Name: GREYSTONE LOGISTICS, INC. Q2 2024 Earnings Call
Start: 2024-01-19T00:00:00.000Z

Executive Summary

Q2 2024 delivered solid year-over-year improvement: revenue rose to $15.60M (+29% YoY), gross margin expanded to 20.1% (+1,000 bps YoY), and EPS turned positive at $0.03 vs a $(0.01) loss in Q2 2023, driven by increased volume, productivity gains, and lower raw material costs .
Sequentially, results normalized from a strong Q1: revenue declined to $15.60M from $17.41M, EPS fell to $0.03 from $0.06, and gross margin eased to 20.1% from 23.2% .
Six-month EPS reached $0.09 and six-month EBITDA was $7.44M; management highlighted operational momentum and expanded capabilities, naming lower resin costs and productivity as margin drivers .
Strategic catalysts: addition of in-house sales hires to deepen customer engagement, and a new tool order under a three-year customer contract—both aimed at accelerating growth and strengthening commercial relationships .

What Went Well and What Went Wrong

Margin expansion and profitability inflection: Q2 gross margin rose to 20.1% from 10.1% YoY; EPS turned positive at $0.03 vs $(0.01), reflecting increased volume, productivity improvements, and lower raw material costs .
Strength in six-month performance: six-month EPS of $0.09 and EBITDA of $7.44M show improved earnings power vs the prior-year period ($0.03 EPS; $4.67M EBITDA) .
Commercial initiatives: “The company experienced yet another great quarter,” noted the CEO, highlighting expanded in-house sales capacity and a new tool order under a three-year customer contract as milestones supporting demand capture and customer intimacy .

Sequential normalization: revenue fell from $17.41M in Q1 to $15.60M in Q2; EPS declined from $0.06 to $0.03; margin compressed from 23.2% to 20.1% QoQ .
Limited formal guidance disclosure for Q2: the press release did not provide quantitative forward guidance, instead including a call announcement and standard forward-looking statements .
Customer variability context (prior quarter call): Walmart pullbacks late in FY2023 and timing shifts at large customers underscored near-term demand variability risk even as the pipeline builds .

Metric	Q4 2023	Q1 2024	Q2 2024
Revenue ($USD Millions)	$16.0	$17.414	$15.597
Diluted EPS ($USD)	N/A	$0.06	$0.03
Gross Margin (%)	20.0%	23.2%	20.1%
Net Income ($USD Millions)	N/A	$1.744	$0.965
EBITDA ($USD Millions, reported incl. credits where applicable)	$5.1	$4.228	$3.214 (calculated: 6M $7.443 − Q1 $4.228)
EBITDA ($USD Millions, ex-tax credits where applicable)	$4.0	N/A	N/A

Notes:

Q4 2023 revenue and margin disclosed on the Q4 call; EBITDA was $5.1M with tax credits and ~$4.0M excluding them .
Q2 2024 EBITDA for the quarter is derived from six-month EBITDA minus Q1 EBITDA; the press release did not state a standalone quarterly EBITDA figure .

Year-over-year Q2 comparison:

Estimates comparison (Wall Street consensus):

Metric	Consensus (Q2 2024)	Actual (Q2 2024)	Result
Revenue ($USD Millions)	N/A	$15.597	N/A
Diluted EPS ($USD)	N/A	$0.03	N/A

Metric	Period	Previous Guidance	Current Guidance	Change
Overall financial guidance	Q3 2024+	Not provided	Not provided in Q2 press release; press release included forward-looking statements only	Maintained (no formal guidance)
Conference call	Q2 2024	N/A	Call scheduled Jan 17, 2024 (2:00 PM ET)	Informational only

Topic	Previous Mentions (Q4 2023)	Previous Mentions (Q1 2024)	Current Period (Q2 2024)	Trend
Raw material costs	Resin prices normalized vs 2021–2022 spike; Q4 GM ~20%	Margin improvement driven by lower raw material costs	Margin expansion YoY; cited lower raw materials as driver	Improving YoY; normalized QoQ
Productivity/automation	Robotics and automated warehousing boosting plastic pallet adoption	Operational setup supports next growth cycle	Productivity improvements cited as margin driver	Positive execution
Customer mix & pipeline	iGPS strong; Walmart volumes variable; grocery pallet and can pallet development	Sales pipeline building; new tooling for grocery/can/nut/cement/tech/beverage	New tool order under a three-year contract; in-house sales expansion	Expanding relationships
Extrusion line (robotic)	Expect $5–$10M potential; addressing quality/dye adjustments; Austria rework	Not in Q1 PR	Not mentioned in Q2 PR	Execution in progress (prior commentary)
Capital allocation/deleveraging	Focus on deleveraging; evaluating cash uses (board)	Not in Q1 PR	Not in Q2 PR	Ongoing strategic review (prior commentary)

“The company experienced yet another great quarter, marked by impressive financial performance and significant milestones,” including expansion of in-house sales and a new tool order under a three-year contract .
Margin drivers: “significant improvement… principally impacted by increased volume, productivity improvements, and lower raw material costs” (three and six months) .
Q4 narrative context: Plastic pallets benefit from robotic warehousing needs; iGPS remains a major customer; Walmart and other large customers influence demand timing .

CapEx outlook and cash priorities: 2024 emphasis on maintenance CapEx; prior-year ~$7M growth CapEx complete; board assessing best uses of growing cash, with ongoing deleveraging focus .
Customer demand and pipeline: iGPS production incrementally higher; Walmart pullbacks with anticipated recovery; new opportunities across grocery, can, automotive, and non-alcoholic beverage customers .
Extrusion line strategy: Targeted quality fixes to dyes and robotic welding; potential $5–$10M revenue on existing line; low labor intensity, flexible sizing .
Strategic considerations: Uplisting discussion and potential structural moves debated; management cautious on macro while pursuing growth .

Street consensus (S&P Global) comparisons are not presented here; the Q2 press release and documents reviewed did not include external consensus references and we did not retrieve estimates at the time of analysis. Default source for consensus would be S&P Global when available .

YoY operating strength: Revenue up 29%, EPS positive, gross margin +1,000 bps—anchored by lower resin costs and productivity improvements; focus on sustaining margin discipline through mix and execution .
Sequential normalization: Q2 moderated from a robust Q1 across revenue, EPS, and margin—watch order timing and customer mix into Q3 .
Commercial expansion: In-house sales hires and a new tool order under a three-year contract expand customer intimacy and product breadth—potential to support volume growth and pricing power .
EBITDA trajectory: Six-month EBITDA of $7.44M underscores cash generation; derived Q2 EBITDA implies healthy profitability despite QoQ margin normalization .
Demand timing risk: Large-customer pullbacks and timing shifts (e.g., Walmart) can influence quarterly cadence even with a robust pipeline—watch for commentary and updates in subsequent calls .
Execution levers: Continued tooling innovation (grocery, can, automotive) and potential extrusion-line commercialization offer optionality for mix and capacity utilization .
Monitoring priorities: Look for any formal guidance, margin sustainability, and conversion of pipeline into revenue; catalysts include new customer implementations and evidence of accelerated order flow .