Greystone Logistics, Inc. (OTC:GLGI) Q2 2026 Earnings Call Transcript

Greystone Logistics, Inc. (OTC:GLGI) Q2 2026 Earnings Call Transcript January 15, 2026

Operator: Good day, everyone, and welcome to today’s Greystone Q2 results conference call. [Operator Instructions] Please note this call is being recorded, and I will be standing by. Now it’s my pleasure to turn the call over to Brendan Hopkins. Brendan, please go ahead.

Brendan Hopkins: Thank you, and thank you, everyone, for joining us today. We have a brief safe harbor and then we’ll get started. So except for historical information contained herein, the statements in this conference call are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties that may cause our actual results in future periods to differ materially from forecasted results. With that said, I would like to turn the call over to Warren Kruger, CEO of Greystone.

Warren Kruger: Thank you, Brendan, and welcome, everyone. I’d like to just kind of dive right in. I want to talk about the Q. As you can see, we’ve had a significant exogenous event occur with our customer of 11 years, iGPS. They called me one day and said, we’re done today. Our 11-year relationship came to an end, which — and the revenue came to an end that day as well. We may have gotten a few dribs and grabs after that, but not much. So it was a shock to our senses a little bit at the Greystone. I will say that we’ve had a wonderful 11-year run, and we — the great news is with iGPS, they allowed us to build a wonderful infrastructure that allows us the next phase of our growth. And so that’s a beautiful thing. So we laid off about 140 people right away.

That was towards the end of November. So it will take some time for those numbers to be reflected. So you can see that, that — some of those costs will be in the first half of our corporate year. We can talk about — we want to about what happened, but we’re going to move on with what we’re doing and what we are going to do. I want to make sure everyone knows that I — this is — Greystone is my life. And I will tell you that I have 8,884,354 shares of Greystone stock. So no one is more affected than me personally. So this is something that I don’t think take line down. This is — we are very aggressive in what we’re doing, and we’re very excited about where we’re going. So I will take some questions about what happened when we get to the Q&A.

But I just want to talk about what we’re doing now to add revenue and get back into a profitable mode and get back to where Greystone where we all want it to be. And first of all, I’ll say that we have an 8-month contract to do some grinding granulating processing of about 18 million pounds of plastic. So that starts next week. So that revenue will start to be reflected after next week. So that will provide — we have a tremendous recycling infrastructure that we were recycling about 300,000-plus pallets a year for iGPS. So a lot of resin. So for us, this is just — it’s something we’ve done a lot of in the past. If you’ve been a long time shareholder. We used to do a lot of grinding, granulating and [ weaving ] plastic for resale. We haven’t done that because we’ve used most of it for product sales.

Then I’m going to talk about where we’re headed in terms of our leasing. We have our — we were prohibited really from doing some leasing because of the iGPS contract. And so we’ve — since we don’t have that in place, we’ll — starting in the middle of February, we can really do some — we are unencumbered. I’ll tell you that we’ve been testing with Walmart a cellular track pallet. We are having good luck there. We’re having success. We also designed a pallet for Walmart. There was a warehouse pallet that has been utilized in the Chicago import facility. And we used it out in California and one in the Ontario, California area. And we had to change that design. So that pallet was remanufacturing in Taiwan for us, and it has been delivered in December, and we have made product, and I’ll be out in the Mira Loma import facility next week with Ron Schelhaas our — who I’ve worked with for 20 years.

We’ll be at the Walmart import facility. And it’s — we’ve got about 5 million square feet out there. So it’s a big import facility. And we’ve probably done about $30 million in revenue over the last 5 or 6 years with Walmart. And I really look forward to what we’re doing there. We’re trying to do a track and trace. So we always know where they are. The pallet is on a daily basis. We know how long the pallet dwell time is. We know what the temperature is. So we see that being helpful in their food side later on. So we’re really excited about that. So we’re going to move rapidly in that arena. We also have a great firm working with us company called Adaptive Pallet Solutions who they are — they’ll be working with us on some of these returnable programs where there’s going to be a lot of management involved.

So that’s good news there. So we feel good about the pallets as a service and more — will continue to take care of our customers on all our other product lines that continue to purchase products for export for the beer side or for the automobile side. But we do think that our big growth is going to come in the — in putting in our pallets in closed loops rather than the open loop. And if you — to distinguish between the open loop and the closed loop and open loop is more like if you go to Costco, and you see blue wooden pallets or red wooden pallets or the iGPS pallets, those pallets are ubiquitous and they’re all over the United States. And they have to have an infrastructure across the United States to take care of that. And what we’re — our focus is on rivers and streams and lakes and ponds.

In other words, where the pallets don’t really leave the — they’re not sent across the country, so their 1s or 2x have to be recovered somewhere else. It’s more in between a product manufacturer sending every week to someone on a consistent basis. And they’re all tired of the wooden pallets that they have. Plastic pallets continue to be strong, [ drawn ] strong in demand. And so we feel good about that. So coupled with the processing of the resin and with our opportunity on the cellular tracking and tracing, we feel quite good about where we are. I think it will take a couple of quarters for us to add good revenue — but I anticipate by — in the next 6 months that we’ll be back on track and we won’t be — we won’t have this punch in the nose, which it was.

It will just take us a little time. I’ve been doing this now for 23 years. It’s not the first time we’ve been punched in the nose, and I’m sure it’s not the last time we’ll be punched in the nose. So anyway, I look forward to answering questions and I’m going to keep these — this kind of brief because I know there’s a lot of questions that need to be asked. So at this time, if there’s — I’d just like to open up to questions and answers.

Q&A Session

Operator: [Operator Instructions] And our first question today comes from Anthony Perala.

Anthony Perala: I guess, looking, like you said, having got the first or last time you’ve been punched in the nose, just kind of looking for — looking back historically, kind of the early 2010 period was another time that you operated with revenues that were in this area, kind of like $6 million to $8 million quarterly. I see anywhere from $23 million to $26 million of annual revenue in 2013 to 2016. And you were able to deliver 20% gross margins in those years, generate some cash. Is there any fundamental changes in the business that prohibit you from being able to put up those types of numbers with that level of revenue today?

Warren Kruger: No, I think you’re dead on. We are a lean — we are very lean organization. We try to run it that way. We have fantastic — our general manager is just fabulous. Or guy that’s in charge of facilities and equipment and molds. He’s been there longer than. He is unbelievable. And everyone knows — everyone has a stake in this. It’s their life. And so we take this — every day, we take very serious. And we were preparing for the next level. We put in a lot of new equipment. I put in $10 million of new equipment, really haven’t leveraged that equipment at all. So almost all of our debt is from new equipment that we have that we really haven’t put into work. I have some outsourcing that I’m going to do over the next year.

I’ve got people who have contacted me and asked me if I have extra capacity to produce some things. So we’ll be doing some outsourcing some other products. We have been asked to do a couple of other non-pallet type programs like for showers, plastic bases for these outdoor showers. So we’ve been asked to do that. So we’ll be doing a lot more of that type of thing. And to answer your question specifically, yes, I think that we’ll have our numbers in order. I’ll make sure that we have cash on hand to run the business. As we’ve always done that. If necessary, we’ll get the money that we need. And our banks, we’ve gone to an interest only for the calendar year 2026 with our bank IBC. And so our payments were about $250,000 a month, and they’ll now just go interest only.

So it will be a significant help on our cash flow, and they’ve been great to work with and have no issues whatsoever.

Anthony Perala: Do you have any MFPs that you mentioned in the Q, just kind of continue to negotiate an extension of the revolver. Any update on those negotiations?

Warren Kruger: Yes, it’s no problem. It’s just they’re waiting for the end of it, and we’ll — I just talked to — a matter of fact, I had — I met with them last Friday and the guy that I worked with, and that will be renewed.

Anthony Perala: Okay. Okay. And then one just kind of more philosophical, like you pointed out, you own 8 million-plus shares here. Some of your partners, you get close to 50%. A check to purchase the entire other part of the business that you don’t own is fairly reasonable, all things told, looking — so I’m just curious if that’s something you’re evaluating or a management buyout or something like that. Just curious what you think of that. I guess more of an open-ended question.

Warren Kruger: That is an interesting question. And I will tell you the last 90 days have been more of really spinning the place of firefighting and getting things prepared. We didn’t have — our last Board minute was prior — Board meeting was prior to the iGPS call. And so we have a Board meeting coming up. And we will be addressing that because, I mean, at this price, being today, we’ve had big sell-off, 300 — last I looked, there was like 335,000 shares that were traded today and the share price has fallen. At this price, it’s — we’ve got $60 million of equipment that we’ve put in over the years. We’ve got $10 million of brand-new equipment. So I feel very, very comfortable about those discussions. And you know what, it’s something we’ve discussed in the past, and we’ll discuss again.

Operator: Next up, we have [ Adam Posner ].

Unknown Analyst: Thank you for your time and frankly, swift action during this potentially turbulent time. My question really is around morale. So given the recent layoffs and the news around iGPS, how’s the team morale the facility and sort of beyond?

Warren Kruger: Thank you for asking that question because I’m concerned about that. I’m really — I care about those who I work with, and I care about those who worked with me a long time. And I will say that our general manager, just — I’m going to give us a short little story here. Our general manager is Marilyn Carter. Marilyn came to us when she was about 25 years old and a single mother. We sent her over the years — we sent her to school. She got her undergraduate degree. She got her master’s degree at Drake. She has grown, and she’s been with us 20 years almost. She’s unbelievable. She knows how — I think she knows how we want to do things. [ Joe Carter ] has been there for 25 years. He is fabulous. Ron Schelhaas, who is our former plant manager, Ron’s working with me on the sales arena.

He is so good with people and with Walmart, it’s incredible. Their attitudes are great. They’re said about what’s happened. They don’t understand sometimes as do I, the logic in at all. So — and then I’ve got another — so the staff that we have are loyal and hard-working and great people. And I had a conversation with one of our sales — other salesmen this morning, Gary Morris. He has some — I mean, in his pipeline, it’s really, really good. So the Toyota thing on our extruded pallet, we finally — there — we’ve got some purchase orders, and we’re sending some of those out. He’s got some great things with Berry Plastics working. He’s got some things with Southwire. He’s got really, really, really, really good opportunities out there as does Ron.

Ron Schelhaas, I’ll meet him at the Walmart import facility in California. And so their attitude is great because they know we have a great product line. They know we have the best designed in for pallets in the United States. We feel that way. And we believe that things will be — we will — we’ll make things happen. How about that?

Unknown Analyst: Awesome. It sounds like you’re doing a great job maintaining the crew there during this time. So thank you.

Operator: Next, we’ll hear from Robert Littlehale.

Robert Littlehale: Warren, could you maybe talk a little bit more about iGPS situation. What prompted this phone call, this midnight phone call that you received? What happened there at that company?

Warren Kruger: Robert — and for those who don’t know, I’ve — Robert has probably been as long an investor as anyone besides myself. So I appreciate that. He was down, he probably bought some things at the nickel. I will tell you that it’s — we had a relationship. I worked with Robert and Jeffrey Levisman years ago. They were the original — they bought the company with a fund about 11 years ago out of bankruptcy. And then we provided the first pallet what we call the MVP for them that worked for iGPS. So we grew with them quite rapidly and had a great relationship. Robert and Jeffrey were removed about 5 years ago. And I really enjoyed them. I enjoyed working with them. The new crew, I just didn’t know the new crew. And I will tell you, I had a good relationship with their national sales manager there and their operations guys.

But they never shared any information that we never shared much information. They put in a — they told us they needed a secondary manufacturing facility just in case something happens. So they put one in for themselves down in Dallas, Texas, and they actually produce another product down there in Dallas. It’s a similar — it’s not a similar. It’s another pallet. It’s not similar. And of course, we recycled probably 300,000 to 400,000 pallets a year for them, broken pallets. So it’s not easy. It’s not for the faint of heart to do this. I mean, it’s — it’s a lot of resin. It’s moving metal out, taking metal out. It’s — and I think what happened there is the fund that was in originally 11 years ago, I believe that they meant to be in for about 5 years, and here they are 11 years in.

I don’t know if they had to do a secondary fund to take that position. I’m not sure because I’m not privy to that. But I just believe that they tried to sell this last year and couldn’t sell. And I think they finally said, okay, we’re not going to be in a growth mode anymore. We’re going to be in just a — let’s reap what we’ve sewn and let’s just flatten out, and we’ll just do maintenance — we’ll just do maintenance on our pallets and we just won’t grow. So — because when you take 800,000 pallets out of the system on an annual basis, that’s going to slow your growth. And so I believe that, that’s the case, Robert. I just think that they — whoever the money people are said, okay, time to just stop going to maintenance only, let’s generate cash, let’s pay down debt if we have it, and let’s return something to the shareholders.

So that’s my guess. And that’s truly just a guess on my part.

Robert Littlehale: The closed-loop pallets from a manufacturing standpoint, is it different? And do you have to retool in order to produce those? Or maybe you could talk about that?

Warren Kruger: Well, we are — we have multiple different pallets that we can put cellular devices in. The whole technology with cellular devices has changed just because the battery life is long, like 7 years. I mean you — now you can put 1 out and appreciate your product over 7 years and you know where it is every single day. That’s pretty interesting. It’s also you can put — you’re putting a fire alarm in every single pallet you put out there because you can set the temperature and have it notify you at a certain level. So it’s — the technology is just unbelievable. And so we believe that we can tie in with existing RFID systems and tie the RFID that they’re currently — that customers are currently using with the cellular device so that we can know where the product is.

And then if you have to go down to an individual level and find a specific palette with maybe a product on there, you can do it with existing RFID hand scanners and so forth. So we’re — just the interest in this is really high, and there’s a lot of discussions within this industry about — because it is an asset. At the end of the day, you buy these pallets or an asset, and they — it’s easy to float away. This is a big country. And now it’s funny because we can monitor these things, and we know where they are every single day within meters. So it’s pretty great.

Robert Littlehale: So the customer achieves economies of scale and productivity enhancement by using these closed-loop pallets, I presume?

Warren Kruger: Yes. Every those that — and I’ll give you an example. We’re talking to a Midwestern company that they just have used CHEP or so long and they’re just done with wood. They just said to us finally, hey, we are just so done with wood. We got a big bill for your — the lost pallets that we don’t think that we lost them, but it’s hard to find out who’s — it’s really — it’s — you start pointing fingers at one another. And with us, we’ll be able to say, hey, here it is. It’s off the reservation. You either recover it or you’re going to have to pay for it. And so we don’t — it’s not ambiguity. It’s going to be real life. It’s going to be data. It will be data driven. And we also know people say, “Oh, my pallets turn really rapidly.

And then you can now you can say, well, they’ve been sitting for 40 days.” So you can also help with some of the things that people believe happening within their systems, but not happening. So data and information is powerful. And we’re — we believe that we can help the customers deliver information.

Robert Littlehale: Final question. Just — so your headcount is what currently?

Warren Kruger: Oh, gosh, it’s probably in the 80s. Yes. It’s low. We were — we’ve been as high as 250, and we — I think we had — we lost 140. I think we’re in the 80 range, something like that.

Operator: [Operator Instructions] Warren, we have no questions at time, I’ll turn it back over to you for any additional or closing comments.

Warren Kruger: Well, I want everybody to know that’s on this call that our — we care about our shareholders, and we work every day for our shareholders. And so I want you to know that. I am — I was saddened about the big loss, but I will tell you I was emboldened as well. And it has now given me the — we look forward opportunistically. And we have multiple products we can put our cellular devices in. And we’re working — our stocking and nonstocking distributors out there have been very good with us. They’ve said, “Hey, we’ll support you and help you as well.” So we’re going to continue to work hard for our shareholders. So if — and anyone is welcome to reach out to me at any time. If I don’t call you — answer it right then, I will follow up. So — but I appreciate everyone being a shareholder, and thank you very much.

Operator: That concludes our meeting today. You may now disconnect.