Tuesday, Nov.
10, 2026 CALL PARTICIPANTS Chief Executive Officer - Sam ChoiChief Financial Officer - Gilbert Kwong-Yiu LeeOperations Lead in Jordan - Eric TangInvestor Relations - Roger Pondel Revenue -- $50.3 million, representing 19.8% growth driven by higher shipments to major U.S.
customers.Gross Profit -- $9.1 million, an increase of 45.4% compared with $6.3 million in the prior-year period.Gross Margin -- 18.2%, expanding 320 basis points due to automation efficiency, strategic raw material purchases, and tighter controls on wastage.Operating Income -- $3.1 million, increasing nearly threefold from $1.1 million in the second quarter of the previous year.Net Income -- $2.2 million, advancing 4.5 times from the $479,000 reported in the prior-year period.Diluted EPS -- $0.16, compared with $0.04 in the second quarter of fiscal 2026.Production Capacity -- Fully booked through June 2027, as incoming orders from existing and prospective customers remain strong.Short-term Capacity Expansion -- 8% expected increase by December 2026, through the addition of production lines at two existing manufacturing facilities.Long-term Capacity Expansion -- 15% to 20% projected increase by September 2027, following renovations at a recently acquired facility and construction of a third satellite factory.Winter Jacket Order -- 5.35 million pieces secured through strategic partner Hansol, with production potentially beginning in fiscal 2028.Trial Orders -- 80,000 pieces across two trial orders for an iconic American apparel brand, with potential for significant future business if performance meets expectations.Workforce Growth -- 1,300 local and foreign workers hired since April 1, 2026, to support expansion and replace completed contracts.Effective Tax Rate -- 15.7%, down from 24.3% due to a Jordanian tax concession lowering the corporate rate from 20% to 10%.Third Quarter Revenue Guidance -- $49 million to $51 million, representing projected growth of 17% to 22% year over year.Third Quarter Gross Margin Guidance -- 16% to 17%, reflecting the impact of higher import logistics costs for raw materials.Cash Position -- $16.9 million in cash, cash equivalents, and restricted cash as of Sept.
30, 2026.Operating Cash Flow -- $7.5 million for the first six months of fiscal 2027, compared with $318,000 in the previous year.Net Working Capital -- $40.6 million as of the end of the second quarter.Inventory -- $23.3 million as of Sept.
30, 2026, representing a decrease from $30.0 million as of March 31, 2026.Dividend -- $0.05 per share, approved for payment on Nov.
23, 2026, to stockholders of record as of Nov.
Need a quote from a Motley Fool analyst? Email [email protected] Sam Choi stated, "Over the past several months, regional shipping disruptions and ongoing uncertainty have driven up transportation costs for imported materials," noting that these logistics challenges continue to weigh on the operating environment.Gilbert Kwong-Yiu Lee warned that the time required to train new workers, which can take two to three months, can have a "negative impact on our productivity and efficiency." Jerash Holdings (US), Inc.
(JRSH +14.92%) reported fiscal second quarter results that management attributed to increased shipment volumes to major U.S.
customers and operational efficiency gains from automation.
The company reported that its production capacity is fully committed through June 2027, prompting strategic initiatives to expand throughput via facility renovations and shift additions.
Management stated that logistics challenges in the Middle East continue to elevate transportation costs for imported materials, which influenced the financial outlook for the upcoming period.
Strategic partnerships with Korean apparel groups and a tax concession in Jordan provided additional support to profitability and volume growth during the quarter.
The company plans a pilot program for a two-shift rotation in one factory to increase capacity while minimizing capital expenditure.Management is converting a recently acquired facility into a smart warehouse and centralized cutting department, which will include 500 new sewing machines.A second large Korean apparel vendor has initiated discussions and provided two trial orders totaling 80,000 pieces.Sam Choi stated, "Our production facilities are fully booked through June 2027."The Jordanian government is supporting the construction of a third satellite factory in rural communities to create approximately 500 local jobs.Eric Tang noted that the company expects to increase overall production capacity by approximately 8% by December through the addition of lines at existing facilities.
INDUSTRY GLOSSARY Hansol: A major Korean apparel group that serves as a strategic partner for Jerash.Satellite factory: A smaller production unit located in rural communities, often supported by government initiatives to create local employment.Smart warehouse: A facility utilizing automation and advanced technology for inventory management and logistics efficiency.Wastage allowances: The permitted amount of material lost or scrapped during the manufacturing process.U.S.-Jordan Free Trade Agreement: An agreement providing duty-free and tariff-free access for apparel and textile exports from Jordan to the United States.
Full Conference Call Transcript Operator: Good morning, and welcome to Holdings Fiscal 27 Second Quarter Financial Results Conference Call.
At this time, all participants are in a listen-only mode.
And we will open up the floor for your questions after the presentation.
You can press 1.
Should you wish to remove yourself from the queue, press 2.
It is now my pleasure to turn the floor over to your host, Roger Pondel, Investor Relations.
The floor is yours.
Roger Pondel: Thank you, operator.
Good morning.
everyone, and good afternoon to some of you, and welcome to Jerash Holdings Fiscal 27 Second Quarter Conference Call.
I am Roger Pondel with PondelWilkinson, Jerash Holdings Investor Relations firm.
On the call today from the company are chief executive officer, Sam Choi chief financial officer, Gilbert Kwong-Yiu Lee, and Eric Tang, who leads the company's operations in Jordan.
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 2000.
Such forward looking statements are subject to numerous conditions, many of which are beyond the company's control, including those set forth in the risk factors 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 may differ materially from these forward looking statements and Jerash Holdings undertakes no obligation to update any forward looking statements except as required by law.
With that, it is my pleasure to turn the call over to Sam Choi.
Sam? Lin Hung Choi: Thank you, Roger.
We deliver meaningful growth in both revenue and profitability for the fiscal second quarter.
Even as logistics challenges across the Middle East weighs on the operating environment.
Over the past several months, regional shipping disruptions and ongoing uncertainty have driven up transportation costs for imported materials.
Making our results all the more significant.
Despite these external pressures, revenue grew by nearly 20%.
And gross margin expanded by 320 basis points.
Compared with the prior year quarter.
We improved margins by strategically purchasing raw materials early.
Maintaining disciplined cost controls, reducing waste, and enhancing operation efficiency through automation initiatives.
The quarter's results underscore the resilience of our Jordan based manufacturing platform.
And the advantages it offers.
Including duty and tariff free assets for apparel and textile exports to the United States Europe, and other key markets.
Just as important, we continue to deliver reliably and on time in a challenging environment.
All of this remains a competitive advantage for Jerash and for our customers.
Turning to demand and capacity.
I am happy to report that our production facilities are fully booked.
Through June 2027.
And incoming orders remain strong.
We are actively looking for ways to expand capacity to support continued growth and pursue new business opportunities.
We expect the renovations at our most recently acquired facility and construction of our satellite factories, supported by the Jordanian government, Will be completed by September 2027.
The additional capacity will help us meet increasing customer demand and support our long term growth objectives.
Despite ongoing geopolitical and regional conflicts, we have continued to navigate effectively while maintaining our commitment to operational excellence and execution of our growth strategy.
We believe Jordan's favorable trade environment will continue to support our growth and our future growth.
open new opportunities with customers and strategic partners, and strengthen our ability to create long term value.
For our customers and shareholders.
With that, I will now turn the call over to Eric Tang who is in charge of our operations in Jordan.
Eric Tang: Thank you, Sam.
Customer interest continues to build.
With increasing order volumes and new inquiries from both existing and prospective customers.
Following the July announcement of the U.S.-Jordan trade agreement, which reinforce the benefits of the 2001 free trade agreement.
Including duty free access for Jordanian apparel and textile exports.
Jerash is uniquely positioned to leverage these advantages to attract new business.
Deepen customer partnership, and drive sustainable long term growth.
On the business front, we continue to receive additional orders from Hansol.
Our strategic partner in Korea, and has recently completed product development for potentially significant winter jacket order for its customer.
With production, that could begin at the start of our fiscal 2028 year.
We have completed product development with another strategic partner.
A large government conglomerate and are now producing an initial trial order for an iconic American Apparel and lifestyle brand.
If the trial order meets expectations, it could lead to additional orders and further enhance our growth momentum.
As Sam mentioned earlier, our facilities are fully booked through June 2027.
We are actively pursuing opportunities to expand production capacity including our previously announced plans to add production lines at 2 existing manufacturing facilities.
Upon completion of the project by December, we expect to increase our overall production capacity by approximately 8%.
Another expansion project involves converting our most recent acquired facility into a smart warehouse and cutting operation.
While also adding production lines.
This phrase includes 500 new state of the art sewing machines, additional automation, and the hiring of approximately 1100 foreign workers.
We now expect to complete this phase by September 2027.
Increasing production capacity by another 15% to 20% Our partnership with the Jordanian Ministry of Labor continues to deepen.
As we move forward with construction of a third satellite factory, that will expand the capacity in rural communities.
And create approximately 500 new local jobs.
Since the start of fiscal 2027 on April 1, 2026, our Jordan operation have hired over 1300 local and foreign workers.
Including a number of replacement workers, following the completion of their contract terms.
As we continue to hire and train new workers, we expect productivity to improve as they gain experience.
We also plan to add shifts as needed to meet consumer demand.
At the same time, we continue to manage near term logistic challenges related to the ongoing conflict in the Middle East.
While operations at the Haifa and Aqaba ports have returned to near-normal levels, with minimum delay, transportation cost, remain elevated.
Our team remains optimistic about the opportunities ahead.
Jordan's favorable trade environment and our long standing reputation for quality, reliability, and service.
Continue to enhance our competitive position in the global apparel market.
As mentioned, we are strategically expanding our production capacity and operational infrastructure to meet rising demand from existing and new customers.
With that, I will turn the call over to Gilbert to discuss our financial results.
Gilbert, please.
Gilbert Kwong-Yiu Lee: Thank you, Eric.
Just want to make a minor correction.
When Eric said that we were hiring approximately 1.1 thousand-- 1100.
Okay? Alright.
Revenue for the fiscal 27 second quarter grew 19.8% to $50.3 million from $42 million in the same quarter last year.
The increase primarily reflected higher shipments to our major US customer and others whose orders are primarily for the U.S.
Gross profit increased 45.4% to $9.1 million for the fiscal 27 second quarter from $6.3 million in the same quarter last year.
And gross margin for the quarter increased 320 basis points to 18.2% compared with 15.0% in the same period last year.
The improvement was primarily driven by higher shipments to US customers that typically generate....
