Greystone Logistics Inc

Good day, everyone, and welcome to today's Graystone Q2 results conference call. At this time, all participants are in a listen-only mode. Later, we'll conduct a 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 if you need assistance. Now, it's my pleasure to turn the call over to Brendan Hopkins. Brendan, please go ahead. Thank you, and thank you, everyone, for joining us today. We have a brief State Harbor, and then we'll get started. So, 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 or 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 Grayskull.

Thank you, Brendan. And welcome, everyone. I'd like to just kind of dive right in. I want to talk about the queue. As you can see, we've had a significant exogenous event occur with our customer of 11 years, IGPS. They called me one day and said, we're done today. Our 11-year relationship came to an end, and the revenue came to an end that day as well. We may have gotten a few dribs and drabs after that, but not much. So it was a shock to our senses a little bit at the grace zone. I will say that we've had a wonderful 11-year run, and the great news is with IGPS, they allowed us to build a wonderful infrastructure that allows us the next phase of our growth. And so that's a beautiful thing. So we laid off about 140 people right away. That was towards the end of November. So it will take some time for those numbers to be reflected. So you can see that some of those costs will be in the first half of our corporate year. We can talk about all we want to about what happened, but we're going to move on with what we're doing and what we're going to do. I want to make sure everyone knows that this is – Greystone is my life, and I will tell you that I have 8,884,354 shares of Greystone stocks. So no one's more affected than me personally. So this is something that I don't think I take lying down. We are very aggressive in what we're doing, and we're very excited about where we're going. So I will take some questions about what happened when we get to the Q&A, but I just want to talk about what we're doing now. to add revenue and get back into a profitable mode and get back to where Graystone, where we all want it to be. And first of all, I'll say that we have an eight-month contract to do some grinding, granulating, processing, about 18 million pounds of plastic. So that starts next week. So that revenue will start to be reflected after next week. So that will provide revenue We have a tremendous recycling infrastructure that we were recycling about 300,000-plus pallets a year for IGPS. So a lot of resin. So for us, this is just something we've done a lot of in the past. If you've been a longtime shareholder, we used to do a lot of grinding, granulating, and BBing plastic for resales. We haven't done that because we've used most of it for product sales. Then I'm going to talk about where we're headed in terms of our leasing. We were prohibited, really, from doing some leasing because of the IGPS contract. And so since we don't have that in place, starting in the middle of February, we can really do some – I'll tell you that we've been testing with Walmart a cellular track pallet. We are having good luck there. We're having success. We also designed a pallet for Walmart. There was a warehouse pallet that has been utilized in the Chicago import facility, and we used it out in California in a one in the Ontario, California area, and we had to change that design, so that pallet was re-manufactured in Taiwan for us, and it has been delivered in December, and we have made product, and I'll be out in the Mira Loma import facility next week with Juan Skelhaus, our who I've worked with for 20 years, will be at the Walmart import facility. And they've got about 5 million square feet out there, so it's a big import facility. And we've probably done about $30 million in revenue over the last five or six years with Walmart. And I really look forward to what we're doing there. We're trying to do a track and trace, so we always know where they are, the pallet is on a daily basis. We know how long the pallet dwell time is. We know what the temperature is. So we see that being helpful in their food side later on. So we're really excited about that. So we're going to move rapidly in that arena. We also have a great firm working with us. a company called Adaptive Palace Solutions, who they are – they'll be working with us on some of these returnable programs where there's going to be a lot of management involved. So that's good news there. So we feel good about the palace as a service, and more – we'll continue to – take care of our customers on all our other product lines that continue to purchase products for export or for the beer side or for the automobile side. But we do think that our big growth is going to come in putting our pallets in closed loops rather than the open loop. And to distinguish between the open loop and the closed loop, An open loop is more like if you go to a Costco and you see blue wooden pallets or red wooden pallets or the IGPS pallets, those pallets are ubiquitous and they're all over the United States. And they have to have an infrastructure across the United States to take care of that. And our focus is on rivers and streams and lakes and ponds. In other words, where the pallets don't really leave, They're not sent across the country, so their ones or twos have to be recovered somewhere else. It's more in between a product manufacturer sending every week to someone on a consistent basis, and they're all tired of the wooden pallets that they have. Plastic pallets continue to be strong, strong in demand. And so we feel good about that. So coupled with the processing of the resin and with our opportunity on the cellular tracking and tracing, we feel quite good about where we are. I think it will take a couple quarters for us to add good revenue, but I anticipate by in the next six months that We'll be back on track, and we won't have this punch in the nose, which it was. It'll just take us a little time. I've been doing this now for 23 years. It's not the first time we've been punched in the nose, and I'm sure it's not the last time we'll be punched in the nose. So, anyway, I look forward to answering questions, and I'm going to keep this kind of brief because I know there's a lot of questions that need to be asked. So, at this time, I'd just like to open up to questions and answers.

If you'd like to ask your question, please press star 1 on your phone now, and you'll be placed into the queue in the order received. Again, everyone, star 1 for a question, and we'll pause briefly to form the queue. Our first question today comes from Anthony Corrala. Please go ahead. Hey, Warren. How's it going? Thanks for taking my time. Good, thank you. I think, looking, like you said, not the first or last time you've been punched in the nose, just kind of looking for, looking back historically, kind of early 2010s period was another time that you operated with revenues that were in this area, kind of like $6 to $8 million quarterly. I see anywhere from $23 to $26 million of annual revenue in 2013 to 2016. You were able to deliver 20% gross margins in those years, generate some cash. Is there any fundamental changes in the business that prohibit you from being able to put up those types of numbers with that level of revenue today?