Jerash Holdings (US) (JRSH) 8 Feb 242024 Q3 Earnings call transcript

Greetings. Welcome to Jerash Holdings Fiscal 2024 Third Quarter Financial Results. A question-and-answer session will follow the formal presentation. Please note that this conference is being recorded.

I will now turn the conference over to your host, Roger Pondel, Investor Relations.

begin. may You

be and Choi; Fiscal Kelly, Jordan. the Pondel everyone. to Lee; Chief Tang, It Welcome PondelWilkinson, the Eric to Thank Chairman and Chief company's Third good operations Financial Quarter company's Holdings and will firm. Relations XXXX Holdings Officer, Roger leads pleasure Conference Jerash in momentarily Jerash introduce Samuel you, Executive Investor morning, my its Call. who with Gilbert I'm Officer,

to meaning Sam, forward-looking that -- on Actual Reform section www.sec.gov, forth set statements. over to company's want most forward-looking Commission Private with I Holdings as to differ include conditions, listeners Risk call Before the XXXX. statements in turn Litigation our I today's numerous the to most of control, statements, law. forward-looking many remind Exchange the Jerash including the XX-K Such filings time. company from Securities copies which the from except these with subject materially required obligation as of SEC's by of could And Factors and undertakes company's Securities Act statements of of those may made are SEC the beyond recently call which update within time the formed filed the the recent no with other Form to are results any website available and forward-looking along at are

over turn to call pleasure to Choi. my it's the that, with Sam? Sam And

Thank you, Roger.

everyone's which I how regarding is Jerash, Before results, is want situation the on we I update provide Middle to our East mind. it review an and quarter fiscal affecting know third

from due disruptions us seeing turmoil region, and in decisive throughout to materials shipments political Asia. chain for caused As we has We took have and all reading action. delayed raw swift return in which of the supply has the been news,

Arab to of Port Emirates. raw Jebel Ali alternative receive materials adopt United we And route in of able an to the through since December, were the import

and for at Additionally, the sea now government reassure the Aqaba Jordan the temporary exports including Haifa environment stable the proactive our Jordanian both Foreign there And routes. a protection port a export in was that Affairs flowing as specifically team port, businesses, Haifa Ministry of at shutdown from and the safe of although is maintaining normal. of are

While revenue profitability due third issues region, the political situation to large supply ongoing down able and to significantly was gross the achieve chain for fiscal improve margin. quarter, XXXX the in we in and part the were

our from orders were they but customers Importantly, not delayed, canceled. were

orders a progress new good customers continue from global with brands. of pipeline make We to established fresh attracting

are have opportunity We European-based particularly another Europe we several in trial orders. and excited high-end begun about growth apparel have our brand where produce to gained

both brands, for all These In future. have indicators addition, European Vans VF and positive orders placed and are markets. U.S. for Dickies, trial the

to call will our I about who Tang, talk Eric to ground is turn the operations now on Jordan the over in there.

fully active. chain fiscal customers Thank turn operations have That currently delayed first The in everyone. which our quarter. said, our are production, down shipments to you. Hello, in for slowed supply resulted our our disruptions

contingency place the challenges, logistical in enable as some put ship that of Despite have necessary. current produce now to external we us will orders and plans

our execute strategic to We customer diversify initiatives base. on to our are continuing

global and long-established lead our steadily, strong customers, consistently While increasing is are from we maintaining brands. relationships with new new flow our customers order attracting

high-end another market. see first the have are penetration further from Sam and are brands European too. Orders yet high-end European-based brand European-based into earlier, mentioned attracted increasing, excited to As apparel we we our apparel

continuing VF months trusted orders. several of manufacturing and costing, trial sampling new is for a to partner producing we Following garment now several Corporation. are be Jerash

placed the fiscal trial producing brands, orders picked Dickies rolling brands have we Timberland its up forward production European look U.S. year. brands quarter. to Vans new to in In and the the apparels markets. out Face fiscal and for and during the addition Both for We North third

through into efforts Orders flourish continuing, the customers Meanwhile, joint with fiscal from joint the but committed, in pushed early being believe new are venture XXXX. and still we our marketing partnership are they Busana will future. are

As plans forward with our for joint build to well, venture moving a mill in new state-of-the-art fiber are textile Jordan.

yet financial active have and the the construction with mill, government are has although been for We collaborating in Jordanian are and a date incentives location discussions the identified for not precise determined. certain

the remains textile and goal long-term manufacturing trusted as namely conscious being growing a solutions apparel in intact, sustainable partner, Our providing industry. environmentally leader responsibly an

to way on our We are fulfilling that mission. well

the please. Gilbert, discuss will Gilbert call turn now to to results. over I our financial

Thank million the for Revenue being million supply to $XX.X was year. fiscal last our with interruptions XXXX primarily for you, quarter the $XX.X of major with third due compared the shipments decrease to some Eric. delivered period U.S. chain in The fewer to the same amounted customers

year. compared last was Gross quarter margin generate larger XXX orders of higher fiscal XX.X% the million produce points product the due with year profit for same increase $X.X was compared improved in to The as proportion basis to customers mix to million ago. XX.X% quarter continue primarily $X.X XXXX improved our that margins. Gross third U.S. with for a we

were Stock-based the quarter million quarter quarter the for year. were third lower quarter same in XXXX fiscal were compared compared year last quarter the $X.X expenses in with year. fiscal Operating million compensation the in expenses year. million expenses last none XXXX last same with million $XXX,XXX same compared $X.X the $X.X SG&A in $X.X at third with

year. fiscal expenses same Operating income the third third last with XXXX in million recent $XXX,XXX quarter the the totaled quarter in other most $XXX,XXX were compared versus $X.X Total in period

Gap] [Audio

$XXX,XXX, last per year fiscal $XXX,XXX, $X.XX XXXX the was quarter or with share, same $X.XX income compared or third diluted in in net year. the share, per diluted and period

provided months ended compared million the Inventory same strong cash capital X year. the with for XXXX, Jerash's $X.X XXXX. accounts XX, $X.X approximately quarter and and of restricted XX, was million December as receivable by fiscal cash the million million, in million $X.X of balance December sheet activities of remain cash XXXX net year and with $XX.X position million. $XX.X last for cash and third working Net was period was operating $XX.X

February X, of on dividend XXXX. as XXXX, a XX, to XX, payable February of $X.XX quarterly of On XXXX, February approved Board record Directors share per stockholders our of

ongoing Lastly, the uncertainties geopolitical imprudent fourth it to at with Middle this what expect on East, provide the guidance in to quarter. formal would us for fiscal be time for

the the please? open we that, call question, Operator, we first up With may have now questions. for will

question Mike Davidson. with [Operator coming Instructions] Your first Baker is from D.A.

live. is line Your

Okay. Thanks. Good morning.

So the Red understandable. perfectly think, issues, Sea I

little give have think first of the us of give I questions. is us would the the One, better be situation sense how the if look you words, bit other you underlying a what demand could sort does Red for a that and X you does -- of could true And underlying what like? If maybe backlog you if could In demand? inform adjust Sea delays?

second different that a but different with a maybe pushed to I little suppose bit? that a Does Busana talk out situation? anything then And Sea venture have you situation? and that question. question, Or related, why Can the is a joint is the Red about do

many geographical there in region. in it put -- are a demand, underlying to so market uncertainties both true it and now, together the contingencies hard really and the right because just number to -- in is so the the many hard is Concerning also

them, obviously. we And the they're -- any they're certain keep being with not not of concerned, just ship. orders. they customers, some and communicating when And on are to canceling They're

get want shipment Sometimes logistics to to situation the the down interruption, sometimes they the they road. want But off the push earlier. the in to further of because shipments

They it want But still goods. is hard there. to overall, predict. still the get So really demands are to their

some can't in that kind sales time, Now get they the product if want them in for of is faster their they of because the the proven earlier actually concerned that already in are market. because shipments

it really is not don't for go. that I to number a have know the quarter, of to an we know projection So pretty we kind thing And put go, going how just direction achieve. cannot it's don't fourth how to something which and want to together. We this because down put going is we don't internal

think hand, in same in kind other are the of is on because boat Busana the But customers the I most of the also U.S.

are marketing orders just to that still sales some the there XXXX. are is our fiscal delay. may be year calendar the But further And the of so It year down there. for XXXX, and pushed some

or... Eric, anything add to do you have

the with Busana, ago actually, customers, from I confirmed, because Yes, is X or quite months progress side. we Busana's already about new have X, X convincing ranging X think,

happened December. in the So -- but Sea Red crisis unfortunately,

situation will and X we to they that still PO customers the to -- into And already of costing officially us. try with go with us. they production, in so the give customers the X the continue customers will ahead East, those finished look to the some trial Although Middle have of confirmed but before the we samples the

after month. But to optimistic And Busana. I be will I'm X we with maybe know joint still about venture think the the able better situation

Your Mark is with Lake Street. coming next Argento question from

the of to chain. Just getting kind core issue supply about back the

explain So maybe you more. little could a

Just to turn is. problems aren't understand and little into bottleneck receive able raw the where to be finished ship materials shipping? bit So those are in able having you Or trying them a you the then here slowdown, to goods to out? the

the maybe is weeds then quarter. revenue? out? couldn't million it products kind shipping Do be these Or this there's helpful. $X you are end a little lastly, get lost up bit down would And ship of you anything, Just in maybe of it more actually

Well, the folds. situation is many

the the First Sea was Red crisis, beginning of there of shipments the all, interruption. outbound at some

and Haifa But in working port, the for the since Aqaba down time. period and think Haifa of which shut port a now the reopened are port has I both is then, normally. it was Israel, been short

because material comes come more the material problems about raw through We're Yemen it the has because shipments to raw inbound Asia. from facing

without Going goes out passing it Yemen. through out,

just materials the is UAE. that have to it then, at to route port established alternative since well. the the UAE in. since the December, Now in, use is working which send of get through part we raw an and truck then have raw We materials to getting And

materials in. So are getting raw slowly

a just bit It all But it on were it and that has can't don't for, might already they negotiated Sea, get settled. but are scene to and and to have we waiting the pay I containers materials Now Red are we are cannot the to they through that trying raw get already -- little to port a there more know. reach. be few the are in, the just reach those to so

X should within inflow X. have of a picture But we weeks, we the know point, we anticipate those at getting raw get of better this materials. how to should we're -- that the next But

just down the So And not will delays. be there are lost road. those are revenue; some just pushed it

Now another and took companies increased the -- they the crisis price. shipping situation here the situation started, as of is as the just soon advantage

Just COVID. it like when was during

think I hard Eric But can with. that. deal to are team have manage his we working that that. we to very situation another is handle that So and

don't So a I right, is anything think Is add? to -- Do temporary it issue. think you just I have Eric? that

Yes.

I shipping change China, easy go the -- go think Jerash in to as Jordan. The port, rather raw Sea, and supply the through Red make routing through to from simple and situation it through about for we apparel actually understanding, Asia Jebel we first of is changed to original to the is go crisis it soon as is material Vietnam, to Sea then soon UAE the from to Red to by as Taiwan, But UAE more occur the the Red the so truck the has from Ali Sea. it of Jordan. from -- in routing routing so that Asia, Port started, the as to Aqaba --

it's more time in can costing we we scheduled anyhow But the course, expensive the bit little Of receive us container a within required. the logistics.

already sea reason main at around -- the forecast give which of So heading Aqaba is want because time, XX the containers, XX the one cannot that container when to -- we is crisis to started. or why reason the maximum, on

still it And the started was did receive into any be Sea. So they not to Red before enter containers. we able

turn another the -- received away to Aqaba the -- that the will from go -- months' X X. ship Georgia. shipping before takes is now to Red why reach to go the because it and we gives away direction But South can Africa through they company X.X vessel is I then to Sea and time go or it X think they

X.X And X will containers month will these those that the months' materials the delayed. it another overall and be delayed, customer raw are So time. to take inform

Jordan of arrive can to mean, Those raw I start we is December materials and in scheduled that in production December. by ship the -- so end

to So is this why next production the reason And carried cannot start able this scheduled. -- is be the we forward as will quarter. the be to

be So will and this. forward canceled. need and order as is situation, quarter. it revenue will well to Gilbert mentioned, the -- clear aware the of more garments the customers next be Only is still not the I it is the the they hope like carried

No, like going that's super committed at with this point? communicating forward? they're to customer your customers. to are orders then Do guys moving manufacturing And you here? Or What's from of you you're helpful. the perspective and obviously, Jordan still attitude they capacity manufacturers other the a sense

for to orders Jordan or they them, from is up apparels Yes. At Jordan situation, out not given or going now, I they desirable well. any best, places until the situation. another Because the to other giving for the because apparel have current same are customers Jordan to that informed all their did no as consider move still moving in manufacturing. the us are to countries mean, And orders

I good appreciate and luck. guys, color, the

coming Your Financial. next AGES question with Felte is from Todd

the times. $XX noticed your to the of you wondering pay share, Good X I in I of about quite $X.XX. you've per short-term if million that in investing you've close in cash quarters, haven't the continued treasuries. challenging was despite earnings share $X.XX thought work but to a dividend last had

add could even and per $X.XX extra to paying share. that or $X.XX like gets back earnings a share you of you're your dividend looks that $X.XX an It when to hopefully

Hello? Were to you hear able me?

is off You of bit. about were your sorry. dividend lack cutting a the just It's Is [Technical and payment that little what the question talking profitability. Difficulty] I'm about?

I $XX and dividend? around don't securities your question short-term back where could boost the high that rates any significant was with and million cash, some the pretty hopefully have my income world considered least income. you investing interest notice even in you Have get in Well, interest earnings your with at you interest the

but cash have do the on deposits. many don't we securities, fixed those securities, not investments And that deposits in in We we we're earning banks short-term use. interest at Yes. have not good for pretty

offsets that chain some So supply raw that to of have interest for pay kind we for expenses of material purchases, the financing.

from there in We income coming securities. But is significant in of We short-term in don't thing. market. speculate invest such terms any investments, don't short-term the no

-- higher do like you invest a treasuries that, could in anything or you? U.S. for even any that yield So provide

capital and We could But capital consider have keep for point, working We to that. we of have do this not. at amount working cash certain purposes.

when for over of guys, my was was you possibilities question think there then and relates second other And Sure. kind it I visited to XXXX. transport. know I I

were The XXXX. and in Kingdom railway of Jordan they building, had that announced a large and started system transport system that they had

system, it I -- think Iraq Syria, and the called Afezda Aqaba. link it was the was to Arabia, Saudi in supposed and to

any you progress help Is guys that's for And is out? rail possibility on there made there that? transport to been any

the raw On imports? material

that that other to possibly Yes. had ports Arabia materials rail. link or know some talked expanding and completed possibilities if I use that transport that, to raw about they give Turkey, you other Saudi by they might

heard you anything? have Eric,

project, neighboring I -- to such in serious there's time, Jordan, logistics. countries that Arabia, -- mean, improve which -- at of cross-country, a Saudi the lot was to considered It -- XXXX. countries Because involved Yes. connect big railway

for reached But corona the will after project. the also latest pull This the Until opened agreement, almost that, recently to X -- discussion and development. years when is again. they they started they

too be couple speculate any next that Okay. far of years? could Or on? that there And possibility is completed even to is in the that away

too this the opinion least to far. years think it to though X that Even project. confirmed at the quite have My I it's year, is project X they finish

now remarks. Choi, CEO, the back question-and-answer closing for turn reached call the Sam to I have of to would over like session. We the the end

for us today and all you, and to of Thank continuous support. you for thanks your joining operator,

grateful our in hopeful to near-term the East we remains are life innocent day-to-day conflict, victims Middle out go the Jordan that While are all hearts of for normal, on resolution. sides a we and

We you Thank Thank look quarter. with to next forward speaking everyone. you. you,

Thank you.

you. Thank

you and Thank at concludes participation day. today's disconnect phone This have your a may this lines your and conference, you wonderful time. for