at our stock and potentially being a shareholder. Last year, Greystones, I'm very happy with the year. I wish I could say I was clicking my heels happy. I'm very happy because, again, we had a steady-eddy year. We had over $57 million in revenue. We had $0.07 share earnings. Our EBITDA was $10 million, and it was a good year. We paid down. I just am going to review some of the things we talked about in previous quarters. What did you do? What kind of accomplishments did you have? Well, as those who have been shareholders for some time know that we've We are prepared. We spent a lot of money on equipment a few years ago, and so we do have capacity. That's one of the things I'll address here about sales in our pipeline. However, the last year we created a lot of cash. We created $10 million, and I want you to know what we're doing with our money, what we're doing with your money. And we spent, we had a preferred years and years ago, another board member, myself, Bob Rosine, put in $5 million in a preferred just to keep the company afloat. We paid on that preferred for years and years and years, and it paid a hefty dividend. We were paying at the time around 11%, so we were paying $550,000, and We created cash, and we talked about it on a board level, and we said this is the right thing to do is pay that back. And so we bought those preferred shares back from Mr. Rosie and myself, saved the company $550,000 in dividends. We were able to do that because of the good things that the company is doing, and that's creating cash. We also, unfortunately, last year had a fire. Some of you may or may not know about the fire. On our website, if you go under investors, you can scroll down and you can actually see a video that we've done comparing wood fires to plastic fires because there's rarely a plastic fire anywhere in the country. And that's one of the headwinds that we always face because we're fighting the wood pallet industry and they have a very big lobby and they don't want us in the industry. So I encourage you to go and watch that video. It's very informative, actually. So in doing so, we thought, okay, let's plan for our future. A parcel of land close to our three other facilities, because where we had the fire is about 35-minute drive. It's just warehouse. We had pallets in the warehouse. So we bought for $1.8 million in cash, we bought some acreage very close to the facility. We are currently using that as a trailer storage. We're not going to build anything right now, but we're prepared because we are rebuilding the 25,000-square-foot facility. We scraped the land, and we're rebuilding that facility. But we do have within, I would say, a half a mile from our locations, we have a new beautiful, beautiful piece of property that there is a building on the structure. We store just a few small items in the building now, but that building will eventually be razed and we'll have manufacturing space that we can build in the future. We also paid, we bought last year, the board authorized a share buyback, and we bought a million, we didn't get it all accomplished during our corporate year, but I'm happy to say as of right now, we've bought back $1 million and 9,000 shares, lowering our overall share count, and so everybody owns a little bit more now if you're a shareholder. We did that again because we said we've got cash on hand, we like what we're doing here, and we're going to buy our own shares. Additionally, if you look at our debt, we just continue to pound down our debt, and it's a We just were focused on pounding down debt, creating cash, pounding down debt. So that's where we are on the income statement balance sheet. I want to talk about what's important here and what's really important, and I've been laser focused on, is sales. And last year, as we talked about in the past, it seemed sluggish last year before the – It just seemed that there weren't the buyers out there. Right after the election, we kind of had a spurt, and that was good for our fourth quarter. We were really, really busy in our fourth quarter. But, again, now there's a malaise, it seems, and I don't know if it's a tariff malaise, but I talk to others in the manufacturing world, and they're suffering a little bit. It's almost like we're right on the edge of – a big explosion, but it's just people continue to hold back. So that's bothered me a little bit because we have tens of millions, if not hundreds of millions of dollars in our pipeline. So we had some new products last year that took off, a nice 45-inch by 45-inch pallet. It's a beautiful, lightweight product that our customers were asking for. We had a brewery, a significant brewery that I won't mention their name right now because we're working with them and we want to make sure that they have a new keg pallet that we designed for them and we'll be rolling out. And I'll announce that as soon as we have some in the marketplace. And it's a Again, we have great engineering, great design minds that we work with, and so I think it's going to be something we're really going to be excited about. Our business with one of our largest customers, IGPS, remains very, very steady. They are a wonderful customer. We love working for them. Last year, we – they – We do quite a bit of business with them, but last year they offered us a significant amount more. They had some sort of machine issue. They have another plant that they own that they produce a few pallets for, but they needed additional product last year, and we were happy to provide that for them. And so our sales were up during 24 with them, and it seems like it would seem on their income statement that it's flattened out, but it's just gone back to kind of a normal However, we've filled that. We had a nice year with Walmart. We had $7 million of revenue with them last year. And I want to talk about that. It leads me to just the pipeline. I first called on Walmart in 2003. And so we didn't get any business with them for probably 15 or 16 years. and I don't know, we've probably done $15 or $20 million of them now. And so my point is it sometimes is a frustratingly long sales cycle, but it is once we get the customer, it's a wonderful thing. Walmart actually helped us design a warehouse pallet that was a little different than what we had been selling them, And it's great. It's a lighter weight. It's got, of course, it's got our standard good coefficient of friction, so there's no slippage. But it also has more ergonomically friendly handholds, and we've changed the bottom up where they were having some damage caused by fork tines. So that product is being produced and is going out. And there's also a big opportunity with – That customer and others, we believe that in certain closed lanes where they may be using a chef now or they may be using whitewood, there's an opportunity for sales to that customer, more sales. And we are, on the technology side, we're using cellular technology. We can use Bluetooth, much like an Apple tag, and that works. But we've been using cellular technology that actually we put the cellular device inside the pallet, and we can track it anywhere in the country. And so the one thing about cellular is that there's only a certain amount of energy. So you have to be very careful with the energy that you consume. And so we only ping it once a day. But with AI, AI is now managing this software properly. where if it doesn't move, then it doesn't get pinged, so it doesn't drain energy. So these batteries can last five, six, seven, eight years. And so we're excited about that because now there's the mysterious disappearance when we go into a situation where we have an opportunity to be in a closed loop. Now that is more secure because these are assets. There's no doubt about it. As a matter of fact, when we sell that asset to our customers, We, when they do a fork tine, does damage it, and that's where most of our damage comes from is fork tines. When that damage does occur, we actually buy it back from our customers. So it's shocking. We probably bought back 500,000 pallets last year, and that's real green. I mean, when you talk about a green business, we're taking plastic out. and we almost use exclusively recycled plastic or mineral products. And then when they're broken, we buy them back, and we push out the fiberglass rods that they have them, which provide bone structure for racking purposes. And we reuse the rods, and we regrind and repelletize and reinject the plastic. So it's an exciting time. We are finally getting some traction. On our extrusion side, which is just extruded lumber, it's hollow extruded lumber, I also encourage you, if you've not seen the film on that, you might go to our website and on that same under investors, you can scroll down and you can see the video of the robot manufacturing the extruded pallet product. It's pretty cool. But Toyota, we're getting good traction there. I've seen a lot of correspondence about Toyota pushing this product down to their vendor level, and we're getting orders. So I'm excited about that. We've had some other opportunities with big, big companies to look at this, and it's been slower, of course. As I mentioned, the sales cycle sometimes can be frustratingly slow. But we've talked to Apple about this. And so we're excited about the extruded product. To our other injection line, we are working on some elephants. And we continue to hunt the smaller opportunities. But we are working on some very, very, very large opportunities And the beautiful thing about us right now is we are positioned very, very well. We don't have a lot of debt, but we have a lot of capacity available. And we are working on that right as we speak. In the past, we used distributors, non-stocking and stocking distributors. And for the last two years, we've had boots on the ground out of our own corporate entity. And they're good boots, too. Ron Skelhaus, who I've worked with for Almost 20 years is out there, and he's worked within the Walmart system. He's worked within the Simplot system, which Simplot is a big potato company, and we make beautiful freezer pallets for them. So we also have a gentleman named Gary Morris who's been working with us. Gary has been around this industry for 20 years. And I will tell you, for me, who I've been around since 2003 as well, it's really a nice feeling when you have people around you that understand the industry, understand how hard the industry is, and understand the huge opportunities within the industry. And I wanted Marilyn in here as well on the operational side. because we work with our employees, and Marilyn's probably been with us 17 or 18 years now, and grew to be our general manager. So it's a wonderful story there. Anyway, that kind of gives you a broad background on the sales, the year end, and where I see us going. But I will say we have to put on sales this year. We just have to because the earnings will drop from the sky if we get our revenue up. And we are out there daily hunting. So at this point, I'll open it up to questions, and hopefully I can answer anything that you guys have to say. to ask.