Greystone Logistics Inc

Good day, everyone, and welcome to today's Greystone Logistics Q3 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. Please note this call is being recorded, and I'll be standing by for assistance.

Now, I'll turn the call over to your host, Brendan Hopkins. Please go ahead. Thank you, and thank you, everyone, for joining us today. We have a brief safe harbor, and then we'll get going. 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 or unknown risks and uncertainties that may cause or actual result in future periods to differ materially from forecasted results. With that said, I would like to turn the call over to Warren Kruger, CEO of Graystone Logistics.

Thank you, Brendan. I appreciate it. And thanks, everyone, for joining the call today. I wanted to just kind of get down to the nuts and bolts and the reality of it, again, to reiterate from a 30,000-foot level what's transpired in the last six months today. And our biggest customer for the last 11 years in November called and just said, today's our last day. And they had tried to sell three times. We went over this last call, but I'm just kind of reiterating where we were. And they apparently have decided to not go into growth mode but just kind of stay stable mode. And that world of leasing pallets is a world I like, and we are actively – it's given us actually a starting point to really take advantage of that, because we couldn't be in that world since we were supplying them. And now that we are not in that world, we're in a better place to provide those services. So let me talk about a few things. The income for the last three months and balance sheet, it affected us greatly. Generally, our December, January months are very slow months regardless. And then February being a slow month, it was a slow month. But good news is for this quarter, we've got a rhythm down. We've got a lot of new customers and existing customers that are continuing to work. We've also, in years past, some of those longtime shareholders will remember, we used to buy resin and grind it and beady it and sell it, and we got out of that world because we were doing so much for our customers. Well, the good news is we're doing about $150,000 a month in revenue there, grinding, granulating, and pelletizing on a contract basis. And it's a beautiful thing because we have the equipment, so we don't have to go out and acquire any equipment. It's just something we do and have done for years. So it's just a great way to generate additional income for us. Greystone while we wait on some of the big opportunities. Walmart has been over the last five or six years, we've done $50 million or so in revenue with them. Over the last 90 days, I think we've got 80 truckloads of orders from Walmart. We are working with them, as I've mentioned in the past, on a tracking and tracing pilot program. where we put cellular devices inside the units, and we can tell them where those units are every single day. We can tell them the temperature. We can tell them if they've been dropped, if there's been a jar to the unit. So, there's a lot of data we can provide that. We've been doing that at a Walmart distribution center in the Midwest, and it is something that we're excited about. we anticipate that we will be doing some more of that in the future. In anticipation of that, last year, before IGPS left us, I did acquire quite a few, probably around 28,000 cellular devices. So the cellular devices are for track and trace. They have a seven-year life, and once they start to be utilized, And so we're prepared for someone who has an opportunity for us to be in the pooling business for up to 38,000 units at this particular moment. And for us to get those new cellular devices, it doesn't take much time, and it's a beautiful thing. There's also some Bluetooth technology that's allowing tracking and tracing, leveraging Apple phones. If there is an Apple phone within the a vicinity of a TAG unit, they can track and trace that unit just off existing iPhones that are in the facility. So, a lot of new exciting technology going on, and we are excited about that. During the last quarter, we've been working diligently on our sales side. Ron Skellhaus has worked with me for many, many years. Ron's out there and has done a fabulous job with Walmart and has a lot of great opportunities working. Gary Morris, who has been in the industry for over 25 years. Gary has some wonderful things. We have a big opportunity with a company for 90,000 pallets to be managed. So we, even this week, they talked about if there are broken pallets, if they lease them, They understood, but if they bought the units, how much credit would they get if we bought them back? So we've got some exciting things happening on the sales front. In terms of just the operational, where we are, money-wise, we have contracted to sell a piece of property we bought for $1.675 million, which will allow us to have some cash on hand for any shortfall we might have. I don't anticipate, I think that cash flow-wise, we're closing in on where we need to be just to get to a constant breakeven basis. Our bank has worked with us. IDC has been fabulous. They are, we've gone to an interest only. Going into this quarter, they were renewing, we're renewing our line of credit, and we also had a, we were out of covenant on a few things, so they're working on that. So, we will get those all resolved in the next 30 days. We have a great relationship with them. They know what our business plan is. They see it. They understand we've been doing this for 23 years, and exogenous events do occur in business, and this is one that we are dealing with, and I'm proud of our staff for doing so. We, as I mentioned in the last call, last quarterly call, we laid off 140 people. That really hurts me as a person because that's hard, but we had to do the right thing. We've hired some of those people back, and so that's nice to be able to do that, and so we've stabilized, and we feel very comfortable with that. On one of our pieces of equipment down in Palmyra, Missouri, which is a brand-new machine, We've been outsourcing one of those machines for the manufacturing under contract for some garbage cans for someone else. Again, just generating revenue to help our cash flows. So I feel very excited about where we're going. It's almost like we're back in time, but going back in time, I didn't have 1,300 ton machines ready to go. And that's where we are right now. We have the equipment. Our standard business has got a steady Eddie. Our nestable business is steady Eddie. We have tested our Yingling keg pallet at Yingling Brewery. They liked it. It worked very, very well. We're just waiting on our first order from them. That same stand-up keg pallet is something Budweiser uses. We're working with a group to get in the Budweiser system to show them our recycled plastic stand-up keg pallet to replace wood. We've also continued to We have one other product. It's a mold. We're not making it capital expenditures. We're limiting our capital expenditures. But we did find a great opportunity on a one-piece sanitized 4840 pallet that one of our customers needed. So we'll be able to acquire that mold probably around a third of the cost that it would if we built it. So I'm excited about that and that we also have a customer that will immediately take uh, palace from that. So, uh, I know that there's a lot of questions out there. I've kind of gone at 30,000 feet, tried to just give you the basics of where we are, but, uh, we have, we have the infrastructure, we have the machinery, we have the tooling, and, uh, we have great opportunities in the marketplace. Now we just have to bring those to, uh, bring those home. And, uh, That's my job is to bring them home, and I've done this before, so we're going to do it again. So at this time, I'd be happy to entertain calls or questions from anyone. If you'd like to ask a question, please press star 1 on your phone now, and you'll be placed into the queue at the order receipt. Again, star 1 for a question, and we'll pause briefly to form our queue.