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Revenue: $61.780715 million.
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Earnings per Share: $0.16.
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EBITDA: Over $13 million.
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Net Income: $5.027491 million.
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Revenue Increase: Approximately $1 million.
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Cost of Goods Sold: Decreased.
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Cash Increase: Up $5.1 million.
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Debt Reduction: Down $3.8 million.
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Income Before Taxes: $6 million.
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Diluted Earnings per Share: $0.15.
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Working Capital: Almost $9 million.
Release Date: September 16, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Revenue increased to $61.78 million, with earnings per share at $0.16.
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EBITDA exceeded $13 million, reflecting strong cash flow generation.
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Net income reached $5.03 million, indicating profitability.
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Debt reduction of $3.8 million, improving the company’s financial health.
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Strong customer relationships, including Walmart and Berry Plastics, with potential for future growth.
Negative Points
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Delay in filing due to the controller’s health issues, causing operational disruptions.
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Manufacturing sector softness and economic uncertainty affecting order volumes.
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Anticipated higher sales with Walmart did not materialize as expected.
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Idle equipment in Missouri and Jasper, Indiana, indicating underutilized capacity.
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Flat sales volumes for the fiscal year, highlighting challenges in increasing market penetration.
Q & A Highlights
Q: Can you provide an update on the approved stock buyback plan and when you will start executing it? A: (Brice Dille, CFO) We plan to start the buyback after the next Q is issued, which is about 30 days away. Legal counsel advised us to wait until after the blackout period. The $1 million buyback is approved, and we will begin once the 10-Q is filed.
Q: Can you expand on the Walmart relationship and its potential growth? A: (Warren Kruger, CEO) Walmart is automating their distribution centers, which bodes well for us as they need consistent and durable pallets. We anticipate growth in our relationship as they move away from wood pallets to our plastic pallets, which are more reliable and suitable for automation.
Q: What is the status of the Jasper, Indiana facility and its capacity? A: (Warren Kruger, CEO) The Jasper facility has significant capacity and can produce a pallet a minute. We are currently at zero production but expect to start sending samples to customers by the end of the month. This facility will help us meet our $100 million revenue target without issues.
Q: What is your current net operating loss (NOL)? A: (Brice Dille, CFO) Our NOL is $5.1 million, with $4 million available for next year and the remaining $1.1 million not expiring.
Q: Are you seeing a shift away from wooden pallets due to environmental concerns? A: (Warren Kruger, CEO) Yes, there is a growing awareness and interest in moving away from wooden pallets due to their environmental impact. Companies like Berry Plastics are taking steps to use recycled plastic pallets, and we are helping them achieve zero waste by creating pallets from their plastic waste.
Q: What were your sales volumes for the fiscal year? A: (Warren Kruger, CEO) Our sales volumes were flat compared to the previous year. We had anticipated higher volumes but faced delays in customer adoption. We are now focusing on filling our capacity with new customer revenue growth.
Q: How do you plan to address the delay in filing and ensure it doesn’t happen again? A: (Brice Dille, CFO) We have made necessary adjustments and movements to prevent future delays. The delay was due to unforeseen circumstances, but we are confident it will not happen again.
Q: What are your plans for the extruded lumber product? A: (Warren Kruger, CEO) The tooling for the extruded lumber product is back, and we expect to send samples to customers, including Toyota, by the end of the month. This product is six months behind schedule, but we are optimistic about its potential.
Q: Can you provide more details on the new keg pallet for Yingling? A: (Warren Kruger, CEO) We designed a prototype for Yingling’s kegs, which worked well in their system. The tool for this product is now on order, and we expect it to be a significant addition to our product line.
Q: How is the relationship with IGPS impacting your business? A: (Warren Kruger, CEO) IGPS is the largest plastic pallet leasing company in America, and our relationship with them is strong. We anticipate continued growth as more companies move towards plastic pallets for their consistency and reliability in automated systems.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
