Q1 2027 Jerash Holdings (US) Inc Earnings Call

August 10, 2026

Speaker #1: Good day, everyone. Welcome to the Jerash Holdings fiscal 2027 first quarter financial results. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions and comments after the presentation.

Operator: Good day, everyone. Welcome to the Jerash Holdings fiscal 2027 Q1 Financial Results. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Roger Pondel, Investor Relations. The floor is yours.

Speaker #1: It is now my pleasure to turn the floor over to your host, Roger Pondel, Investor Relations. The floor is yours.

Speaker #2: Thanks so much, operator. Good morning, everyone. Welcome to Jerash Holdings fiscal 2027 first quarter conference call. I'm Roger Pondel with Pondel Wilkinson, Jerash Holdings Investor Relations firm.

Roger Pondel: Thanks so much, operator. Good morning, everyone. Welcome to Jerash Holdings fiscal 2027 Q1 Conference Call. I'm Roger Pondel with Pondel Wilkinson, Jerash Holdings investor relations firm. On the call today from the company, our Chief Executive Officer, Sam Choi, Chief Financial Officer, Gilbert Lee, and Eric Tang, who leads the company's operations in Jordan. Also, Ringo Ng, the company's Head of Marketing, will be on the call for the Q&A session. Before I turn the call over to Sam, I want to remind our listeners that today's call may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Speaker #2: On the call today from the company, our chief executive officer, Sam Choi, chief financial officer, Gilbert Lee, and Eric Tang, who leads the company's operations in Jordan.

Speaker #2: Also, Ringo Ng, the company's head of marketing, will be on the call for the Q&A session. Before I turn the call over to Sam, I want to remind our listeners that today's call may include forward-looking statements within the meaning of the private securities litigation reform act of 1995.

Roger Pondel: Also, Ringo Ng, the company's Head of Marketing, will be on the call for the Q&A session. Before I turn the call over to Sam, I want to remind our listeners that today's call may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Speaker #2: Such forward-looking statements are subject to numerous conditions, many of which are beyond the company's control, including those described in the risk factor section of the company's most recent Form 10-K, as filed with the Securities and Exchange Commission. Copies of this filing are available on the SEC's website at www.sec.gov, along with other company filings made with the SEC from time to time.

Roger Pondel: Such forward-looking statements are subject to numerous conditions, many of which are beyond the company's control, including those set forth in the risk factor section of the company's most recent Form 10-K, as filed with the Securities and Exchange Commission, and copies of which are available on the SEC's website at www.sec.gov, along with other company filings made with the SEC from time to time. Actual results could differ materially from these forward-looking statements, and Jerash Holdings undertakes no obligation to update any forward-looking statements except as required by law. With that, it is my pleasure to turn the call over to Sam Choi. Sam?

Speaker #2: Actual results could differ materially from these forward-looking statements, and Jerash Holdings undertakes no obligation to update any forward-looking statements except as required by law.

Roger Pondel: Actual results could differ materially from these forward-looking statements, and Jerash Holdings undertakes no obligation to update any forward-looking statements except as required by law. With that, it is my pleasure to turn the call over to Sam Choi. Sam?

Speaker #2: And with that, it is my pleasure to turn the call over to Sam Choi. Sam?

Speaker #3: Thank you, Roger. We are pleased to report another quarter of exceptional financial performance. Highlighted by record revenue, improved gross margins, and a significant increase in profitability.

Sam Choi: Thank you, Roger. We are pleased to report another quarter of exceptional financial performance, highlighted by record revenue, improved gross margins, and a significant increase in profitability. This strong result reflect the continued advantages of our Jordan-based manufacturing platform, combined with disciplined execution on delivery, quality, and operational efficiency. Fiscal Q1 revenue reached a record level of more than $15 million, representing growth of nearly 27% compared with the prior year period. We are pleased to see increased order volumes from our two largest US customers, along with continued contributions from the company's strategic partner, Hansol Group in Korea. As customer demand continues to grow, we are expanding our production capacity in a disciplined manner while maintaining the quality, reliability, and service standards our customers expect. The strong momentum in our business reinforces our confidence in Jerash ability to scale efficiently and deliver sustainable growth.

Speaker #3: This strong result reflects the continued advantages of our Jordan-based manufacturing platform. Combined with disciplined execution on delivery, quality, and operational efficiency, fiscal first quarter revenue reached a record level of more than $15 million, representing growth of nearly 27% compared with the prior year period.

Sam Choi: Fiscal Q1 revenue reached a record level of more than $15 million, representing growth of nearly 27% compared with the prior year period. We are pleased to see increased order volumes from our two largest US customers, along with continued contributions from the company's strategic partner, Hansol Group in Korea.

Speaker #3: We are pleased to see increased order volumes from our two largest U.S. customers, along with continued contributions from the company's strategic partner, Hensel Group in Korea.

Speaker #3: As customer demand continues to grow, we are expanding our production capacity in a disciplined manner while maintaining the quality reliability and service standards our customers expect.

Sam Choi: As customer demand continues to grow, we are expanding our production capacity in a disciplined manner while maintaining the quality, reliability, and service standards our customers expect. The strong momentum in our business reinforces our confidence in Jerash ability to scale efficiently and deliver sustainable growth.

Speaker #3: This strong momentum in our business reinforces our confidence in Jerash's ability to scale efficiently and deliver sustainable growth. In addition to our operational achievements, we are encouraged by recent trade developments that further strengthen our competitive position in the marketplace.

Sam Choi: In addition to our operational achievements, we are encouraged by recent trade developments that further strengthen our competitive position in the marketplace. The newly announced duty-free access for Jordanian apparel and textile exports to the US is a meaningful advantage for Jerash and reinforces our standing as a preferred manufacturing source for leading global brands and retailers. We believe this favorable trade environment will support future growth, create opportunities to attract new customers and strategic partners, and enhance our ability to deliver long-term value for our customers and shareholders. While our outlook remains positive, we are closely monitoring geopolitical developments in the Middle East that could affect near-term regional market conditions, including export logistics and transportation costs for raw materials sourced from Asia.

Speaker #3: The newly announced duty-free assets for Jordanian apparel and textile exports to the US is a meaningful advantage for Jerash and reinforces our standing as a preferred manufacturing source for leading global brands and retailers.

Speaker #3: We believe this favorable trade environment will support future growth, create opportunities to attract new customers, and strategic partners and enhance our ability to deliver long-term value for our customers and shareholders.

Sam Choi: We believe this favorable trade environment will support future growth, create opportunities to attract new customers and strategic partners, and enhance our ability to deliver long-term value for our customers and shareholders.

Speaker #3: While our outlook remains positive, we are closely monitoring geopolitical developments in the Middle East that could affect near-term regional market conditions including export logistics and transportation costs for raw materials sourced from Asia.

Sam Choi: While our outlook remains positive, we are closely monitoring geopolitical developments in the Middle East that could affect near-term regional market conditions, including export logistics and transportation costs for raw materials sourced from Asia.

Speaker #3: Although these factors may create periodic challenges, we believe our strong customer relationships, operational flexibility, and growing attractiveness in the marketplace position us well to navigate a dynamic environment and continue supporting our customers' needs effectively.

Sam Choi: Although these factors may create periodic challenges, we believe our strong customer relationships, operational flexibility, and growing attractiveness in the marketplace position us well to navigate a dynamic environment and continue supporting our customers' needs effectively. We remain focused on executing our growth strategy, investing in capacity and capabilities, and leveraging the unique advantages of our manufacturing platform. With an expanded customer base, product mix, and favorable trade conditions, we believe Jerash is well-positioned to capitalize on emerging opportunities in the years ahead. With that, I will now turn the call over to Eric Tang, who is in charge of our operations in Jordan. Hi, Eric.

Sam Choi: . We remain focused on executing our growth strategy, investing in capacity and capabilities, and leveraging the unique advantages of our manufacturing platform. With an expanded customer base, product mix, and favorable trade conditions, we believe Jerash is well-positioned to capitalize on emerging opportunities in the years ahead. With that, I will now turn the call over to Eric Tang, who is in charge of our operations in Jordan. Hi, Eric.

Speaker #3: We remain focused on executing our growth strategy investing in capacity and capabilities and leveraging the unique advantages of our manufacturing platform. With an expanded customer base, product mix, and favorable trade conditions, we believe Jerash is well positioned to capitalize on emerging opportunities in the years ahead.

Speaker #3: With that, I will now turn the call over to Eric Tang, who is in charge of our operations in Jordan. Hi, Eric.

Speaker #4: Thank you, Sam. We had a very active fiscal first quarter. Driven by increased production for our two largest customers, a new style orders placed by Hensel.

Eric Tang: Thank you, Sam. We had a very active fiscal Q1, driven by increased production for our two largest customers and new style orders placed by Hansol. We continue to actively respond to a growing volume of inquiries, particularly following the recent US-Jordan trade agreement announced in July. By reinforcing the benefits of the original 2001 free trade agreement with zero duty for Jordanian apparel and textile exports, the new agreement further enhanced Jordan's attractiveness as a sourcing hub for the US market. As one of the country's leading apparel manufacturers, Jerash is uniquely positioned to capitalize on this favorable trade environment and convert new opportunities into long-term customer relationships. We are pleased to have received additional orders from Hansol, including expanded product categories and higher unit sales price.

Speaker #4: We continue to actively respond to a growing volume of inquiries particularly following the recent US-Jordan trade agreement announced in July. By reinforcing the benefits of the original 2001 three-trade agreement with zero duty for Jordanian apparel and textile exports, the new agreement further enhanced Jordan's attractiveness as a sourcing hub for the US market.

Eric Tang: By reinforcing the benefits of the original 2001 free trade agreement with zero duty for Jordanian apparel and textile exports, the new agreement further enhanced Jordan's attractiveness as a sourcing hub for the US market.

Speaker #4: As one of the country's leading apparel manufacturers, Jerash is uniquely positioned to capitalize on this favorable trade environment and convert new opportunities into long-term customer relationships.

Eric Tang: As one of the country's leading apparel manufacturers, Jerash is uniquely positioned to capitalize on this favorable trade environment and convert new opportunities into long-term customer relationships. We are pleased to have received additional orders from Hansol, including expanded product categories and higher unit sales price.

Speaker #4: We are pleased to have received additional orders from Hensel. Including expanded product categories and higher unit sales price. Additional product development through another large garment conglomerate is progressing toward its final stage.

Eric Tang: Additional product development through another large garment conglomerate is progressing towards its final stage, with order placements for a well-known global brand anticipated in the near term. If completed as anticipated, these orders could further support our growth momentum in fiscal 2027. Turning to our previously announced expansion plans, we are on target to add approximately 15% of production capacity by the end of calendar year 2026, expanding two of our existing manufacturing facilities with additional production lines and 500 additional workers. The next stage of our expansion involves repurposing our most recently acquired facility into a smart warehouse and cutting operation, while also adding production lines. As part of this expansion, we are converting the facilities that currently serve as our warehouse and cutting department for additional production.

Speaker #4: With order placements for a well-known global brand and anticipated in the near term, if completed as anticipated, this orders could further support our growth momentum in fiscal 2027.

Speaker #4: Turning to our previously announced expansion plans, we are on target to act approximately 15% of production capacity by the end of calendar year 2026.

Speaker #4: Expanding two of our existing manufacturing facilities with additional production lines and 500 additional workers. The next stage of our expansion involves repurposing our most recently acquired facility into a smart warehouse and cutting operation.

Speaker #4: While also acting production lines, as part of this expansion, we are converting the facilities that currently serve as our warehouse and cutting department for additional production.

Speaker #4: This initiative is expected to enhance our operating capability with 500 new state-of-the-art sewing machines and automation, supported by approximately 1,100 additional workers. The second phase is expected to increase capacity by approximately 20% to 25%.

Eric Tang: These initiatives are expected to enhance our operating capability with 500 new state-of-the-art sewing machines and automation, supported by approximately 1,100 additional workers. The second phase is expected to increase capacity by approximately 20% to 25%, with completion targeted for around mid-calendar year 2027. Our partnership with the Jordanian Ministry of Labour to add capacity in rural communities continue to move forward. Our second satellite factory, which opened in March 2026, now supports 130 local jobs. We are currently expanding the site with additional floors, a project expected to increase overall production capacity by approximately 5%. Bring employment at the facility to as many as 250 local workers. We expect this expansion to be completed by the end of fiscal year 2027.

Speaker #4: With completion targeted for around mid-calendar year 2027. Our partnership with the Jordanian Ministry of Labor to add capacity in rural community continue to move forward.

Speaker #4: Our second satellite factory which opened in March 2026 now supports 130 local jobs. We are currently expanding the site with additional floors a project expected to increase overall production capacity by approximately 5% and bring employment at the facility to as many as 250 local workers.

Speaker #4: We expect this expansion to be completed by the end of fiscal year 2027. In addition, we continue to work closely with the Ministry of Labor on plans for a third satellite factory to create approximately 500 additional jobs in the surrounding community.

Eric Tang: In addition, we continue to work closely with the Ministry of Labour on plans for a third satellite factory to create approximately 500 additional jobs in the surrounding community, which is about one hour away from Jerash's first satellite operation in Az-Zarqa. Together, these initiatives support Jerash's growth objectives while also contributing to local employment and economic development. At the same time, we are managing through near-term logistic challenges related to the ongoing conflicts in the Middle East. Export shipments out of Haifa ports are experienced periodic delays, and the cost of transporting imported raw materials from Asia has increased since the conflict resumed in July. While this condition may increase some timing and cost pressure, we are working closely with our customers and suppliers and keep production flexibility to mitigate disruptions and maintain reliable delivery schedules. Overall, we see growth opportunities ahead.

Speaker #4: Which is about one hour away from Jerash's first satellite operation in Al-Hasa. Together this initiatives support Jerash's growth objectives. While also contributing to local employment and economic development.

Speaker #4: At the same time, we are managing through near-term logistic challenges related to the ongoing conflict in the Middle East. Export shipments out of Haifa ports are experienced periodic delays.

Speaker #4: And the cost of transporting imported raw materials from Asia has increased since the conflict resumed in July. While this condition may increase some timing and cost pressure, we are working closely with our customers and suppliers and keep production flexibility to mitigate disruptions and maintain reliable delivery schedules.

Speaker #4: Overall, we see growth opportunities ahead. Our strategic capacity expansion plans, combined with Jordan's competitive trade advantages and our reputation for quality and reliability, continue to enhance our position in the global apparel supply trade.

Eric Tang: Our strategic capacity expansion plans, combined with Jordan's competitive trade advantages and our reputation for quality and reliability, continue to enhance our position in the global apparel supply chain. With that, I will now turn the call over to Gilbert to discuss our financial results. Gilbert, please.

Speaker #4: With that, I will now turn the call over to Gilbert to discuss our financial results Gilbert, please.

Speaker #1: Thank you, Eric. Revenue for the fiscal 2027 first quarter grew 26.7% to $50.2 million, compared with $39.6 million in the same quarter last year.

Gilbert Lee: Thank you, Eric. Revenue for the fiscal 2027 Q1 grew 26.7% to $50.2 million, compared with $39.6 million in the same quarter last year. The increase was primarily driven by higher shipments to the two major US customers, as well as continuous contributions from the company's strategic partner in Korea. Gross profit increased 35.7% to $8.3 million for the fiscal 2027 Q1, from $6.1 million in the same quarter last year. Gross margin for the quarter increased 100 basis points to 16.4%, compared with 15.4% in the same period last year. The improvement was primarily driven by higher shipments to US customers that typically generate stronger margins, as well as improved efficiency gains from automation. Operating expenses totaled $5.6 million in the fiscal 2027 Q1, compared with $5.1 million in the same quarter last year.

Speaker #1: The increase was primarily driven by higher shipments to the two major US customers as well as continuous contributions from the company's strategic partner in Korea.

Speaker #1: Gross profit increased 35.7% to $8.3 million for the fiscal 2027 first quarter, from $6.1 million in the same quarter last year. Gross margin for the quarter increased 100 basis points to 16.4%, compared with 15.4% in the same period last year.

Speaker #1: The improvement was primarily driven by higher shipments to US customers, which typically generate stronger margins, as well as improved efficiency gains from automation. Operating expenses totaled $5.6 million in the fiscal 2027 first quarter, compared with $5.1 million in the same quarter last year.

Speaker #1: The increase was primarily attributable to higher sales volume, as well as increased headcount and related expenses. Operating income rose 174% to $2.6 million in the fiscal 2027 first quarter, from $959,000 in the same period last year.

Gilbert Lee: The increase was primarily attributable to higher sales volume, as well as increased head count and related expenses. Operating income rose up 174% to $2.6 million in the fiscal 2027 Q1, from $959,000 in the same period last year. Total other expenses were $546,000 in the fiscal 2027 Q1, compared with $307,000 in the same quarter last year. The increase was mainly due to higher interest expenses from supply chain financing programs used by two major customers, as well as letter of credits for raw material purchases to support growing business from Hansol. Income tax expenses were $404,000 in the fiscal 2027 Q1, compared with $329,000 in the prior year quarter. Net income advanced more than five-fold to $1.7 million, or $0.13 per diluted share in the fiscal 2027 Q1, compared with $324,000 or $0.03 per diluted share in the same quarter last year.

Speaker #1: Total other expenses were $546,000 in the fiscal 2027 first quarter, compared with $307,000 in the same quarter last year. The increase was mainly due to higher interest expenses from supply chain financing programs used by two major customers, as well as letters of credit for raw material purchases to support growing business from Hansell.

Speaker #1: Income tax expenses were 404,000 dollars in the fiscal 2027 first quarter compared with 329,000 in the prior year quarter. Net income advanced more than fivefold to 1.7 million dollars or 13 cents per diluted share.

Speaker #1: In the fiscal 2027 first quarter, compared with $324,000 or $0.03 per diluted share in the same quarter last year. Comprehensive income attributable to the company's common stockholders advanced to $1.7 million in the fiscal 2027 first quarter, compared with $328,000 in the same period last year.

Gilbert Lee: Comprehensive income attributable to the company's common stockholders advanced to $1.7 million in the fiscal Q1 2027, compared with $328,000 in the same period last year. As of 30 June 2026, cash equivalents, and restricted cash totaled $14.5 million, and net working capital was $38.1 million. Inventory was $26.6 million, and accounts receivable amounted to $5.9 million. Net cash provided by operating activities was $2.5 million for the three months ended 30 June 2026, compared with net cash used in operating activities of $6.5 million in the same period last year. On 7 August 2026, Jerash's board of directors approved a regular quarterly dividend of $0.05 per share on its common stock, payable on 24 August 2026 to stockholders of record as of 17 August 2026.

Speaker #1: As of June 30th, 2026, cash cash equivalents and restricted cash totaled 14.5 million. And net working capital was 38.1 million. Inventory was 26.6 million and accounts receivable amounted to 5.9 million.

Speaker #1: Net cash provided by operating activities was $2.5 million for the three months ended June 30, 2026, compared with net cash used in operating activities of $6.5 million in the same period last year.

Speaker #1: On August 7th, 2026, Jerash's board of directors approved a regular quarterly dividend of 5 cents per share on its common stock payable on August 24th, 2026 to stockholders of record as of August 17th.

Gilbert Lee: As Sam and Eric noted earlier, we remain optimistic about the company's future as we continue to focus on cost management and operating efficiencies, navigating current market conditions. Looking immediately ahead, we expect revenue for the fiscal Q2 2027 to be approximately $49 million to $51 million, subject to logistics efficiency amid geopolitical uncertainties. Gross margin target for the fiscal Q2 2027 is expected to be approximately 14% to 15%, taking into consideration the increased transportation costs for raw material imports. I will turn the call back to the operator as we open the call for questions.

Speaker #1: As Sam and Eric noted earlier, we remain optimistic about the company's future as we continue to focus on cost management and operating efficiencies while navigating current market conditions.

Speaker #1: Looking immediately ahead, we expect revenue for the fiscal 2027 second quarter to be approximately $49 million to $51 million, subject to logistics efficiency amid geopolitical uncertainties.

Speaker #1: Gross margin target for the fiscal 2027 second quarter is expected to be approximately 14 to 15 percent, taking into consideration the increased transportation costs for raw material imports.

Speaker #1: I will turn the call back to the operator as we open the call for questions.

Speaker #2: Certainly. The floor is now open for questions. If you have any questions or comments, please press star one on your phone at this time.

Operator: Certainly. The floor is now open for questions. If you have any questions or comments, please press star one on your phone at this time. We ask that while posing your question, you please pick up your handset as listening on a speakerphone to provide optimum sound quality. Please hold for just a few moments while we poll for questions. Your first question is coming from Ryan Myers with Lake Street Capital Markets. Please pose your question. Your line is live.

Speaker #2: We ask that, while posing your question, you please pick up your handset if listening on a speakerphone to provide optimum sound quality. Please hold for just a few moments while we pull for questions.

Speaker #2: Your first question is coming from Ryan Myers with Lake Street Capital Markets. Please pose your question. Your line is live.

Speaker #3: Hey guys. Congrats on another strong quarter here. I'm just wondering if you could start. So with the announcement of the duty free access, you know, have you seen any inbound orders from potentially new customers and then secondly, you know, what sort of capacity would you guys need to bring online and at what point potentially do you think you could do that should new orders come through with this new update to the duty free?

Ryan Myers: Hey, guys. Congrats on another strong quarter here. I'm just wondering if you could start. With the announcement of the duty-free access, have you seen any inbound orders from potentially new customers? Secondly, what sort of capacity would you guys need to bring online, and at what point potentially do you think you could do that, should new orders come through with this new update to the duty-free?

Ryan Meyers: Hey, guys. Congrats on another strong quarter here. I'm just wondering if you could start. With the announcement of the duty-free access, have you seen any inbound orders from potentially new customers? Secondly, what sort of capacity would you guys need to bring online, and at what point potentially do you think you could do that, should new orders come through with this new update to the duty-free?

Speaker #1: Yes, Ryan. We definitely have seen increased inquiries and actually purchase orders after the announcement of the free trade, or the duty free. Eric, do you want to mention a couple of the new opportunities?

Gilbert Lee: Yes, Ryan, we definitely have seen increased inquiries and actually purchase orders after the announcement of the free trade or the duty-free. Eric, do you want to mention a couple of the new opportunities?

Speaker #3: Yes.

Speaker #1: After the announcement?

Eric Tang: Yes.

Gilbert Lee: -after the-

Eric Tang: Yes

Gilbert Lee: announcement?

Speaker #3: I guess, yeah. After the announcement of the, I mean, new tariff system applied to Jordan, which is a zero duty. So for the old customer—okay, like we have with our biggest customer, okay.

Eric Tang: Yeah. After the announcement of the new tariff system applied to Jordan, which is zero duty. For the old customer, like VF is our biggest customer, okay? We received the projection for the coming season, which compared with last season, is around 15, one five, 15% more than last year. At the same time, we also received some more inquiries from importers, new importers from US, and all importers also receive more inquiries for order placement. I think Jordan is now become the most competitive manufacturing hub. This is the reason why we get so many inquiries when we expect the orders will be coming shortly and, compared with last year, it will be increased significantly.

Speaker #3: So, we received the projection for the coming season, which, compared with last season, is around 15 to 15 percent more than last year. At the same time, we also received some more inquiries from a new importer for you from the US, and all importers also received more inquiries.

Speaker #3: For all the placement. So I think we are also Jordan is now become the most competitive manufacturing hub. This is the reason why we get so many inquiry when we expect the orders will be coming shortly and and on compared with the last year, it will be increased significantly.

Speaker #3: Got it. No, that's also just a ringo. Maybe I can add one more thing about the new customer. Actually, I just took a business trip to New York and just came back, and we have successfully opened a few new customers.

Ryan Myers: Got it. No, that's great.

Ryan Meyers: Got it. No, that's great.

Ringo Ng: This is Ringo. I add one more about the new customer. Actually, I just take a business trip back to New York and just come back, and we have successfully opened a few new customer, like Urban Outfitters. That's a very big potential customer. We just opened that this year. We forecast for the first year already $5 million order business. We're still waiting for another three brand like Lee, Wrangler, and Reebok. Since they know Jordan is a zero tariff, zero duty, they know our price will be very competitive. We have a lot of requirements. Also, even Nordstrom, they want us to do something new, like the down jacket, which is the value is very high, and the padding jacket. All these new opportunity is coming.

Speaker #3: Like Urban Outfitter, there's a very big potential customer. We just opened that this year we forecast for the first year already 5 million 5 million order business.

Speaker #3: And we are still waiting for another free brand like Lee, Wrangler, and Reebok. And since they know Jordan is a zero-tariff, duty-free country, they know our price will be very competitive.

Speaker #3: So we we have a lot of requirement and also even North Face they they want us to do something new like the tank jacket which is the value is very high and the padding jacket all this new opportunity is coming.

Speaker #3: Got it. No, that's great to hear. And then, you know, with some of those new opportunities, can you maybe just talk about the product mix there and maybe the potential for gross margins—largely in the second half of the year—to kind of rebound to above 15%, maybe back towards 16% or 17%? Just the potential for gross margin expansion as the product mix changes a little bit with some of these new orders.

Ryan Myers: Got it. No, that's great to hear. Then, with some of those new opportunities, can you maybe just talk about the product mix there and maybe the potential for gross margins largely in H2 to maybe kind of rebound to above 15%, maybe back towards 16%, 17%. Just the potential for gross margin expansion as maybe the product mix changes a little bit with some of these new orders.

Ryan Meyers: Got it. No, that's great to hear. Then, with some of those new opportunities, can you maybe just talk about the product mix there and maybe the potential for gross margins largely in H2 to maybe kind of rebound to above 15%, maybe back towards 16%, 17%. Just the potential for gross margin expansion as maybe the product mix changes a little bit with some of these new orders.

Speaker #1: Well, Ryan, we definitely would try to achieve a higher gross margin by working hard on improving our efficiency, as well as our our sourcing but as as we all know, once we acquire a new customer, there will be a period of time that we that we will experience a little bit of lower margin.

Gilbert Lee: Well, Ryan, we definitely will try to achieve a higher gross margin by working hard on improving our efficiency as well as our sourcing. As we all know, once we acquire a new customer, there will be a period of time that we will experience a little bit of lower margin until we get ramped up and get to a better efficiency with new customer and new products. We'll continue to diversify our customer base and continue to diversify our product mix. Like Ringo said, we have opportunities to get some new customers and try on some new products, which has a higher ASP and higher gross margin. At the beginning, I wouldn't say that we will be able to achieve a high gross margin. Especially, the gross margin is facing two separate forces.

Speaker #1: Until we until we get ramped up and get to a better efficiency with new customer and new products. So we'll continue to diversify our customer base and continue to diversify our product mix.

Speaker #1: Like Ringo said, we have opportunities to get some new customers and and try on some new products which has higher ASP and higher gross margin.

Speaker #1: But at the beginning, I wouldn't say that we will be able to achieve a higher gross margin, especially since the gross margin is facing two separate forces.

Speaker #1: One is, we will, on one hand, improve our productivity and efficiency and try to achieve a higher gross margin, and work on higher ASP products.

Gilbert Lee: One is, we will, at one hand, improve our productivity and efficiency and try to achieve a higher gross margin and work on higher ASP products. However, at this point, we are also facing some uncertainties in terms of increasing raw material costs due to the logistics interruption in the area of importing raw materials and supplies from Asia because of the regional conflict of the transportation issues. We will monitor the situation, and we will try our best to come up with alternatives and control our costs.

Speaker #1: However, at this point, we are also facing some uncertainties in terms of increasing raw material costs due to the logistics interruption.

Speaker #1: By in the area of importing raw materials and supplies from Asia. Because of the because of the regional conflicts of the transportation issues. So we will monitor the situation and we will try our best to come up with alternatives.

Speaker #1: And control our cost.

Speaker #3: Got it. No, that's helpful. Thank you, guys, for taking my questions.

Ryan Myers: Got it. No, that's helpful. Thank you guys for taking my questions.

Ryan Meyers: Got it. No, that's helpful. Thank you guys for taking my questions.

Speaker #1: Thank you.

Gilbert Lee: Thank you.

Speaker #2: Once again, if you do have any questions or comments, please press star one at this time. Again, please press star one at this time if you have any remaining questions.

Operator: Once again, if you do have any questions or comments, please press star one at this time. Again, please press star one at this time if you have any remaining questions. There appear to be no further questions in queue. I would now like to turn the floor back over to CEO, Sam Choi, for closing remarks.

Speaker #2: There appear to be no further questions in the queue. I would now like to turn the floor back over to CEO Sam Choi for closing remarks.

Sam Choi: Thank you, operator. Thanks to all of you for joining us today. We appreciate your ongoing support and interest in Jerash, and look forward to updating you on our progress in the near future. Thank you very much.

Speaker #3: Thank you, operator, and thanks to all of you for joining us today. We appreciate your ongoing support and interest in Jerash, and look forward to updating you on our progress in the near future.

Speaker #3: Thank you very much.

Speaker #2: Thank you, everyone. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.

Operator: Thank you, everyone. This does conclude today's conference call.

Sam Choi: Thank you.

Operator: You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.

Sam Choi: Thank you.

Gilbert Lee: Thank you.

Ryan Myers: Bye.

Ryan Meyers: Bye.

Q1 2027 Jerash Holdings (US) Inc Earnings Call

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