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LiveWorld Platform Integrates Smart Automation and Agents for Real-Time Customer Service, at Scale
Jul 31, 2017
OTC Disclosure & News Service
-
LiveWorld, Inc. (OTC Markets: LVWD) announced today the launch of its new customer service automation suite, further enhancing the power of its social and messaging conversation management platform for service and support organizations. This new feature set provides brands with the ability to offer dynamic and personalized customer experiences by increasing the efficiency and productivity of customer service organizations. This offering provides a real-time responsive solution to the growing volume of inquiries coming through mobile, messaging apps, and social media. By automating routine tasks and responses, brands are able to realize cost savings, scale engagement, and allow human agents to use their skills and empathy on conversations that matter most.
LiveWorld’s platform lifts the burden of administrative tasks and delivers first-line customer engagement through intelligent automation – enabling businesses to set customized rules for auto-responses, auto-scheduling, and chatbots. Rules may be set based on messaging channels, conversation topics, sentiment, customer profile, language, and more. More complex issues are immediately passed along to the appropriate team or agent. With full conversation history and customer information, agents can then respond and resolve issues quickly and effectively. The software also provides seamless bi-directional transitions between chatbots and humans, empowering brands to define their ideal blend of automation and agent engagement. LiveWorld clients have reduced their initial response time to customer requests by more than 40 percent.
“Many brands experiment with hastily produced, laissez-faire bots that have backfired, leading to frustrated customers,” said Peter Friedman, Chairman and CEO, LiveWorld. "The best customer service combines thoughtful, smart automation with human agents to better communicate with consumers.”
LiveWorld’s chatbot/human hybrid model gives agents the ability to focus on delivering the best customer experience, while reducing time and operational cost. A first-of-its-kind platform to address the growing need for brands to have real-time customer conversations on a global scale, LiveWorld’s feature set includes:
Conversation Management
Smart Triage – Offers automatic tagging, prioritization, routing, and notification of high-priority customer service requests.
Chatbot Integration – Enables first responder bots to collaborate with agents as digital assistants to answer routine tasks, while also directing more complex requests to agents, automatically or upon customer request.
Integrated Customer Profile – Provides full conversational history, CRM integration, and automatic segmentation, delivering a complete understanding of the customer for more personalized and accurate responses.
Intelligent Responses – Offers access to a library of dynamic customer responses and a customized set of rules for delivery based on customer status, time since last response, segment, or keyword.
Resolution Management
Auto-Distribution Workload Management – Implements an even workload amongst team members through inbound request balancing or round-robin team assignments.
Automation Rules – Customizes scheduling for auto re-engagement, satisfaction surveys, conversation conclusions, and more.
Conversation Analytics
Conversational Engagement – Provides view of topic popularity, sentiment, and performance of customized content categories.
Resolution Metrics – Measure time-to-resolution, first response time, and conversation resolution trends to gauge customer satisfaction.
Performance Measurement – Evaluates the performance of the customer service team with metrics, such as first response and resolution times, to educate brands on agent efficiency.
“We empower customer service teams to positively address more customers faster, effectively reducing time and costs,” says Frank Chevallier, LiveWorld Vice President of Software Products. “Our hybrid chatbot/human solution lowers the resolution time for inquiries by more than 50 percent.”
LiveWorld offers brands a conversation management solution for customer service communications across all the leading social and messaging channels, including: Facebook Messenger, Twitter DM, WeChat, Telegram, Skype, Kik, LINE, Viber, Facebook, Twitter, Instagram, YouTube, Google+, SMS, and web chat.
For more information, please visit www.liveworld.com. To schedule a demo, contact us at hello@liveworld.com.
INUV. Yes that's a good point. I read the CC and they seem to think it will do better this quarter or next. They are doing a share buy back and it was just $1.50 a few weeks ago , so I'm looking for a pop in the near future.Time will tell.
INUV $.99 Bought some today, would buy more if it keeps going down into earnings. Any thoughts any one?
I bought in at $4.82 hot weather is on the way for the next few weeks. Turn on the ac and they burn nat gas to keep us cool.
Go CHK!!
GLGI $.32 CEO continues to buy.
Just thought you might want to know.
MMMB It's the Bowser Report company of the month for April.
Last quarter i posted that at .22 i thought it was a buy. Remember the 4th and 1st quarters are strong.
The future looks bright. IMO
Yes,
The upcoming 4th and first quarter are the best so stay tuned!!
GREYSTONE LOGISTICS, INC.
(Exact name of registrant as specified in its charter)
Oklahoma 75-2954680
(State or other jurisdiction of
incorporation or organization) (I.R.S. Employer
Identification No.)
1613 East 15 th Street, Tulsa, Oklahoma 74120
(Address of principal executive offices) (Zip Code)
(918) 583-7441
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and posted on its Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to post and submit such files). Yes [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] (Do not check if a smaller reporting company) Smaller reporting company [X]
Indicate by checkmark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act). Yes [ ] No [X]
Applicable only to corporate issuers:
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: April 10, 2017 - 28,361,201
GREYSTONE LOGISTICS, INC.
FORM 10-Q
For the Period Ended February 28, 2017
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements 1
Consolidated Balance Sheets (Unaudited) As of February 28, 2017 and May 31, 2016 1
Consolidated Statements of Operations (Unaudited) For the Nine Months Ended February 28(29), 2017 and 2016 2
Consolidated Statements of Operations (Unaudited) For the Three Months Ended February 28(29), 2017 and 2016 3
Consolidated Statements of Cash Flows (Unaudited) For the Nine Months Ended February 28(29), 2017 and 2016 4
Notes to Consolidated Financial Statements (Unaudited) 5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 13
Item 3. Quantitative and Qualitative Disclosures About Market Risk 18
Item 4. Controls and Procedures 18
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 19
Item 1A. Risk Factors 19
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 19
Item 3. Defaults Upon Senior Securities 19
Item 4. Mine Safety Disclosures 19
Item 5. Other Information 19
Item 6. Exhibits 19
SIGNATURES 20
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Greystone Logistics, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
February 28, 2017 May 31, 2016
Assets
Current Assets:
Cash $ 483,027 $ 897,377
Accounts receivable -
Trade, net of allowance for doubtful accounts of $31,660 and $13,260, respectively 393,657 3,536,574
Related party receivable 121,577 150,113
Inventory 3,551,442 1,304,495
Prepaid expenses 157,501 70,058
Total Current Assets 4,707,204 5,958,617
Property and Equipment, net of accumulated depreciation 20,110,110 12,565,319
Deferred Tax Asset 726,982 1,283,682
Other Assets 11,841 23,405
Total Assets $ 25,556,137 $ 19,831,023
Liabilities and Equity
Current Liabilities:
Current portion of long-term debt $ 4,629,186 $ 2,088,327
Accounts payable and accrued expenses 2,949,117 2,642,112
Accrued interest payable – related party - 2,475,690
Preferred dividends payable 26,850 60,005
Total Current Liabilities 7,605,153 7,266,134
Long-Term Debt, net of current portion 17,783,137 13,289,236
Equity:
Preferred stock, $0.0001 par value, cumulative, 20,750,000 shares authorized, 50,000 shares issued and outstanding, liquidation preference of $5,000,000 5 5
Common stock, $0.0001 par value, 5,000,000,000 shares authorized, 28,361,201 and 27,886,201 shares issued and outstanding 2,836 2,789
Additional paid-in capital 53,790,764 53,613,811
Accumulated deficit (54,688,575 ) (55,385,912 )
Total Greystone Stockholders’ Deficit (894,970 ) (1,769,307 )
Non-controlling interest 1,062,817 1,044,960
Total Equity (Deficit) 167,847 (724,347 )
Total Liabilities and Equity (Deficit) $ 25,556,137 $ 19,831,023
The accompanying notes are an integral part of these consolidated financial statements.
1
Greystone Logistics, Inc. and Subsidiaries
Consolidated Statements of Operations
For the Nine Months Ended February 28(29),
(Unaudited)
2017 2016
Sales $ 25,759,823 $ 15,270,671
Cost of Sales 21,103,691 12,743,989
Gross Profit 4,656,132 2,526,682
General, Selling and Administrative Expenses 2,133,228 1,840,574
Operating Income 2,522,904 686,108
Other Expense:
Interest expense (832,887 ) (619,481 )
Income before Income Taxes 1,690,017 66,627
Provision for (Benefit from) Income Taxes 556,700 (39,100 )
Net Income 1,133,317 105,727
Income Attributable to Variable Interest Entities (180,466 ) (175,249 )
Preferred Dividends (255,514 ) (244,741 )
Net Income (Loss) Attributable to Common Stockholders $ 697,337 $ (314,263 )
Income (Loss) Per Share of Common Stock -
Basic and Diluted $ 0.02 $ (0.01 )
Weighted Average Shares of Common Stock Outstanding -
Basic 28,309,003 27,640,033
Diluted 28,888,170 27,640,033
The accompanying notes are an integral part of these consolidated financial statements.
2
Greystone Logistics, Inc. and Subsidiaries
Consolidated Statements of Operations
For the Three Months Ended February 28(29),
(Unaudited)
2017 2016
Sales $ 8,693,851 $ 5,280,480
Cost of Sales 6,234,807 4,574,839
Gross Profit 2,459,044 705,641
General, Selling and Administrative Expenses 745,924 601,106
Operating Income 1,713,120 104,535
Other Expense:
Interest expense (290,087 ) (232,105 )
Income (Loss) before Income Taxes 1,423,033 (127,570 )
Provision for (Benefit from) Income Taxes 502,150 (67,750 )
Net Income (Loss) 920,883 (59,820 )
Income Attributable to Variable Interest Entities (60,914 ) (58,912 )
Preferred Dividends (86,302 ) (81,796 )
Net Income (Loss) Attributable to Common Stockholders $ 773,667 $ (200,528 )
Income (Loss) Per Share of Common Stock -
Basic and Diluted $ 0.03 $ (0.01 )
Weighted Average Shares of Common Stock Outstanding -
Basic 28,361,201 27,886,201
Diluted 28,935,114 27,886,201
The accompanying notes are an integral part of these consolidated financial statements.
3
Greystone Logistics, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
For the Nine Months Ended February 28(29),
(Unaudited)
2017 2016
Cash Flows from Operating Activities:
Net income $ 1,133,317 $ 105,727
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 1,997,334 1,043,365
Decrease (Increase) in deferred tax asset 556,700 (39,100 )
Stock based compensation - 40,068
Changes in trade accounts receivable 3,142,917 (82,097 )
Changes in related party receivable 28,536 (23,492 )
Changes in inventory (2,246,947 ) (2,362,667 )
Changes in prepaid expenses (87,243 ) (82,762 )
Changes in accounts payable and accrued expenses 307,005 2,865,698
Net cash provided by operating activities 4,831,619 1,464,740
Cash Flows from Investing Activities:
Purchase of property and equipment (2,242,366 ) (3,394,268 )
Cash Flows from Financing Activities:
Proceeds from long-term debt - 2,530,072
Proceeds from revolving loan 500,000 1,200,000
Payments on long-term debt and capitalized lease (2,704,325 ) (1,249,557 )
Payments on revolving loan (275,000 ) (300,000 )
Debt issue costs (130,000 ) -
Proceeds from exercised stock options 57,000 57,000
Dividends paid on preferred stock (288,669 ) (245,631 )
Dividends paid by variable interest entity (162,609 ) (153,000 )
Net cash provided by (used in) financing activities (3,003,603 ) 1,838,884
Net Decrease in Cash (414,350 ) (90,644 )
Cash, beginning of period 897,377 598,887
Cash, end of period $ 483,027 $ 508,243
Non-Cash Activities:
Acquisition of equipment pursuant to capital lease $ 5,450,474 $ -
Acquisition of equipment from related party -
Through issuance of note payable $ 1,469,713 $ 688,296
Through decrease in related party receivable - $ 449,569
Acquisition of building with long-term debt $ 318,750 $ -
Conversion of accrued interest to long-term debt $ 2,475,690 $ -
Warrants issued $ 120,000 $ -
Preferred dividend accrual $ 26,850 $ 890
Supplemental Information:
Interest paid $ 832,887 $ 351,988
The accompanying notes are an integral part of these consolidated financial statements.
4
GREYSTONE LOGISTICS, INC.
Notes to Consolidated Financial Statements
(Unaudited)
Note 1. Basis of Financial Statements
In the opinion of Greystone Logistics, Inc. (“Greystone”), the accompanying unaudited consolidated financial statements contain all adjustments and reclassifications, which are of a normal recurring nature, necessary to present fairly its financial position as of February 28, 2017, the results of its operations for the nine-month and three-month periods ended February 28(29), 2017 and 2016, and its cash flows for the nine-month periods ended February 28(29), 2017 and 2016. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the fiscal year ended May 31, 2016 and the notes thereto included in Greystone’s Form 10-K for such period. The results of operations for the nine-months and three-month periods ended February 28(29), 2017 and 2016 are not necessarily indicative of the results to be expected for the full fiscal year.
The consolidated financial statements of Greystone include its wholly-owned subsidiaries, Greystone Manufacturing, L.L.C. (“GSM”) and Plastic Pallet Production, Inc. (“PPP”), and the variable interest entity, Greystone Real Estate, L.L.C. (“GRE”). GRE owns two buildings located in Bettendorf, Iowa which are leased to GSM.
Note 2. Earnings Per Share
Basic earnings per share is based on the weighted-average effect of all common shares issued and outstanding and is calculated by dividing net income (loss) available to common stockholders by the weighted-average shares outstanding during the period. Diluted earnings per share is calculated by dividing net income (loss) available to common stockholders by the weighted-average number of common shares used in the basic earnings per share calculation plus the number of common shares that would be issued assuming exercise or conversion of all potentially dilutive common shares outstanding.
Greystone excludes equity instruments from the calculation of diluted earnings per share if the effect of including such instruments is anti-dilutive, as follows:
2017 2016
Nine-month periods ended February 28(29):
Options to purchase common stock - 675,000
Preferred stock convertible into common stock 3,333,333 3,333,333
Total 3,333,333 4,008,333
Three-month periods ended February 28(29):
Options to purchase common stock - 675,000
Preferred stock convertible into common stock 3,333,333 3,333,333
Total 3,333,333 4,008,333
The following tables set forth the computation of basic and diluted earnings per share for the following periods:
2017 2016
Nine-month periods ended February 28(29):
Numerator -
Net income (loss) available to common stockholders $ 697,337 $ (314,263 )
Denominator -
Weighted-average shares outstanding - basic 28,309,003 27,640,033
Incremental shares from assumed conversion of options and warrants 579,167 -
Diluted shares 28,888,170 27,640,033
Loss per share -
Basic and Diluted $ 0.02 $ (0.01 )
Three-month periods ended February 28(29):
Numerator -
Net income (loss) available to common stockholders $ 773,667 $ (200,528 )
Denominator -
Weighted-average shares outstanding - basic 28,361,201 27,886,201
Incremental shares from assumed conversion of options and warrants 573,913 -
Diluted shares 28,935,114 27,886,201
Loss per share -
Basic and Diluted $ 0.03 $ (0.01 )
5
Note 3. Inventory
Inventory consists of the following:
February 28, 2017 May 31, 2016
Raw materials $ 1,162,324 $ 536,350
Finished goods 2,389,118 768,145
Total inventory $ 3,551,442 $ 1,304,495
Note 4. Related Party Transactions
Yorktown Management & Financial Services, LLC
Yorktown Management & Financial Services, LLC (“Yorktown”), an entity wholly owned by Greystone’s CEO and President, owns and rents to Greystone (1) grinding equipment used to grind raw materials for Greystone’s pallet production and (2) extruders for pelletizing recycled plastic into pellets for resale and for use as raw material in the manufacture of pallets. GSM pays weekly rental fees to Yorktown of $22,500 for use of Yorktown’s grinding equipment and $5,000 for the use of Yorktown’s pelletizing equipment for which GSM paid Yorktown rental fees of $1,100,000 for the nine months ended February 28(29), 2017 and 2016, respectively.
Effective February 21, 2017, Greystone purchased certain production equipment from Yorktown for $1,500,340 which included a cash payment of $30,627 and the assumption of a note payable with First Bank in the amount of $1,469,713 with an interest rate of 1.45% above the prime rate of interest (5.2% at February 28, 2017), and a maturity of August 21, 2021. The note with First Bank is secured by the equipment. During the period from September 2016 through January 2016, Greystone rented this equipment from Yorktown for a total of $163,204.
In addition, Yorktown provides office space for Greystone in Tulsa, Oklahoma at a monthly rental of $2,200.
TriEnda Holdings, L.L.C.
TriEnda Holdings, L.L.C. (“TriEnda”) is a manufacturer of plastic pallets, protective packing and dunnage utilizing thermoform processing for which Warren F. Kruger, Greystone’s President and CEO, serves TriEnda as the non-executive Chairman of the Board and is a partner in a partnership which has a majority ownership interest. Greystone charges a tolling fee for blending and pelletizing plastic resin using TriEnda’s equipment and raw materials. Revenue from TriEnda totaled $519,814 and $253,466 for the nine months ended February 28(29), 2017 and 2016, respectively. The account receivable from TriEnda at February 28, 2017 was $65,168.
The tolling service provided by Greystone generates a certain amount of scrap material which is purchased by Greystone. Purchases for the nine months ended February 28(29), 2017 and 2016 totaled $24,265 and $71,000, respectively. Greystone had accounts payable to TriEnda of $17,031 at February 28, 2017.
6
Green Plastic Pallets
Greystone sells plastic pallets to Green Plastic Pallets (“Green”), an entity that is owned by James Kruger, brother to Warren Kruger, Greystone’s President and CEO. Greystone had sales to Green of $220,325 and $203,562 for the nine months ended February 28(29), 2017 and 2016, respectively. The account receivable due from Green at February 28, 2017 was $73,440.
Note 5. Debt
Debt as of February 28, 2017 and May 31, 2016 is as follows:
February 28, 2017 May 31, 2016
Term note A payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.0%, maturing January 7, 2019 $ 4,797,299 $ 5,310,179
Term note B payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.0%, maturing January 7, 2019 1,962,157 2,688,659
Revolving note payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.0%, due January 31, 2019 1,900,000 1,675,000
Term note payable by GRE to International Bank of Commerce, interest rate of 4.5%, monthly principal and interest payments of $26,215, due January 31, 2019 2,886,906 3,021,734
Note payable to First Bank, prime rate of interest plus 1.45% but not less than 4.95%, monthly principal and interest payments of $30,628, due August 21, 2021, secured by equipment 1,469,713 -
Capital lease with a private pallet leasing company, interest rate of 5%, maturity of August 7, 2019 4,380,410 -
Note payable to Robert Rosene, 7.5% interest, due January 15, 2019 4,498,383 2,066,000
Note payable to Yorktown Management & Financial Services, LLC, 5% interest, due February 28, 2019, monthly principal and interest payments of $20,629 470,212 634,616
Other 316,970 50,560
Face value of long-term debt 22,682,050 15,446,748
Debt issue costs, net of amortization (269,727 ) (69,185 )
22,412,323 15,377,563
Less: Current portion (4,629,186 ) (2,088,327 )
Long-term debt $ 17,783,137 $ 13,289,236
The prime rate of interest as of February 28, 2017 was 3.75%. The prime rate of interest changed to 4% effective March 16, 2017.
7
Loan Agreement between Greystone and IBC
On January 31, 2014, Greystone and GSM (the “Borrowers”) and International Bank of Commerce (“IBC”) entered into a Loan Agreement (the “IBC Loan Agreement”). The IBC Loan Agreement provides for a revolving loan in an aggregate principal amount of up to $2,500,000 (the “Revolving Loan”) and a term loan in the aggregate principal amount of $9,200,000 (the “Term Loan”). The exact amount which can be borrowed under the Revolving Loan from time to time is dependent upon the amount of the borrowing base, but can in no event exceed $2,500,000.
On January 7, 2016, the Borrowers and IBC entered into the First Amendment to the IBC Loan Agreement (the “First Amendment”) whereby IBC made an additional term loan to Borrowers in the original principal amount of $2,530,072 (the “New Equipment Loan”). The New Equipment Loan and $2,917,422 of the principal amount outstanding on the Term Loan were consolidated into a new loan in the combined principal amount of $5,447,504 (the “Term Loan A”). The Term Loan’s remaining principal balance of $3,000,000 was deemed to be a separate term loan (the “Term Loan B”). Greystone’s board of directors approved compensation to Warren F. Kruger, President and CEO, and Robert B. Rosene, Jr., a member of Greystone’s board of directors, as the individual guarantors pursuant to the IBC Agreement, as amended. Messrs. Kruger and Rosene each recieved a cash payment of $65,000 and a warrant to purchase 250,000 shares of Greystone common stock for $0.01 per share as discussed further in Note 6. The cost of the compensation is accounted for as debt issue costs to be amortized over the remaining primary terms of the IBC notes.
The Term Loans A and B bear interest at the New York Prime Rate plus 0.5% but not less than 4.0% and mature January 7, 2019. The Borrowers are required to make equal monthly payments of principal and interest in such amounts sufficient to amortize the principal balance of (i) the Note A Term Loan over a seven year period beginning January 31, 2016 (currently $74,455 per month) and (ii) the Note B Term Loan over the three-year life of the loan (currently $88,790 per month).
The Revolving Loan bears interest at the New York Prime Rate plus 0.5% but not less than 4.0%. Effective December 12, 2016, the Revolving Loan was amended and restated to extend the maturity of the note to January 31, 2019. The Borrowers are required to pay all interest accrued on the outstanding principal balance of the Revolving Loan on a monthly basis. Any principal on the Revolving Loan that is prepaid by the Borrowers does not reduce the original amount available to the Borrowers.
8
The IBC Loan Agreement includes customary representations and warranties and affirmative and negative covenants which include (i) requiring the Borrowers to maintain a debt service coverage ratio of 1:25 to 1:00 and a funded debt to EBIDA ratio not exceeding 3:00 to 1:00 measured quarterly, (ii) subject to certain exceptions, limiting the Borrowers’ combined capital expenditures on fixed assets to $1,000,000 per year, (iii) prohibiting Greystone, without IBC’s prior written consent, from declaring or paying any dividends, redemptions of stock or membership interests, distributions and withdrawals (as applicable) in respect of its capital stock or any other equity interest, other than additional payments to holders of its preferred stock in an amount not to exceed $500,000 in any fiscal year, (iv) subject to certain exceptions, prohibiting the incurrence of additional indebtedness by the Borrowers, and (v) requiring the Borrowers to prevent (A) any change in capital ownership such that there is a material change in the direct or indirect ownership of (1) Greystone’s outstanding preferred stock, and (2) any equity interest in GSM, or (B) Warren Kruger from ceasing to be actively involved in the management of Greystone as President and/or Chief Executive Officer. The foregoing list of covenants is not exhaustive and there are several other covenants contained in the IBC Loan Agreement.
Greystone’s debt service coverage ratio as of February 28, 2017 was 0.95 to 1:00 which was less than the required minimum as discussed above. Effective December 12, 2016, the Borrowers and IBC entered into the Third Amendment to the IBC Loan Agreement (the “Third Amendment”) waiving this instance of noncompliance, and further removing the requirement to maintain the minimum debt service coverage ratio until the rolling test period ending February 28, 2018.
The IBC Loan Agreement includes customary events of default, including events of default relating to non-payment of principal and other amounts owing under the IBC Loan Agreement from time to time, inaccuracy of representations, violation of covenants, defaults under other agreements, bankruptcy and similar events, the death of a guarantor, certain material adverse changes relating to a Borrower or guarantor, certain judgments or awards against a Borrower, or government action affecting a Borrower’s or guarantor’s ability to perform under the IBC Loan Agreement or the related loan documents. Among other things, a default under the IBC Loan Agreement would permit IBC to cease lending funds under the IBC Loan Agreement, and require immediate repayment of any outstanding loans with interest and any unpaid accrued fees.
The IBC Loan Agreement is secured by a lien on substantially all of the assets of the Borrowers. In addition, the IBC Loan Agreement is secured by a mortgage granted by GRE on the real property owned by GRE in Bettendorf, Iowa (the “Mortgage”). GRE is owned by Warren F. Kruger, Greystone’s President and CEO, and Robert B. Rosene, Jr., a director of Greystone. Messrs. Kruger and Rosene have provided a combined limited guaranty of the Borrowers’ obligations under the IBC Loan Agreement, with such guaranty being limited to a combined amount of $6,500,000 (the “Guaranty”). The Mortgage and the Guaranty also secure or guaranty, as applicable, the obligations of GRE under the Loan Agreement between GRE and IBC dated January 31, 2014 as discussed in the following paragraph.
9
Loan Agreement between GRE and IBC
On January 31, 2014, GRE and IBC entered into a Loan Agreement which provided for a mortgage loan to GRE of $3,412,500. The loan provides for a 4.5% interest rate and a maturity of January 31, 2019 and is secured by a mortgage on the two buildings in Bettendorf, Iowa which are leased to Greystone.
Capital Lease with Private Pallet Leasing Company
In August, 2016, Greystone entered into a three-year lease agreement with a private pallet leasing company to provide for certain production equipment with a total cost of approximately $5.4 million. The lease agreement includes a bargain purchase option to acquire the production equipment at the end of the lease term. The lease is for two Milacron injection molding machines and two pallet molds designed and dedicated to production of 48X40 pallets (the “Pallets”) for the pallet leasing company. Monthly lease payments, estimated at approximately $100,000 per machine, are payable on a per invoice basis at the rate of $6.25 for each pallet produced by the leased production equipment and shipped to the leasing company. The lease bears an interest rate of 5%, has a three-year maturity and provides for minimum monthly lease rental payment based upon the total Pallets sold in excess of a specified amount not to exceed the monthly productive capacity of the leased machines.
The first of the Milacron machines was placed into service in August, 2016. The second machine was placed into service in September, 2016 under the same terms and conditions as the first machine. Maturities for the two years subsequent to February 28, 2017 for the capital lease are estimated to be $2,148,796 and $2,231,614.
Note Payable between Greystone and Robert B. Rosene, Jr.
Effective December 15, 2005, Greystone entered into an agreement with Robert B. Rosene, Jr., a member of Greystone’s board of directors, to convert $2,066,000 of advances into a note payable at 7.5% interest. Effective June 1, 2016, the note was restated (the “Restated Note”) to combine the outstanding principal, $2,066,000, and accrued interest, $2,475,690, into a note payable of $4,541,690. Effective April 10, 2017, Mr. Rosene agreed to an extended maturity date of January 15, 2019. The Restated Note provides that accrued interest is payable monthly and allows Greystone to use commercially reasonable efforts to pay such amounts as allowed by the IBC Loan Agreement against the interest accrued prior to the restatement.
Note Payable between Greystone and Yorktown Management Financial Services, LLC (“Yorktown”)
On February 29, 2016, Greystone entered into an unsecured note payable to Yorktown in the amount of $688,296 in connection with the acquisition of equipment from Yorktown. The note payable bears interest at the rate of 5% and is payable over three years with monthly principal and interest payments of $20,629.
Maturities
Maturities of Greystone’s long-term debt and capital leases for the five years subsequent to February 28, 2017 are $4,629,186, $16,962,065, $373,064, $379,791 and $337,944.
Note 6. Warrants to Purchase Common Stock
Effective September 1, 2016, Greystone’s board of directors authorized the issuance of warrants to purchase 250,000 shares of Greystone’s common stock for $0.01 per share to each of Warren F. Kruger, President and CEO, and Robert B. Rosene, Jr., a member of Greystone’s board, as compensation for providing guarantees on Greystone’s debt with International Bank of Commerce. The warrants have a vesting period of two years and expire August 31, 2026. The issuance will be capitalized as debt issue cost as of the measurement date for approximately $120,000 and amortized over the remaining guaranty term.
10
The value of Greystone’s common stock on September 1, 2016 was $0.24 per share. The estimated fair value at the date of the grant for the warrants utilizing the Black-Scholes option valuation model and the assumptions that were used in the Black-Scholes option model for fiscal year 2017 are as follows:
Estimated fair value of warrants at date of grant $ 120,000
Black-Scholes model assumptions
Average expected life (years) 6
Average expected volatility factor 145.77 %
Average risk-free interest rate 4.0 %
Average expected dividend yields $ -0-
Note 7. Fair Value of Financial Instruments
The following methods and assumptions are used in estimating the fair-value disclosures for financial instruments:
Debt: The carrying amount of loans with floating rates of interest approximate fair value. Fixed rate loans are valued based on cash flows using estimated rates of comparable loans. The carrying amounts reported in the balance sheet approximate fair value.
Note 8. Concentrations, Risks and Uncertainties
Greystone derived approximately 67% of its total sales from two customers (21% and 46% respectively) in fiscal year 2017 and approximately 41% (31% and 10%, respectively) in fiscal year 2016. The loss of a material amount of business from these customers could have a material adverse effect on Greystone.
Greystone purchases damaged pallets from its customers at a price based on the value of the raw material content in the pallet. A majority of these purchases, totaling $1,202,381 and $1,216,492 in fiscal years 2017 and 2016, respectively, is from one of its major customers.
Robert B. Rosene, Jr., a Greystone director, has provided financing and guarantees on Greystone’s bank debt. As of February 28, 2017, Greystone is indebted to Mr. Rosene in the amount of $4,498,383 for a note payable due January 15, 2019. There is no assurance that Mr. Rosene will renew the note as of the maturity date.
Note 9. Commitment
As of February 28, 2017, Greystone had an outstanding commitment in the amount of $1.9 million toward the purchase of certain production equipment.
11
Note 10. Recent Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “ Revenue from Contracts with Customers ” (“ASU 14-09”) which creates a comprehensive set of guidelines for the recognition of revenue under the principle: “Recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” The requirements of ASU 14-09 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2017 and will require either retrospective application to each prior period presented or retrospective application with the cumulative effect of initially applying the standard recognized at the date of adoption. Greystone is currently evaluating the impact this ASU will have on our financial position and results of operations.
In February 2016, the FASB issued Accounting Standards 2016-02, Leases (Topic 842) , which is intended to improve financial reporting about leasing transactions. The ASU will require organizations (“lessees”) that lease assets with lease terms of more than twelve months to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. Organizations that own the assets leased by lessees (“lessors”) will remain largely unchanged from current GAAP. In addition, the ASU will require disclosures to help investors and other financial statement users better understand the amount, timing and uncertainty of cash flows arising from leases. The effective date of this ASU is for fiscal years beginning after December 31, 2018 and interim periods within that year. Greystone is currently reviewing the ASU to assess the potential impact on the consolidated financial statements.
In March 2016, FASB issued Accounting Standards 2016-09, Improvements to Employee Share-Based Payment Accounting , which amends ASC Topic 718, Compensation – Stock Compensation . The objective of this amendment is part of the FASB’s Simplification Initiative as it applies to several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The effective date of the amendment is for fiscal years beginning after December 31, 2016 and interim periods within that reporting period. Greystone is currently reviewing the ASU to assess the potential impact on the consolidated financial statements.
12
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Results of Operations
General to All Periods
The unaudited consolidated financial statements include Greystone Logistics, Inc., its two wholly-owned subsidiaries, Greystone Manufacturing, L.L.C. (“GSM”) and Plastic Pallet Production, Inc. (“PPP”). Greystone also consolidates its variable interest entity, Greystone Real Estate, L.L.C. (“GRE”). All material intercompany accounts and transactions have been eliminated.
References to fiscal year 2017 refer to the nine-month and three-month periods ended February 28, 2017. References to fiscal year 2016 refer to the nine-month and three-month periods ended February 29, 2016.
Sales
Greystone’s primary focus is to provide quality plastic pallets to its existing customers while continuing its marketing efforts to broaden its customer base. Greystone’s existing customers are primarily located in the United States and engaged in the beverage, pharmaceutical and other industries. Greystone has generated and plans to continue to generate interest in its pallets by attending trade shows sponsored by industry segments that would benefit from Greystone’s products. Greystone hopes to gain wider product acceptance by marketing the concept that the widespread use of plastic pallets could greatly reduce the destruction of trees on a worldwide basis. Greystone’s marketing is conducted through contract distributors, its President and other employees.
13
Greystone derives a substantial portion of its revenue from two customers. One customer accounted for approximately 21% and 31% of Greystone’s total sales in fiscal year 2017 and 2016, respectively. The second customer accounted for 46% and 10% of Greystone’s total sales in fiscal years 2017 and 2016, respectively.
Personnel
Greystone had approximately 158 and 150 full-time employees as of February 28(29), 2017 and 2016, respectively.
Nine-Month Period Ended February 28, 2017 Compared to Nine-Month Period Ended February 29, 2016
Sales
Sales for fiscal year 2017 were $25,759,823 compared to $15,270,671 in fiscal year 2016 for an increase of $10,489,152. Pallet sales were $25,240,009 in fiscal year 2016 compared to $14,999,740 in fiscal year 2016 for an increase of $10,240,269. Other sales included tolling services of $519,814 in fiscal year 2017 and $270,931 in fiscal 2016.
Greystone has two major customers – a national brewer and a pallet leasing company. Sales to these major customers in fiscal year 2017 were 67% of total sales compared to 41% in fiscal year 2016. Sales to the national brewer were 21% and 31% in fiscal years 2017 and 2016, respectively. Sales to the pallet leasing company were 46% and 10% in fiscal years 2017 and 2016, respectively. The increase in pallet sales from fiscal year 2016 to 2017 was primarily due to increased sales to the pallet leasing company. Pallet sales to Greystone’s major customers are generally based on their need and may vary by period. Greystone cannot predict the future needs for these major customers and continues its marketing efforts toward new customers to broaden and diversify the customer base.
Due to Greystone’s increased demand for refined, recycled plastic resin in the manufacturing process for pallets, Greystone estimates that tolling services and sales of pelletized resin will be minimal, if any, in future periods.
Cost of Sales
Cost of sales in fiscal year 2017 was $21,103,691, or 82% of sales, compared to $12,743,989, or 83% of sales, in fiscal year 2016. Greystone showed an improved ratio of cost of sales to sales (the “cost of sales ratio”) in fiscal year 2017 over fiscal year 2016 as well as the previously reported cost of sales ratio of 87% for the six-month period ended November 30, 2016.
As discussed herein in the comparison of the three-month period ended February 28, 2017 to the prior period, Greystone achieved a cost of sales ratio of 72% in fiscal year 2017 resulting principally by emerging from the production start-up phase for the pallet designed for the pallet leasing customer.
14
General, Selling and Administrative Expenses
General, selling and administrative expenses were $2,133,228 in fiscal year 2017 compared to $1,840,574 in fiscal year 2016 for an increase of $292,654, or approximately 16%. The increase is primarily due to increased activity from the substantial increase in sales and related operations in fiscal year 2017 compared to fiscal year 2016.
Interest Expense
Interest expense was $832,887 in fiscal year 2017 compared to $619,481 in fiscal year 2016 for an increase of $213,406. This increase in interest expense in fiscal year 2017 over fiscal year 2016 is principally attributable to the increase in debt related to the acquisition of equipment to necessary to meet current demand for plastic pallets.
Provision for Income Taxes
The provision for (benefit from) income taxes was $556,700 and $(39,100) in fiscal years 2017 and 2016, respectively. The provision for income taxes does not include the income from the variable interest entity as the entity is not included in the income tax returns of Greystone and the taxable income of the entity is passed-through to the respective owners.
Based upon a review of its income tax filing positions, Greystone believes that its positions would be sustained upon an audit by the Internal Revenue Service and does not anticipate any adjustments that would result in a material change to its financial position. Therefore, no reserves for uncertain income tax positions have been recorded.
Net Income
Greystone recorded net income of $1,133,317 in fiscal year 2017 compared to $105,727 in fiscal year 2016 primarily for the reasons discussed above.
Net Income (Loss) Attributable to Common Stockholders
Net income available to common stockholders for fiscal year 2017 was $697,337, or $0.02 per share, compared to a net loss available to common stockholders of $(314,263), or $(0.01) per share, in fiscal year 2016 primarily for the reasons discussed above.
Three-Month Period Ended February 28, 2017 Compared to Three-Month Period Ended February 29, 2016
Sales
Sales for fiscal year 2017 were $8,693,851 compared to $5,280,480 in fiscal year 2016 for an increase of $3,413,371. Pallet sales were $8,542,727 in fiscal year 2017 compared to $5,122,785 in fiscal year 2016 for an increase of $3,419,942. Other sales included tolling services of $151,124 in fiscal year 2017 and compared to $157,695 in fiscal year 2016.
15
Greystone has two major customers – a national brewer and a pallet leasing company. Sales to these major customers in fiscal year 2017 were 67% of total sales compared to 54% in fiscal year 2016. Sales to the national brewer were 14% and 32% in fiscal years 2017 and 2016, respectively. Sales to the pallet leasing company were 53% and 22% in fiscal years 2017 and 2016, respectively. The increase in pallet sales from fiscal year 2016 to 2017 was primarily due to increased sales to the pallet leasing company. Pallet sales to Greystone’s major customers are generally based on their need and may vary by period. Greystone cannot predict the future needs for these major customers and continues its marketing efforts toward new customers to broaden and diversify the customer base.
Due to the Greystone’s increased demand for refined, recycled plastic resin in the manufacturing process for pallets, Greystone estimates that tolling services and sales of pelletized resin will be minimal, if any, in future periods.
Cost of Sales
Cost of sales in fiscal year 2017 was $6,234,807, or 72% of sales, compared to $4,574,839, or 87% of sales, in fiscal year 2016. The improved ratio of cost of sales to sales in fiscal year 2017 resulted principally by Greystone ability to emerge from the production start-up phase for the pallet designed for the pallet leasing customer.
General, Selling and Administrative Expenses
General, selling and administrative expenses were $745,924 in fiscal year 2017 compared to $601,106 in fiscal year 2016 for an increase of $144,818 or 24%. The increase is primarily due to increased activity from the substantial increase in sales and related operations in fiscal year 2017 compared to fiscal year 2016.
Interest Expense
Interest expense was $290,087 in fiscal year 2017 compared to $232,105 in fiscal year 2016 for an increase of $57,982. This increase in interest expense in fiscal year 2017 over fiscal year 2016 is principally attributable to the increase in debt related to the acquisition of equipment to necessary to meet current demand for plastic pallets.
Provision for Income Taxes
The provision for (benefit from) income taxes was $502,150 and $(67,750) in fiscal years 2017 and 2016, respectively. The provision for income taxes does not include the income from the variable interest entity as the entity is not included in the income tax returns of Greystone and the taxable income from this entity is passed-through to the respective owners.
Based upon a review of its income tax filing positions, Greystone believes that its positions would be sustained upon an audit by the Internal Revenue Service and does not anticipate any adjustments that would result in a material change to its financial position. Therefore, no reserves for uncertain income tax positions have been recorded.
16
Net Income
Greystone recorded a net income of $920,883 in fiscal year 2017 compared to a net loss of $(59,820) in fiscal year 2016 primarily for the reasons discussed above.
Net Income (Loss) Attributable to Common Stockholders
The net income available to common stockholders for fiscal year 2017 was $773,667, or $0.03 per share, compared to a net loss of $(200,528), or $(0.01) per share, in fiscal year 2016 primarily for the reasons discussed above.
Liquidity and Capital Resources
A summary of cash flows for the nine-month period ended February 28, 2017 is as follows:
Cash provided by operating activities $ 4,831,619
Cash used in investing activities (2,242,366 )
Cash used in financing activities (3,003,603 )
The contractual obligations of Greystone are as follows:
Total
Less than
1 year
1-3 years 4-5 years
More than
5 years
Long-term debt $ 22,682,050 $ 4,629,186 $ 17,335,129 $ 717,735 $ -0-
Greystone had a working capital deficit of $(2,897,949) at February 28, 2017. To provide for the funding to meet Greystone’s operating activities and contractual obligations as of February 28, 2017, Greystone will have to continue to produce positive operating results or explore various options including additional long-term debt and equity financing. However, there is no guarantee that Greystone will continue to create positive operating results or be able to raise sufficient capital to meet these obligations.
As discussed in Note 5 to the consolidated financial statements, Greystone has loans with IBC which include a term loan with a maturity of January 7, 2019 and a revolving loan which expires January 31, 2019. The exact amount which can be borrowed under the revolving loan from time to time is dependent upon the amount of the borrowing base, but can in no event exceed $2,500,000.
Substantially all of the financing that Greystone has received through the last few fiscal years resulted from loans provided by certain officers and directors of Greystone and bank loans which are guaranteed by certain officers and directors of Greystone. Greystone continues to be dependent upon its officers and directors to provide and/or secure additional financing and there is no assurance that its officers and directors will continue to do so. As such, there is no assurance that funding will be available for Greystone to continue operations.
17
Greystone has 50,000 outstanding shares of cumulative 2003 Preferred Stock with a liquidation preference of $5,000,000 and a preferred dividend rate of the prime rate of interest plus 3.25%. Greystone does not anticipate that it will make cash dividend payments to any holders of its common stock unless and until the financial position of Greystone improves through increased revenues, another financing transaction or otherwise. Pursuant to the IBC Loan Agreement, as discussed in Note 5 to the consolidated financial statements, Greystone may pay dividends on its preferred stock in an amount not to exceed $500,000 per year.
Forward Looking Statements and Material Risks
This Quarterly Report on Form 10-Q includes certain statements that may be deemed “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are made in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, that address activities, events or developments that Greystone expects, believes or anticipates will or may occur in the future, including decreased costs, securing financing, the profitability of Greystone, potential sales of pallets or other possible business developments, are forward-looking statements. Such statements are subject to a number of assumptions, risks and uncertainties. The forward-looking statements contained in this Quarterly Report on Form 10-Q could be affected by any of the following factors: Greystone’s prospects could be affected by changes in availability of raw materials, competition, rapid technological change and new legislation regarding environmental matters; Greystone may not be able to secure additional financing necessary to sustain and grow its operations; and a material portion of Greystone’s business is and will be dependent upon a few large customers and there is no assurance that Greystone will be able to retain such customers. These risks and other risks that could affect Greystone’s business are more fully described in Greystone’s Form 10-K for the fiscal year ended May 31, 2016, which was filed on August 29, 2016. Actual results may vary materially from the forward-looking statements. Greystone undertakes no duty to update any of the forward-looking statements contained in this Quarterly Report on Form 10-Q.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable.
Item 4. Controls and Procedures.
As of the end of the period covered by this Quarterly Report on Form 10-Q, Greystone carried out an evaluation under the supervision of Greystone’s Chief Executive Officer and Chief Financial Officer of the effectiveness of the design and operation of Greystone’s disclosure controls and procedures pursuant to the Securities Exchange Act Rules 13a-15(e) and 15d-15(e). Based on an evaluation as of May 31, 2016, Warren F. Kruger, Greystone’s Chief Executive Officer, and William W. Rahhal, Greystone’s Chief Financial Officer, identified two material weaknesses in Greystone’s internal control over financial reporting. As of the end of the period covered by this Quarterly Report on Form 10-Q, such material weaknesses had not been rectified. As a result of the continuation of these two material weaknesses, Greystone’s CEO and Chief Financial Officer concluded that Greystone’s disclosure controls and procedures were not effective at February 28, 2017.
18
During the nine-month period ended February 28, 2017, there were no changes in Greystone’s internal controls over financial reporting that have materially affected, or that are reasonably likely to materially affect, Greystone’s internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 1A. Risk Factors.
Not applicable.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures .
Not applicable.
Item 5. Other Information .
None.
Item 6. Exhibits.
The following exhibits are filed or furnished as part of this Quarterly Report on Form 10-Q.
31.1 Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended, and Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (submitted herewith).
31.2 Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended, and Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (submitted herewith).
32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (submitted herewith).
32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (submitted herewith).
101 Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Balance Sheets at February 28, 2017 and May 31, 2016, (ii) the Consolidated Statements of Operations for the nine-month and three-month periods ended February 28(29), 2017 and 2016, (iii) the Consolidated Statements of Cash Flows for the nine-month periods ended February 28(29), 2017 and 2016, and (iv) the Notes to the Consolidated Financial Statements (submitted herewith).
CALL Yesterday $7.30 today 7.90 woo hoo
CALL $7.30 In the past when this stock has gone down before earnings it has with in two weeks gone up .50 to $1 This time however the worthless CEO is fired, CALL has over 50 million is cash with no deb
and activist investors are buying in. Lots of new things going on here.. No where to go but up in my opinion.
http://www.bizjournals.com/sanantonio/news/2017/02/21/carnegie-technology-holdings-magicjack-proxy.html?ana=yahoo
B-Scada Named to CIOReview’s “20 Most Promising IoT Solution Providers 2017”
Tuesday, January 31, 2017
CRYSTAL RIVER, FL: B-Scada, Inc. (OTCQB: SCDA) was recently awarded recognition from some of today's top IoT industry professionals. As a global leader in data acquisition and visualization technology, B-Scada has been recognized as one of the top 20 IoT Solution Providers of 2017 by CIOReview Magazine.
Most Promising IoT Solution Provider Certificate
"It's a great honor to select B-Scada as one among the 20 Most Promising IoT Solution Providers of 2017," said Jeevan George, Managing Editor of CIOReview. "B-Scada's Status Device Cloud is a customizable IoT platform that uses OPC UA information modeling to allow users to connect data from hundreds of different types of hardware for real-time visualization, reporting, archiving, workflow, and other higher level functions."
B-Scada's Status Device Cloud is a new IoT PaaS (Platform-as-a-Service) that allows users of any skill level to develop sophisticated IoT solutions using a simple point-and-click interface without any programming.
"Dozens of companies have jumped on the IoT bandwagon to provide IoT solutions," explains B-Scada CEO, Ron DeSerranno. "However, most of these vendors are only providing API's and web services which require a great deal of custom programming and development to build a solution. This is time consuming, expensive and risky. With Status Device Cloud solutions can be developed in a few days with far greater functionality, at a fraction of the cost and with no programming."
Status Device Cloud eliminates many of the barriers to entry into the IoT for many budget-conscious consumers, providing a platform for powerful, far-reaching solutions without the need for a large upfront investment. Learn more at http://scada.com/Software/device-cloud-iot.
Read the full CIO Review article here: http://internet-of-things.cioreview.com/vendor/2017/b-scada
About CIOReview
Published from Fremont, California, CIOReview is a print magazine that explores and understands the plethora of ways adopted by firms to execute the smooth functioning of their businesses. A distinguished panel comprising of CEOs, CIOs, IT VPs including CIOReview editorial board finalized the "20 Most Promising IoT Solution Providers 2017" and shortlisted the best vendors and consultants. For more info, visit: www.cioreview.com.
About B-Scada
B-Scada provides software and hardware solutions for the monitoring and analysis of real time data in the SCADA (Supervisory Control and Data Acquisition), IoT (Internet of Things) and Smart City domains. B-Scada systems are sold worldwide in various verticals including building automation, transportation, smart grid, manufacturing, agriculture and commerce. B-Scada's IoT and SCADA software platforms are deployed worldwide in a wide range of industries.
Greystone Logistics, Inc. Reports First Quarter Results of Operations
Date : 01/24/2017 @ 6:00AM
Source : Marketwired
Stock : Greystone Logistics, Inc. (QB) (GLGI)
Quote : 0.24 0.0 (0.00%) @ 8:00AM
Greystone Logistics, Inc. Reports First Quarter Results of Operations
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Greystone Logistics, Inc. Reports First Quarter Results of Operations
TULSA, OK-(Marketwired - Jan 24, 2017) - Tulsa-based Greystone Logistics, Inc. (OTCQB: GLGI) reported sales for the three months ended November 30, 2016 totaled $9,221,711 compared to $4,420,210 for the prior period for an increase of $4,801,501, or 108%. Sales for the six months ended November 30, 2016 of $17,065,972 compared to $9,990,191 for the prior period for an increase of $7,075,781, or 71%.
Net income before preferred dividends for the three months and six months ended November 30, 2016, were $258,826 and $212,434, and, respectively, compared to $115,151 and $165,547, respectively, for the prior periods. Greystone recorded a net income for the three months ended November 30, 2016, available to common shareholders after preferred dividends of $41,109 compared to a net loss available to common shareholders of $(22,420) for the prior period. Greystone recorded a net loss available to common stockholders after preferred dividends of $(76,330), compared to $(113,735) for the six months ended November 30, 2016.
Greystone's EBITDA (net income before stock compensation costs, interest expense, income taxes, depreciation and amortization) for the six months ended November 30, 2016 was $2,004,389 compared to $1,294,750 for the prior period.
"The addition of the previously announced pallet leasing customer continues to have a significant impact on Greystone's sales and operations," stated Warren Kruger, President and CEO. "The second quarter of our fiscal year 2017 began to show a turnaround in earnings and this trend is expected to continue throughout the remaining part of this year. Unfortunately, our two newest machines were not operating at full capacity and our two oldest injection machines were down awaiting parts during this quarter. These unexpected delays affected our efficiency and margin goals for the quarter. To meet the increasing demand for our pallets, we have ordered a Milacron injection-molding machine to add to the three similar machines acquired during the past year. We anticipate this machine will become operational during the latter part of this year. Improving the returns for our shareholders is a continuing major goal for Greystone as we review operations for improvements in operating efficiencies and cost containment to achieve better margins."
Greystone Logistics is a "Green" manufacturing and leasing company that reprocesses and sells recycled plastic and designs, manufactures, sells high quality 100% recycled plastic pallets that provide logistical solutions needed by a wide range of industries such as the food and beverage, automotive, chemical, pharmaceutical and consumer products. The Company's technology, including that used in its injection molding equipment, proprietary blend of recycled plastic resins and patented pallet designs, allows production of high quality pallets quickly and at lower costs than many processes. The recycled plastic for its pallets helps control material costs while reducing environmental waste and provides cost advantages over users of virgin resin. Excess plastic not used in production of pallets may be reprocessed for resale.
This press release includes certain statements that may be deemed "forward-looking statements" within the meaning of the federal securities laws. All statements, other than statements of historical facts that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future, including the potential sales of pallets or other possible business developments are forward-looking statements. Such statements are subject to a number of assumptions, risks and uncertainties, including the ability of the Company to continue as a going concern. Actual results may vary materially from the forward-looking statements. For a list of certain material risks relating to the Company and its products, see Greystone Logistics' Form 10-K for the fiscal year ended May 31, 2016.
This release contains disclosure of EBITDA, which is a non-GAAP financial measure within the meaning of Regulation G promulgated by the Securities and Exchange Commission. A reconciliation of EBITDA to net income, the most directly comparable GAAP financial measure, as well as additional information concerning EBITDA, are included at the end of this release.
Greystone Logistics, Inc.
Supplemental Statistical Information
Six Months Ended November 30,
2016 2015
-------- --------
Supplemental Statistical Information:
Net Income $ 212,434 $ 165,547
Adjustments to Net Income to calculate
EBITDA -
Stock Compensation Costs - 26,712
Interest Expense 542,800 387,376
Provision for Income Taxes 54,550 28,650
Depreciation and Amortization 1,194,602 686,465
-------- --------
EBITDA (A) $ 2,004,386 $ 1,294,750
(A) Greystone's EBITDA represents net income before stock compensation
costs, interest expense, provision for income taxes and depreciation and
amortization. The Company has included stock compensation costs as it is a
non-cash transaction. The EBITDA presented above while considered the most
common definition used by investors and financial analysts, may not be
comparable to similarly titled measures reported by other companies. The
Company believes that EBITDA, while providing useful information, should not
be considered in isolation or as an alternative to other financial measures
determined under GAAP.
Contact:
Warren F. Kruger
President/CEO
Corporate Office
1613 East 15th Street
Tulsa, Oklahoma 74120
(918) 583-7441
(918) 583-7442 (FAX)
http://www.greystonelogistics.com
NICE $8.50 buy out http://ih.advfn.com/p.php?pid=nmona&article=73550465
I saw it also, it's from November? The question is if they restructure and take it private , what does that mean for the stock.
MERRY CHRISTMAS TO ALL!!
Call
MagicJack Has Been Left for Dead
“When things are going well and prices are high, investors rush to buy, forgetting all prudence. Then, when there’s chaos all around and assets are on the bargain counter, they lose all willingness to bear risk and rush to sell. And it will ever be so.” –Howard Marks – Oaktree Capital Management
“Investing is the only business I know that when things go on sale, people run out of the store.” – Mark Yusko
“Investment markets follow a pendulum-like swing: between euphoria and depression, between celebrating positive developments and obsessing over negatives, and thus between overpriced and underpriced.” -Howard Marks – Oaktree Capital Management
I believe the pendulum of magicJack stock has swung entirely too far to the downside and now presents an opportune time to go long the stock. MagicJack (CALL) has become a textbook deep value play with an Enterprise value to EBITDA of 1.9x, a cash cow of a consumer (core) business spewing out plenty of cash, and the shares have practically been left for dead.
Business Overview: MagicJack VocalTec Ltd. (Nasdaq:CALL), the inventor of magicJack and a pioneer in Voice over IP (VoIP) technology and services, is a leading cloud communications company. With its easy-to-use, low cost solution for telecommunications, the Company has sold more than 11 million award-winning magicJack devices, now in its fifth generation, has millions of downloads of its free calling app, and holds more than 30 technology patents, magicJack is the largest-reaching CLEC (Competitive Local Exchange Carrier) in the United States in terms of area codes available and number of states in which it is certified. MagicJack VocalTec Ltd. and its subsidiaries is a cloud communications company. The Company provides magicJack devices and other magicJack products and services. The Company also provides voice applications on smart phones, as well as the magicJack PLUS, magicJack GO and magicJack EXPRESS, which are updated versions of the magicJack device that have their own central processing unit (CPU) and can connect a regular phone directly to the user’s broadband modem/router and function as a standalone phone without using a computer. The magicJack device uses Voice Over Internet Protocol (“VoIP”) to allow you to make local and long-distance calls to the U.S. and Canada using an existing internet connection. Over the past two decades, VoIP has revolutionized the way people communicate and has become a mainframe technology that is here to stay. Considerable cost savings that VoIP offers to both residential as well as enterprise users as compared to traditional PSTN telephony is the key market driver. VoIP adoption is rapidly growing in the enterprise space with companies realizing that efficiencies could be gained through the simplified management of a single voice & data network. At its most basic, VoIP is an internet phone service. Instead of having your phone calls delivered through your local phone company they are instead delivered through your Internet connection.
The Company’s large existing user base, pricing advantage, efficient customer acquisition model, low cost service delivery and customer care capabilities, position it well to compete effectively in the future.
mj-1mj-2
CALL is an uncovered and unloved $110 million market cap company trading at 5x cash flows – and that’s before you back out the 51 mm ($3.43/share) in balance sheet cash and no debt – EV/EBITDA is under 2x. While earnings are steadily declining from the legacy business – it is still a cash cow with a fairly sticky user base of 2.21 million active subscribers. The stock trades just above six year lows. CALL has recently moved up a point on decent volume as is usual around the earnings period, the stock is sitting around a multiyear support/resistance level of ~$7. The run-up is likely due to a better than feared Q3 earnings (stock popped 8% on the day of) and the recent break-neck rally in small cap stocks.
Let us dig into the Bear Case(s) for MagicJack: (With my base cases following each bear case)
“The technology of the Magicjack device is irrelevant and will continue to be disrupted, the core (consumer) business is a melting ice cube.”
This may prove to be the case, while Magicjack’s core user base is fading it is still relatively sticky. With a monthly churn rate of 2.4% (28.8% annually) on a current user base of 2.21 million, I am modeling the continued churn as well as trending activations in line with the previous two years – with a conservative 17.5% decrease in activations each year for the next four. This leads me to believe that subscribers (subs) will decline as follows. Also, CALL’s low cost-structure allows it to be the cheapest in the space at $35 a year. Anyone looking to save several thousand a year on cell phone bills from major carriers can do so for peanuts with a Magicjack device – this is the niche CALL can likely continue to stay relevant in.mj-3
In a conservative model below we can feed through MagicJack’s estimated revenues and gross profits from the expected trend in subs.
mj-4
At the current valuation, primarily looking at a sum of the parts basis the stock is a classic cigar butt (very cheap, with opportunities for future puffs – aka cash flow generation) even if the ice cube melts and there is no stability.
“Short interest is 21%, these guys know it’s going to zero, management misses on every objective, management has to reach for growth through acquisitions at 30x EBITDA (Broadsmart – late 2015/ early 2016), they are not returning cash to shareholders but diluting them through desperate acquisitions.”
The capital structure is free of debt and the company has $51 million in cash, the cash buffer combined with the cash flow characteristics of the business should support the stock. The recent activist involvement could bring some stability and a greater focus on creating value and returning cash to shareholders.
CALL has excellent cash-flow characteristics. When a new majicJack is sold, it is paid for the equipment and a year’s worth of call subscription. The call subscription portion of the payment is booked as deferred revenue and converted into revenues on the operating statement over the course of the year. The same thing happens when someone renews their subscription; most renewals pay for a full year up front.
Management is milking the consumer business for the cash flows – Management on the Q3 call – “We continue to identify potential areas for cost reductions to maximize cash flow from the consumer business.” The analysis below shows how management has been able to handle a decreasing top line – cost of revenues and operating expenses where each down 19.7% and 31.1% respectively – this lead to an increase in margins.
YEAR ENDED DECEMBER 31, 2015 COMPARED TO YEAR ENDED DECEMBER 31, 2014
Net Revenues
Total net revenue was $101.0 million and $116.3 million for the years ended December 31, 2015 and 2014, respectively, representing a decrease of $15.4 million, or 13.2%. The decreases in the components of net revenues were primarily attributable to the following:
· a $8.7 million decrease in revenues recognized for the sale of magicJack devices, primarily as a result of lower unit volume on the sale of magicJack devices.
· a $1.3 million decrease in shipping and handling revenues primarily as a result of the reduction in unit sales mentioned above.
· a $2.7 million decrease in other magicJack related products reflecting lower unit sales on the device.
· a $1.8 million decrease in revenues from prepaid minutes primarily as a result of lower usage of prepaid minutes and;
· a $1.1 million decrease in access and wholesale charges primarily reflecting lower network traffic.
These decreases in components of net revenue were partially offset by an $0.2 million increase in access right renewals. This is why you own the stock – the access right renewals are quality, largely steady cash flows.
Cost of Revenues
Total cost of revenues was $34.1 million and $42.5 million for the years ended December 31, 2015 and 2014, respectively, representing a decrease of $8.4 million, or 19.7%. This decrease in cost of revenues was primarily attributable to:
· a $3.8 million combined decrease in costs related to the magicJack devices, shipping and handling and credit card processing fees primarily reflecting lower unit sales of the magicJack device;
· a $4.3 million reduction in network and carrier charges reflecting lower network volume and continuing efforts to negotiate more favorable rates with other carriers.
While revs declined 13.2% yoy management was able to target 19.7% decrease in cost of revenues, thus aiding margins.
Total operating expenses were $41.5 million and $60.2 million for the years ended December 31, 2015 and 2014, respectively, representing a decrease of $18.7 million, or 31.1%. This decrease in operating expenses was primarily due to:Operating Expenses
· a $11.0 million decrease in marketing-related expense driven by (i) a $7.2 million decrease in advertising media buys reflecting management’s decision not to spend significantly on media buys, (ii) a $1.2 million decrease in marketing related personnel costs driven by a decrease in head-count, and (iii) a $2.6 million decrease in sponsorships and other advertising spend reflecting a more conservative approach to our marleting spend in 2015;
· a $6.4 million decrease in general & administrative expenses primarily due to (i) approximately $5.0 million in lower legal and other professional expenses reflecting less litigation, and the settlement of certain regulatory and tax-related matters.
· a $1.4 million decrease in research and development costs primarily reflecting lower personnel related expenses and a decrease in research and development related consulting costs.
With 21% of the float short, any of the catalysts (listed later) coming into play can get the stock out of the doldrums and on its way to trading on the same planet as its intrinsic value.
“MagicJack’s entire business is in decline all across the board”
While it may look this way, The company’s growth initiatives (Broadsmart and SMB (Small/Medium Business) operations) are on their way to leveraging MagicJack’s assets already in place to drive the top and bottom lines. While I’m not taking managements word for it they say the following – “Both of these are targeting business voice customers and industry segment that is growing and what we believe our low cost infrastructure and other core assets bring significant value.” And Broadsmart “The business is highly profitable, having generated approximately 13 million in revenues and 4.6 million of EBITDA in 2015, an EBITDA margin of over 35 on an unaudited basis. For 2016, the Broadsmart business is forecasting over 20 year-over-year growth in sales.
There is a large “governance discount” built into the shares at the moment – where investors have such little faith in company management & board that they assume they will continue to destroy value. This is explained by CALL being a $12 stock last November before management embarked on a 40mm cash acquisition of Broadsmart – paying 30x EBITDA for a business not expected to meaningfully impact EPS for the next couple years. This cut the stock in half over a couple months as they have suspended the buyback as well. But do these two moves really destroy 100mm in value for MagicJack? The market has written off any moderate stability out of CALL – this gives an embedded call option on the growth of the company’s initiatives targeting the enterprise segment.
Catalysts
Activist Investor Kanen Wealth Management: Kanen Wealth Management is a 5% owner of MagicJack (9% of their portfolio) and wrote a letter in late August calling for board representation and change at CALL. Kanen getting board representation would solidify the case for the underlying value in shares of CALL, an activist like Kanen is going to appoint responsible “outside” professionals who are going to get in there and say “we need to get the business on track number 1 – create value and be good stewards of the cash flows we generate, and secondly we need to return capital to shareholders via buybacks & dividends” this reduces the risk of the board attempted to buy growth which is what they may be thinking sitting on half the market cap in cash and no recapitalization strategy.
Highlights from the activist letter: We believe, with “effective execution” on the right growth initiatives, as well as an equally important focus on capital allocation, significant upside exists for CALL shareholders. However, the “status quo” must cease, and “correct change” be implemented. We are immediately calling for two simple yet extremely important changes.
A $50 million stock buyback to be executed over the next three years (a conservative estimate of our projected free cash flow, exception being if our stock no longer trades at a significant discount to our peers)
Addition of two new board members with proven track records of delivering high returns for shareholders. The additional criteria for the new board members will be that they have telco/VoIP experience and will be engaged with and exercise active oversight of management, holding them accountable to our goals of growing and reinventing the company. The clear objectives will be to:
Ensure growth of app revenue
Bring in international revenue
Grow “Magicjack for Business” (small enterprise)
Grow B.S. (enterprise)
Reduce churn to below 1.8% and in-line with our peer average, through more effective renewals, (focus on auto renewal) and improved customer service
Foster a culture of innovation and creativity that is married to execution and results
We believe significant upside exists when our articulated game plan is executed upon along with a large share repurchase. For example, if CALL were to generate organic growth next year, with revenue growing 5-9% and EBITDA at a faster rate, we believe the market will “reprice CALL shares” at or near parity with Vonage Holdings Corporation. Our math is as follows:
Total revenue of $112.5 million in 2017:
$86 million consumer core
$2.5 million app revenue
$16 million B.S. revenue
$6 million Magicjack for Business (SMB)
$2 million Other
We would anticipate EBITDA $30 million full year with EBITDA margins increasing in 2H 2017 as revenue grows. If our share count is reduced to 13 million by 2017 year-end (through stock buyback) and we trade at a 12x EBITDA (Vonage Holdings Corporation currently trades at 14.93x EBITDA) our stock would trade at $27.20 per share before adding back cash.
While the EBITDA multiple expansion is likely farfetched, Kanen’s goal of better governance could significantly turn the tide. I don’t think there is any reason for these parties to enter a proxy fight – CALL will likely settle with Kanen soon.
Growth Initiatives drive top and bottom lines: As previously discussed, SMB and Broadsmart both are just now coming online this year and seeking to grow in the enterprise VoIP segment. Business adoption will help drive the global VoIP market to expand at a 9.7 percent compound annual growth rate between 2014 and 2020, from $70.90 billion to $136.76 billion, projects Transparency Market Research. Given the size and growth in this market if SMB/BS were to gain any traction this could drive earnings and significantly change investor perception.
Recent Consolidation of VoIP: Broadsoft acquiring VoIP Logic, 8×8 purchasing Contactual, Transcend United merging with LiquidSmoke, and West Corp. acquiring Smoothstone, shine a light on the growth of small business VoIP. Highlighting that the cornerstone in the VoIP marketing message is the ability to launch and manage a business phone system at a significantly reduced cost. With the growth in SMB VoIP, it simply makes sense for VoIP providers to add managed contact center capability to their portfolio. Diane Myers, senior research director for VoIP, UC and IMS for IHS Markit, said in a September 2016 research note – “But as the market continues to scale, consolidation amongst industry continues to rise, particularly in North America. Market participants are looking for greater scalability, infrastructure maximization and cost savings. During the first half of this year, over eight deals were completed, a trend that IHS market said they expected to continue.” CEO Vento previously headed TeleCorp PCS Inc., which was sold to AT&T Inc. in 2002 for $5.7 billion. Insider ownership at CALL is high with the chairman owning 2.5% of outstanding shares or roughly $2.7 million, and three other directors each having over a million tied up in MagicJack shares. At the current valuation, the company could get acquired by a strategic player (attractive due to Intellectual Property, market share/seasoned brand, cash on balance sheet + cash flow generation from renewals, and synergies).
WhatsApp was acquired by Facebook in 2014 for $20.8 Billion, primarily for its vast user base. MagicJack differentiates itself from WhatsApp and Viber because its service allows users to call any fixed or mobile phone line, not just people who are using the same application.
MagicJack is redomesticating its headquarters from Israel (possibly to avoid political risk) to the US which may not move the needle much but CEO Vento said the following about the move, “We are pleased to be redomesticating our parent company to the U.S. and believe this step will make us an attractive security for large institutional investors who cannot hold a position in non-U.S. companies. We plan to fully maintain our Israeli operations as they are critical to our business.”
Moreover, due to increasing smart phone penetration and demand for mobility among the corporate and individual consumers, the market for computer-to-computer VoIP services is expected to show minimum growth, wherein computers (desktops) are gradually being replaced by smart phones and other portable devices. These trends are working against MagicJack’s consumer business, as MagicJack’s “edge” is in its cheap pricing (no monthly bills) and unlimited calling to any United States & Canadian number. As more of the large carriers have switched to unlimited calling plans this has taken an edge away from Magicjack’s unlimited calling “edge” but the price differential is still an attractive proposition for consumers. The rising demand for mobility encourages the corporate and individual consumers to adopt smart portable devices such as tablet and smart phones. As a result, the demand for affordable VoIP services also increases, wherein these devices can also be used to communicate over the internet. Thus, with the increasing penetration of these smart portable devices the number of subscribers of phone-to-phone (mobile VoIP) and computer-to-phone VoIP configuration are expected to witness high growth rates over the forecast period. MagicJack’s mobile app launched on May 10th 2016 and grew to 100,000 subscribers in the first month – this service is attractive to international travelers.
With half the market cap in cash, a core business well apt to generate a cumulative total of 65+ million in after tax earnings ($4.20+ in EPS) over the next 5 years (modeled below), market discounting zero growth and high cash burn on growth initiatives that could prove to grow the business’s reach, and an activist knocking on the door – the margin of safety is high and investors are risking a dollar of downside to obtain four to five on the upside.
mj-5
The above accounts for zero growth in revenues and earnings from SMB & Broadsmart from 2016 – 2020.
My estimated base case is cash eventually will be returned to shareholders (currently $3.43/share, consumer business top line decreases 15-17% annually, margins largely the same – consumer business generates an average 16mm in pre-tax income annually till 2020, 3% of float decreased annually, growth initiatives aren’t a home run but don’t flop either. All this gives you 50% upside. The bull case lies in new board becoming shareholder friendly and exceptional stewards of cash, they milk the consumer business for cash even while its top line dropping 15-17% annually, profit margins can stay the same over next 4-5 years. Growth initiatives moderately live up to management’s expectations and are profitable. The bear case would look like cash being burned, growth initiatives are basically a flop, consumer business will die of new technology in just a couple years.
mj-6
As Ben Graham said, “the stock market is a voting machine in the short-term, but a weighing machine in the long run.” The cash flow generation of the core business, combined with growth in the enterprise segment, and a return of capital to shareholders will tip the weighing scale and the pendulum back into favor for MagicJack shareholders.
MagicJack Has Been Left for Dead
“When things are going well and prices are high, investors rush to buy, forgetting all prudence. Then, when there’s chaos all around and assets are on the bargain counter, they lose all willingness to bear risk and rush to sell. And it will ever be so.” –Howard Marks – Oaktree Capital Management
“Investing is the only business I know that when things go on sale, people run out of the store.” – Mark Yusko
“Investment markets follow a pendulum-like swing: between euphoria and depression, between celebrating positive developments and obsessing over negatives, and thus between overpriced and underpriced.” -Howard Marks – Oaktree Capital Management
I believe the pendulum of magicJack stock has swung entirely too far to the downside and now presents an opportune time to go long the stock. MagicJack (CALL) has become a textbook deep value play with an Enterprise value to EBITDA of 1.9x, a cash cow of a consumer (core) business spewing out plenty of cash, and the shares have practically been left for dead.
Business Overview: MagicJack VocalTec Ltd. (Nasdaq:CALL), the inventor of magicJack and a pioneer in Voice over IP (VoIP) technology and services, is a leading cloud communications company. With its easy-to-use, low cost solution for telecommunications, the Company has sold more than 11 million award-winning magicJack devices, now in its fifth generation, has millions of downloads of its free calling app, and holds more than 30 technology patents, magicJack is the largest-reaching CLEC (Competitive Local Exchange Carrier) in the United States in terms of area codes available and number of states in which it is certified. MagicJack VocalTec Ltd. and its subsidiaries is a cloud communications company. The Company provides magicJack devices and other magicJack products and services. The Company also provides voice applications on smart phones, as well as the magicJack PLUS, magicJack GO and magicJack EXPRESS, which are updated versions of the magicJack device that have their own central processing unit (CPU) and can connect a regular phone directly to the user’s broadband modem/router and function as a standalone phone without using a computer. The magicJack device uses Voice Over Internet Protocol (“VoIP”) to allow you to make local and long-distance calls to the U.S. and Canada using an existing internet connection. Over the past two decades, VoIP has revolutionized the way people communicate and has become a mainframe technology that is here to stay. Considerable cost savings that VoIP offers to both residential as well as enterprise users as compared to traditional PSTN telephony is the key market driver. VoIP adoption is rapidly growing in the enterprise space with companies realizing that efficiencies could be gained through the simplified management of a single voice & data network. At its most basic, VoIP is an internet phone service. Instead of having your phone calls delivered through your local phone company they are instead delivered through your Internet connection.
The Company’s large existing user base, pricing advantage, efficient customer acquisition model, low cost service delivery and customer care capabilities, position it well to compete effectively in the future.
mj-1mj-2
CALL is an uncovered and unloved $110 million market cap company trading at 5x cash flows – and that’s before you back out the 51 mm ($3.43/share) in balance sheet cash and no debt – EV/EBITDA is under 2x. While earnings are steadily declining from the legacy business – it is still a cash cow with a fairly sticky user base of 2.21 million active subscribers. The stock trades just above six year lows. CALL has recently moved up a point on decent volume as is usual around the earnings period, the stock is sitting around a multiyear support/resistance level of ~$7. The run-up is likely due to a better than feared Q3 earnings (stock popped 8% on the day of) and the recent break-neck rally in small cap stocks.
Let us dig into the Bear Case(s) for MagicJack: (With my base cases following each bear case)
“The technology of the Magicjack device is irrelevant and will continue to be disrupted, the core (consumer) business is a melting ice cube.”
This may prove to be the case, while Magicjack’s core user base is fading it is still relatively sticky. With a monthly churn rate of 2.4% (28.8% annually) on a current user base of 2.21 million, I am modeling the continued churn as well as trending activations in line with the previous two years – with a conservative 17.5% decrease in activations each year for the next four. This leads me to believe that subscribers (subs) will decline as follows. Also, CALL’s low cost-structure allows it to be the cheapest in the space at $35 a year. Anyone looking to save several thousand a year on cell phone bills from major carriers can do so for peanuts with a Magicjack device – this is the niche CALL can likely continue to stay relevant in.mj-3
In a conservative model below we can feed through MagicJack’s estimated revenues and gross profits from the expected trend in subs.
mj-4
At the current valuation, primarily looking at a sum of the parts basis the stock is a classic cigar butt (very cheap, with opportunities for future puffs – aka cash flow generation) even if the ice cube melts and there is no stability.
“Short interest is 21%, these guys know it’s going to zero, management misses on every objective, management has to reach for growth through acquisitions at 30x EBITDA (Broadsmart – late 2015/ early 2016), they are not returning cash to shareholders but diluting them through desperate acquisitions.”
The capital structure is free of debt and the company has $51 million in cash, the cash buffer combined with the cash flow characteristics of the business should support the stock. The recent activist involvement could bring some stability and a greater focus on creating value and returning cash to shareholders.
CALL has excellent cash-flow characteristics. When a new majicJack is sold, it is paid for the equipment and a year’s worth of call subscription. The call subscription portion of the payment is booked as deferred revenue and converted into revenues on the operating statement over the course of the year. The same thing happens when someone renews their subscription; most renewals pay for a full year up front.
Management is milking the consumer business for the cash flows – Management on the Q3 call – “We continue to identify potential areas for cost reductions to maximize cash flow from the consumer business.” The analysis below shows how management has been able to handle a decreasing top line – cost of revenues and operating expenses where each down 19.7% and 31.1% respectively – this lead to an increase in margins.
YEAR ENDED DECEMBER 31, 2015 COMPARED TO YEAR ENDED DECEMBER 31, 2014
Net Revenues
Total net revenue was $101.0 million and $116.3 million for the years ended December 31, 2015 and 2014, respectively, representing a decrease of $15.4 million, or 13.2%. The decreases in the components of net revenues were primarily attributable to the following:
· a $8.7 million decrease in revenues recognized for the sale of magicJack devices, primarily as a result of lower unit volume on the sale of magicJack devices.
· a $1.3 million decrease in shipping and handling revenues primarily as a result of the reduction in unit sales mentioned above.
· a $2.7 million decrease in other magicJack related products reflecting lower unit sales on the device.
· a $1.8 million decrease in revenues from prepaid minutes primarily as a result of lower usage of prepaid minutes and;
· a $1.1 million decrease in access and wholesale charges primarily reflecting lower network traffic.
These decreases in components of net revenue were partially offset by an $0.2 million increase in access right renewals. This is why you own the stock – the access right renewals are quality, largely steady cash flows.
Cost of Revenues
Total cost of revenues was $34.1 million and $42.5 million for the years ended December 31, 2015 and 2014, respectively, representing a decrease of $8.4 million, or 19.7%. This decrease in cost of revenues was primarily attributable to:
· a $3.8 million combined decrease in costs related to the magicJack devices, shipping and handling and credit card processing fees primarily reflecting lower unit sales of the magicJack device;
· a $4.3 million reduction in network and carrier charges reflecting lower network volume and continuing efforts to negotiate more favorable rates with other carriers.
While revs declined 13.2% yoy management was able to target 19.7% decrease in cost of revenues, thus aiding margins.
Total operating expenses were $41.5 million and $60.2 million for the years ended December 31, 2015 and 2014, respectively, representing a decrease of $18.7 million, or 31.1%. This decrease in operating expenses was primarily due to:Operating Expenses
· a $11.0 million decrease in marketing-related expense driven by (i) a $7.2 million decrease in advertising media buys reflecting management’s decision not to spend significantly on media buys, (ii) a $1.2 million decrease in marketing related personnel costs driven by a decrease in head-count, and (iii) a $2.6 million decrease in sponsorships and other advertising spend reflecting a more conservative approach to our marleting spend in 2015;
· a $6.4 million decrease in general & administrative expenses primarily due to (i) approximately $5.0 million in lower legal and other professional expenses reflecting less litigation, and the settlement of certain regulatory and tax-related matters.
· a $1.4 million decrease in research and development costs primarily reflecting lower personnel related expenses and a decrease in research and development related consulting costs.
With 21% of the float short, any of the catalysts (listed later) coming into play can get the stock out of the doldrums and on its way to trading on the same planet as its intrinsic value.
“MagicJack’s entire business is in decline all across the board”
While it may look this way, The company’s growth initiatives (Broadsmart and SMB (Small/Medium Business) operations) are on their way to leveraging MagicJack’s assets already in place to drive the top and bottom lines. While I’m not taking managements word for it they say the following – “Both of these are targeting business voice customers and industry segment that is growing and what we believe our low cost infrastructure and other core assets bring significant value.” And Broadsmart “The business is highly profitable, having generated approximately 13 million in revenues and 4.6 million of EBITDA in 2015, an EBITDA margin of over 35 on an unaudited basis. For 2016, the Broadsmart business is forecasting over 20 year-over-year growth in sales.
There is a large “governance discount” built into the shares at the moment – where investors have such little faith in company management & board that they assume they will continue to destroy value. This is explained by CALL being a $12 stock last November before management embarked on a 40mm cash acquisition of Broadsmart – paying 30x EBITDA for a business not expected to meaningfully impact EPS for the next couple years. This cut the stock in half over a couple months as they have suspended the buyback as well. But do these two moves really destroy 100mm in value for MagicJack? The market has written off any moderate stability out of CALL – this gives an embedded call option on the growth of the company’s initiatives targeting the enterprise segment.
Catalysts
Activist Investor Kanen Wealth Management: Kanen Wealth Management is a 5% owner of MagicJack (9% of their portfolio) and wrote a letter in late August calling for board representation and change at CALL. Kanen getting board representation would solidify the case for the underlying value in shares of CALL, an activist like Kanen is going to appoint responsible “outside” professionals who are going to get in there and say “we need to get the business on track number 1 – create value and be good stewards of the cash flows we generate, and secondly we need to return capital to shareholders via buybacks & dividends” this reduces the risk of the board attempted to buy growth which is what they may be thinking sitting on half the market cap in cash and no recapitalization strategy.
Highlights from the activist letter: We believe, with “effective execution” on the right growth initiatives, as well as an equally important focus on capital allocation, significant upside exists for CALL shareholders. However, the “status quo” must cease, and “correct change” be implemented. We are immediately calling for two simple yet extremely important changes.
A $50 million stock buyback to be executed over the next three years (a conservative estimate of our projected free cash flow, exception being if our stock no longer trades at a significant discount to our peers)
Addition of two new board members with proven track records of delivering high returns for shareholders. The additional criteria for the new board members will be that they have telco/VoIP experience and will be engaged with and exercise active oversight of management, holding them accountable to our goals of growing and reinventing the company. The clear objectives will be to:
Ensure growth of app revenue
Bring in international revenue
Grow “Magicjack for Business” (small enterprise)
Grow B.S. (enterprise)
Reduce churn to below 1.8% and in-line with our peer average, through more effective renewals, (focus on auto renewal) and improved customer service
Foster a culture of innovation and creativity that is married to execution and results
We believe significant upside exists when our articulated game plan is executed upon along with a large share repurchase. For example, if CALL were to generate organic growth next year, with revenue growing 5-9% and EBITDA at a faster rate, we believe the market will “reprice CALL shares” at or near parity with Vonage Holdings Corporation. Our math is as follows:
Total revenue of $112.5 million in 2017:
$86 million consumer core
$2.5 million app revenue
$16 million B.S. revenue
$6 million Magicjack for Business (SMB)
$2 million Other
We would anticipate EBITDA $30 million full year with EBITDA margins increasing in 2H 2017 as revenue grows. If our share count is reduced to 13 million by 2017 year-end (through stock buyback) and we trade at a 12x EBITDA (Vonage Holdings Corporation currently trades at 14.93x EBITDA) our stock would trade at $27.20 per share before adding back cash.
While the EBITDA multiple expansion is likely farfetched, Kanen’s goal of better governance could significantly turn the tide. I don’t think there is any reason for these parties to enter a proxy fight – CALL will likely settle with Kanen soon.
Growth Initiatives drive top and bottom lines: As previously discussed, SMB and Broadsmart both are just now coming online this year and seeking to grow in the enterprise VoIP segment. Business adoption will help drive the global VoIP market to expand at a 9.7 percent compound annual growth rate between 2014 and 2020, from $70.90 billion to $136.76 billion, projects Transparency Market Research. Given the size and growth in this market if SMB/BS were to gain any traction this could drive earnings and significantly change investor perception.
Recent Consolidation of VoIP: Broadsoft acquiring VoIP Logic, 8×8 purchasing Contactual, Transcend United merging with LiquidSmoke, and West Corp. acquiring Smoothstone, shine a light on the growth of small business VoIP. Highlighting that the cornerstone in the VoIP marketing message is the ability to launch and manage a business phone system at a significantly reduced cost. With the growth in SMB VoIP, it simply makes sense for VoIP providers to add managed contact center capability to their portfolio. Diane Myers, senior research director for VoIP, UC and IMS for IHS Markit, said in a September 2016 research note – “But as the market continues to scale, consolidation amongst industry continues to rise, particularly in North America. Market participants are looking for greater scalability, infrastructure maximization and cost savings. During the first half of this year, over eight deals were completed, a trend that IHS market said they expected to continue.” CEO Vento previously headed TeleCorp PCS Inc., which was sold to AT&T Inc. in 2002 for $5.7 billion. Insider ownership at CALL is high with the chairman owning 2.5% of outstanding shares or roughly $2.7 million, and three other directors each having over a million tied up in MagicJack shares. At the current valuation, the company could get acquired by a strategic player (attractive due to Intellectual Property, market share/seasoned brand, cash on balance sheet + cash flow generation from renewals, and synergies).
WhatsApp was acquired by Facebook in 2014 for $20.8 Billion, primarily for its vast user base. MagicJack differentiates itself from WhatsApp and Viber because its service allows users to call any fixed or mobile phone line, not just people who are using the same application.
MagicJack is redomesticating its headquarters from Israel (possibly to avoid political risk) to the US which may not move the needle much but CEO Vento said the following about the move, “We are pleased to be redomesticating our parent company to the U.S. and believe this step will make us an attractive security for large institutional investors who cannot hold a position in non-U.S. companies. We plan to fully maintain our Israeli operations as they are critical to our business.”
Moreover, due to increasing smart phone penetration and demand for mobility among the corporate and individual consumers, the market for computer-to-computer VoIP services is expected to show minimum growth, wherein computers (desktops) are gradually being replaced by smart phones and other portable devices. These trends are working against MagicJack’s consumer business, as MagicJack’s “edge” is in its cheap pricing (no monthly bills) and unlimited calling to any United States & Canadian number. As more of the large carriers have switched to unlimited calling plans this has taken an edge away from Magicjack’s unlimited calling “edge” but the price differential is still an attractive proposition for consumers. The rising demand for mobility encourages the corporate and individual consumers to adopt smart portable devices such as tablet and smart phones. As a result, the demand for affordable VoIP services also increases, wherein these devices can also be used to communicate over the internet. Thus, with the increasing penetration of these smart portable devices the number of subscribers of phone-to-phone (mobile VoIP) and computer-to-phone VoIP configuration are expected to witness high growth rates over the forecast period. MagicJack’s mobile app launched on May 10th 2016 and grew to 100,000 subscribers in the first month – this service is attractive to international travelers.
With half the market cap in cash, a core business well apt to generate a cumulative total of 65+ million in after tax earnings ($4.20+ in EPS) over the next 5 years (modeled below), market discounting zero growth and high cash burn on growth initiatives that could prove to grow the business’s reach, and an activist knocking on the door – the margin of safety is high and investors are risking a dollar of downside to obtain four to five on the upside.
mj-5
The above accounts for zero growth in revenues and earnings from SMB & Broadsmart from 2016 – 2020.
My estimated base case is cash eventually will be returned to shareholders (currently $3.43/share, consumer business top line decreases 15-17% annually, margins largely the same – consumer business generates an average 16mm in pre-tax income annually till 2020, 3% of float decreased annually, growth initiatives aren’t a home run but don’t flop either. All this gives you 50% upside. The bull case lies in new board becoming shareholder friendly and exceptional stewards of cash, they milk the consumer business for cash even while its top line dropping 15-17% annually, profit margins can stay the same over next 4-5 years. Growth initiatives moderately live up to management’s expectations and are profitable. The bear case would look like cash being burned, growth initiatives are basically a flop, consumer business will die of new technology in just a couple years.
mj-6
As Ben Graham said, “the stock market is a voting machine in the short-term, but a weighing machine in the long run.” The cash flow generation of the core business, combined with growth in the enterprise segment, and a return of capital to shareholders will tip the weighing scale and the pendulum back into favor for MagicJack shareholders.
Banks flying high Trump’s Transition Team Pledges to Dismantle Dodd-Frank Act. Including FNMA & FMCC could be a lot of upside.
I think the key here is Facebook. This could be huge, Facebook has something like 1 billion users.
Lets see if the CEO throws cold water on it.
I'm in at .10 for a long time, i thought it was really cheap at that price, ha ha.
I didn't wait this long just to break even, if this is what we've been waiting for we could see .50 to .80 pretty quick IMO
NEW YORK & SAN JOSE, Calif.--(BUSINESS WIRE)--LiveWorld, Inc. (OTC Markets: LVWD), the social customer experience company, announced today the launch of its new chatbot management tools for Facebook Messenger.
Oct 18, 2016
OTC Disclosure & News Service
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Greystone Logistics, Inc. Reports First Quarter Results of Operations
TULSA, OK--(Marketwired - Oct 18, 2016) - (OTCQB: GLGI). Tulsa-based Greystone Logistics, Inc. reported sales for the first quarter ended August 31, 2016 of $7,844,261 compared to $5,569,981 for the prior period for an increase of $2,274,280. Pallet sales were $7,657,259 or 98% of total sales, for the quarter ended August 31, 2016 compared to $5,566,868, or 100% of total sales, in the prior period for an increase of $2,090,391.
Greystone's pallet sales to its two major customers during the three months ended August 31, 2016 were 66% of total sales (36% and 30%, respectively) compared to 31% (31% and -0-%, respectively) in the prior period. The increase in pallet sales is primarily attributable to the addition of the second major customer, a pallet leasing company.
For the three months ended August 31, 2016, Greystone recorded net income of $27,008 compared to $48,396 in the prior period. For the three months ended August 31, 2016, Greystone recorded a net loss available to common stockholders of $(117,439), or $(0.00) per share, compared to $(91,315), or $(0.00) per share, for the prior period.
"The addition of the pallet leasing customer has had a significant impact on Greystone's sales and operations," stated Warren Kruger, President and CEO. "Greystone incurred substantial costs necessary to achieve this growth including an approximately 68% increase in the number of employees over the prior period. The pallet leasing company's demand for pallets is expected to be a continuing major source of revenue for Greystone. To meet this demand, we continued to invest in our company's future through the addition of another injection-molding machine under a capital lease during the quarter ended August 31, 2016 and a second machine in September, 2016. Further, we will be focusing on improving the returns for our shareholders through improvements in operating efficiencies and cost containment to achieve better margins."
Greystone Logistics is a "Green" manufacturing and leasing company that reprocesses and sells recycled plastic and designs, manufactures, sells high quality 100% recycled plastic pallets that provide logistical solutions needed by a wide range of industries such as the food and beverage, automotive, chemical, pharmaceutical and consumer products. The Company's technology, including that used in its injection molding equipment, proprietary blend of recycled plastic resins and patented pallet designs, allows production of high quality pallets quickly and at lower costs than many processes. The recycled plastic for its pallets helps control material costs while reducing environmental waste and provides cost advantages over users of virgin resin. Excess plastic not used in production of pallets may be reprocessed for resale.
This press release includes certain statements that may be deemed "forward-looking statements" within the meaning of the federal securities laws. All statements, other than statements of historical facts that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future, including the potential sales of pallets or other possible business developments are forward-looking statements. Such statements are subject to a number of assumptions, risks and uncertainties, including the ability of the Company to continue as a going concern. Actual results may vary materially from the forward-looking statements. For a list of certain material risks relating to the Company and its products, see Greystone Logistics' Form 10-K for the fiscal year ended May 31, 2016.
Contact:
Warren F. Kruger
President/CEO
Corporate Office
1613 East 15th Street
Tulsa, Oklahoma 74120
(918) 583-7441
(918) 583-7442 (FAX)
http://www.greystonelogistics.com
Earnings in the next week or two.
Kruger bought 249,000 shares in the open market.
The new customer is at 15% of sales with one mold, now two more molds are in play.
Should be interesting.
MEET... last night Jim Cramer gave it a speculative buy.
GLGI. It's a good point but at $.22 this is a good buy. IMO
GLGI $2.5 million per mold.
Lol Insiders own way too much of GLGI for this ever to go bankrupt.
The debt was for new molds for the new customer. The problem is they never do the press release until weeks after the earnings.
I think if the CEO said he was going to be replaced the stock would fly. Thanks for looking at it.
GLGI I'm confused also. They do have a good amount of debt, but they are paying it back. Seems really cheap at .23 JMO
GLGI That's a point about Q4. I think the difference is the new customer , they are using a different pallet than the beer customer.
GLGI 10-K out ,
2015= 120,000 sq ft of manufacturing & warehouse space.. 2016 = 195,000 sq ft.
New customer. Sales 2015 22 million 2016 sales 26 million. I would like to hear your thoughts.
Thanks in advance.
Hello twointen ,
I frist bought 3/2014 when micro cap club was pumping GLGI and the AB contract came into play.
I have bought again about 3 months ago in the low .20s because i think the stars are lining up.
I think the slim keg pallets will do very well, also the new customer should be huge, and maybe some new business from Molson / Coors ? at least the slim keg pallet must look good to them.
New business to Trienda , hopefully another new customer ? I hope we learn the name of the pallet pool customer. Earnings should be out any day now, lets hope for the best. All JMO
Vasomedical to Report Second Quarter 2016 Results on August 15, 2016
Management to Hold Investor Conference Call on August 15, 2016 at 11:00 a.m. ET
PLAINVIEW, NY / ACCESSWIRE / August 8, 2016 / Vasomedical, Inc. (PINKSHEETS:VASO) announced today that it will release its financial results for the three months ended June 30, 2016 on Monday, August 15, 2016, before market open.
The Company will host a conference call on Monday, August 15, 2016 at 11:00 a.m. ET featuring remarks by Jun Ma, Ph.D., President and CEO, Peter Castle, Chief Operating Officer, and Michael Beecher, Chief Financial Officer of Vasomedical. To join the conference call, please dial 1-877-407-8033 from the U.S. or 1-201-689-8033, internationally. Please call at least five minutes before the scheduled start time. The conference call will also be available via webcast and can be accessed through the Investor Relations section of Vasomedical's website, www.vasomedical.com. Please allow extra time prior to the call to visit the site and download any necessary software to listen to the live broadcast.
There is a lot of money out there looking for low float stocks right now, all we need is some news. long and strong !!
I bought more shares in the low .20's
I would not be surprised to see someone buy GLGi, with a market cap of 6-7 million this is really cheap.
Anheuser-Busch InBev (NYSE: BUD) may have just received approval to make its biggest acquisition ever as the Justice Dept. signs off on its $107 billion merger with SABMiller Under the terms of the agreement, Anheuser-Busch will sell the Miller brand to MillerCoors and shed Miller's stake in the joint venture with Molson Coors (NYSE: TAP). Together, the two brewers account for 70% of the beer sold in the U.S., and in some areas, it runs as high as 90%.
In a statement announcing its signing off on the deal, the Justice Dept. said, "The two largest U.S. brewers -- ABI and MillerCoors -- will now remain independent competitors after the deal." Perhaps it would be more appropriate to say the duopoly has been institutionalized.
I think the pallet business will pick up if not this quarter, then by the next quarter, when it's hot like it is now they sell more beer, need more pallets. From 2015...
Warren Kruger, CEO, stated, "While the company's sales lagged for the reporting periods, the outlook for the fourth quarter is very promising with the fulfillment of orders for our seasonal customers and business from new customers." Kruger continued, "'We are excited about the future of the new slim-keg pallet, the versatile-new 48X40MVP pallet and our 37X37 beverage pallet as these pallets are testing extremely well."
Kruger adds, "Our entire organization is committed to the Company's goals, producing results that are in line with the expectations laid out in our business plan and continuing to build value for our shareholders. The diligence and patience exhibited while working through an extended series of challenges and opportunities will be rewarded. Plastic pallets are more frequently being recognized as a necessity rather than a luxury and our 100% recycled plastic products help the environment while providing sustainable money saving solutions. Growth is coming from a broad range of products and new product designs with concentrations in the beverage, agriculture, and pharmaceutical industries."
All this and the new customer that will need a 2nd mold ?
Everything is pointing up in my opinion.
Don't forget CALL $5.98 New acquisition complete, large share buy back complete, moving from Israel to the USA, cash 45 million no debt.Etc
New website. http://greystonelogistics.com
Says 30 million in sales, ? on the about tab
$40 million in revenue from two of their companies. Com-Tec & MCS not bad!!
http://www.correctionalnews.com/sites/default/files/reports/SEC_Report_16.pdf
Musical chairs at the top, but still a good company. I use their products and are happy with it.
Earnings should be very good. JMO
Up list to the Nasdaq? This is very good news!
I hope your still in.
Monday, May 2, 2016
CRYSTAL RIVER, FL: B-Scada, Inc. (OTCQB: SCDA) ("B-Scada") today announced that the company has submitted the necessary documentation with Finra and other required agencies to execute a 1 for 10 reverse split of its common stock. The corporate action will take effect 5/2/2016. The new symbol for the company will be SCDAD. The "D" will be removed after 20 business days and the symbol will change to SCDA. The number of authorized shares and the par value per share will remain unchanged.
"Over the last few months we have had discussions with investors, advisors and our board about our capital structure. By completing this reverse stock split, we expect to gain broader access to the institutional investment community, it is also one of the required steps for us to relist on a major exchange. This strengthened position will provide us the opportunity to fund future transactions which may be required for growth of the company", said Ron DeSerranno CEO of B-Scada.
For what it's worth.
Revenues and Earnings for Greystone Logistics, Inc.
Date : 05/03/2016 @ 5:00AM
Source : Marketwired
Stock : Greystone Logistics, Inc. (QB) (GLGI)
Quote : 0.23 0.02 (9.52%) @ 4:00PM
Revenues and Earnings for Greystone Logistics, Inc.
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Revenues and Earnings for Greystone Logistics, Inc.
TULSA, OK-(Marketwired - May 3, 2016) - Tulsa-based Greystone Logistics, Inc. (OTCQB: GLGI) reported sales for the third quarter ending February 29, 2016 of $5,280,480 compared to $3,685,044 for the prior period for an increase of $1,595,436. Pallet sales were $5,122,785 or 97% of total sales, in the quarter ended February 29, 2016 compared to $3,520,056, or 96% of total sales, in the prior period for an increase of $1,602,729.
Sales for the nine months ended February 29, 2016 were $15,270,671 compared to $13,676,492 in the nine months ended February 28, 2105 for an increase of $1,594,179. Pallet sales were $14,999,740, or 98% of total sales, in nine months ended February 29, 2016 compared to $12,466,944, or 91% of total sales, in prior period for an increase of $2,532,796.
Greystone's pallet sales to its major customer in the nine months ended February 29, 2016 were 31% of total sales (32% of pallet sales) compared to 40% of total sales (44% of pallet sales) in prior period. Pallet sales to the major customer decreased by approximately $0.7 million from nine months ended February 38, 2015 2015 to the nine months ended February 29, 2016, while pallet sales to new and existing customers provided the basis for the increase in pallet sales in the current fiscal year.
For the third quarter ended February 29, 2016, Greystone recorded a net loss available to common stockholders of $(200,528), or $(0.01) per share, compared to net income of $198,859, or $0.01 per share, in the prior period. For the nine months ended February 29, 2016, Greystone recorded a net loss available to common stockholders of $(314,263), or $(0.01) per share, compared to $(382,764), or $(0.01) per share, for the nine months ended February 28, 2015.
"During the third quarter, Greystone acquired an additional injection molding machine at a cost of $2.5 million to accommodate the needs of a new customer", stated Warren Kruger CEO. "There were substantial costs in preparation for full implementation of the new equipment which affected the margins for the third quarter. The equipment became fully operational in March 2016. We anticipate higher sales and better margins in the fourth quarter ending May 31, 2016. We continue to invest in our company's future."
Greystone Logistics is a "Green" manufacturing and leasing company that reprocesses and sells recycled plastic and designs, manufactures, sells high quality 100% recycled plastic pallets that provide logistical solutions needed by a wide range of industries such as the food and beverage, automotive, chemical, pharmaceutical and consumer products. The Company's technology, including that used in its injection molding equipment, proprietary blend of recycled plastic resins and patented pallet designs, allows production of high quality pallets quickly and at lower costs than many processes. The recycled plastic for its pallets helps control material costs while reducing environmental waste and provides cost advantages over users of virgin resin. Excess plastic not used in production of pallets is reprocessed for resale
Oops 2nd highest revenue
Look who had the highest revenue in 2015. Buddy must be doing something right!!
http://www.correctionalnews.com/sites/default/files/reports/DEC_Report_15_0.pdf