GREYSTONE LOGISTICS, INC.
For the period ended May 31, 2025. Filed Aug 29, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Aug 29, 2025
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-05-31; filed 2024-09-13.
0001437749-24-029155
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-05-31; filed 2025-08-29.
0001437749-25-028050
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 50 previous paragraphs and 57 current paragraphs.
29 unchanged; 15 reworded; 13 added; 6 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 9 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
Critical Accounting Policies and Estimates
Current report
General
Current report
The Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its consolidated financial statements.
Current report
Revenue Recognition
Current report
Revenue is recognized at the point in time a good or service is transferred to a customer and the customer obtains control of that good or receives the service performed. Sales arrangements with customers are short-term in nature involving single performance obligations related to the delivery of goods and generally provide for transfer of control at the time of shipment. In limited circumstances, where acceptance of the goods is subject to approval by the customer, revenue is recognized upon approval by the customer unless, historically, there have been insignificant rejections of goods by the customer.
Current report
Inventories
Current report
Inventory consists of finished pallets and raw materials which are stated at the lower of average cost or net realizable value, with cost being determined on the “first-in, first-out” basis of accounting. The cost of finished goods include an estimate for manufacturing overhead.
Current report
Income Taxes
Current report
Greystone accounts for income taxes under the liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the consolidated financial statements and tax bases of assets and liabilities and tax loss carryforwards using enacted tax rates in effect for the year in which the differences are expected to reverse.
Current report
Sales were $57,869,480 for fiscal year 2025 compared to $61,780,715 for fiscal year 2024 representing a decrease of $3,911,235, or about 6%. The reduction in sales, compared to the prior period is primarily attributable to an approximate 24% decrease in demand from one of its significant customers, which was offset somewhat by an increase in demand from another of its significant customers. The increase in demand from the latter customer was due to a newly designed plastic pallet to specifically meet the customer’s needs.
Current report
During the year ended May 31, 2025, the Company paid $606,737 to repurchase 519,124 shares of outstanding common stock under a plan announced by the Board on June 28, 2024. Under the plan, the Company has the ability to repurchase an additional $393,263 worth of shares for a total repurchase commitment of $1 million through the period ended June 28, 2025. The Board’s intent as disclosed in the 8k filed on June 28, 2024, was to employ strategic buybacks to enhance shareholder value. Subsequent to year-end, the Company paid $111,897 to repurchase an additional 80,876 shares.
Current report
On January 14, 2025, Greystone and IBC entered into a Third Amendment to the Amended and Restated Loan Agreement. The amendment served to limit repurchase of equity interests in Greystone Logistics in an aggregate amount not exceeding $1,000,000 through the period ended May 31, 2026.
Current report
A waiver was obtained related to the current year preferred and common stock repurchases being in excess of the maximum allowable under the credit agreement.
Removed paragraphs (6)
Previous report
Results of Operations
Previous report
Sales were $61,780,715 for fiscal year 2024 compared to $60,758,962 for fiscal year 2023 representing an increase of $1,021,753, or about 2%. Fiscal year 2023 was a turn-around period to recover from declining sales as customers shied away from inflationary pricing during the pandemic period. As raw material pricing returned to relatively normal historic levels during the second quarter of fiscal year 2023, the Company focused its efforts on rebuilding relations with existing customers as well as seeking new customers.
Previous report
During fiscal years 2023, Greystone received $4,911,863, reimbursement from the Department of Treasury for refundable tax credits against certain employment taxes pursuant to the Employee Retention Credit (“ERC”) under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). There were no such credits recognized in 2024.
Previous report
As a result of the deconsolidation of GRE in 2023, the Company recognized a gain of $569,997 in fiscal year 2023 which was attributable to a deferred gain from Greystone’s sell and leaseback of the building to GRE in the prior years.
Previous report
The cash provided by operations included payments of approximately $3,756,000 on long term loans, financing leases, and revolving loans.
Previous report
As a result of the fire at the Company's Comanche location, the Company has filed an insurance claim which amounts to approximately $2,100,000. Once received the Company will commence construction plans and operations to remediate the damage at the Comanche location. Additionally, the remaining insurance funds are anticipated to be used to bolster the Company's inventory position as needed.
Reworded paragraphs (15)
Previous wording
Item 7.** ** Management's Discussion and Analysis of Financial Condition and Results of** Operations.
Current wording
Management’s discussion and analysis of financial condition and results of operations are based upon the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). The preparation of these consolidated financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Previous wording
The consolidated financial statements include Greystone and its two wholly owned subsidiaries, Greystone Manufacturing, L.L.C. (“GSM”), and Plastic Pallet Production, Inc. (“PPP”), and one variable interest entity, Greystone Real Estate, L.L.C. (“GRE”). Effective July 29, 2022, GRE was no longer deemed to be a beneficiary of Greystone and, accordingly, was deconsolidated on the effective date as discussed further in Note 1 to the consolidated financial statements.
Current wording
The consolidated financial statements include Greystone and its two wholly owned subsidiaries, Greystone Manufacturing, L.L.C. (“GSM”), and Plastic Pallet Production, Inc. (“PPP”).
Previous wording
As of May 31, 2024 and 2023, Greystone had FTE’s of approximately 190 and 179 employees, respectively. Temporary personnel from a personnel service entity are utilized as needed. There were FTE’s of approximately 69 and 109 temporary personnel as of May 31, 2024 and 2023, respectively. Greystone's in-house production capacity for its injection molding machines capable of producing pallets is approximately 225,000 plastic pallets per month, or 2,700,000 per year. Production levels will vary proportionately as a result of the pallet design, machine downtime or customer restrictions for maintaining stringent sizing on certain pallets.
Current wording
As of May 31, 2025 and 2024, Greystone had FTE’s of approximately 190 employees. Temporary personnel from a personnel service entity are utilized as needed. At any point in time, the Company can have between 65-80 temporary employees. Greystone's in-house production capacity for its injection molding machines capable of producing pallets is approximately 225,000 plastic pallets per month, or 2,700,000 per year. Production levels will vary proportionately as a result of the pallet design, machine downtime or customer restrictions for maintaining stringent sizing on certain pallets.
Previous wording
Greystone’s major customers, varying from three to four, accounted for approximately 81% and 73% of total sales in fiscal years 2024 and 2023, respectively. Customers that account for significant sales may vary in any one year. Generally, customers purchasing substantial quantities to replace or add pallets to their inventory consistently comprise a significant portion of sales. Any customer(s) needing a substantial quantity of pallets to fulfill a specific need may vary from year to year.
Current wording
Greystone’s major customers, varying from three to four, accounted for approximately 76% and 81% of total sales in fiscal years 2025 and 2024, respectively. Customers that account for significant sales may vary in any one year. Generally, customers purchasing substantial quantities to replace or add pallets to their inventory consistently comprise a significant portion of sales. Any customer(s) needing a substantial quantity of pallets to fulfill a specific need may vary from year to year.
Previous wording
Cost of sales was $50,065,085 (81% of sales) and $51,427,409 (85% of sales) in fiscal years 2024 and 2023, respectively. The decrease in the ratio of cost of sales to sales (the “ratio”) in fiscal year 2024 from fiscal year 2023 was the result of several factors, including a decline in the price of raw materials toward relatively historic levels.
Current wording
Cost of sales was $48,391,187 (84% of sales) and $50,065,085 (81% of sales) in fiscal years 2025 and 2024, respectively. The increase in the ratio of cost of sales to sales (the “ratio”) in fiscal year 2025 from fiscal year 2024 was the result of several factors, including a decline in production of plastic pallets. Due to Greystone’s inflexible manufacturing costs, the gross profit margin is directly affected by variations in the quantity of plastic pellets produced.
Previous wording
Selling, general and administrative (SGA) expenses were $5,168,607, (8.4% of sales) for fiscal year 2024 compared to $5,100,170 (8.4% of sales) for fiscal year 2023, representing an increase of $68,437.
Current wording
Selling, general and administrative (SGA) expenses were $5,906,804, (10% of sales) for fiscal year 2025 compared to $5,168,607, (8.4% of sales) for fiscal year 2024, representing an increase of $738,197. The increase is primarily due to bonuses paid during the year ended May 31, 2025.
Previous wording
Gain on involuntary conversion was $593,647 for fiscal year 2024. In February 2024, one of the Company’s storage warehouses caught fire with damage to finished goods inventory valued at $1,326,752 and the building with a net book value of $161,850. The Company recorded an insurance receivable of $2,058,602 as an estimate for damage to the inventory and building, which resulted in a gain from the involuntary conversion of $593,647. The insurer and Company are currently reviewing and finalizing the claim value for the inventory. The Company will record any additional consideration once a settlement has been reached, which may increase the gain recorded in future periods.
Current wording
Gain on involuntary conversion was $741,821 for fiscal year 2025. In February 2024, one of the Company’s storage warehouses caught fire with damage to finished goods inventory valued at $1,326,752 and the building with a net book value of $161,850. As of May 31, 2024, the Company recorded an insurance receivable of $2,058,602 as an estimate for damage to the inventory and building, which resulted in a gain from the involuntary conversion of $593,647 for the fiscal year ended May 31, 2024. The insurer and Company finalized the claim value for the inventory as well as a prior claim for equipment damage from an electrical storm occurring in December 2022, resulting in an additional gain from the involuntary conversion of $741,821 for the year ended May 31, 2025. All amounts owed related to these claims, reflected in other receivables as of May 31, 2024 on the consolidated balance sheets, were fully funded during the second quarter by the insurer.
Previous wording
Interest expense was $1,291,054 in fiscal year 2024 compared to $1,189,034 in fiscal year 2023 for an increase of $99,903. This increase is primarily attributable to the increase in the prime rate of interest which was 8.50% at May 31, 2024, compared to 8.25% at May 31, 2023.
Current wording
Interest expense was $1,018,084 in fiscal year 2025 compared to $1,291,054 in fiscal year 2024 for a decrease of $272,970. This decrease is primarily attributable to the decrease in the prime rate of interest which was 7.5% at May 31, 2025, compared to 8.5% at May 31, 2024.
Previous wording
The provision for income taxes was $1,031,204 in fiscal year 2024 compared to $2,461,700 in fiscal year 2023. The effective tax rate differs from federal statutory rates due to state income taxes, charges which have no income tax benefit, changes in the valuation allowance, and changes in state income tax rates.
Current wording
The provision for income taxes was $1,106,465 in fiscal year 2025 compared to $1,031,204 in fiscal year 2024. The effective tax rate differs from federal statutory rates due to state income taxes, charges which have no income tax benefit, changes in the valuation allowance, and provision to return adjustments primarily attributable to fixed assets depreciation and lease accounting.
Previous wording
Net income was $5,027,491 in fiscal year 2024 compared to $6,388,108 in fiscal year 2023 for a decrease of $1,360,617 for the reasons discussed above.
Current wording
Net income was $2,351,010 in fiscal year 2025 compared to $5,027,491 in fiscal year 2024 for a decrease of $2,676,481 for the reasons discussed above.
Previous wording
After deducting preferred dividends and income attributable to non-controlling interests, the net income attributable to common stockholders was $4,440,265, or $0.16 per share, in fiscal year 2024 compared to $5,842,828, or $0.21 per share, in fiscal year 2023 for the reasons discussed above.
Current wording
After deducting preferred dividends and income attributable to non-controlling interests, the net income attributable to common stockholders was $1,922,297, or $0.07 per share, in fiscal year 2025 compared to $4,440,265, or $0.16 per share, in fiscal year 2024 for the reasons discussed above. As of May 31, 2025, all preferred stock has been retired so no futher dividend payments are anticipated.
Previous wording
Greystone had a working capital of $9,607,867 as of May 31, 2024.
Current wording
Greystone had a working capital of $4,230,393 as of May 31, 2025.
Previous wording
Greystone has 50,000 outstanding shares of cumulative 2003 Preferred Stock for a total of $5,000,000 with a preferred dividend rate at the prime rate of interest plus 3.25% (11.75% as of May 31, 2024). Greystone paid accrued dividends to its preferred stockholders during fiscal years 2024 and 2023 of $721,640 and $446,644, respectively, and plans to continue to make preferred stock dividend payments to the holders of its preferred stock as allowed under the terms of the IBC Restated Loan Agreement as discussed herein under the caption “Loans from International Bank of Commerce” which allows for such payments not to exceed $1,000,000 per year. 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, additional financing or otherwise. Further, pursuant to the terms and conditions of certain loan documentation with International Bank of Commerce, as discussed herein under the caption “Loans from International Bank of Commerce,” and the terms and conditions of Greystone's 2003 preferred stock, Greystone is restricted in its ability to pay dividends to holders of its common stock.
Current wording
During the third and fourth quarters for fiscal year 2025, the Company paid $5,000,000 to retire all shares of preferred stock. Prior to retiring, Greystone has 50,000 outstanding shares of cumulative 2003 Preferred Stock for a total of $5,000,000 with a preferred dividend rate at the prime rate of interest plus 3.25%. Greystone paid accrued dividends to its preferred stockholders during fiscal years 2025 and 2024 of $427,103 and $721,640, respectively. Preferred stock dividend payments to the holders of its preferred stock were allowed under the terms of the IBC Restated Loan Agreement as discussed herein under the caption “Loans from International Bank of Commerce” which allows for such payments not to exceed $1,000,000 per year. 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, additional financing or otherwise. Further, pursuant to the terms and conditions of certain loan documentation with International Bank of Commerce, as discussed herein under the caption “Loans from International Bank of Commerce,” and the terms and conditions of Greystone's 2003 preferred stock, Greystone is restricted in its ability to pay dividends to holders of its common stock
Previous wording
*Rental fees.*GSM pays weekly rental fees of $27,500 to Yorktown for grinding equipment and pelletizing equipment. Total rental fees of approximately $1,457,200 and $1,430,000 were paid in both fiscal years 2024 and 2023, respectively.
Current wording
*Rental fees.*GSM pays weekly rental fees of $27,500 to Yorktown for grinding equipment and pelletizing equipment. Total rental fees were $1,457,200 for both fiscal years 2025 and 2024.
Previous wording
On July 29, 2022, Greystone and International Bank of Commerce (“IBC”) entered into an Amended and Restated Loan Agreement (the “Restated IBC Loan Agreement”) as further described in Note 5, Long-Term Debt, of the consolidated financial statements. The Restated IBC Loan Agreement provides for the IBC to make to Greystone (i) a term loan in the amount of $7,854,708 to consolidate all existing term loans in the aggregate amount of $2,669,892 with Lender, extend credit in the amount of $3,271,987 to pay off a note payable to Robert B. Rosene, Jr. and extend additional credit in the amount of $1,912,829 to fund the purchase of the equipment subject to the iGPS Logistics, LLC, leases, (ii) an advancing term loan facility whereby Greystone may obtain advances up to the aggregate amount of $7,000,000 subsequently increased by $1,000,000 under the First Amendment dated May 5, 2023 (items i and ii referred to as “Term Loans”), and (iii) a renewal of the revolving loan with an increase of $2,000,000 (the “Revolving 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 $6,000,000. The Restated Loan Agreement requires limited guarantees from Warren F. Kruger, President and CEO, and Robert B. Rosene, Jr., a director of Greystone.
Current wording
On July 29, 2022, Greystone and International Bank of Commerce (“IBC”) entered into an Amended and Restated Loan Agreement (the “Restated IBC Loan Agreement”) as further described in Note 5, Long-Term Debt, of the consolidated financial statements. The Restated IBC Loan Agreement provides for the IBC to make to Greystone (i) a term loan in the amount of $7,854,708 to consolidate all existing term loans in the aggregate amount of $2,669,892 with Lender, extend credit in the amount of $3,271,987 to pay off a note payable to Robert B. Rosene, Jr. and extend additional credit in the amount of $1,912,829 to fund the purchase of the equipment subject to the iGPS Logistics, LLC, leases, (ii) an advancing term loan facility whereby Greystone may obtain advances up to the aggregate amount of $7,000,000 subsequently increased by $1,000,000 under the First Amendment dated May 5, 2023 (items i and ii referred to as “Term Loans”), and (iii) a renewal of the revolving loan with an increase of $2,000,000 (the “Revolving 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 $6,000,000. The Restated Loan Agreement requires limited guarantees from Warren F. Kruger, President and CEO, and Robert B. Rosene, Jr., a director of Greystone. During 2025, Mr. Rosene was released from his limited guaranty in accordance with the IBC Restated Loan Agreement. Robert B. Rosene, Jr., also sits on the board for IBC. The debt agreements were negotiated on an arm's length basis and terms are no less favorable than those that could have been obtained from an unrelated third party and the Company has concluded that the relationship is not a conflict of interest.