TULSA, Okla. – Tulsa-based Greystone Logistics, Inc. GLGI has reported its results of operations for the three months ended August 31, 2023.
Greystone reported earnings per share of common stock for the three months ended August 31, 2023, of $0.06 compared to $0.04 for the prior period. Net income was $1,744,219 and $1,373,741 for the three months ended August 31, 2023 and 2022, respectively. EBITDA for the three months ended August 31, 2023, was $4,228,410 compared to $3,302,499 for the three months ended August 31, 2022.
Sales for the three months ended August 31, 2023, were $17,413,671 compared to sales of $18,953,599 in the prior period. Gross profit margins were 23.2% and 13.0% for the three months ended August 31, 2023 and 2022, respectively. The profit margin for the current period showed significant improvement over the prior period which was principally impacted by lower raw material costs.
“Credit goes to our employees for the robust start in the current fiscal year,” stated CEO Warren Kruger.
“Our sales team is working diligently filling our pipeline with business from existing and new customers,” he continued. “The Company’s capital investment in two new large tonnage injection molding machines and a robotic extrusion line to manufacture hollow extrusion pallets, were well timed in preparing Greystone for our next growth cycle. New tooling for expansion of our products for selected markets – grocery, can, nut, cement, tech and beverage industries – is in process. We remain confident that we will fill our machines with aggressive marketing of our creatively designed products.”
Kruger commented in an investor call that the company has installed two brand new large tonnage machines over the last year. “We need to fill those,” he said on the investor call. “And so we are working diligently to do so. And the opportunities with the new equipment, we’ve also expanded our reach with some new products.” He stated that the extra capacity will give it flexibility to fill larger orders more promptly.
Walmart, Costco and Fire Retardancy
Walmart continues to be a big opportunity for Greystone, according to Kruger. Greystone has been producing for them but currently has stopped as Walmart is looking for the addition of ergonomic handholds. “So we are looking at that and that opportunity with them,” he said. “We have done a lot of business with them in the past, and I believe we are going to do a lot of business with them in the future as well.”
Greystone is also currently testing three different fire retardant chemicals. Kruger stressed that fire retardancy is a big deal for Costco and Costco suppliers because the big box retailer wants it for any plastic pallet that is in its facilities. He described the opportunity as huge.
“We previously had a fire retardant additive,” he said. “It had decabromine in it, which is banned now. So we don’t utilize that anymore at all for our own account. So we needed to find other opportunities. But it is also hard to sell a $125 plastic pallet. So we have to be very careful with the cost of the chemical additives that go in.”
Beverage Pallets and Extrusion
Greystone has had a 44×56 pallet for the bottle and canning industry that it outsourced to a structural foam company. While the tool itself was good, there were issues with the product design that impacted manufacturing and made product costing difficult. “It was very hard for us to price,” Kruger said. “So we bought a new injection tool for that particular market. And that would be like anything you have in your hand today, a bottle of water or a can, a Coke can, a beer can, anything like that. There’s so much of that in America.” The company is testing the new pallet at Virginia Tech. “Once we have that data, we’ll be able to market that, not only to Ball but to others such as our existing customer, Molson Coors, they buy as well. So it’s a very good opportunity for us.”
In April 2023, Greystone announced the purchase of Paradigm Plastic Pallets. The extruded plastic boards can be cut to any length, so the company can address custom sizes without investing hundreds of thousands of dollars in a new tool. They have been modifying the dies to make a better, flatter product. Kruger said he will have an update in about the next 90 days.