Q2 2025 Armlogi Holding Corp Earnings Call
Today's call is being recorded I'll now turn the meeting over to Matthew App and anti <unk>.
Speaker Change: Investor Relations for arm largely holding Corp.
Speaker Change: Thank you operator, and thanks to everyone for joining us today for <unk> earnings conference call to discuss the second quarter and first half of 2025 results.
Speaker Change: Please note that our earnings press release was issued yesterday, along with our quarterly report on Form 10-Q, which was also filed yesterday with the Securities and Exchange Commission.
Speaker Change: Both are available in the Investor Relations section of our website at IR dot or <unk> Dot com.
Speaker Change: Joining us on the call today are Ied Chao, Chairman and Chief Executive Officer of <unk> and.
Speaker Change: And Scott <unk>, Chief Financial Officer.
Speaker Change: The format of our call will consist of comments provided by management, followed by a question and answer session addressing the questions that were submitted by investors.
Speaker Change: Thank everyone for submitting these questions before.
Speaker Change: Before we get started I'm going to review the Safe Harbor statement.
Speaker Change: Please note that today's discussion will contain forward looking statements.
Speaker Change: In addition from time to time.
Speaker Change: We or our representatives may make forward looking statements orally or in writing.
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Speaker Change: We base. These forward looking statements on our expectations and projections about future events.
Speaker Change: Which we derived from the information currently available to us.
Speaker Change: Such forward looking statements related to future events or our future performance, including our financial performance and projections, our growth in revenue and earnings and our business prospects and opportunities.
Speaker Change: Uh huh.
Speaker Change: Hum.
Speaker Change: You can identify forward looking statements by those that are not historical in nature.
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Speaker Change: Particularly those that use the terminology such as May should expect anticipate contemplate estimates intends believes plans projected predict potential or hopes or the negative of these or Sim.
Speaker Change: Thank you for calling Mega pass code. Please.
Session will contain forward looking statements.
In addition from time to time.
We or our representatives may make forward looking statements orally or in writing.
Speaker Change: Fuller terms.
Speaker Change: In evaluating these forward looking statements you should consider various factors, including our ability to change the direction of the company our ability to keep pace with new technology and changing market needs.
Speaker Change: We base. These forward looking statements on our expectations and projections about future events.
Speaker Change: We derived from the information currently available to us.
Speaker Change: Such forward looking statements related to future events or our future performance, including our financial performance and projections our growth in revenue and earnings in our business prospects and opportunities.
Speaker Change: And the competitive environment of our business.
Speaker Change: These and other factors may cause our actual results to differ materially from any forward looking statements.
Speaker Change: Forward looking statements are only predictions, we are not obligated to publicly update or revise any forward looking statement, whether as a result of uncertainties our assumptions.
Speaker Change: Can identify forward looking statements by those that are not historical in nature, particularly those that use the terminology such as may should.
Speaker Change: Forward looking statements discussed on this call and other statements made from time to time by us or our representatives may not occur and actual events and results may differ materially and are subject to risks uncertainties and assumptions about us.
Ied Chow: And with that I'd like to hand, the call our first speaker Ied Chow chairman and CEO of <unk> good morning.
Matt: Good morning, Matt.
Ied Chow: And thank you everyone.
Joining us today.
Ied Chow: I would like to discuss our second quarter and first half results for fiscal 2020 five.
Ied Chow: Outline our strategic progress.
Ied Chow: But Q2 as far as 2025.
Ied Chow: We can.
Ied Chow: Revenue stricter one $1 million.
Ied Chow: Representing growth of 21, 8% compared to the same period last year.
Ied Chow: Our top line growth demonstrates strong market demand.
Ied Chow: We have faced margin pressure this quarter.
Ied Chow: <unk> on our expansion.
Ied Chow: <unk>.
Ied Chow: We will gross farmer Mac to toggle warehouses.
Ied Chow: Pending our total space from 2 million to over 350 fit with.
Ied Chow: <unk> newest strategic location in Savannah, Georgia.
Ied Chow: <unk>, California.
Ied Chow: And most of it Richard.
Ied Chow: <unk> hundred founder Squirrel, CIT facility in St. Louis Metro area.
Ied Chow: Looking ahead.
Ied Chow: We remain.
Ied Chow: Confidence in our long term strategy.
Ied Chow: Our expanded footprint now provide access to 70% of the U S population with two day strike.
Ied Chow: Paul focus reman.
Ied Chow: The main thing is.
Ied Chow: Facility, while maintaining our high service level.
Ied Chow: I would now turn it over to our new CFO Scott true.
Scott true: <unk> provide a detail review of our financial performance.
Speaker Change: Thank you Ivy I would now take us through.
Kenseth: Kenseth redo of all financial results and outlook.
Speaker Change: All right.
Speaker Change: Metrics for both the second quarter and the first half of the fiscal year to sell some quantified.
Speaker Change: Let me start by spending our revenue performance.
Speaker Change: We achieved 21, 8% top line growth.
Speaker Change: And the $51 1 million in Q2.
Speaker Change: The composition of this grocery deals important trends across all business segments.
Speaker Change: Our transportation and services revenue grew 28%.
Speaker Change: $6 1 million.
Speaker Change: We've been by increase in loan volumes won't all expanded warehouse network.
Speaker Change: Our warehousing services revenue.
Speaker Change: Stronger growth.
Speaker Change: Increased 25, 7% to 15 medium.
Speaker Change: Reflecting the success for a day.
Speaker Change: All the new facilities.
Speaker Change: On the service revenue.
Speaker Change: My memory custom brokers decreased to 6200 <unk>.
Speaker Change: We focus on all cooperation.
Speaker Change: However, gross kind of wish list.
Speaker Change: Cost pressures.
Speaker Change: Total cost of sales increased by 16 point food needed or 47, 6% to $50 9 million.
Speaker Change: The increase was driven by two main sectors.
Speaker Change: There was a rise in freight expense due to higher shipping costs.
Speaker Change: This expense employee survey and the benefit and the temporary they broke coast increase as we expand our warehouse and the operation teams to support growth.
Speaker Change: This close increased respecting bowls.
Speaker Change: Our expansion activities and the industry wireless pagers, resulting in our gross profit margin decreased <unk>, 9% in Q2 fiscal year 2000 public slide wrong at some point.
$6200.
We focus on our core operation.
Speaker Change: 3% in Q2.
Speaker Change: Year 2024.
However, gross kind of wish list you can do.
Speaker Change: General and administrative expenses decreased by a viewpoint that immediate or a 9% coupon 9 million for the three months end December 31st 2000.
Strangers.
Total cost of sales increased by 16 point C media or 47, 6% to $50 9 million.
Speaker Change: The increase was driven by two main factors.
Speaker Change: Two 6 million for the same period in two sell sometime before.
Speaker Change: First there was a rise in freight expense due to higher shipping costs.
Speaker Change: The.
Speaker Change: Primary driver being a $1 two immediately.
Speaker Change: <unk> taken this expands in place and a benefit in the <unk>.
Speaker Change: Professional fees related.
Speaker Change: The investment financial other vessel Reis services.
Deborah: Deborah Coast increase as we expand our warehouse and the operation teams to support growth.
Speaker Change: As a result on than those for the three months ended December 31st 2024 was $1 6 million compared with net income of three points of immediate for the same period in 2020.
Speaker Change: This cost increase reflecting both.
Speaker Change: Our expansion activities and the industry wireless pagers, resulting in our gross profit margin decreased to a <unk>, 9% in Q2 fiscal year 2025 from 18.
Speaker Change: Representing a decrease of $5 4 million.
Speaker Change: Looking at our first half performance total revenue grew 12, 5% to $93 six media.
Speaker Change: 3% into physical year 2024.
Speaker Change: General and administrative expenses decreased by Bill Clinton media or a 9% coupon 9 million for the three months end December 30, <unk> 2130 to two 6 million for the same period in 2024.
Speaker Change: However, the cost pressure I described earlier.
Speaker Change: Of the six months and they said that's okay.
Speaker Change: 2044 of $6 3 million compared with net income.
Speaker Change: By medium bullish then cura into southern countries, representing a decrease by 12 points in India.
Speaker Change: With the <unk>.
Primary driver being a one point to a media increased professional fees for <unk>.
Speaker Change: Turning to our balance sheet and liquidity position us well to December 31, 2024, and at June 30 to sell sometime before.
Speaker Change: The investment financial other vessel Reis services.
Speaker Change: As a result of those for the three months ended December 31st 2024 was $1 6 million compared with net income of three points of immediate for the same period in 2020, representing a decrease of $5 4 million.
Speaker Change: We had cash and restricted cash of $7 4 million and 10 million respectively.
Speaker Change: Which primarily consist of the cash deposit bank.
Speaker Change: Cash flow atlas's fills all crazy activity you have the.
Speaker Change: The net cash of $9 two a day in the first half.
Speaker Change: Looking at our first half performance total revenue grew 12, 5% to $93 six media.
Speaker Change: Due to our expense.
Speaker Change: Please.
Speaker Change: Investing activities used 1 million, making for the property and equipment purchases while financing activities.
Speaker Change: However, the cost pressure I described earlier net a net loss of the six months ended December 31, 2044 of six points. They media compared with a net income of $6 5 million. Polish then cura into southern countries, representing a decrease by $12 8 million.
Speaker Change: I did.
Speaker Change: For media by memory long hauls.
Speaker Change: Then by equity participation.
Speaker Change: We have taken the significant steps to strengthen our financial flexibility.
Speaker Change: This includes the securing of the media and by quickly purchase agreement with Hawaii.
Speaker Change: Turning to our balance sheet and liquidity position ourselves at December 31, 2024, and at June 32000 coming forward.
Speaker Change: <unk> up to 21 million income basketball promissory notes.
Speaker Change: We had cash and restricted cash of $7 4 million under $10 million.
Speaker Change: Ooh media and countries of prepay OS events.
Speaker Change: <unk>, which primarily consist of the cash deposit and bank.
Speaker Change: Our working capital position remains solid with a poor.
Speaker Change: Correct.
Speaker Change: Cash flow annotates shows operating activities.
Speaker Change: $42 9 million I guess cause I'm not at all.
Speaker Change: The net cash of $9 2 million in their first half.
Speaker Change: Welcome to media and our total stockholders equity stands at $3 2 million.
Speaker Change: Salary due to our expansion related expenses.
Speaker Change: Investing activities, just 1 million, meaning for the property and equipment purchases.
Speaker Change: Particularly encouraging metric is our growing customer base.
Speaker Change: Financing activities provided.
Which has expanded from $100 five at the end of June 2024 to 200.
Speaker Change: For media by memory front haul a standby equity participation.
Speaker Change: Actually the customers softwood December 31st 2024.
Speaker Change: We have taken significant steps to strengthen our financial flexibility missing.
Speaker Change: The nearly three times growth in our customer base demonstrated strong market demand for <unk>.
Speaker Change: This includes securing of $15 million repurchased.
Speaker Change: The purchase agreement with Hawaii, establishing up to 21 million income bucket for promissory notes and completing who buy media in countries of prepay OS events.
Speaker Change: Our service.
Speaker Change: Despite the near term margin pressure.
Speaker Change: Looking ahead, our financial strategy focused on four key areas first improving utilization rates at all the new facility will drive better operating in that region.
Speaker Change: Our working capital position remains solid with a total current assets of <unk>.
Ken: Hey, Ken implementing automation and efficiency initiatives to manage operating costs.
Speaker Change: $2 9 million against current bookings.
Speaker Change: <unk> $2 million and our total stockholders equity stands at $3 2 million.
Speaker Change: Third.
Speaker Change: <unk> what's impactful.
Speaker Change: Inventory and local management.
Speaker Change: And for <unk>.
Speaker Change: Particularly encouraging metric is our growing customer base.
Speaker Change: Eddie credit liquidity to support our continued growth initiatives.
Speaker Change: Which has expanded from 105 at the end of June 2024 to 298 active.
Speaker Change: With that the comprehensive financial overview, our attaining back to Matt for Christian.
Speaker Change: Yeah.
Speaker Change: Thank you Scott we will now move to the question and answer portion of the call.
Speaker Change: The customers are software December 31st 2024.
Speaker Change: Three times growth in our customer base demonstrates strong market demand for our service is.
Speaker Change: Thank you to everyone who has submitted questions.
Speaker Change: Our first question can you provide more color on the <unk> cost increases and what steps you're taking to mitigate the impact on margin.
Speaker Change: Despite the near term margin pressure.
Speaker Change: Looking ahead, our financial strategy is focused on four key areas first improving utilization rates at our new facility to drive better operating leverage.
Speaker Change: Yeah.
Speaker Change: The UBS coast increased contract to build a significant we'll all $8 3 million rise in expenses this quarter.
Speaker Change: Implementing automation and efficiency initiatives to manage operating costs.
Speaker Change: We are chasing these through multiple births.
Speaker Change: Third optimizing what's impactful at all about the inventory and local management.
Speaker Change: First our recent integration with <unk>.
Speaker Change: And for.
Speaker Change: Advise that we'll come to here.
Speaker Change: Maintaining adequate liquidity to support our continued growth initiatives.
Speaker Change: <unk> that's the way.
Speaker Change: <unk> helps us diversify our shipping costs.
Speaker Change: With that the comprehensive financial overview, our attaining back to Matt for questions.
Speaker Change: Leveraging our new cocoa, our transportation management software or optimizing that.
Speaker Change: Yes.
Speaker Change: Routine and the consolidated shipping.
Matt: Thank you Scott we will now move to the question and answer portion of the call.
Speaker Change: Where possible.
Speaker Change: The ongoing discussion with some multiple carriers to ensure competitive rates plus we continue to grow our volume.
Speaker Change: Thank you to everyone who has submitted questions.
Speaker Change: Our first question can you provide more color on the <unk> cost increases and what steps you're taking to mitigate the impact on margin.
Speaker Change: Thank you.
Speaker Change: Your warehousing footprint has grown significantly but utilization themed mixed.
Speaker Change: Yes.
Speaker Change: <unk> cost increased contract via the significant will all $8 3 million rise in expenses this quarter.
Speaker Change: Whats your target utilization rate and timeline for reaching and across the new facility.
Speaker Change: We are tracing data through multiple.
Speaker Change: Yeah.
Speaker Change: First our recent integration with <unk>.
Speaker Change: Wow.
Speaker Change: Well I'll stop on that facility has reached 70% utilization within six months.
Speaker Change: Advised sample come to <unk>.
Speaker Change: <unk> that's the way.
Speaker Change: <unk> will help us diversify our shipping costs.
Speaker Change: We are faced with.
Speaker Change: Some of our newer facilities are still ramping up.
Speaker Change: We are leveraging our new coal car transportation management software for optimizing.
Speaker Change: I'll talk to you with Irishman ranges, 5% across the network. We expect most facilities to reach this demo we seen 12 months to 18 months.
Speaker Change: Routine and the consolidated shipping.
Speaker Change: Where possible.
The ongoing discussion with some multiple carriers to ensure competitive rates fluctuate.
Speaker Change: Ultimate Ultimate based.
Speaker Change: Based on already is totally current experiments.
Speaker Change: And Louise the facility just came online.
Speaker Change: And yet to go.
Speaker Change: All of them.
Speaker Change: That's where it takes a long time, but Ontario is taking.
Speaker Change: Thank you.
Speaker Change: To solve on a ramp up curve.
Speaker Change: Your warehousing footprint has grown significantly but utilization team mixed.
Okay.
Speaker Change: Okay.
Speaker Change: And given the cash burn this quarter and current market conditions do you anticipate needing to draw down more of this type of facility in the near term.
Speaker Change: What's your target utilization rate and timeline for reaching and across the new facility.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Wow.
Speaker Change: Well I'll stop on that facility has reached 70% utilization, we're seeing six months fees, which were up this week.
Speaker Change: We ended the quarter with the tipping point for media and cash and the restricted cash and we have only dropped 10 million or 15 media at VPN, let's say that while we believe all of the currently accretive position is adequate for our near term needs have been the facility.
Speaker Change: Our newer facilities are still ramping up.
Speaker Change: I'll talk to you with Irishman raised 85% across the network. We expect most facilities to reach this demo we seen 12 months to 18 months.
Speaker Change: It provides important flexibility as we continue to optimize our extended operations, we will be strategic about any additional cost balancing growth opportunities dilution country or region.
Speaker Change: Ultimate ultimate.
Speaker Change: Based on already is totally current experiences.
Speaker Change: Louise the facility just came online.
Speaker Change: That's where it takes some time, but I'm taking.
Speaker Change: To some of our remarks Kurt.
Speaker Change: Thank you and our last question now you mentioned AI integration in your WNS.
Kurt: Good morning.
Speaker Change: Yes.
Speaker Change: And given the cash burn this quarter.
Speaker Change: Can you quantify the expected efficiency gains and timeline for implementation.
Speaker Change: Current market conditions do you anticipate needing to draw down more of the Tampa facility in the near term.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Our expense with Dolby Atmos is currently being rolled out across our network with full implementation expected.
Speaker Change: We ended the quarter with $7 four media in cash and the restricted cash and we have only dropped 10 million.
Speaker Change: By fiscal year end.
Speaker Change: Early results from our pilot facilities full potential over the 15, 2% in Brooklyn.
Speaker Change: <unk> media SVP epilepsy.
Speaker Change: While we believe all of the Koran Decretive Ashish.
Speaker Change: For our near term needs, having no facility provides important flexibility.
Speaker Change: Yeah.
Speaker Change: And the 25% reduction in Walker walking distance.
Speaker Change: Continuing to optimize our extended operations.
Speaker Change: However, we expect the full benefit will not be revised almost speaks to itself months.
Speaker Change: I'll be strategic about any additional costs balancing growth opportunities with dilution consideration.
Speaker Change: Tim Barrett from our operation and we optimize easily computation.
Speaker Change: Thank you Scott and thank you for your comments.
Speaker Change: Thank you and our last question now you mentioned AI integration in your WNS can you quantify the expected efficiency gains and timeline for implementation.
Matthew: And thank you everyone for participating on today's call. We look forward to providing additional updates in the near future in the meantime, we can be reached at info at <unk> Dot com or you can contact me at Matthew at strategic Dash.
Yes.
Speaker Change: Our expansive topic and that is currently being rolled out across our network with full implementation by.
Speaker Change: <unk> Dot com.
Speaker Change: By fiscal year end.
Speaker Change: Early results from our pilot facilities full potential over the 15, 2% in cooking.
Speaker Change: Ladies and gentlemen, this concludes our conference for today. Thank you for your participation and you may now disconnect.
Speaker Change: Okay.
Speaker Change: And the 25% reduction in Walker walking distance.
However, we expect the full benefits will materialize over six to 12 months.
Speaker Change: I was just wondering from our operation and we optimize easily commutation.
Speaker Change: Thank you Scott and thank you for your comments.
Speaker Change: And thank you everyone for participating on today's call. We look forward to providing additional updates in the near future in the meantime, we can be reached at info at <unk> Dot com or you can contact me at Matthew at strategic Dash IR Dot com.
Speaker Change: Ladies and gentlemen, this concludes our conference for today. Thank you for your participation and you may now disconnect.
Speaker Change: [music].
Speaker Change: Perfect.
Speaker Change: <unk>.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: [music].
Thanks.
Speaker Change: Yeah.