Full Year 2025 Jerash Holdings (US) Inc Earnings Call
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Good morning, everyone, well can chew jerash Holdings' fiscal 'twenty to 'twenty, five fourth quarter and full year financial results.
Operator: Good morning everyone. Welcome to Jerash Holdings Fiscal 2025 fourth quarter and full year financial results. At this time, all participants are in a listen-only mode and the floor will be open for questions following the call.
At this time all participants are in a listen only mode and the floor will be opened for questions. Following the presentation.
Operator: If anyone should require operator assistance during this conference, please press star zero on your phone.
If anyone should require operator assistance. During this conference. Please press star zero on your phone keypad. Please note. This conference is being recorded I will now turn the conference over to your host watch upon Dow Investor Relations Roger the fraud issue.
Roger Pondel: Note this conference is being I will now turn the conference over to your host, Roger Pondel, Investor Relations. Roger, the floor. Jenny, thank you so much.
Jamie: Jamie. Thank you so much good morning or afternoon, everyone wherever you may be.
Roger Pondel: Good morning or afternoon, everyone, wherever you may be. Roger Pondel, Jerash Holdings. Relations Firm.
Speaker Change: Roger Palmdale Dredge holdings Investor Relations firm and welcome to the 20 to 25 fourth quarter Conference call.
Sam Choi: We have a call today from the company, our Chairman and Chief Executive Officer Sam Choi. Financial Officer Gilbert Lee, and Eric Tang, who leads...
Jamie: On the call today from the company are chairman and Chief Executive Officer, Sam Joy.
Gilbert Lee: Chief Financial Officer of Gilbert Lee and Eric Chang, who leads the company's operations in Jordan.
Sam Choi: I turn it over to you. and Sam.
Jamie: I turn the call over to Sam I want to remind all listeners that today's call may include forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.
Sam Choi: I want to remind all listeners that today's call may include forward-looking statements. The meaning of the private such forward-looking statements are subject to numerous conditions, many of which are being including those who set forth is filed with the Securities and Exchanges. of which are available on website.
Gilbert Lee: Such forward looking statements are subject to numerous conditions, many of which are beyond the company's control, including those.
Jamie: <unk> for the room.
Jamie: The.
Jamie: The company's most recent Form 10-K as filed with the Securities and Exchange Commission copies of which are available on the Sec's website at Www SEC Gov, along with other filings made with the SEC from time to time.
Sam Choi: Thank you. Gov, along with other filings made with. The results could differ materially from these forward-looking statements.
Jamie: Actual results could differ materially from these forward looking statements.
Sam Choi: And I'll see you next time.
Jamie: <unk> Holdings undertakes no obligation to update any forward looking statement, except of course as required by law and with that it is my pleasure to turn the call over to Sam Choy Sam.
Sam Choi: takes no obligation to update any phone With that, it is my pleasure to turn the call.
Sam Choi: Roger Troy, Sam Thank you, Roger. We continue to see strong demand from our existing customers. and a notable increase in new inquiries from brands and large apparel manufacturers seeking strategic collaboration. While this is an exciting time for Jerash on the business front, revenue remains affected by logistic disruption. at Israel's Haifa Park. driven by ongoing geopolitical instability in the region. Our fiscal four-quarter revenue increased by nearly 36%. yet results were lower than originally anticipated. We estimated approximately... 3 to 4 million of finished goods not shipped until early in the fiscal 2026 first quarter. to mitigate further shipping delays due to the recent bombing of the Haifa port.
Speaker Change: Thank you Roger.
Speaker Change: We continue to see strong demand from our existing customers.
Speaker Change: Notable increase in new inquiries.
Speaker Change: Brands and large apparel manufacturers seeking strategic collaboration.
Speaker Change: Well.
Speaker Change: Taking time for the rest of the business.
Speaker Change: <unk> remains affected by logistic disruption.
Speaker Change: Israel's hydro plants.
Speaker Change: Driven by ongoing geopolitical instability in the region.
Speaker Change: Our fiscal fourth quarter revenue increase.
Speaker Change: Many of you there.
Speaker Change: 6%.
Speaker Change: Yes, we're supposed to be lower than originally anticipated.
Speaker Change: We estimate that approximately.
Speaker Change: Two full median.
Speaker Change: In the schools not simple.
Speaker Change: Early in the fiscal 2020 full first quarter.
Speaker Change: The Medicaid for the shipping delays due to the reason Bombay.
Speaker Change: Hi, Paul.
Sam Choi: We are actively collaborating with our customers. to re-route shipments through Jordan's aquifer. as recently announced.
Speaker Change: Actively collaborating with our customers so we would ship through Jordan.
Speaker Change: Pop up for us.
Speaker Change: As recently announced it.
Sam Choi: Jerash secured a major initial order for one of the largest U.S.-based multinational and omni-channel retail corporations. through a strategic collaboration with Henshaw Technology. a leading South Korea-based group of apparel brands that supplies a wide range of garments to major international retail and fashion brands. Production for the Order, which marks one of the largest initial orders in Jerash history. is scheduled to begin in October. with Applebee Delivery Planned for the 3rd and 4th quarters of 2025.
Speaker Change: The rest of two major missile or the well one of the largest U S based.
Speaker Change: Multinational and Omnichannel, because copper and ship.
Speaker Change: Through our strategic collaboration with him so.
Speaker Change: Okay.
Speaker Change: And leaving South Korea, they were ever broke that surprised a value range of dominance two major that's no co infection bricks.
Speaker Change: So it doesn't put the order.
Speaker Change: This marks one of the largest in MISO order in <unk> history.
Speaker Change: Aren't you too picky in office.
Speaker Change: It will be the lever we planned for it.
Speaker Change: And fourth quarter of 2012.
Speaker Change: Following this initial order is both our and <unk> mutual and pension.
Sam Choi: Following this initial order, it is both our and Hansel's mutual intention to explore additional sceneries. and identify opportunities for continued growth and collaboration. and the ongoing terrorist and search... local brands are actively seeking manufacturing alternatives. out of China and Southeast Asia to stay competitive in an increasingly dynamic trade environment. with long established operations in Jordan and our reputation for high quality. Jerash is well positioned to meet this growing demand, supported by the country's free trade agreements with the EU, UK, and Canada, as well as the favorable tariff treatment currently in place from the U.S.
Speaker Change: Additional synergies and identify opportunities for continued growth.
Speaker Change: Collaboration.
Speaker Change: I mean ongoing tariff uncertainties.
Speaker Change: Both brands at Liberty seeking manufacturing alternatives.
Speaker Change: The southeast Asia to stay competitive and increasingly Amanda Butler.
Speaker Change: With long established operations in Jordan and our reputation for high quality.
Speaker Change: The rest is well positioned to meet this growing demand supported by the country's free trade agreements with the EU UK and Canada as well as the paper both paired with equipment currently in place from the U S.
Speaker Change: He was a rising demand for our production capacity directly from local brands, we have decided to terminate and so on.
Sam Choi: Due to rising demand for our production capacity directly from global brands, we have decided to terminate the joint venture with Rosanna after more than two years of limited poker. The solution of the joint venture is expected to be done by April 2027, upon fully completion of outstanding customer orders, collection of receivables, and other methods. Our focus is now on further advancing Jerash's goal of diversifying our direct customer base.
Speaker Change: Sure with what's there.
Speaker Change: After more than two years, leading up to two questions.
Speaker Change: So Lucy with all the joint venture.
Speaker Change: That's yet to be done by April 2027.
Speaker Change: About 40 completion of outstanding customer orders collection of receivables and other matters.
Speaker Change: Our focus is now on further advancing duress goal of diversifying our direct customer base.
Sam Choi: and expanding our product mix to increase year-round capacity utilization and reduce revenue systematically.
Speaker Change: Our product mix to increase youre wrong capacity utilization and reduced revenues is an attitude.
Speaker Change: I will now turn the call over to Eric Chang, who is in charge of our operation in Georgia right now right.
Eric Tang: I will now turn the call over to Eric Tang, who is in charge of our operation in Jordan. Hi, Eric. Thank you, Sam. Our factories are fully booked through the end of December. with growing order volume from our global brand customers. We are also working diligently to accommodate new business inquiries.
Eric Chang: Thank you Sam.
Eric Chang: Our factory are fully booked through the end of December.
Speaker Change: Well, let's go in order volume from our Robo brand customer.
Speaker Change: We are also working diligently to accommodate new business.
Speaker Change: Yeah.
Speaker Change: We are excited very much about our strategic collaboration with patents.
Eric Tang: We are excited very much about our strategic collaboration with Hands On. and the initial large-order trade for high-profile retail corporations. With FOB orders, we are achieving better margins. compare with traditional contract manufacturing through third parties. that we often took on during Jordan's Jerash seasonally slower period in the second half of our fiscal year. with the strategic collaboration in place. We are hopeful to continue developing additional synergies and identifying new opportunities for mutual growth. Additionally, we are working on sample orders and pricing for other well-known brands in regions like Europe and Persian Gulf. This new business opportunity further reinforces our growth strategy.
Speaker Change: And the initial launch or the trade for a high profile be tip Corporation.
Speaker Change: F O B orders, we are achieving better margin.
Speaker Change: Comparable traditional contract manufacturing for third parties.
Speaker Change: That we often talk board.
Speaker Change: Jordan.
Speaker Change: So ross seasonally slower periods in the second half of our fiscal year.
Speaker Change: Well if that strategic collaboration in trade.
Speaker Change: We are hopeful to continue developing additional synergies and the daiichi binding deal opportunities for mutual growth.
Speaker Change: Additionally, we are working on sample orders and pricing for other well known brands.
Speaker Change: In regions like Europe and personally in golf.
Speaker Change: This new business opportunity further reinforce our growth strategy.
Speaker Change: Which centers on expanding our customer base and product mix to more effectively balance production capacity throughout the year.
Eric Tang: which centers on expanding our customer base and product mix to more effectively balance production capacity throughout.
Speaker Change: To support our growth.
Eric Tang: to support our growth.
Speaker Change: We are pleased to announce the completion of the expansion at our existing manufacturing facility in Amman.
Eric Tang: We are pleased to announce the completion of expansion at our existing manufacturing facility in our mine. And we are now in the progress of onboarding additional foreign workers. The expansion is expected to increase our production capacity by approximately 15%.
Speaker Change: And we are now in the progress of Onboarding additional foreign workers.
Speaker Change: Do you expect same expansion are expected to increase our production capacity by approximately 15%.
Speaker Change: Starting in the second fiscal year fiscal quarter. So.
Eric Tang: starting in the second fiscal year, fiscal portion.
Speaker Change: Separately.
Eric Tang: separately.
Speaker Change: We are actively collaborating with the Jordan minutes tree of labor to develop an extension.
Eric Tang: We are actively collaborating with the Jordan Ministry of Labor to develop an extension adjacent to our existing factory in Alhazen. This project is expected to get an additional 5-10% in overall production capacity. and it is currently targeted for completion in early calendar year 2026.
Speaker Change: Jason to our existing factory and I'll hop off.
Speaker Change: This project is expected to get that additional 5% to 10% in over all production capacity.
Speaker Change: And it is currently targeted for completion in early calendar year 2026.
Speaker Change: We also are assessing longer term.
Eric Tang: We also are assessing longer-term...
Eric Tang: larger scale expansion plans to construct manufacturing, warehousing, and accommodation facilities on the land that we purchased several years ago. The Persistence Regional geopolitical tensions continue to cause delay in export shipments from high support. However, Jordan remains a skilled and stable country with a full operational port. We are also exploring additional logistic channels to ensure reliable and timely delivery.
Speaker Change: Largest scale with expansion plans to construct manufacturing warehousing and accommodation facilities.
Speaker Change: Land, that's pizza chain several years ago.
Speaker Change: The persistent.
Speaker Change: Read you know Joel political tension continue to cause delay in export shipments from high support.
Speaker Change: However, Jordan remains a SKU unstable country with a food operation no pulp.
Speaker Change: We are also exploring additional logistic chengdu to ensure reliable and timely deliveries.
Gilbert Kwong: With that, I will now turn the call over to Gilbert to discuss our financial results. Gilbert, please. Thank you, Eric. Revenue for our fiscal 2025 fourth quarter increased by 35.6% to $29.3 million. from $21.6 million in the same quarter last year. The quarter's revenue reflected an increase in shipments to Jerash's major U.S. customers.
Speaker Change: What's that.
Gil: I will now turn the call over to Gil, but to discuss our financial results.
Speaker Change: Right.
Gil: Thank you Eric.
Speaker Change: Revenue for our fiscal 2025 fourth quarter increased by 35, 6%.
Speaker Change: To $29 $3 million.
Speaker Change: $21 6 million in the same quarter last year.
Speaker Change: The quarter's revenue reflected an increase in shipments to draft as major U S customers.
Speaker Change: As Sam mentioned due to congestion.
Gilbert Kwong: As Sam mentioned, due to congestions at Israel's hyperport, which caused delays in shipments, Revenue for the fiscal fourth quarter was impacted by approximately $3 to $4 million. Gross profit for the fiscal 2025 fourth quarter advanced nearly 250% to $5.2 million from $1.5 million in the same quarter of last year. Growth margin increased to 17.9% in the fiscal 2025 fourth quarter from 7.0% in the same quarter last year. The increase was primarily driven by higher production and shipment volume, which lowered the unit cost of production and generated higher margin through economies of scale. Operating expenses for fiscal 2025 fourth quarter increased by $284,000 to $4.8 million.
Speaker Change: Israel is hydro imports.
Speaker Change: Which caused delays in shipments.
Speaker Change: Revenue for the fiscal fourth quarter was impacted by approximately $3 million to $4 million.
Speaker Change: Gross profit for the physical 2025 fourth quarter.
Speaker Change: Vans to nearly 250% to $5 $2 million from one 5 million in the same quarter of last year.
Speaker Change: Gross margin increased to 17.9% in the physical towards 25 fourth quarter from 7.0% in the same quarter last year.
Speaker Change: The increase was primarily driven by higher production and shipment volumes, which lowered the unit cost of production and generate higher margin through economies of scale.
Speaker Change: Operating expenses for the fiscal 2025 fourth quarter increased by $284000 two full points eight milli.
Gilbert Kwong: from 4.5 million in the same period last year. The higher costs included a 4.7% increase in SG&A expenses due to higher sales and an $83,000 increase in stock-based compensation.
Speaker Change: From $4 5 million in the same period last year.
Speaker Change: The higher costs include a 4.7% increase in SG&A expenses due to higher sales and then $83000 increased.
Speaker Change: In the stock based compensation.
Speaker Change: Operating income was $434000 for the physical 2025 fourth quarter compared with an operating loss of $3 million a year ago.
Gilbert Kwong: Operating income was $434,000 for the fiscal 2025 fourth quarter, compared with an operating loss of $3 million a year ago. Total audit expenses in the fiscal 2025 fall quarter was $254,000 compared with $134,000 for the same quarter last year. The increase was primarily attributable to higher interest expense from supply chain financing programs and short-term debt as a result of higher sales.
Speaker Change: Total other expenses in the fiscal 2025.
Speaker Change: Well, it's 254000 compared with 134000 for the same quarter last year being.
Speaker Change: The increase was primarily attributable to higher interest expense from a supply chain financing programs and sometimes that that certainty. So it's both higher sales.
Speaker Change: Income tax expenses for fiscal 2025 fourth quarter weather approximately $324000 compared with tax income.
Gilbert Kwong: Income tax expenses for fiscal 2025-2024 were approximately $324,000 compared with tax income of $16,000 in the same period in fiscal 2024. The effective tax rate was high due to some tax provision adjustments stemmed from prior amended tax returns and increased subpar tax income at operating subsidiaries in Jordan and Hong Kong. certain non-deductible expenses were reinstated, included. Interest Expense Limitations, Stock Base Compensation, and Entertainment Expenses. We expect effective tax rates to normalize going forward as consolidated income rises and adjustments are now behind us.
Speaker Change: 16000.
Speaker Change: In fiscal 'twenty four.
Speaker Change: The effective tax rate was high.
Speaker Change: Due to some tax provision adjustments stemmed from prior year amended tax returns.
Speaker Change: Inquiries subpar F income at operating subsidiary in Jordan and Hong Kong.
Speaker Change: Certain non deductible expenses, where everybody in the state.
Speaker Change: Diluted.
Speaker Change: Interest expense limitations.
Speaker Change: Stock based compensation and entertainment expenses.
Speaker Change: We expect the effective tax rates to normalize going forward as consolidated income rises and adjustments are now behind us.
Speaker Change: We intend to consult and international tax experts on improving our tax structure.
Gilbert Kwong: We intend to consult international tech experts on improving our tech structure. Net loss was reduced to $144,000 or one cent per share for the fiscal 2025 fourth quarter from a net loss of $3.1 million or 25 cents per share in the same period last year. As of March 31, 2025, Jerash had $15.1 million in cash and restricted cash and net working capital was $34.6 million. Inventory was $27.7 million and $3.1 million in accounts receivable. Net cash provided by operating activities was approximately $1.4 million for the fiscal year ended March 31, 2025, compared with $2.5 million for fiscal year 2024.
Speaker Change: Net loss was reduced to $144000 or one cents per share for the fiscal 2025 fourth quarter from the net loss of $3 $1 million or 25 cents per share in the same period last year.
Speaker Change: As of March 31st 2025.
Speaker Change: The rash had $15.1 billion in cash and restricted cash and net working capital was $34 $6 million.
Speaker Change: Inventory was $27 7 million and $3 1 million in accounts receivable.
Speaker Change: Net cash provided by operating activities was approximately $1 4 million for the fiscal year ended March 31, 2025, compared with $2 5 million for fiscal year 2024.
Gilbert Kwong: As Sam and Eric mentioned, our business remains solid and continues to grow. demonstrated by a record high revenue in fiscal 2025 of $146 million. Despite a $772,000 increase in stock-based compensation to $1.8 million in FY 2025, from FY 2024's $986,000, our operating income fiscal year 2024 was $1.4 million compared with an operating loss of $665,000 in fiscal year 2024.
Speaker Change: As Sam and Eric mentioned, our business remains solid and continues to grow.
Speaker Change: Demonstrated by our record high in revenue in fiscal 2025.
Speaker Change: $146 million.
Speaker Change: Despite a $772000 increase in stock based compensation to $1.8 million in fiscal 2025 from physical 2020 Four's 986000.
Speaker Change: Operating income.
Speaker Change: So year 2024 five.
Speaker Change: Was one 4 million compared with an operating loss of 665000 in fiscal year 2024.
Speaker Change: Looking ahead, we are focused on driving continued growth and operational efficiency.
Gilbert Kwong: Looking ahead, we are focused on driving continued growth and operational efficiency. Revenue for the fiscal 2026 first quarter is expected to be approximately $38 to $40 million pending outbound shipping port conditions for the remainder of June. Our gross margin goal for the fiscal 2026 first quarter is expected to be approximately 15 to 16 percent.
Speaker Change: Revenue for the fiscal 2026 first quarter is expected to be approximately $38 million to $40 million.
Speaker Change: Pending outbound shipping port conditions for the remainder of June.
Speaker Change: Our gross margin goal for the physical 26 first quarter is expected to be approximately 15% to 16%.
Speaker Change: On may 20th 2025.
Gilbert Kwong: On May 20, 2025, Jerash's Board of Directors approved a regular quarterly dividend of $0.05 per share on its common stock, payable on June 6, 2025, to stockholders of record as of May 30, 2025.
Speaker Change: <unk>.
Speaker Change: Board of directors approved a regular quarterly dividend of five cents per share on this common stock payable on June six 2025 to stockholders of record as of May 30 of 2025.
Speaker Change: We will now open up the call for questions and I will turn the call back to the operator.
Operator: We will now open up the call for questions, and I will turn the call back to the operator. Thank you very much.
Speaker Change: Thank you very much we will now be conducting a question and answer session.
Operator: We will now be conducting our question. If you would like to ask a question, please press star 1 on your phone keypad now. We ask that while you're posing your question...
Speaker Change: I would like to ask a question. Please press star one on your signing key patent now we also while pacing. Your question. Please pick up skill set do you feel on this I'm going to speak for the hydro and the sound quality.
Operator: Please visit if you are listening on a speakerphone to provide optimum sound quality. Please wait a moment whilst we poll...
Speaker Change: Please wait a moment mostly poll for questions.
Speaker Change: Yeah.
Speaker Change: Thank you.
Sam Choi: Your first question is coming from Mark Argento. Mark, you're live. Just a few quick ones here. Maybe, um... help us understand or think about. the incremental costs around having to move forward. from Haifa to the Jordanian port, and I'm assuming is that built into the gross margin expectations for Q1? Well, actually, Mark, the cost. to Aqaba, for us, is actually lower than transporting it to high. If I remember the numbers right, I think each truckload traveling to Acrobat is about $1,200. and to Haifa is about 3,200. That is our cost, because once we deliver to the port, the shipping cost Shipping the container to its destination will be the cost for our customers.
Speaker Change: Your first question is coming from.
Speaker Change: Mark Argento.
Speaker Change: No.
Speaker Change: Your line is life.
Speaker Change: Just a few quick ones here.
Speaker Change: Maybe.
Speaker Change: Help us understand or think about the incremental cost around having to move courts.
Speaker Change: But to the Jordanian court and I'm, assuming is that built into the gross margin expectations for <unk> for Q1.
Speaker Change: Well actually mark the cost.
Speaker Change: To ask about.
Speaker Change: For us, it's actually lower than transporting it to hybrid.
Speaker Change: If I remember the numbers right.
Speaker Change: Thing each truckload traveling to ask about is about $1200.
Speaker Change: And two.
Speaker Change: And too high but it's about 3200.
Speaker Change: Yeah.
Speaker Change: That is our cost because once we delivered to the port.
Speaker Change: The shifting cost.
Speaker Change: Shifting the container to its destination will be the cost for our customers.
Speaker Change: Got it.
Eric Tang: And I'm assuming that shipping costs from Acobar is higher than PIPA. for the customer. And that's why you guys have been so good on AutoHack. We don't really have visibility on the shipping cost for the customer, whether it is shipped from Acrobar or from Hive. But I know usually they want to use Hiver because the lead time for shipping is shorter. I think it's about one week shorter. Am I right, Eric? All right.
Speaker Change: I'm, assuming that shipping cost remark the bar is higher than <unk>.
Speaker Change: Broker customer.
Speaker Change: Why are you guys are concerned.
Speaker Change: That please.
Speaker Change: We don't really have.
Speaker Change: Visibility on on the shipping costs for the for the customer whether it is shipped from <unk> or from the hydro.
Speaker Change: But I know.
Speaker Change: Usually they wanted to use high bar because the lead time for shipping is shorter.
Speaker Change: It's about one week shorter am I right or wrong.
Speaker Change: Yes, Theyre wrong 10 to 12 days shorter and the lead time its more important than the customer, especially this is on the cost of this all flows you rush. So they choose HIFU because state governments can arrive to New York I think.
Eric Tang: Yes, they're around 10 to 12 days shorter, and the lead time is more important than the customer. especially this is on the coast of Jerash. So they choose Hyde Park because the government can arrive to New York, I think, at least 10 days early. but through Agrabah, of course, we always recommend in the beginning to go through Agrabah. They have been going through Agrabah for many, many years already, okay, and we pay less in the logistic cost because trucking, we pay almost 30, 40% less, okay. So now they have no choice because Haifa port has been, I mean, attacked and Haifa was closed.
Speaker Change: Just 10 days earlier.
Speaker Change: But throughout the bar of course, we always recommend in the beginning to go through alcohol. They have been going through a bubble for many many years already okay, and we pay less in the logistic cost.
Speaker Change: Cause trucking, we paid almost <unk> 34, 40% less okay. So now they have no choice because hi, Bob Houghton has been attacked and hi, Bob Walsh close they have to shift back to alcohol, which is more beneficial to us on the cost side.
Mark Argento: They have to shift back to Agrabah, which is more beneficial to us on the cost side. Okay, that's helpful.
Speaker Change: Great that's helpful.
Speaker Change: Just pivoting it.
Mark Argento: pivoting in terms of the timing of orders. I know in last quarter we saw some shift from Q3 into Q4 and now we're seeing a little bit of shift from Q4 to Q1. Just talk about that dynamic a little bit.
Speaker Change: In terms of the timing of orders I know in last quarter, we saw some shift from Q3 into Q4.
Speaker Change: And now we're seeing a little bit of a shift from Q4 to Q1.
Speaker Change: Talk about that dynamic a little bit have you seen any orders being canceled or is this really just a timing issue at this point.
Sam Choi: Have you seen any orders being canceled or is this really just a timing issue at this point? No, it's just a timing issue. No order has been cancelled and it's just that there was some congestions toward the end of March that some containers did not reach the delivery point. in Haifa. It was too many containers going through Haifa to be shipped out. So there were about $3 to $4 million worth of merchandise or worth of sales that didn't get booked because it was not shown on the customer's system. We already shipped it out from our factory.
Speaker Change: No. It's just a timing issue no order has been cancelled.
Speaker Change: And.
Speaker Change: So it's just that there was some congestion is towards the end of March.
Speaker Change: Some containers.
Speaker Change: Did not rich.
Speaker Change: It did not in which the delivery point.
Speaker Change: In hydraulics.
Speaker Change: It was too many containers going through the Hydra.
Speaker Change: Two to be shipped out.
Speaker Change: So there were about $3 million to $4 million worth of our merchandise or worth of sales that didn't get booked because it was not shown on the customer's system.
Speaker Change: We already shipped it out from our factory.
Sam Choi: but it didn't reach the customer's system, so they didn't recognize it as a receipt. The FCR was not issued. Once they have seen how it is issued, they will be taking the book themselves.
Speaker Change: But it didn't reach the customers.
Speaker Change: The system. So they didn't recognize it as a as a receipt the F C. R O S.
Speaker Change: Not our issue.
Speaker Change: It will be.
Speaker Change: It can be booked ourselves.
Speaker Change: Okay.
Speaker Change: Got it okay.
Sam Choi: And then last kind of question for me, can you just talk a little bit more about the decision to dissolve the Busana JV and then also maybe in conjunction with that talk about this new uh opportunity with Hansel in particular that you referenced in the press release. Well, Sam, do you want to talk about the Buzana decision? Yes, in fact, up to two years of collaboration, the joint venture with Prusanna. We didn't see great events in the program. And in fact, most of their referred customers by the joint venture, we can independently handle those customers.
Speaker Change: And then last question for me.
Speaker Change: Just talk a little bit more about the decision to dissolve the bousada.
Speaker Change: And then also.
Speaker Change: In conjunction with that I've talked about this new.
Speaker Change: The opportunity for example in particular that you referenced in the press release.
Speaker Change: Well.
Speaker Change: You want to talk about the split within decision.
Speaker Change: Yes in fact up to two years of cooperation that joint venture with <unk>.
Speaker Change: We didnt see a great events in the progress.
Speaker Change: And in fact, most of their refer to customer funded by the joint venture.
Speaker Change: Independent handle those customers so.
Sam Choi: So, it's on a mutual understanding basis that we terminate the joint venture. And in fact, some customers... They are actively contacting us so that we can do business with them directly. So, I mean, we expect. There will be more and more direct visits through ourselves instead of going through the joint ventures.
Speaker Change: Ah is a mutual understanding bases.
Speaker Change: Then we terminate.
Speaker Change: The joint.
Speaker Change: Joint venture and in fact, some customer yeah actively I mean contacting us.
Speaker Change: We can do business with them directly.
Speaker Change: So I mean.
Speaker Change: We expect.
Speaker Change: There will be more and more directly is fool ourselves instead of going through the joint venture.
Speaker Change: Right.
Sam Choi: And then in terms of the Hansel and the new domestic customer you're talking about, maybe, you know, touch on who Hansel is and why that's important. For Hansel, may I just to say something, because Hansel is one of the largest importers in South Korea. So I think everyone knows this company, and they are actually the number one supplier for Walmart order at Sam's Club. So, uh, actually, they want to. They got the green light from Walmart and Sam's Club that they want to increase the business with Hensel. But they want Hensel to go to duty-free country, especially Jordan.
Speaker Change: And then in terms of the handful and that new customer domestic customer you're talking about maybe touch on.
Speaker Change: Handful is and why that's important.
Speaker Change: Well I hadn't though just.
Speaker Change: Just to say something because hadn't though is one of the largest importers in South Korea.
Speaker Change: So I think everyone knows this company and they are actually the number one supplier for the Walmart order at Sam's club.
Speaker Change: So actually they want to.
Speaker Change: They got the Green light from our Walmart and Sam's club that they want to increase the business both hands.
Speaker Change: One has to go through duty free countries, especially Jordan.
Sam Choi: So Hansel agreed that, OK, they will come to Jordan. OK. And then it is Walmart who introduced Jerash to Hansel. So the question is, OK. Wal-Mart said, according to the top management, they don't, at this sensitive period, they don't want to increase one more additional vendor directly doing business for Wal-Mart. Okay. Otherwise, Wal-Mart will directly approach you. They will give the expansion of the business to Hansel and their wife, Hansel, will work together with Jerash. This is why we are coming in together.
Speaker Change: So I tend to agree that okay. They will come to Jordan, Okay, and then it just ballpark.
Speaker Change: Who introduce garage to handle.
Speaker Change: Okay. So the question is okay.
Speaker Change: Walmart that according to the top management they don't at this sensitive periods, they don't want to increase.
Speaker Change: One more additional wenda directly doing business for hallmark Okay.
Speaker Change: Otherwise Wal Mart will directly approach us.
Speaker Change: They will give the expansion of the business to help though and why potential work together with Josh. This is why we are coming together.
Speaker Change: So last month, the sand, the chairman and I and mingle their marketing director also visited pencil and see that top management, including the CEO and we have a very good discussion.
Sam Choi: So last month, Sam, the chairman, and I, and Ringo, the marketing director, also visited Pencil and see the top management, including the CEO. And we have a very good discussion. And then they are very seriously considered to open more business. with Jerash in 2026. Meanwhile, we already got the first confirmed order from them, and we already placed order to the supplier. Okay, and it is around, the first order is already 3.2 million pieces goes short. And the total volume in US dollars, the business is around 6.5 million U.S. dollars. This is only the first order.
Speaker Change: And then they are very similar as they consider to open more business, okay with garage in 2026.
Speaker Change: Meanwhile, we already got the first confirmed order from them and we already placed orders with a supplier.
Speaker Change: Okay and it is around the first order is ready.
Speaker Change: <unk> 3.2 million pieces.
Speaker Change: Shocked.
Speaker Change: And the total water or in U S dollars the business so wrong.
Speaker Change: $6 5 million U S. Dollar. This is only the first part of.
Speaker Change: So it keeps telling me is for 2026, maybe each months you will be getting underway okay.
Sam Choi: They keep telling me for 2026, maybe each month you will be getting at least half a million to a million pieces of order. So we have to work out the capacity ourselves and try to choose the good customer. And then that's why we also place in the earnings call about our expansion on the factory capacity.
Speaker Change: Okay at least.
Speaker Change: Million, two 1 million pieces of Florida, Okay. So we have to work out the capacity ourself, Okay and tried to choose the good test them, though and then that's why we also placed in the earnings call about our expansion on the.
Speaker Change: On the factory capacity.
Speaker Change: Great I appreciate the extra color and good luck and stay safe. Thank you.
Mark Argento: Great, appreciate the extra color and good luck and stay safe. Okay, thank you. Thank you.
Mike: Okay. Thank you. Thank you Mike.
Mike Baker: Thank you very much. Our next question is coming from Mike Baker of D. A Davidson Mike Your line is life.
Mike Baker: Our next question is coming from Mike Baker of DHS. Mike Ulline Okay, thanks. Just to follow up on that last point.
Mike Baker: Okay. Thanks.
Speaker Change: To follow up on that last point.
Sam Choi: Can you quantify or at least give some qualitative color on the kind of conversations you're having with tariffs from China and other places? Is that compelling more companies, like presumably Walmart, to look for other sources and if you can sort of contextualize that or give any metrics or anything along those lines to give some color on how that tariff situation is impacting you either positively or negatively? Well, I think that was in the present. Yeah.
Speaker Change: What can you quantify or at least give some.
Speaker Change: Qualitative.
Speaker Change: Over on the kind of.
Speaker Change: Conversations youre, having with tariffs or from.
Speaker Change: From a China and other places.
Speaker Change: Is that compelling more companies like presumably Walmart.
Speaker Change: Look for other sources and yeah. If you can sort of contextualize that or give any metrics or anything along those lines.
Speaker Change: Give some color on how how that tariff situation is impacting you either positively or negatively.
Speaker Change: Well I think so.
Speaker Change: Right.
Speaker Change: Yeah, Yeah yeah.
Sam Choi: Please. Okay, ever since President Trump announced his tariff or what he called the liberation date, we have seen almost every existing customer or new customer, they're kind of having an urgency to try to find alternative suppliers. … … … In the past few years, we have already seen a trend of people trying to get out of China, trying to get out of Asia into duty-free countries. But ever since Mr. Trump announced his matrix of tariff increases, and if you remember, Jordan and some other countries were placed on the basic 10% tariff line, which is very competitive compared to some other major, whether it's China or Southeast Asian countries.
Speaker Change: Oh, okay.
Speaker Change: Smith.
Speaker Change: President Trump announced as a tariff.
Speaker Change: Or what he called the liberation date.
Speaker Change: We have seen almost every takes.
Speaker Change: Existing customer or new customer they kind of.
Speaker Change: Having.
Speaker Change: An urgency to try to find alternative suppliers.
Speaker Change: Uh huh.
Speaker Change: In the past few years, we have already seen.
Speaker Change: A trend of people trying to get out of China trying to get out of Asia into duty free countries, but ever since Mr. Trump announced his matrix of tariff.
Speaker Change: Increases and.
Speaker Change: If you remember Jordan was in the mountains and some other countries were placed on the basic.
Speaker Change: 10%.
Speaker Change: Tara mine, which is.
Speaker Change: Very competitive comparing to some other major.
Speaker Change: Whether it's China or southeast Asian countries.
Sam Choi: So.
Speaker Change: So.
Sam Choi: buyers and brands, they are approaching Jerash because this is just making the exodus out of Asia a more urgency. and they want us to commit to more capacity. They want to start... start some inquiries and come to the factory to see some new customers. Actually, I was here a few weeks ago, and I've seen many customers. Actually, people that I don't know of, they just came and visited us and toured our factory and wanted to start doing business. So after they toured the factory, they were very pleased, and they wanted to send us some samples or send us some pricing exercise so that we can start doing some pricing.
Speaker Change: Buyers in branches they are approaching garage.
Speaker Change: This is just maintain the exodus out of Asia more urgency.
Speaker Change: And they wanted to have there they want us to commit to a more capacity they want to start.
Speaker Change: Yeah.
Speaker Change: We'll start some inquiries and come to the factory to to see some some new customers actually I was here.
Speaker Change: A few weeks ago, and I've seen many customers actually people there I don't know off they just came and visited US and tour our factory and wanted to start doing business. So after the two of them.
Speaker Change: They they were very close and they wanted to send us some samples, though so some.
Speaker Change: Pricing exercise so that we can start doing some pricing so I see it as a as a very good.
Sam Choi: So I see this as a very good opportunity for us to even further diversify our customer base away from the major customers such as VF and New Balance. If you see our 2025 distribution of customers, you can see even though VF sales still has increased, but the percentage has dropped. and we have increased significantly some of the customers' sales. So I think we're going to the right direction, and this terrorist war is actually providing it more stimulus. to get to that point.
Speaker Change: <unk> opportunity for us too.
Speaker Change: Even further diversify our customer base.
Speaker Change: Away from the major customers, such as the oven and new balance.
Speaker Change: If you see our 2025 distribution of customers you can see even though the sales heads.
Speaker Change: <unk> has increased but the percentage has dropped.
Speaker Change: And we have increased significantly somehow the customer's sales.
Speaker Change: So I think we're going to the right direction and this terrorist war is actually.
Speaker Change: Providing it more stimulus.
Speaker Change: To get to that point.
Sam Choi: So right now, nobody knows what the final tariff rates are going to be. We have some indications from the Prime Minister of Jordan, because they have been talking with U.S. Department of, Representative of Trade. and they are pretty sure that the rate is not going to be significant. Right now we're thinking about maybe just keeping 10% or even lower. But that is already very competitive, comparing with China, comparing with Vietnam, and some other Southeast Asian countries. So I see the trend continue, and our capacity is... really in need of some major increase.
Speaker Change: So right now nobody knows what the final tariff.
Speaker Change: Rates are going to be we have some indications from the prime minister of Jordan.
Speaker Change: Because they have been talking with U S.
Speaker Change: A department or representative of Trey.
Speaker Change: And they are pretty sure that the that the rate is not going to be significant right. Now we're thinking about maybe just keeping 10% or even lower.
Speaker Change: But that is already very competitive.
Speaker Change: Comparing with.
Speaker Change: China comparative of Vietnam, and some other service Asian countries.
Speaker Change: So I see the trend continue and our capacity is.
Speaker Change: Really in need of some major increase but where work will come because considering food partner with and what way to increase our capacity.
Sam Choi: But we're considering who to partner with and what way to increase our capacity. So.
Speaker Change: So.
Speaker Change: So we're being conservative actually four plus.
Sam Choi: So we are being conservative, actually, for fiscal year 2026. just projecting that we will have minor increase in our capacity and minor increase in sales. So that's why you can see the first quarter, we're only projecting about, I think, 10% increase for the first quarter.
Speaker Change: For fiscal year 2026.
Speaker Change: Just projecting that we will.
Speaker Change: <unk> mine the increase in our capacity and minor increases in sales. So that's why you can see the first quarter were only projecting a BOE thing, 10% increase for the first quarter, yes, no actually first quarter comparing to last year.
Sam Choi: No, actually, first quarter, comparing to last year, is a decrease by 4%. Because last year, first quarter, we had $41 million in sales, and this year, it's only $39 million. Yeah, makes sense.
Speaker Change: A decrease by 4%.
Speaker Change: Because last year first quarter, we had $41 million in sales and this year, there's only 39 years.
Speaker Change: Yes, it makes sense.
Sam Choi: But to follow up on that, the increased capacity, you talked about I'm curious about the longer term idea of Presumably opening more manufacturing facilities and warehousing on the land that you already own. Any timing on when you would think about doing that or how likely that is to come to fruition? Right now our projection or our CAPEX projection is it will not happen in year 2026. because it is still a very unstable geopolitical situation here. And unless we can be sure. that we will fill up that factory almost immediately. I think we're just going to hold off.
Speaker Change: A follow up on that the increased capacity.
Speaker Change: Talked about.
Speaker Change: <unk> completed awesome expansion and talking about another 5% to 10% increase in existing facilities I am curious about the longer term our idea of of presumably opening more more manufacturing facilities and warehousing on the land that you already own any any timing on when you would think about doing it.
Speaker Change: That or how likely that is to come to fruition.
Speaker Change: Yeah.
Speaker Change: Right now our projection or capex.
Speaker Change: Projection is it will not happen in year 2026.
Speaker Change: Yes, it is still a very unstable geopolitical go.
Speaker Change: Situations here.
Speaker Change: And unless we can be sure.
Speaker Change: That we will fill up that factory almost immediately.
Speaker Change: I just think we're just going to hold off but in the meantime, we will continue to do studies, we will continue to talk to potential partners.
Sam Choi: But in the meantime, we will continue to do studies. We'll continue to talk to potential partners. and also find ways of financing the expansion. because we're talking about $20 to $30 million in investment. So we need to find some way of financing. Yeah, makes sense. I appreciate it.
Speaker Change: Partners.
Speaker Change: And also find ways of financing the expansion.
Speaker Change: Was that we were talking about $20 million to $30 million in India.
Speaker Change: In the investment.
Speaker Change: So we need to find some way of financing.
Speaker Change: Yeah makes sense I appreciate it thank you.
Speaker Change: Thank you. Thank you very much.
Speaker Change: And our next question is coming from.
Speaker Change: Eagle North correct Seth of.
Sergio Novkarertsev: and Sergio Novkarertsev. store. You'll Thank you.
Igor: Nevertheless capital Igor Your line is live.
Speaker Change: Oh. Thank you good morning, or good evening, depending on where you are and think about taking my question. The follow up on that increase inquiries. After the tariff are in Georgia, and the suspect to become a much more competitive Vietnam, another big manufacturing countries.
Sergio Novkarertsev: Good morning or good evening, depending on where you are, and thank you for taking my question. To follow up on the increase after the tariff in Germany is expected to become much more competitive to Vietnam and other big manufacturing countries, do you think it will positively affect the gross margin? Because I remember that during the highest demand, right, or during COVID you had a margin close to 20%, now your gross margin is more than 15-16%. What do you think is going to happen to your gross margin if you have a higher demand but limited capacity?
Speaker Change: Do you think it's more positively affected the gross margin because I remember that during the highest demand for I was called it during the call that you had mark and close to 20% in all your gross margin is more than 50 and 60% are what do you think that's going to happen to your gross margin. If you know you'll have a higher demand but limited capacity.
Igor: I believe the gross margin well would definitely be.
Sam Choi: I believe the gross margin will definitely be... be improved. because right now we're switching more and more over to what we call FOB business. In the past, when our capacity was not fully utilized, especially during our slow season, which is the second physical year, second half of the physical year, we tend to take on business that, what we call CM business. cut and make business. So for those business, we're just doing more simple styles, but higher volume, because that is our industry. It is the summer season. OK, our strength is in producing jackets, outerwear. Those are more complicated styles that we can do the FOB business and gain more ASP and gain more margin.
Speaker Change: Being improved.
Speaker Change: Uh huh.
Speaker Change: Because right now we're switching more and more over to what we call F O B business.
Speaker Change: In the past when our capacity was not fully utilized especially during our slow season, which is the second physical year second half of the fiscal year.
Speaker Change: We.
Speaker Change: We tend to take on business that Oh, what we call C M business cut them make business. So.
Speaker Change: For those business, we're just doing more simple styles, but a higher volume.
Speaker Change: That is our or you know you know us.
Speaker Change: Industry. It is the sum of the season.
Speaker Change: Okay, our strength in producing jackets, although aware those are more complicated styles that we can.
Speaker Change: Dude F O b business and gain more E S P and gain more margin.
Sam Choi: But now the situation has changed, because we have more business than we can handle. So we will forego some of the, or the majority of the CM business, and take on more FOB business. So naturally, that will improve our ASP, that will improve our gross margin percentage. At the same time, the market is getting more and more competitive. Our buyers. continue to put pressure on us to make us be more competitive in terms of pricing. So this overall there is some offsetting, but I believe going forward we will be able to maintain pretty healthy gross margin.
Speaker Change: But now the situation has changed because we have more business. Then we can then we can handle so we will forego some of the or the majority of the C. M business and take on more F. O B business. So naturally that will improve our ESP that will improve.
Speaker Change: Our gross margin percentage.
Speaker Change: But.
Speaker Change: At the same time.
Speaker Change: The the market is getting more and more competitive our buyers.
Speaker Change: Continue.
Speaker Change: To put pressure on us to make us.
Speaker Change: Be more competitive in terms of pricing. So this overall there there are some offsetting but.
Speaker Change: But I believe going forward, we will be able to maintain a.
Speaker Change: Pretty healthy gross margin.
Speaker Change: And with the lift the handset business.
Sam Choi: and with the Hansel business. Because it's high volume, while we will be able to gain a pretty significant or pretty healthy gross margin, I think the efficiency will also help us to achieve a higher gross margin.
Speaker Change: Because it's high volumes, while we we will be able to to gain a pre significant or a pretty healthy gross margin.
Speaker Change: I think the efficiency will also help us to achieve a higher gross margin.
Speaker Change: Okay. Following up on that you press release says that you are fully booked through December. So if you are fully booked and does it mean that you already know our your gross margin for the rest of the year or this is still somewhat up in the air and also our <unk>.
Sam Choi: Okay, following up on that, you press release says that you're fully booked through December. So if you're fully booked, does it mean that you already know your gross margin for the rest of the year? Or this is still somewhat up in the air? And also, I believe you projected the gross margin for the next quarter. But can you project the gross margin for the rest of the year? Or at least through December? Or you don't know yet? Well, we are fully booked through the rest of the year, but there could still be changes.
Speaker Change: Felipe you project that the gross margin for the next quarter, but can you project. The gross warfarin for the rest of the year or at least through December or you don't know yet.
Speaker Change: Well, we are fully booked through the rest of the year, but there could still be changes.
Speaker Change: Uh huh.
Eric Tang: I think, Eric, maybe you can add to this. How do we, what kind of changes do we still anticipate that could affect the overall margin that we project? Okay, it will be more or less the same, actually, but usually the buyer pays to Jerash, okay, each year two times order. Okay, so now they are giving us the, I mean, another batch of order, which is projection. Usually the confirmed PO will be sent to us maybe three to four months before, I mean, actual delivery, at least four months. So this is projection. That's why, okay, Gilbert can tell you, okay, up to the first quarter, what is our actual profit margin, because it is already an actual order.
Eric Chang: I think Eric maybe you can add to this.
Eric Chang: Oh, Yeah, we are what what kind of changes do we still.
Eric Chang: Anticipate that could affect the overall margin that we that we project.
Speaker Change: Okay, it will be more or less the same exited but usually the pipe plays to garage. Okay. Each year two times orders. Okay. So now they are giving us the.
Eric Chang: The idea and that's another batch of all of that which is our projection.
Speaker Change: Usually they come from T O will be sent to us maybe a three to four months.
Speaker Change: Before I mean actual delivery at least four months. So this is Joe.
Speaker Change: Total protection, that's why okay, Ken Gilbert can tell you okay up to the first quarter of what is our actual profit margin because it is already an actual order we have to pee already but for I mean September August Okay. We still are waiting for the efficient so appeal from the buyer auto more or less the same.
Eric Tang: We have the PO already. But for, I mean, September onwards, okay, we still are waiting for the official PO from the buyer, although more or less the same, okay, and there will be a little bit changes in sometimes the top, but the price usually will be the same. So this is the reason why until December, we cannot give you an actual profit margin percentage, but it will be more or less the same as we project. Okay.
Speaker Change: Okay, and they will be a little bit changes in sometimes the figure the top but the price you usually will be the same. So this is the reason why until December we cannot give you an actual profit.
Speaker Change: Paul but margin percentage, but it will be more or less the same as we project.
Speaker Change: Hum.
Speaker Change: And May I say, I mean, because of the tariff issue.
Sam Choi: And may I say, I mean, because of the television issue. There's already a trend that some customers are moving. they are sourcing from China of Southeast Asia to Jordan. And through that transition, Jerash can pitch a more higher gross profit margin from those orders. brand name like Food Joy, or even like Worm. they are willing to place in a duty-free country to secure their production and their supply. So for that kind of order, Jerash can reach a relatively higher margin and efficiency.
Speaker Change: They're already a trend that some customers are moving.
Speaker Change: Yeah I'm.
Speaker Change: Sourcing from China, South East Asia to Jordan, and fruit X transition duress can teach them more high gross profit margin from those orders.
Speaker Change: Brand name life for Joy.
Speaker Change: Or even like Wal Mart, you know they are willing to pay.
Speaker Change: M. A T P country to secure their production and they are supply yeah and.
Speaker Change: And so that kind of all the tourists and pitch them relatively higher margin and efficiency yeah.
Speaker Change: My other question is the August they mentioned geopolitics several times during this call and I understand the cross sell more slanted towards your factory and free samples and very interested but how much do you think the oh persistent issues is a mid August.
Sam Choi: My other question is, we obviously mentioned geopolitics several times during this call, and I understand that customers come to tour your factory and try samples and were interested, but how much do you think the persistent issues with Middle East political issues hold them back from, you know, working with you long-term? Are they really concerned that something may be even worse in a year, or it's not something that really comes into play? Well, of course, how the Middle East conflict will play out is anybody's guess.
Speaker Change: Political issues hold them back from working with your long term as it really concerned that something may be even worse than a year or it's not something that is really comes into play.
Speaker Change: Well first the holiday or the middle East conflicts.
Speaker Change: Will play out is anybody's guess.
Sam Choi: and uh... So far, Jordan is still considered the most peaceful and the safest country within the Middle East, even though it's in between Israel and Iraq and Iran. Jordan is able to stay out of the conflict and the missiles are going around Jordan for those two countries to hit each other. So the US has the most interest in keeping Jordan to be a peaceful and safe place. many countries, when they evacuate their citizens from Israel as they are doing right now. They actually moved their citizens away from Israel into Jordan because they believe Jordan would be a safe haven for their citizens.
Speaker Change: And.
Speaker Change: So far Jordan is still.
Speaker Change: Consider the most a peaceful and the safest country.
Speaker Change: Within the Middle East, even though is in between Israel, and and in Iraq, and Iran, but.
Speaker Change: Jordan is able to stay out of the conflict and the missiles.
Speaker Change: Going around Jordan.
Speaker Change: Two for those two countries do it to.
Speaker Change: You try to.
Speaker Change: So and in U S has to has the most interest in keeping Jordan T V a peaceful and safe place.
Speaker Change: Many countries when they.
Speaker Change: Evacuate their citizens from Israel.
Speaker Change: They are doing right now.
Speaker Change: They actually move their citizens away from eat away from Israel into Jordan, because they believe Jordan would be a safe haven for their citizens.
Sam Choi: Obviously, people cannot fly out of Israel. Tel Aviv is closed, shut down the airport. So they have to get to somewhere if they want to go back to their country. And the first choice is go to Jordan. and anyone who has visited Jordan, a lot of our new customers, once they came to Jordan, they would agree that this is a very safe and calm place. So, unless they have never visited Jordan, they shouldn't have a concern of. the safety. the continuity of doing business in Jordan.
Speaker Change: Obviously.
Speaker Change: People cannot fly out of Israel.
Speaker Change: Tel Aviv is is close to shut down the airport. So they have to get up to somewhere if they wanted to go back to their country.
Speaker Change: And the first choice is go to Jordan.
Speaker Change: And anyone who has visited Jordan a lot of our new customers once they came to Jordan.
Speaker Change: They would agree that this is a very safe and and comm plays.
Speaker Change: So unless they have never visited Jordan.
Speaker Change: They are they shouldn't have a concern.
Speaker Change: Of.
Speaker Change: The safety.
Speaker Change: The continuous T of doing business in Jordan.
Speaker Change: Okay.
Sam Choi: Okay, I mean, that's great to hear.
Speaker Change: Okay. I mean, that's a great. This year Oh My last question. That's also on Geo politics is how are you getting your supplies because at some point of time a year ago, you had trouble because of who these are getting your supplies, obviously, Brian Asia is that do you.
Sam Choi: My last question that's also on geopolitics is, how are you getting your supplies? Because at some point of time, a year ago, you had trouble because of Hooties getting your supplies, obviously, from Asia. Is that, do you guys have alternatives? You don't anticipate anything? Or how do you think about this? Because, you know, we don't know what may happen in a few weeks if Hooties will become, targeting the ships? Or how do you guys think about that?
Speaker Change: If you don't anticipate anything or how do you think about this because.
Speaker Change: If you talk about what may happen in a few weeks at who just won't be comstock targeting the shapes or how do you guys think about that.
Speaker Change: Yeah learning from that experience, a year ago, which which mainly the fourth quarter of fiscal of 'twenty 'twenty four and the first quarter of 2025 during that six month period was when we lost so much money because of this oh.
Sam Choi: Yeah, learning from that experience a year ago, which mainly the fourth quarter of fiscal 2024 and the first quarter of 2025, during that six-month period was when we lost so much money because of this supply chain issue. We couldn't get containers into Jordan. We tried many different ways, sometimes even have to air freight some very urgent fabrics or supplies into Jordan. So that was what caused us to lose money in the fourth quarter of 24 and the first quarter of 25. So we learned the lesson from this, and now we have multiple alternatives of routes.
Speaker Change: Supply chain issue.
Speaker Change: Shouldn't get containers into Jordan.
Speaker Change: We try many different ways, sometimes even have to airfreight, some very virgin fabrics or supplies into Jordan.
Speaker Change: So that was what caused us to lost money in the fourth quarter of <unk> 24 in the first quarter of 'twenty five.
Speaker Change: So we learn the lesson from this and now we have.
Speaker Change: Multiple alternatives of rounds.
Sam Choi: getting supplies and materials from Asia into Aqaba, into our, into the port in Jordan. In addition to that, we have also strengthened our sourcing within the region, sourcing of fabrics and supplies in the countries like Turkey and Egypt, so that it will shorten the lead time of getting supplies in. comparing to relying on a supply chain from China or other Asian countries. Okay, that's great to hear.
Speaker Change: Getting supplies and materials from Asia into basketball into our seem to the port in Jordan.
Speaker Change: In addition to that we have also strengthened our sourcing.
Speaker Change:
Speaker Change: Within the region sourcing of fabrics and supplies in the countries like Turkey and in Egypt. So that it will shorten the lead time of getting supplies in.
Speaker Change: Comparing to are relying on the sourcing with eye on our supply chain from China or other Asian countries.
Speaker Change: Okay. That's great. This year I don't have any more questions. Thank you.
Sergio Novkarertsev: I don't have any more questions. Thank you.
Speaker Change: Thank you. Thank you you're welcome.
Speaker Change: Thank you very much while we appear to have reached the end of our question and answer session I will now hand back over to Simon.
Speaker Change: For any closing comments.
Speaker Change: Yeah.
Sam Choi: Thank you, Tramie, and thanks to all of you for joining us today. We are certainly in interesting times and appreciate your continued support.
Speaker Change: Thank you Jeremy.
Speaker Change: Thanks to all of you for joining us today.
Speaker Change: We are certainly interesting times and I appreciate your continuous support.
Operator: We look forward to speaking with you next quarter. Thank you very much. Thank you.
Speaker Change: We look forward to speaking with you this quarter. Thank you very much.
Speaker Change: Thank you very much. Thank you conclude today's conference you may disconnect. Your phone lines at this time and have a wonderful day, we thank you for your participation.
Operator: This does conclude today's conference. All phone lines at this time. Thank you, Jay. Thank you.
Jeff: Thank you Jeff. Thank you thank.
Speaker Change: Thank you.