Good day, everyone. Welcome to the Jerash Holdings Fiscal 2027 First Quarter Financial Results. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Roger Pondell, Investor Relations. The floor is yours.

Thanks so much, operator. Good morning, everyone. Welcome to Jurash Holdings Fiscal 2027 First Quarter Conference Call. I'm Roger Pondell with Pondell Wilkinson, Jurash Holdings Investor Relations Firm. On the call today from the company are Chief Executive Officer Sam Choi, Chief Financial Officer Gilbert Lee, and Eric Tang, who leads the company's operations in Jordan. Also, Ringo Ng, The company's head of marketing will be on the call for the Q&A session. Before I turn the call over to Sam, I want to remind our listeners that today's call may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to numerous conditions, many of which are beyond the company's control, including those before in the risk factor section of the company's most recent form, 10-K, as filed with the Securities and Exchange Commission, and copies of which are available on the SEC's website at www.sec.gov, along with other company filings made with the SEC from time to time. Actual results could differ materially from these forward-looking statements, and Jurasch Holdings undertakes no obligation to update any forward-looking statements, except as required by law. And with that, it is my pleasure to turn the call over to Sam Choi. Sam?

Thank you, Roger. We are pleased to report another quarter of exceptional financial performance, highlighted by record revenue, improved gross margins, and a significant increase in profitability. These strong results reflect the continued advantages of our Jordan-based manufacturing platform, combined with disciplined execution on delivery, quality, and operational efficiency. Fiscal first quarter revenue reached a record level of more than $15 million, representing growth of nearly 27%. compared with the prior year period. We are pleased to see increased order volumes from our two largest US customers, along with continued contributions from the company's strategic partner, Hensel Group in Korea. As customer demand continues to grow, we are expanding our production capacity in a disciplined manner while maintaining the quality The strong momentum in our business reinforces our confidence, interest, ability to scale efficiently and deliver sustainable growth. In addition to our operational achievements, we are encouraged by recent trade developments that further strengthen our competitive position The newly announced duty-free access for Jordanian apparel and textile exports to the U.S. is a meaningful advantage for Juresh and reinforces our standing as a preferred manufacturing source for leading global brands and retailers. We believe this favorable trade environment will support future growth. create opportunities to attract new customers and strategic partners and enhance our ability to deliver long-term value for our customers and shareholders. While our outlook remains positive, we are closely monitoring geopolitical developments in the Middle East that could affect near-term regional market conditions, including export logistics, and transportation calls for war materials sourced from Asia. Although these factors may create periodic challenges, we believe our strong customer relationships, operational flexibility and growing attractiveness in the marketplace position us well to navigate a dynamic environment and continue supporting our customers' needs effectively. We remain focused on executing our growth strategy, investing in capacity and capabilities, and leveraging the unique advantages of our manufacturing platform. With an expanded customer base, product mix, and favorable trade conditions, we believe Jerez is well positioned to capitalize on emerging opportunities in the years ahead. With that, I will now turn the call over to Eric Tang, who is in charge of our operations in Jordan.

Hi, Eric. Thank you, Sam. We had a very active fiscal first quarter, driven by increased production for our two largest customers and new style orders placed by Hanson. We continue to actively respond to a growing volume of inquiries, particularly following the recent U.S.-Jordan trade agreement announced in July. By reinforcing the benefits of the original 2001 free trade agreement with zero duty for Jordanian apparel and textile exports, the new agreement further enhanced Jordan's attractiveness as a sourcing hub for the U.S. market. As one of the country's leading apparel manufacturers, Jiraj is uniquely positioned to capitalize on this favorable trade environment and convert new opportunities into long-term customer relationships. We are pleased to have received additional orders from Hansel. including expanded product categories and higher unit sales price. Additional product development through another large garment conglomerate is progressing toward its final stage, with order placements for well-known global brands anticipated in the near term. If completed as anticipated, these orders could further support our growth momentum in fiscal 2027. Turning to our previously announced expansion plans, we are on target to act approximately 15% of production capacity by the end of calendar year 2026. Expanding two of our existing manufacturing facilities The next stage of our expansion involves repurposing our most recently acquired facility into a smart warehouse and cutting operation, while also adding production lines. As part of this expansion, we are converting the facilities that currently serve as our warehouse and cutting department for additional production. These initiatives are expected to enhance our operating capability with 500 new state-of-the-art sewing machines and automation supported by approximately 1,100 additional workers. The second phase is expected to increase capacity by approximately 20% to 25%, with completion targeted for around mid-calendar year 2027. Our partnership with the Jordanian Ministry of Labor to add capacity in rural communities continues to move forward. Our second satellite factory which opened in March 2026 now supports 130 local jobs. We are currently expanding the site with additional floors, a project expected to increase overall production capacity by approximately 5% and bring employment at the facility to as many as 250 local workers. We expect this expansion to be completed by the end of fiscal year 2027. In addition, we continue to work closely with the Ministry of Labour on plans for a third satellite factory to create approximately 500 additional jobs in the surrounding community, which is about one hour away from Jurassic Park. and the first satellite operation in Ahasa. Together, this initiative supports Jiraf's growth objectives while also contributing to local employment and economic development. At the same time, we are managing through near-term logistic challenges related to the ongoing conflict in the Middle East. Export shipments out of hyphal ports are experiencing periodic delays, and the cost of transporting imported raw materials from Asia has increased since the conflict resumed in July. While this condition may increase some timing and cost pressure, we are working closely with our customers and suppliers and keep production flexibility to mitigate disruptions and maintain reliable delivery schedules. Overall, we see growth opportunities ahead. Our strategic capacity expansion plans combined with Jordan's competitive trade advantages and our reputation for quality and reliability continue to enhance our position in the global apparel supply chain. With that, I will now turn the call over to Gilbert to discuss our financial results. Gilbert, please.

Thank you, Eric. Revenue for the fiscal 2027 first quarter grew 26.7% to $50.2 million, compared with $39.6 million in the same quarter last year. The increase was primarily driven by higher shipments to the two major U.S. customers, as well as continuous contributions from the company's strategic partner in Korea. World's profit increased 35.7% to $8.3 million for the fiscal 2027 first quarter, from $6.1 million in the same quarter last year. Growth margin for the quarter increased 100 basis points to 16.4%, compared with 15.4% in the same period last year. The improvement was primarily driven by higher shipments to U.S. customers that typically generate stronger margins, as well as improved efficiency gains from automations. Operating expenses totaled $5.6 million in the fiscal 2027 first quarter, compared with $5.1 million in the same quarter last year. The increase was primarily attributable to higher sales volume, as well as increased tech counts and related expenses. Operating income rose 174% to $2.6 million in the fiscal 2027 first quarter from $959,000 in the same period last year. Total auto expenses were $546,000 in the fiscal 2027 first quarter compared with $307,000 in the same quarter last year. The increase was mainly due to higher interest expenses from supply chain financing programs used by two major customers, as well as letter of credit for raw material purchases to support growing business from Hansel. Income tax expenses were $404,000 in the fiscal 2027 first quarter, compared with $329,000 in the prior year quarter. Net income advanced more than fivefold to $1.7 million or 13 cents per diluted share in the fiscal 2027 first quarter compared with $324,000 or 3 cents per diluted share in the same quarter last year. Comprehensive income attributable to the company's common stockholders advanced to $1.7 million in the fiscal 2027 first quarter, compared with 328,000 in the same period last year. As of June 30th, 2026, cash, cash equivalents, and restricted cash totaled 14.5 million, and net working capital was 38.1 million. Inventory was 26.6 million, and accounts receivable amounted to $5.9 million. Net cash provided by operating activities was $2.5 million for the three months ended June 30, 2026, compared with net cash used in operating activities of $6.5 million in the same period last year. On August 7, 2026, Gerash's Board of Directors approved a regular quarterly dividend of $0.05 per share on its common stock, payable on August 24, 2026 to stockholders of record as of August 17. As Sam and Eric noted earlier, we remain optimistic about the company's future as we continue to focus on cost management and operating efficiencies, navigating current market conditions. Looking immediately ahead, we expect revenue for the fiscal 2027 second quarter to be approximately $49 million to $51 million, subject to logistics efficiency amid geopolitical uncertainties. Growth margin target for the fiscal 2027 second quarter is expected to be approximately 14 to 15 percent, taking into consideration the increased transportation costs for raw material imports. I will turn the call back to the operator as we open the call for questions.

Certainly. The floor is now open for questions. If you have any questions or comments, please press star 1 on your phone at this time. We ask that while posing your question, you please pick up your handset if listening on a speakerphone to provide optimum sound quality. Please hold for just a few moments while we poll for questions. Your first question is coming from Ryan Myers with Lake Street Capital Markets. Please pose your question. Your line is live.

Hey, guys. Congrats on another strong quarter here. I'm just wondering if you could start. So with the announcement of the duty-free access, have you seen any inbound orders from potentially new customers? And then secondly, what sort of capacity would you guys need to bring online, and at what point potentially do you think you could do that should new orders come through with this new update to the duty-free?

Yes, Ryan. We definitely have seen an increase Eric, do you want to mention a couple of the new opportunities after the announcement?

After the announcement of the new terrace system applied to Jordan, which is zero duty, for the old customer, like we have with our biggest customer, we received the projection for the coming season, which compared with last season, is around 15% more than last year. At the same time, we also received some more and many inquiries from importers, new importers from U.S. and all importers also received more inquiries for order placement. So I think we are also, Jordan is now become the most competitive manufacturing hub. This is the reason why we get so many inquiries when we expect the orders will be coming shortly and Compatible for last year, it will be increased significantly.

Got it.

Also, this Ringo, this Ringo, maybe I add one more about the new customer. Actually, I just took a business trip back to New York and just come back, and we have successfully opened a few new customers. Like Urban Outfitter, that's a very big potential customer. We just opened that this year. We forecast for the first year already 5 million order business. And we're still waiting for another three brands like Lee, Rangura, and Reeboks. And since they know children is a task, zero duty, They know our price will be very competitive, so we have a lot of requirements. And also, even North Face, they want us to do something new, like the Tang Jacket, which is the value is very high, and the Padding Jacket. All this new opportunity is coming.

Got it. No, that's great to hear. And then, you know, with some of those new opportunities, can you maybe just talk about the product mix there and maybe the potential for gross margins largely in the second half of the year to maybe kind of rebound to above 15, maybe back toward 16, 17, just the potential for gross margin expansion as maybe the product mix changes a little bit with some of these new orders?

Well, Ryan, We definitely will try to achieve a higher growth margin by working hard on improving our efficiency as well as our sourcing. But as we all know, once we acquire a new customer, there will be a period of time that we will experience a little bit of lower margins. and many more. We will continue to diversify our customer base and continue to diversify our product mix. Like Ringo said, we have opportunities to get some new customers and try on some new products which has higher ASP and the higher growth margin. But at the beginning, I wouldn't say that we will be able to achieve a higher growth margin, especially the growth margin is facing two separate forces. One is we will, at one hand, improve our productivity and efficiency and try to achieve a higher growth margin. and work on higher ASP products. However, at this point, we are also facing some uncertainties in terms of increasing raw material costs due to the logistics interruption in the area of importing raw materials and supplies from Asia. Thank you.

Once again, if you do have any questions or comments, please press star 1 at this time. Again, please press star 1 at this time if you have any remaining questions. There appear to be no further questions in queue. I would now like to turn the floor back over to CEO Sam Choi for closing remarks.

Thank you, operator. and thanks to all of you for joining us today. We appreciate your ongoing support and interest in Juresh and look forward to updating you on our progress in the near future. Thank you very much.

Thank you everyone. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.