Greystone’s Financial Performance Overview

Greystone Logistics, Inc. is a manufacturer of plastic pallets primarily for the beverage, pharmaceutical, and other industries. This report summarizes and analyzes the key financial highlights from Greystone’s unaudited consolidated financial statements for the nine months ended February 28, 2025 and February 29, 2024.

Sales and Revenue Trends

• Sales for the nine months ended February 28, 2025 were $39,911,692, a decrease of 15% compared to the prior year period. This was primarily due to a 29% decrease in demand from one of Greystone’s significant customers, partially offset by increased demand from another major customer.
• Greystone has a limited number of customers, generally 2-4, that account for a significant portion of its sales, around 76% and 83% during the respective nine-month periods.
• The company’s sales are primarily to customers in the United States, with international sales to Canada and Mexico making up less than 1% of total sales.

Profitability and Margins

• Gross profit for the nine months ended February 28, 2025 was $6,021,246, or 15% of sales, compared to $9,048,537, or 19% of sales, in the prior year period.
• The decrease in gross profit margin was primarily due to a 30% decline in production of plastic pallets, which led to higher fixed manufacturing costs as a percentage of sales.
• Selling, general and administrative expenses increased to 11% of sales in the current period, up from 8% in the prior year, mainly due to higher bonuses paid.
• Net income for the nine months was $1,096,405, down from $3,006,974 in the prior year period.

Liquidity and Capital Resources

• Greystone had a working capital of $5,926,695 as of February 28, 2025.
• The company will need to continue generating positive operating results or seek additional financing to meet its contractual obligations, including $11.7 million in long-term debt and $7.4 million in operating leases.
• Greystone remains dependent on its officers and directors to secure additional financing, as a substantial portion of its debt is guaranteed by them.
• The company plans to fully extinguish its remaining 29,000 shares of preferred stock during the fourth quarter of fiscal year 2025.

Outlook and Risks

• Greystone faces risks related to the availability of raw materials, competition, technological change, and potential loss of major customers.
• The company’s financial performance is heavily dependent on a few large customers, and there is no assurance it will be able to retain these customers going forward.
• Greystone will need to continue its marketing efforts to diversify its customer base and secure additional financing to sustain and grow its operations.

In summary, Greystone experienced a decline in sales and profitability during the nine-month period ended February 28, 2025 compared to the prior year, primarily due to reduced demand from one of its major customers. The company remains reliant on a small number of large customers and will need to address its liquidity and capital needs to support future growth and operations.