Jerash Holdings(JRSH) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue for the fiscal twenty twenty five fourth quarter increased by 35.6% to $29.3 million from $21.6 million in the same quarter last year [13] - Gross profit for the fiscal twenty twenty five fourth quarter advanced nearly 250% to $5.2 million from $1.5 million in the same quarter of last year, with gross margin increasing to 17.9% from 7% [14] - Net loss was reduced to $144,000 or $0.01 per share for the fiscal twenty twenty five fourth quarter from a net loss of $3.1 million or $0.25 per share in the same period last year [16] - Revenue for the fiscal year ended March 31, 2025, reached a record high of $146 million [17] Business Line Data and Key Metrics Changes - The company is experiencing strong demand from existing customers and an increase in inquiries from new brands and large apparel manufacturers [4] - The strategic collaboration with Hanseltexa is expected to enhance margins compared to traditional contract manufacturing [9] - The company plans to terminate the joint venture with Brusena due to limited progress and focus on diversifying its customer base [6] Market Data and Key Metrics Changes - Global brands are actively seeking manufacturing alternatives out of China and Southeast Asia due to tariff uncertainties, positioning the company favorably [6] - The company is well-positioned to meet growing demand supported by Jordan's free trade agreements with the EU, UK, and Canada [6] Company Strategy and Development Direction - The company aims to diversify its direct customer base and expand its product mix to increase year-round capacity utilization and reduce revenue seasonality [6] - Expansion at the existing manufacturing facility in Arman is expected to increase production capacity by approximately 15% starting in the second fiscal quarter [11] - The company is assessing long-term expansion plans for manufacturing and warehousing facilities on previously purchased land [11] Management's Comments on Operating Environment and Future Outlook - Management noted that revenue remains affected by logistic disruptions due to geopolitical instability, particularly at Israel's Haifa Port [4] - The company expects revenue for the fiscal twenty twenty six first quarter to be approximately $38 million to $40 million, pending shipping conditions [17] - Management expressed confidence in maintaining healthy gross margins despite competitive pressures [56] Other Important Information - The Board of Directors approved a regular quarterly dividend of $0.05 per share payable on June 6, 2025 [18] Q&A Session Summary Question: Incremental costs of moving ports - The cost to transport goods to Aqaba is lower than to Haifa, with trucking costs being approximately 34-40% less [20][22] Question: Timing of orders and cancellations - There have been no order cancellations; the shifts in timing are due to congestion at Haifa [24][25] Question: Decision to dissolve the joint venture with Brusena - The joint venture was terminated due to limited progress, and the company can handle customers independently [26][27] Question: Impact of tariffs on sourcing - The urgency to find alternative suppliers has increased due to tariffs, with Jordan being a competitive option [41][42] Question: Long-term expansion plans - The company is holding off on new facilities due to geopolitical instability but will continue to explore options [48][49] Question: Concerns about geopolitical issues - Jordan is considered a safe and stable country, and customers have shown interest in visiting and working with the company [65][66] Question: Supply chain alternatives - The company has developed multiple routes for sourcing supplies and strengthened regional sourcing to mitigate past supply chain issues [70]