Speaker #1: Mode. Later, you'll have the opportunity to ask questions during the Q&A session. You may register to ask a question at any time, by pressing the star and 1 on your telephone keypad.
Speaker #1: Please note this call is being recorded, and I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Brendan Hopkins.
Speaker #1: Please go ahead.
Speaker #2: Thank you, and thank you all for joining us today. We have a brief safe harbor, and then we'll get started. So, except for historical information contained herein, the statements in this conference call are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Speaker #2: Forward-looking statements involve known and unknown risks and uncertainties that may cause our actual results and future periods to differ materially from forecasted results. With that said, I would like to turn the call over to Warren Kruger, CEO of GREYSTONE.
Speaker #3: Oh, good afternoon, everyone. I'm pleased that you've joined us today. And I wanted to give you an update on where we stood. The last quarter was a difficult call for me because it was a more trying, and today I can offer up a better outlook of where GREYSTONE is.
Speaker #3: We continue to make a continual progress on the sales front. You can see by sales, our sales have not picked up dramatically. We've had some good things happen.
Speaker #3: Recently, I've signed nondisclosures with 3 international groups to manufacture pallets for them. In the United States, that's very positive. And one of those 3, we actually— they purchased some tooling, and we got the tooling in last week from Taiwan, where we made the tools.
Speaker #3: And we have produced sample parts for them, and it's a— they're very very pleased. So that opportunity is about, as with all these things in the sales cycle, about 45 days behind, but we're on track there.
Speaker #3: And again, the other 2 opportunities, we have a— the packaging show starting— it starts Sunday in Chicago. It's an annual packaging show, and I'll be there Monday, Tuesday, and Wednesday.
Speaker #3: And I have meetings with the international— our new opportunities. So we're looking forward to running some revenue through our machines. There are, of course, risks and uncertainties, but I'm very cautiously optimistic now that we are finally on track to get where we need to be.
Speaker #3: I've got— for 2027 calendar year, we have a bunch of them in the pipeline that we've penciled in, and so last month we had a nice $500,000 order come through, and so we'll be completing at— through this month.
Speaker #3: And that, with our steady businesses, it helps on the cash flow side. I will say cash flow is— we watching— we're watching things like a hawk.
Speaker #3: Of course, we're only spending and making capital expenditures on operating equipment where we need to do the right thing. On maintenance and so forth.
Speaker #3: But we are focusing on sales, I've— I am discussing with others trying to get a sales group aligned with us. So we're working on that.
Speaker #3: And I think in the next 90 days, some really, really, really positive things are going to happen for us. So I do want to say that we had a product, and I can— I think I can mention this name.
Speaker #3: I don't think we have a nondisclosure. We've been working with QuickCrete for many years, about 6 years. And the gentleman we were working with, was working out of the San Antonio— one of their facilities there, and we were trying— we were testing one of our newer products that's probably the most robust product we have.
Speaker #3: And we'd put cellular tracking technology in there, and the interesting thing with that is it is a lease pool type of program that we're heading towards.
Speaker #3: And QuickCrete has their own pallet pool. So this isn't a— and it's a wooden pallet pool. So this is a very, very, very interesting opportunity for us because of the size and scope of their organization.
Speaker #3: Of course, with all things, like I said, we were working with a gentleman for 6 years who left, so now we're working with new people to bring that opportunity to fruition.
Speaker #3: We're also working with a couple other— while we had IGPS, the giant leasing company that we've manufactured for, we were prohibited from doing business in a leasing world.
Speaker #3: So we have some leasing companies that have been working with us. I've got 3 nice, nice opportunities that are with 3 different organizations. For a pooling programs, and we're excited about those because those are with tools that we already have.
Speaker #3: We don't have to create new tools. These are with tool— existing tools that we have. And just so everyone understands, in this world, everything's large.
Speaker #3: The tooling, the tools are 40,000 pounds, a piece. The injection machine's at 3,300 tons, pressure. These are massive machines that are 2.5 million dollars a pop.
Speaker #3: And so we have a wonderful asset base and, again, we just need to fill the revenue side. So I'd love it if someone out there in this audience said, "Gosh, I know the QuickCrete people." So that would be a wonderful addition.
Speaker #3: But I'm— you can see from our filing, our cash flows tenuous. We have steady customers that have been customers for 20 years. A continued order.
Speaker #3: So we have a nice base. But the nice base is not enough. And it's on my shoulders to continue to bring in revenue. And so that's what I have been focusing on, and that's what I'm working for our shareholder base to bring on new customers.
Speaker #3: So that being said, I'm— I'd love to take questions from people out there. So if you have any, let me know. If not, know that we're working very hard for our shareholders.
Speaker #2: And at this time, we will open the question and answer session. If you would like to ask a question, please press star and 1 on your telephone keypad, and you'll be placed into the queue in the order received.
Speaker #2: You may remove yourself from the queue at any time by pressing pound and 1. Once again, to ask a question, press star 1 now.
Speaker #2: And our first question will come from Adam Postner. Please go ahead.
Speaker #1: Hey, Warren, thanks for your time as always. Sounds like a lot of exciting things coming down the line and everything here. We just wanted to ask you how sort of morale the teams doing, and I know it's been a tough time that sounds like we're getting to the other side of it, but how's everybody sort of doing with that?
Speaker #3: Adam, that's a really good question because one of my— one of the things in my life is I love people and I love to work with people, and some of the people that I've worked with, it's been 25 years.
Speaker #3: And these are relationships that aren't built overnight. And so they have faith in what we're doing. They have faith in each other. And so that helps.
Speaker #3: But it's— I will tell you, it's been very trying. When we last December, we laid off hundreds, and we are running a lean machine now.
Speaker #3: As we should, always, but we are running a really lean machine now because we are watching the cash. And so we're also— my board has instructed me to continue to look for opportunities out there.
Speaker #3: With partnerships, and so we are working on those types of things. So I really appreciate it. The team is holding up well. But they also have to be reassured.
Speaker #3: And I've told them, you know, this— we've been through a swoon like this before, and this is something we'll come out on the other side.
Speaker #3: So thank you very much for asking because we have wonderful, wonderful people, and I will tell you, many of them have been there for their entire career.
Speaker #3: So I care about them, and they care about the company.
Speaker #1: Makes sense. Warren, thank you so much as always.
Speaker #3: Thank you, Adam.
Speaker #2: And as a reminder, if you'd like to ask a question, please signal by pressing star 1. And we'll move next to Eric Nickerson. Please go ahead.
Speaker #4: Yeah, hi Warren. You may be pleased to know that there's at least 1 person out here who reads your filings. And that's just a few questions to ask that kind of jumped out at me from this 10Q.
Speaker #4: I noticed we had 6 million something in sales last quarter, and 5 million and something in cost of goods sold. So I'm kind of wondering if you're logging 3 quarters of a million dollar gross loss on sales.
Speaker #4: Are there some sales in there that maybe we shouldn't be doing?
Speaker #3: No, the depreciation— it skews that, just so you know. Our depreciation's great. We have over— I don't have the numbers right in front of me, but you'll notice it's 400 and— yes, I do have the numbers in front of me.
Speaker #3: It's 400 and— let's see, in May, the depreciation's going to run 460,000 dollars a month, and that goes up in cost. The way they book it kind of goes up in cost of goods sold.
Speaker #3: So it skews. It skews.
Speaker #4: You run depreciation as part of the cost of goods sold, then?
Speaker #3: That's exactly right. Yeah, for the machine cost. Yeah. Yeah. That's a good catch. That's a very good catch. I appreciate that you looked at it.
Speaker #3: Let me mention a couple other things, Eric, while you're— since you've asked. I just had a meeting today with our lead bank, and that's IBC.
Speaker #3: Because I give them a 6-month projection, and then I kind of tell them where they are. And they are— it's a wonderful institution, and they've been working extremely well with us.
Speaker #3: And they— we, of course, were interested only through year-end. The notes that both those notes, not the working capital line, but both the notes, they are running— they run probably through, I think, 30, 20, 30 or something there.
Speaker #3: They're out there quite a bit. But because of our position and the way we— and our auditors made us put everything current. As though everything's due today.
Speaker #3: And it's really not. So just so that since you're asking questions on the balance sheet, you know, we do have an interest only, and our payments don't renew until after the first of the year.
Speaker #4: Yeah, I understand that. You explained that pretty well in the last call, last quarter. It's there for anybody to read. I'm good with that.
Speaker #4: This might be an accounting magic, but we logged a 2.5 million dollar loss in the quarter. And a 398,000 dollar provision for income taxes.
Speaker #4: How does that happen?
Speaker #3: Believe me, if I wish I was a CPA, I wish I— it is— it'll be reversed. And that's what I've said. And it's, again, it's an— one of those auditors things that they make you do these silly entries.
Speaker #3: And I don't understand it, frankly, to tell you the truth. And I will tell you, if you want— you and I can connect— sometime in the next week or so, and I'll try to get you an answer for that.
Speaker #3: Is that okay?
Speaker #4: Oh, yeah, sure. I know accounting magic— weird things like that happen. I'm not real concerned about it. I was just curious. Just one more.
Speaker #4: Just jumping down to the cash flow statement. A 3.25 million dollar increase in accounts payable. Does that mean we're really stretching our suppliers on payments pretty severely?
Speaker #1: Yeah. Yeah, we are
Speaker #3: stretching some. We are. We're, believe me, we're watching every dime we spend, and we know that we're running at a cash deficit. So, I mean, it's— so we understand that we have to use all the tools and our toolbox.
Speaker #3: And that is one of them.
Speaker #4: Okay. We're hanging in there. It sounds like some good things do need to happen pretty soon.
Speaker #3: Well, I'm going to mention— yeah, well, Eric, I'm going to mention something to you, which I'm not sure that you know. Since you read everything, you know, but I'm personally guaranteed— I personally guarantee all the debt for the company, which is very strange in a public arena.
Speaker #3: So on that 12.5 million dollars, I'm a guarantor. So there's no one more motivated than me to make things work. Just so you know, I'm not sure that you knew that or not.
Speaker #4: I did know that, yeah. It's all disclosed. Various places. And that's great. I mean, it's a— I know it's a considerable contribution on your part to be personally guaranteeing company debt.
Speaker #3: Well, I also, in 33% of the common too, so. Yeah. I'm pretty motivated.
Speaker #4: That's why you do it. Okay, well, that's all I had. Thanks for having run in the call, and press on. Maybe you'll land some of these deals.
Speaker #3: Okay, Eric. Thank you so much.
Speaker #2: And as a reminder, if you'd like to ask a question, please signal by pressing star 1 at this time. And once again, that's star 1.
Speaker #2: If you'd like to ask a question, we'll pause for just a moment to allow everyone an opportunity to signal. And Mr. Kruger, it appears there are no further questions at this time.
Speaker #2: I'll turn the conference back to you for any additional or closing remarks.
Speaker #3: Oh, thank you very much. Again, I want to appreciate— I want to appreciate and say thank you so much for being on this call today.
Speaker #3: I appreciate you being a shareholder, and I— we have a great product. I think we have the best product in the United States. So I'm— I think that we just need to fill our sales channel, and not with just the pipeline.
Speaker #3: We don't— the pipeline's great, but the pipeline needs to be inked. And that's what we're working for every day, is inking more business. And so I appreciate you guys at any time anyone wants to reach out to me on the side, on my emails out there, my phone numbers out there.
Speaker #3: You guys just— anyone's welcome to reach out to me. So thank you much once again for being a shareholder.
