Greystone Logistics Reports 23% Revenue Decline and Net Income Drop for Six Months Ended November 30, 2024

Greystone Logistics, Inc. reported a significant decline in financial performance for the six months ended November 30, 2024, with sales totaling $25.6 million, down 23% from $33.0 million in the same period last year. The decrease in revenue was primarily attributed to a 38% drop in demand from one of its major customers, although this was partially offset by increased demand from another key client due to a newly designed plastic pallet tailored to their needs. The company's gross profit also fell sharply to $3.3 million, representing 13% of sales, compared to $7.2 million, or 22% of sales, in the prior year.

The cost of sales for the latest six-month period was $22.3 million, accounting for 87% of total sales, an increase from 78% in the previous year. This rise in the cost-to-sales ratio was largely due to a 30% decrease in production of plastic pallets, which negatively impacted the gross profit margin. Selling, general, and administrative expenses rose to $3.2 million, or 12% of sales, up from $2.6 million, or 8% of sales, in the prior year, primarily due to bonuses paid during the period. As a result, Greystone recorded a net income of $130,740, a sharp decline from $2.7 million in the previous year, with a net loss attributable to common stockholders of $157,925.

Operationally, Greystone's workforce decreased to approximately 161 full-time equivalents as of November 30, 2024, down from 181 a year earlier. The company continues to rely heavily on a limited customer base, with 76% of sales derived from just a few customers. This concentration poses a risk, as the loss of any significant customer could materially impact future revenues. The company is actively seeking to expand its customer base through marketing efforts and participation in industry trade shows.

In terms of financial health, Greystone's total assets decreased to $50.6 million from $52.3 million at the end of the previous fiscal year. Current liabilities also fell to $6.6 million, down from $7.2 million, while long-term debt decreased to $10.0 million from $11.1 million. The company reported a working capital of $7.0 million as of November 30, 2024, indicating a need for continued positive operating results or additional financing to meet its obligations.

Looking ahead, Greystone acknowledges the challenges posed by fluctuating demand from its major customers and the need for strategic initiatives to enhance sales. The company is focused on improving its operational efficiency and exploring new market opportunities to stabilize and grow its revenue base. However, management has indicated that the outlook remains uncertain, contingent on market conditions and the ability to secure additional financing if necessary.