Hey, everyone, and welcome to today's Greystone Q4 Results conference call. At this time, all participants are in a listen-only mode. Later, you'll have the opportunity to ask questions during the question-and-answer session. You may register to ask a question at any time by pressing the star and 1 on your telephone keypad. Please note this call is being recorded, and I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Brendan Hopkins. Please go ahead.

Thank you and thank everyone for joining us today. We have a brief blue sky statement and then we'll start. So, except for historical information contained herein, the statements in this conference call are forward-looking statements that are made pursuant to the Safe Hydrofissions, the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties that may cause our actual results in future periods to differ materially from forecasted results. With that said, I would like to turn the call over to Warren Kruger, CEO of Graystone.

Hello, everyone, and thank you so much for being on the call. These are the times that I wish that there was better news to present to you, but the news is the news, and you've all gone through our 10K, and you can see we had a very difficult year ending May 31. And again, I'll go back and I'll rehash the history so that those who don't know will have a fresh idea of what happened. We had an 11-year relationship with a company called IGPS. We started with them with one mold, one machine, and we went up to about a million, two pallets per year. And in... Last, it was in October last year, I got a call and they said today's our last day after an 11-year relationship. Well, it was most certainly unexpected because we were grinding about 400,000 broken pallets a year and reprocessing that resin. And these are things that are not easy. to do. They're difficult. You have to have the equipment. You have to have the knowledge. You have to have the personnel. And then we have to have the equipment to reprocess it, to put it in a BB form to reutilize it. And it's great because that's the world we live in. It is exactly as we present ourselves. We take waste plastic and we make new products. So it was a wonderful thing. And we never anticipated that they would leave us. And in fact, they did. They've decided to go out of the growth mode and go into just a more like reap what they've sown type of mode. And they did have an operation to produce pallets down in Dallas, Texas. So they dropped off about 800,000 pallets a year in their growth plans. So that lead left us in a situation that presented us, we had to jump on it. And we laid off about 140 people in December. And we have pared back dramatically. The good news is we immediately reached out to our bank, IDC Bank. They've been a fabulous, we've had a fabulous relationship with them over time. We said, hey, we need to go immediately into interest-only for 2026 for the year, and they agreed to do so. And part of what you'll see on our 10-K is everything's current. Well, our auditors make us show everything is current, but in fact, we're paying interest-only, and our banker has been He's been gracious enough to say, why is it all current when it's not due until the date of the note? But in fact, the auditors, the way we're structured is they have to put it all as current. So we feel comfortable with our banking relationship. We feel comfortable with our plan. We have had, let me just go to the financials. As you can see, we're off about $30 million. And that $30 million, it matters. It's once you cover those fixed costs and you put on the sales and everything drops to the bottom line. And so we have had really a tough year filling that void. And so I anticipate that it'll be in calendar year 27 before we're really fully back on board. We've had numerous discussions. We have a relationship with multiple firms that we're doing projects with now that will add revenue. We have a keg pallet for Yingling that we have produced, and Yingling said that they couldn't take it in the summertime, but I anticipate we'll be selling to them in the fall. Walmart, we've had a $50 million relationship with Walmart over the last five or six years. We continue to provide housing to the Walmart system, but we are behind our schedule with them. And there was some leadership change at the top at Walmart. And our contact who I had for about 20 years, a gentleman named Bill Greaton, he retired. and so we've been dealing with new folks. But all that being said, our team at Greystone continues to work diligently every day to fill the sales volume. And what we have done is during the period of time that IGPS was our customer, we were prohibited from going out and leasing pallets. We are now in full-scale mode. We are tracking and tracing pallets and doing that in multiple areas. We have a firm out of Philadelphia that's been a wonderful partner that is, they have their own tracking and tracing program, and they're testing our pallet with multiple customers. We have another firm out of California that they're testing our product with track and trace and their own track and trace program and that's been quite enlightening. We have another big leasing program that we quoted on and I anticipate that in the next 90 days that will come to fruition. It's a large Midwestern company that's been using wooden pallets for years and they generate plastic and they know that they should be on plastic and I anticipate that happened. We also have a double-decker pallet that we have designed. It's the same on the top as it is on the bottom. It will take – we're doing some of this in the concrete industry, and we've been tracking and tracing pallets that can carry the concrete. And it's been quite successful, and we also anticipate that we'll continue to get some more of that business. be that as it may, we have to replace revenue. And that's our focus right now is replacing revenue and managing our expenses and our capital. We've really limited any capital expenditures except for maintenance capex. So I'm proud of what our internal staff is doing in the Bettendorf area and our new equipment in Palmyra, Missouri. We've had some of that subleased. It was empty equipment, and we've subleased it so that we could get some revenue off those machines. And, again, I look forward to opening it up for questions because all I can do is answer your questions and say that we're working very hard every day for you. So at this time, I'd be happy to answer any questions that our shareholders might have.

Thank you. At this time, we will open the question and answer session. If you would like to ask a question, please press star and 1 on your telephone keypad, and you'll be placed into the queue in the order received. You may remove yourself from the queue at any time by pressing pound and 1. Once again, to ask a question, press star 1 on your phone now. and once again, if you would like to ask a question, please signal by pressing star one. Wow. Okay, Mr. Kruger, it appears there are no questions at this time. I'll turn the conference back to you.

Well, I will mention anyone on the call. and there's quite a few that we have on the call this morning. I am available every day for my shareholders to talk to. And so if someone wants to ask questions offline and ask about our capabilities, what our strategic plan is on the sales side, I'd welcome those calls. And if everyone has a pencil in hand, I want to make sure that you have my mobile number so that you can reach me at any time. and that's 231-0616.

And Mr. Kruger, we did have a participant signal. We'll go ahead and take that question from Eric Nickerson. Please go ahead.

Yeah, hi. I had some conversations with Brendan where he mentioned that you guys are doing some sort of sideline work, Grinding Plastic or Grinding Pallets for other companies. I'm sorry I don't recall the details of that too well, but apparently it's a revenue generator. I wonder if you'd like to mention that.

Yes, thank you for mentioning that. Years ago, when we got in this business, we had kind of a three-legged stool, and we were, one, we were going to make and sell pallets. Two, we were going to make and and reprocess and sell resin. And then three, we were going to lease. Well, we took care of the leasing by getting IGPS as a customer. So we took care of that leg of the stool. We already had the manufactured pallets, so we had that leg of the stool. And the third leg of the stool was selling excess plastic resin in the marketplace. We did that for many, many years. We processed and sold excess resin. But as we grew, we consumed everything we used. We consumed it all. So we really didn't generate new revenue from selling excess resin. When we knew we were going to have this issue, we contracted to grind and granulate a large quantity of plastic. and then we've also been contracted with to provide BB services to make usable BBs for the customer and that has helped on the revenue side and we are continuing to do so and we are continuing to solicit business. Matter of fact, I talked to someone today that's funny that you even brought it up. I talked to someone today out of St. Louis that said that they had large quantities of plastic that they reprocessed, they outsourced and so it was one of those we'll be happy to quote on that and do that because we had the capabilities and the equipment to do so. I really appreciate that you mentioned that.

Okay, well good. Apparently you have some time so maybe you could add some color to another comment. So you lost IPGS or IGPS back in December. They just suddenly stopped buying. $30 million of revenue is gone. It's been, what, six to nine months since then? Have you been able to identify all of the, you know, where are those people that they're not selling to getting their pallets now?

Well, IGPS is a leasing company. So they were a growth company. and they're really the only large plastic, there are three large pallet rental companies in America. A wooden pallet company called CHEP, owned by Brambles of Australia. Another company called PECO, P-E-C-O and those companies really, they'll go to Procter & Gamble's of the world or whomever and they will say, how many pallets do you need? And they'll provide wooden pallets on a rent per use basis and IGPS entered that market probably oh now it's been 13 or 14 years long time ago and they are the really the largest plastic pallet leasing company but they were in a growth mode for years and years and years so a lot of opportunity to do that on that side and people do want to lease plastic versus wood. But they're owned by a private equity company, and they were generating a lot of cash, but they were pouring all their cash back into growth and pallets. And what they've done is they've said, okay, we're not going to pour all our money now into growth. We're going to retain some of that money, and we're just going to go into a maintenance mode. and we're going to mow the grass we already have and we're not going to grow any new fields right now. So that's where they are. So the opportunities haven't gone away, but they're not putting on as many customers as they were now. And that allows people like other leasing companies, other folks that want to do leasing in that world, allows them to enter and have an opportunity. So they haven't gone away, but in this world, in the pallet world, anyone I've been listening to, this is 25 years, it's a long sales cycle.

I guess the thrust then of your revenue recovery mode is to try to become another big player in leasing. Am I right?

That's one aspect of it, yes. We think there are opportunities for palace and leasing industry. Most certainly, IUPS has proved that.

Okay. All right, thanks. That's all I have. Thanks very much.

You bet. Thank you.

And as a reminder, if you would like to ask a question, you can signal by pressing star 1 at this time. and we'll pause for just a moment to allow everyone an opportunity to signal. And Mr. Kruger, it appears there are no further questions at this time.

Great. Again, if anyone wants to reach out to me at any time, please do so. Brendan, you have any comments?

No, I think we've covered everything. I was going to reach out about the pallet thing. I mean, maybe one thing just to give people an idea of the scale of the recycling and repalletizing. I believe in a conversation you and I had a few months back, You were talking about millions of pounds. Is that the type of size, you know, orders you're seeing on these, you know, re-pelotizing?

Yeah, it's, there's, we've, in the past, when we are probably our most, our largest year, we probably reprocessed over 50 million pounds. And we were using it for our own consumption. And so, right now, we have capacity to do so. and so we will quote on a bunch of that business in the future. Yeah, and the opportunity is large, but it's also you have to understand that there are other people that are in the reprocessing business out there processing it. And we have not been in the business for many, many years, so we're breaking back into something we haven't been into in years. So it'll take some time, as with all things.

Okay. Are you comfortable? I believe you threw out a number on a profit per pound, I believe, or maybe it was per ton. I can't remember. Is that something you can share? You know, just for people who can imagine a perfect world.

You know, truckload quantities are about 42,000 pounds, and if you are, you know, if you're processing that type of material. The material is going to be in the $0.35 to $0.40 range per pound for a customer, so they provide the resident to process it. You get a processing fee. And the processing fee, it's not humongous, but it's $4,000 to $5,000 a day. Per Machine. So it can add up. And it's just something they're doing in the interim while our pallet sales come back on. Because we do have the best product line in America in pallets. We've got a beautiful pallet line that includes probably 30 different SKUs. And we need to focus, and that is my entire focus, is sales, sales, sales. because that's what will do it for us is getting some of these customers on board, getting some of the leasing customers on board, getting Walmart to continue to buy a product from us. We are working on our fire retardancy. Throughout the years, fire retardancy has been something that, risk managers within organizations will often say I need a fire retardant plastic pallet and we've stayed away from that for years and years but we actually have done some testing on this because the chemical changes and the AI has helped in putting putting formulations together and so we've actually passed our fire test in a simple form and we are we're set to do some large-scale testing. And we're optimistic about that because that's the type of thing Costco won't utilize plastic pallets unless they have a UL rating. So, we believe there is a big opportunity on the Costco side. We don't believe it. I know it because I've talked to them. And so, we're pursuing that in a hot and heavy manner. and anything else? No, I'm good. Well, maybe one just piece of color.

You mentioned, you know, how much you can process with those machines. I know it's got, you know, fresh new sales, but didn't you mention like having like a half a dozen of those machines or something like that?

Oh, yeah. We've got grinding and granulating machines and we've got four processing lines that we can BB. So they're they're actually, we keep them pretty busy. It's a good thing. We process for our own use, and now, as I've mentioned to you and I've used mentioned, we're processing for someone else. So, we do have some capacity left over, though, and these are all things that we're exploring and pursuing. I'm good. I'm good, too. Anybody, if you need anything from me or from Brendan, just give us a call. We'd be happy to discuss it with you. Thank you.

Thank you. This does conclude today's Greystone Q4 Results Conference Call. Thank you for your participation. You may now disconnect.