Executive Summary

Revenue surged 54.7% YoY to $22.45M in Q3 FY2022 on volume recovery and a large retail contract; sequential sales also rose sharply from $15.84M in Q2 to $22.45M in Q3 .
Margins improved sequentially with gross margin rising to ~12.1% from ~6.2% in Q2, though still below ~17.6% a year ago due to inflationary raw material/labor costs; operating margin recovered to ~4.6% vs. -1.0% in Q2 .
EPS was $0.02 vs. $(0.01) in Q2 and $0.02 a year ago; Q1 EPS ($0.09 diluted) benefited from PPP loan forgiveness, distorting year-to-date comparisons .
Management emphasized continued pricing actions, contract manufacturing (including Mexico), and capacity additions (two large-tonnage injection machines; shredder/pelletizing lines) to offset inflation and support growth .
No Wall Street consensus from S&P Global was available to assess beat/miss; focus shifts to execution on capacity ramp and margin normalization (S&P Global estimates unavailable).

What Went Well and What Went Wrong

What Went Well

Strong top-line growth: Q3 sales grew 54.7% YoY to $22.45M, driven by a major retailer contract, returning beer industry volume, and ~91% YoY distributor sales growth .
Sequential margin recovery: Q3 gross profit of $2.72M on $22.45M sales (~12.1% margin) vs. $0.98M on $15.84M (~6.2%) in Q2; operating income improved to $1.04M from a Q2 loss .
Arbitration overhang removed: iGPS arbitration terminated in Jan 2022 with no monetary settlement, reducing legal uncertainty and SG&A drag from legal fees .

Management quote: “Greystone continues to perform well in a very difficult inflationary environment… [We are] now manufacturing under contract at three other locations including Mexico. Two large tonnage injection machines are on order… [but] material costs … continue to pressure margins and we anticipate the need to make additional adjustments.”

What Went Wrong

Margin compression vs. prior year: Q3 gross margin ~12.1% and operating margin ~4.6% remain below ~17.6% and ~9.6% in Q3 FY2021, reflecting inflation in recycled resin, wage increases, and cost absorption .
Elevated cost structure: Management cited inflationary raw material pricing, labor shortages/downtime, and wage inflation as key headwinds impacting profitability .
Customer concentration: Three customers accounted for ~78% of sales in the quarter, maintaining concentration risk despite expanding distributor mix .

Financial Results

Quarterly P&L progression (oldest → newest)

Metric	Q1 FY2022 (Aug 31, 2021)	Q2 FY2022 (Nov 30, 2021)	Q3 FY2022 (Feb 28, 2022)
Revenue ($)	$14,774,399	$15,844,567	$22,450,682
Gross Profit ($)	$1,462,094	$976,966	$2,716,527
Gross Margin (%)	9.9% (calc from )	6.2% (calc from )	12.1% (calc from )
Operating Income ($)	$243,490	$(156,934)	$1,035,548
Operating Margin (%)	1.6% (calc from )	-1.0% (calc from )	4.6% (calc from )
Net Income to Common ($)	$2,970,921	$(378,844)	$452,458
Diluted EPS ($)	$0.09	$(0.01)	$0.02

YoY comparison for the quarter

Metric	Q3 FY2021 (Feb 28, 2021)	Q3 FY2022 (Feb 28, 2022)
Revenue ($)	$14,511,196	$22,450,682
Gross Profit ($)	$2,556,974	$2,716,527
Gross Margin (%)	17.6% (calc from )	12.1% (calc from )
Operating Income ($)	$1,388,548	$1,035,548
Operating Margin (%)	9.6% (calc from )	4.6% (calc from )
Net Income to Common ($)	$633,456	$452,458
Diluted EPS ($)	$0.02	$0.02

KPIs and Balance Sheet (as of Q3 FY2022 unless noted)

KPI	Value
Cash and Equivalents	$7,982,172
Total Long-Term Debt (gross)	$14,245,772
Current Portion of Long-Term Debt	$2,818,321
Long-Term Debt, net of current	$11,396,240
Deferred Revenue (period-end)	$10,218,357
Operating Cash Flow (9M)	$9,184,533
Capex Purchases (9M)	$4,875,530
Customer Concentration (Q3)	~78% of sales from three customers

Notes:

Q1 EPS was boosted by PPP loan forgiveness recognized in Q1 ($3.07M gain), materially inflating YTD earnings .
Sequential margin improvement in Q3 reflects higher throughput and pricing actions amid still elevated input costs .

Guidance Changes

No formal numerical guidance was provided. Operational updates indicate capacity and cost initiatives:

Metric/Item	Period	Previous Guidance	Current Update	Change
Shredder & Pelletizing System	Target online	n/a	Expected operational “about December 2022”	New timing detail
Injection Molding Capacity	Multi-quarter	n/a	Two large-tonnage machines on order; additional grinding/pelletizing lines	Expansion underway
Contract Manufacturing	Ongoing	n/a	Manufacturing under contract at three other locations including Mexico	Expanded footprint
Legal (iGPS arbitration)	Q3 FY2022	Ongoing in Q2	Terminated in Jan 2022 with no monetary settlement	Resolved

Earnings Call Themes & Trends

No earnings call transcript was available for Q3 FY2022; themes compiled from the 8-K/press releases and 10-Q MD&A.

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q3 FY2022)	Trend
Supply chain & inflation	Q1/Q2: Significant raw material inflation; labor shortages; price actions underway . Q2 press: “Supply chain issues are real!” .	Costs still pressuring margins; continued pricing and adjustments planned .	Persistent headwind; mitigation ongoing.
Labor & capacity utilization	Q1/Q2: Labor shortages, downtime; 40 hires and training initiatives .	Sequential margin recovery suggests better absorption; contract manufacturing adds flexibility .	Improving sequentially, still tight market.
Pricing actions	Q1/Q2: Implemented/working on price increases .	Costs rising “faster than ability to compensate” earlier; continued adjustments anticipated .	Ongoing, catching up to costs.
Capacity expansion	Q2 press: New equipment ordered over ~10 months .	Two injection machines on order; shredder/pelletizing to be online ~Dec 2022 .	Building for growth/cost control.
Legal/regulatory	Q2: iGPS arbitration ongoing .	Arbitration terminated without monetary settlement .	Overhang removed.
Customer/distributor mix	Q1/Q2: Distributor sales 29%/26% of mix .	Distributor sales up ~91% YoY; 3 customers still ~78% of sales .	Broader channel, still concentrated.

Management Commentary

Strategy and growth: “Our current customer base is stable and demand is growing… manufacturing under contract at three other locations including Mexico… two large tonnage injection machines are on order… [plus] plastic grinding and pelletizing lines to support the additional production.”
Margin outlook: “Material costs… continue to pressure margins and we anticipate the need to make additional adjustments.”
Operating environment: “Supply chain issues are real!”; management implemented necessary price increases, hired ~40 staff, and expects new tools/equipment to “push top line and bottom-line growth.”
New business: “New contract for $13,500,000 of recycled pallets to a national retailer is expected to have a definite impact.”

Q&A Highlights

No earnings call transcript for Q3 FY2022 was available; no Q&A to report (no transcript found).

Estimates Context

S&P Global consensus estimates for GLGI’s Q3 FY2022 revenue and EPS were unavailable at the time of review; therefore, we cannot assess beat/miss versus Wall Street expectations (S&P Global estimates unavailable).
Given the lack of published consensus, near-term estimate revisions will likely focus on gross margin recovery trajectory (input costs vs. pricing), volume ramp from capacity additions, and potential moderation of legal/SG&A expenses post-arbitration .

Key Takeaways for Investors

Sequential recovery: Strong Q3 revenue and improved margins vs. Q2 suggest healthier throughput and pricing traction, though margins remain below prior year due to persistent inflation .
Capacity-led upside: Two new injection machines plus shredder/pelletizing assets (target ~Dec 2022) should support volume growth and greater recycled input control, aiding margin normalization .
Customer/channel mix: Distributor growth and a large national retailer contract diversify demand, but concentration risk persists with ~78% of Q3 sales from three customers .
Legal overhang cleared: The termination of the iGPS arbitration without monetary settlement removes a notable uncertainty and could reduce SG&A burden going forward .
Watch the cost curve: Investment case hinges on input cost normalization and pass-through pricing effectiveness; management signaled continued “adjustments” amid inflation .
Cash generation: YTD operating cash flow of $9.18M vs. $4.88M capex supports investment in growth while managing leverage and working capital needs .
No consensus: With no S&P Global consensus available, stock moves may be driven by company-specific execution (capacity ramp, margin trend) rather than beats/misses (S&P Global estimates unavailable).

Sources: Q3 FY2022 8-K press release and exhibits ; Q3 FY2022 10-Q financial statements and MD&A ; Q2 FY2022 10-Q and press release .

GREYSTONE LOGISTICS, INC. (GLGI)·Q3 2022 Earnings Summary