Greystone Logistics Reports 52% Revenue Decline and $8.2 Million Net Loss

Greystone Logistics, Inc. reported significant financial challenges in its latest 10-K filing for the fiscal year ending May 31, 2026. The company recorded total sales of $27.5 million, a substantial decrease of approximately 52% from $57.9 million in the previous fiscal year. This decline was primarily attributed to a 60-65% drop in demand from two major customers, which previously accounted for a significant portion of Greystone's revenue. The company's cost of sales also increased to $29.3 million, exceeding sales and resulting in a gross profit margin of negative 6%. Consequently, Greystone reported a net loss of $8.2 million, a stark contrast to the net income of $2.4 million reported in the prior year.

In response to these financial difficulties, Greystone has implemented strategic initiatives aimed at broadening its customer base and reducing operational costs. The company lost a major customer during the fiscal year, which it estimates will result in a loss of approximately $30 million in sales, or 55% of its revenue. This loss has prompted Greystone to explore opportunities in the pallet pooling market, which was previously restricted under contract. The company is also focusing on tighter expense controls and plans to adjust sales prices to align with current contribution margins.

Operationally, Greystone's workforce has seen a significant reduction, with full-time equivalents dropping from approximately 190 employees in the previous year to around 82 as of May 31, 2026. The company has also shifted its production strategy, utilizing its in-house capacity of 225,000 pallets per month while outsourcing additional production as needed. Greystone's facilities include three primary buildings in Bettendorf, Iowa, and a location in Palmyra, Missouri, which houses two injection molding machines. The company has also relocated equipment from a facility in Jasper, Indiana, which was previously used for extrusion processing.

Looking ahead, Greystone's management has expressed concerns regarding its ability to continue as a going concern, citing a working capital deficit of $7.9 million and non-compliance with certain financial covenants. The company has entered into amendments with its lender, International Bank of Commerce, to provide temporary relief from covenant violations and has suspended testing of certain financial covenants through November 2026. However, management acknowledges that future compliance with these covenants may require additional amendments or waivers, and there is no assurance that such accommodations will be granted.

In summary, Greystone Logistics, Inc. is navigating a challenging financial landscape marked by significant revenue declines and operational adjustments. The company is actively pursuing strategies to mitigate the impact of lost customers and improve its financial position, while also facing uncertainties regarding its future viability and compliance with debt obligations.