Earnings call transcript: Jerash Holdings Q4 2025 sees improved margins, stock dips

Jerash Holdings (JRSH) reported its Q4 FY2025 financial results, showcasing significant year-over-year improvements in revenue and gross profit. The company's stock experienced a decline in pre-market trading, dropping 3.04% to $3.248, influenced by a net loss per share slightly below expectations. According to InvestingPro analysis, JRSH appears undervalued at current levels, with analysts setting price targets between $4.00 and $5.00. The company remains optimistic about future growth, driven by strategic partnerships and capacity expansion.

Key Takeaways

• Revenue increased by 35.6% YoY to $29.3 million.
• Gross profit surged by 250% YoY, with margins improving to 17.9%.
• Stock fell 3.04% pre-market, reflecting investor concerns over net loss.
• Major order secured from a U.S. multinational retailer, with potential for future growth.
• Factory expansion completed, boosting production capacity by 15%.

Company Performance

Jerash Holdings demonstrated robust performance in Q4 FY2025, significantly improving its revenue and gross profit compared to the previous year. The company benefited from increased demand and strategic collaborations, positioning itself as an attractive manufacturing alternative amid global tariff uncertainties. While the net loss narrowed considerably from the previous year, the market reacted negatively to the earnings per share results.

Financial Highlights

• Revenue: $29.3 million, up 35.6% YoY
• Gross Profit: $5.2 million, up 250% YoY
• Gross Margin: 17.9%, up from 7% last year
• Net Loss: $144,000, or $0.01 per share, improved from a $3.1 million loss last year
• Full Year Revenue: $146 million

Market Reaction

In pre-market trading, Jerash Holdings' stock dropped 3.04% to $3.248. The decline follows the announcement of a net loss per share that slightly missed expectations. The stock's movement aligns with a broader market trend of cautious investor sentiment towards companies with recent losses, despite improved operational metrics.

Outlook & Guidance

Looking ahead, Jerash projects Q1 FY2026 revenue between $38 million and $40 million, with a gross margin target of 15-16%. The company remains committed to a conservative growth strategy for FY2026 and has approved a quarterly dividend of $0.05 per share. InvestingPro analysis shows a projected revenue growth of 27% for FY2025, with 10+ additional ProTips available for subscribers. Future growth is expected to be bolstered by continued demand and capacity expansion.

Executive Commentary

CEO Sam Choi remarked, "We continue to see strong demand from our existing customers and a notable increase in new inquiries." He highlighted the strategic advantage of Jerash's position amid global tariff uncertainties. Operations Lead Eric Teng added, "We are fully booked through December," underscoring the company's robust order pipeline.

Risks and Challenges

• Supply Chain Issues: Ongoing logistics challenges could affect delivery timelines.
• Geopolitical Concerns: Regional instability may impact operations.
• Tariff Impact: Changes in global trade policies could influence cost structures.
• Market Saturation: Increased competition in the manufacturing sector.
• Macroeconomic Pressures: Inflation and economic slowdowns could affect consumer demand.

Q&A

During the earnings call, analysts inquired about the impact of port logistics challenges and tariff uncertainties on Jerash's operations. The company addressed concerns by outlining its supply chain resilience strategies and emphasizing its competitive positioning as a manufacturing hub.

Full transcript - Jerash Holdings US Inc (JRSH) Q4 2025:

Conference Operator: Good morning, everyone. Welcome to Girash Holdings Fiscal twenty twenty five Fourth Quarter and Full Year Financial Results. At this time, all participants are in a listen only mode and the floor will be open for questions following the presentation. I will now turn the conference over to your host, Roger Pondell, Investor Relations. Roger, the floor is yours.

Roger Pondell, Investor Relations, Jerash Holdings: Jenny, thank you so much. Good morning or afternoon, everyone, wherever you may be. I'm Roger Pondell, Jerash Holdings Investor Relations firm and welcome to the twenty twenty five fourth quarter conference call. On the call today from the company are Chairman and Chief Executive Officer, Sam Choi Chief Financial Officer, Gilbert Lee and Eric Teng, who leads the company's operations in Jordan. Before I turn the call over to Sam, I want to remind all 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 set forth in the Risk Factors section of the company's most recent Form 10 ks as filed with the Securities and Exchange Commission, copies of which are available on the SEC's website at www.sec.gov, along with other filings made with the SEC from time to time. Actual results could differ materially from these forward looking statements and Girash Holdings undertakes no obligation to update any forward looking statements except, of course, as required by law. And with that, it is my pleasure to turn the call over to Sam Choi. Sam?

Sam Choi, Chairman and Chief Executive Officer, Jerash Holdings: Thank you, Roger. We continue to see strong demand from our existing customers and a notable increase in new inquiries from brands and large apparel manufacturers seeking strategic collaboration. While this is an exciting time for Juresh on the business front, revenue remains affected by logistic disruptions at Israel's hyperplot, driven by ongoing geopolitical instability in the region. Our fiscal fourth quarter revenue increased by nearly 36%, yet results were lower than originally anticipated. We estimated approximately 3,000,000 to 4,000,000 of finished goods not shipped until early in the fiscal twenty twenty six for first quarter.

To mitigate further shipping delays due to the recent bombing of the Haifa Port, we are actively collaborating with our customers to reroute shipments through Jordan's Aqua Port. As recently announced, Duress secured a major initial order for one of the largest U. S.-based multinational and omnichannel retail corporation through a strategic collaboration with Hanseltexa, a leading South Korea based group of apparel group that supplies a wide range of garments to major international retail and fashion brands. Production for the order, which marks one of the largest initial orders in Jurassic history, is scheduled to begin in August with FOB delivery planned for the third and fourth quarters of twenty twenty five. Following this initial order, it is both our and Hansel's mutual intention to explore additional synergies and identify opportunities for continued growth collaborations.

Amid ongoing tariff uncertainties, global brands are actively seeking manufacturing alternatives out of China and Southeast Asia to stay competitive in an increasingly dynamic trade environment. With long established operations in Jordan and our reputation for high quality, Duresh is well positioned positioned to meet this growing demand, supported by the country's free trade agreements with the EU, UK, and Canada, as well as the favorable tariff treatment currently in place from The US. Due to rising demand for our production capacity directly from global brands, we have decided to terminate the joint venture with Brusena after more than two years of limited progress. The solution of the joint venture is expected to be done by April 2027, about fully completion of outstanding customer orders, collection of receivables and other matters. Our focus is now on further advancing Jurest's goal of diversifying our direct customer base and expanding our product mix to increase year round capacity utilization and reduce revenue seasonality.

I will now turn the call over to Eric Tang, who is in charge of our operation in Jordan. Hi, Eric.

Eric Teng, Operations Lead in Jordan, Jerash Holdings: Thank you, Sam. Our factories are fully booked through the December. With growing order volume from our global brand customer, we are also working diligently to accommodate new business inquiries. We are excited very much about our strategic collaboration with Hansel and the initial large order trade for high profile retail cooperation. With FOB orders, we are achieving better margins compared with traditional contract manufacturing through third parties that we often took on during Jordan's seasonally slower periods in the second half of our fiscal years.

With the strategic collaboration in place, we are hopeful to continue developing additional synergies and identifying new opportunities for mutual growth. Additionally, we are working on sample orders and pricing for other well known brands in regions like Europe and Persian Gulf. This new business opportunity further reinforce our growth strategy, which centers on expanding our customer base and product mix to more effectively balance production capacity throughout the year. To support our growth, we are pleased to announce the completion of expansion at our existing manufacturing facility in Arman. And we are now in the progress of onboarding additional foreign workers.

The expansion are expected to increase our production capacity by approximately 15% starting in the second fiscal year fiscal quarter. Separately, we are actively collaborating with the Jordan Ministry of Labor to develop an extension adjacent to our existing factory in Al Hasa. This project is expected to get an additional 5% to 10% in overall production capacity and it is currently targeted for completion in early calendar year twenty twenty six. We also are assessing longer term, larger scale expansion plans to construct manufacturing, warehousing and accommodation facilities on the land that we purchased several years ago. The persistent regional geopolitical tension continue to cause delay in export shipment from Hyderport.

However, Jordan remains a skilled and stable country with a full operational port. We are also exploring additional logistic channel to ensure reliable and timely deliveries. With that, I will now turn the call over to Gilbert to discuss our financial results. Gilbert, please.

Gilbert Lee, Chief Financial Officer, Jerash Holdings: Thank you, Eric. Revenue for our fiscal twenty twenty five fourth quarter increased by 35.6% to $29,300,000 from $21,600,000 in the same quarter last year. The quarter's revenue reflected an increase in shipments to Jiraj's major U. S. Customers.

As Sam mentioned, due to congestions at Israel's hyper port, which caused delays in shipments, revenue for the fiscal fourth quarter was impacted by approximately $3,000,000 to $4,000,000 Gross profit for the fiscal twenty twenty five fourth quarter advanced nearly 250% to $5,200,000 from $1,500,000 in the same quarter of last year. Gross margin increased to 17.9% in the fiscal twenty twenty five fourth quarter from 7% in the same quarter last year. The increase was primarily driven by higher production and shipment volume, which lowered the unit cost of production and generated higher margin through economies of scale. Operating expenses for fiscal twenty twenty five fourth quarter increased by $284,000 to $4,800,000 from $4,500,000 in the same period last year. The higher costs included a 4.7% increase in SG and A expenses due to higher sales and an $83,000 increase in stock based compensation.

Operating income was $434,000 for the fiscal twenty twenty five fourth quarter compared with an operating loss of $3,000,000 a year ago. Total other expenses in the fiscal twenty twenty five fourth quarter was 254,000 compared with $134,000 for the same quarter last year. The increase was primarily attributable to higher interest expense from supply chain financing programs and short term debt as a result of higher sales. Income tax expenses for fiscal twenty twenty five fourth quarter were approximately $324,000 compared with tax income of $16,000 in the same period in fiscal twenty twenty four. The effective tax rate was high due to some tax provision adjustments stemmed from prior year amended tax returns and increased sub par income at operating subsidiaries in Jordan and Hong Kong.

Certain non deductible expenses were reinstated included interest expense limitations, stock based compensation and entertainment expenses. We expect the effective tax rates to normalize going forward as consolidated income rises and adjustments are now behind us. We intend to consult international tax experts on improving our tax structure. Net loss was reduced to $144,000 or $01 per share for the fiscal twenty twenty five fourth quarter from a net loss of $3,100,000 or $0.25 per share in the same period last year. As of 03/31/2025, Jirash had $15,100,000 in cash and restricted cash and net working capital was $34,600,000 Inventory was $27,700,000 and $3,100,000 in accounts receivable.

Net cash provided by operating activities was approximately $1,400,000 for the fiscal year ended 03/31/2025, compared with $2,500,000 for fiscal year twenty twenty four. As Sam and Eric mentioned, our business remains solid and continues to grow, demonstrated by our record high revenue in fiscal twenty twenty five of $146,000,000 Despite a $772,000 increase in stock based compensation to $1,800,000 in fiscal twenty twenty five from fiscal twenty twenty four's $986,000 Our operating income in fiscal year twenty twenty was $1,400,000 compared with an operating loss of $665,000 in fiscal year twenty twenty four. Looking ahead, we are focused on driving continued growth and operational efficiency. Revenue for the fiscal twenty twenty six first quarter is expected to be approximately 38,000,000 to $40,000,000 pending outbound shipping port conditions for the remainder of June. Our gross margin goal for the fiscal twenty twenty six first quarter is expected to be approximately 15% to 16%.

On 05/20/2025, Jiraj's Board of Directors approved a regular quarterly dividend of $05 per share on its common stock payable on 06/06/2025 to stockholders of record as of 05/30/2025. We will now open up the call for questions and I will turn the call back to the operator.

Conference Operator: Thank you very much. We will now be conducting our question and answer Thank you. Your first question is coming from Mark Argento. Mark, your line is live.

Mark Argento, Analyst: Just a few quick ones here. Can maybe help us understand or think about the incremental costs around having to move ports from Haifa to the Jordanian port? And I'm assuming is that built into the gross margin expectations for Q1?

Gilbert Lee, Chief Financial Officer, Jerash Holdings: Well, actually, Mark, the cost to Aqaba for us is actually lower than transporting it to Hyva. If I remember the numbers right, I think each truckload traveling to Aqaba is about 1,200 and to Haiva is about 3,200. That is our cost because once we deliver to the port, the shipping cost, shipping the container to its destination will be the cost for our customers.

Mark Argento, Analyst: Got it. And I'm assuming that shipping costs from Akbar is higher than than, HIPAA for the customer, and that's why you guys have historically gone out of

Gilbert Lee, Chief Financial Officer, Jerash Holdings: Well, that we we don't really have visibility on on the shipping cost for the for the customer, whether they ship from Acaba or from Haiva. But I know usually they want to use Haiva because the lead time for shipping is shorter. I think it's about one week shorter. Am I right, Eric?

Eric Teng, Operations Lead in Jordan, Jerash Holdings: Yes. Around ten to twelve days shorter. And the lead time is more important than the customer. Especially, this is on the cost of this of a garage. So they choose Haifa because they the the government can arrive to New York, I think, at at least ten days earlier.

But through Agaba, of of course, we always recommend in the beginning to go through Agaba. They have been going through Agaba for for many many years already. Okay. And we pay less in the logistic cost. Because trucking, we pay almost 34 40% less.

Okay. So now they they have no choice because HyferPod has been, I mean, attacked, and Hyfer was closed. They have to shift back to Agaba, which is more beneficial to us on the cost side.

Mark Argento, Analyst: Okay. That's helpful. Just pivoting in terms of the timing of orders. I know in last quarter, we saw some shift from Q3 into Q4. And now we're seeing a little bit of shift from Q4 to Q1.

Can you just talk about that dynamic a little bit? Have you seen any orders being canceled? Or is this really just a timing issue at this point?

Gilbert Lee, Chief Financial Officer, Jerash Holdings: No. It's just a timing issue. No order has been canceled. And it's just that there was some congestions toward the March that some containers did not reach the did not reach the delivery point in Haifa. It was too many containers going through Haiva to to be shipped out.

So there were about 3 to $4,000,000 worth of merchandise or worth of sales that didn't get booked because it was not shown on the customer's system. We already shipped it out from our factory, but it didn't reach the customer's system, so they didn't recognize it as a receipt. The FCR was not issued. Once the FCR is issued, it be booked in sales.

Mark Argento, Analyst: Got it. Okay. And then last kind of question for me. Could you just talk a little bit more about decision to dissolve the Busana JV? And then also maybe in conjunction with that, talk about this new opportunity with Hansel in particular that you referenced in the press release.

Gilbert Lee, Chief Financial Officer, Jerash Holdings: Sam, you wanna you wanna talk about the Luzana Luzana. Decision?

Sam Choi, Chairman and Chief Executive Officer, Jerash Holdings: Yes. In fact, up to two years of collaboration, the joint venture with Pusena, we didn't see great events in the progress. And in fact, most of their referred customer in the by the joint venture, we can independently handle those customers. So it's on a mutual understanding basis, then we terminate the joint venture. And in fact, some customer, they are actively, I mean, contacting us that we can do the business with them directly.

So, I mean, we expect there will be more and more direct visits through ourselves instead of going through the joint venture.

Gilbert Lee, Chief Financial Officer, Jerash Holdings: Right.

Mark Argento, Analyst: And then and then in terms of the Hansel and the new customer, domestic customer you're talking about, maybe, you know, touch on who Hansel is and and why that's important.

Eric Teng, Operations Lead in Jordan, Jerash Holdings: For Hansel, may I I just to say something because Hanseo is one of the largest importers in South Korea. So I think everyone knows this company, and they are actually the number one supplier for for Walmart order and Sam's Club. So actually, they want to they got the green light from Walmart and Sam's Club that they want to increase the business with Hansel. But they want Hansel to go to duty free country, especially Jordan. So Hansel agreed that, okay, they will come to Jordan.

Okay. And then it is Walmart who introduced Jiraj to Hansel. Okay. So the question is, okay. Walmart said, according to the top management, they don't at this sensitive period, they don't want to increase one more additional vendor directly doing business for Walmart.

Okay. Otherwise, Walmart will directly approach us. They will give the expansion of the business to Hansel, and their wife Hansel will work together with Girash. This is why we are coming in together. So last month, Sam, the chairman, and I, and Ringo, the marketing director, also visited Hansel and see the top management, including the CEO.

And we have a very good discussion. And then they are very seriously considered to open more business, okay, with Girard in 2026. Meanwhile, we already got the first confirmed order from them, and we already placed order to the supplier. Okay, and it is around the first order is already 3,200,000.0 pieces gross short. And total volume in US dollar of the business is around 6,500,000.0 US dollar.

This is only the first order. Keep telling me for 2026, maybe each month you will be getting, okay, at least half million to a million pieces of order. Okay. So we have to work out the capacity ourselves. Okay.

And try to choose the good customer. And then that's why we also placed in the earnings call about our expansion on the something on the factory capacity.

Mark Argento, Analyst: Great. Appreciate the extra color and good luck and stay safe. Thank you.

Eric Teng, Operations Lead in Jordan, Jerash Holdings: Okay. Thank you. Thank

Gilbert Lee, Chief Financial Officer, Jerash Holdings: you very much.

Conference Operator: Our next question is coming from Mike Baker of D. A. Davidson. Mike, your line is live.

Mike Baker, Analyst, D.A. Davidson: Okay, thanks. Just to follow-up on that last point. Can you quantify or at least give some qualitative color on the conversations you're having with tariffs from China and other places? Is that compelling more companies like presumably Walmart to look for other sources? If you can contextualize that or give any metrics or anything along those lines to give some color on how that tariff situation is impacting you either positively or negatively?

Gilbert Lee, Chief Financial Officer, Jerash Holdings: Well, I think so. Yeah.

Eric Teng, Operations Lead in Jordan, Jerash Holdings: Yeah. You please.

Gilbert Lee, Chief Financial Officer, Jerash Holdings: Okay. Ever since, President Trump announced his, tariff, or what he called a liberation date, We have seen almost every existing customer or new customer, they're kind of having an urgency to try to find alternative suppliers. In the past few years, we have already seen a trend of people trying to get out of China, trying to get out of Asia into duty free countries. But ever since Mr. Trump announced his matrix of tariff increases and if you remember Jordan was an amount some other countries were placed on the basic 10% tariff line, which is very competitive comparing to some other major whether it's China or Southeast Asian countries.

So buyers and brands, are approaching Jerash because this is just making the exodus out of Asia a more urgency. And they want to have, they want us to commit to, more capacity. They want to some inquiries and come to the factory to see some new customers. Actually, I was here a few weeks ago and I've seen many customers actually. People that I don't know of, they just came and visited us and tour our factory and wanted to start doing business.

So after they toured the factory, they were very pleased and they wanted to send us some samples or send us some pricing exercise so that we can start doing some pricing. So I see this as a very good opportunity for us to even further diversify our customer base away from the major customers such as VF and New Balance. If you see our twenty twenty five distribution of customers, you can see even though VF sales has still has increased, but the percentage has dropped. And we have increased significantly some other customers' sales. So I think we're going to the right direction and this tariff war is actually, providing it more stimulus to to get to that point.

So right now nobody knows what the final tariff rates are going to be. We have some, indications from the Prime Minister of Jordan, because they have been talking with US, Department or Representative of Trade. And they are pretty sure that the rate is not going to be significant. Right now we're thinking about maybe just keeping 10% or even lower. But that is already very competitive comparing with China, comparing with Vietnam, and some other Southeast Asian countries.

So I see the trend continue and our capacity is really in need of some major increase. But we're considering who to partner with and what way to increase our capacity. So so we are being conservative actually for for fiscal year 2026. Just projecting that we will have minor increase in our capacity and minor increase in sales. So that's why you can see the first quarter, we're only projecting about, I think, percent increase for the first quarter.

Yes. No, actually, first quarter comparing to last year is a decrease by 4% because last year first quarter, we had $41,000,000 in sales, and this year is only $39,000,000

Mike Baker, Analyst, D.A. Davidson: Yeah. Makes sense. But to follow-up on that, the increased capacity, you've talked about well, completed some expansion and talking about another 5% to 10% increase in existing facilities. I'm curious about the longer term idea of presumably opening more manufacturing facilities and and warehousing on the land that you already own. Any any timing on when you would think about doing that or how likely that is to to come to fruition?

Gilbert Lee, Chief Financial Officer, Jerash Holdings: Right now, our projection or our CapEx projection is it will not happen in year 2026. Because it is still a very unstable geopolitical situation here. And unless we can be sure that we will fill up that factory almost immediately, I think we're just going to hold off. But in the meantime, we will continue to do studies. We'll continue to talk to potential partners and also find ways of financing the expansion.

Because that we're talking about 20,000,000 to $30,000,000 in investment. So we need to find some way of financing it.

Mike Baker, Analyst, D.A. Davidson: Yep. Makes sense. I appreciate it. Thank you.

Eric Teng, Operations Lead in Jordan, Jerash Holdings: Thank you.

Conference Operator: Thank you very much. And our next question is coming from Igor Novgorodsev of Lares Capital. Igor, your line is live.

Igor Novgorodsev, Analyst, Lares Capital: Thank you. Good morning or good evening, depending on where you are, and thank you for taking my question. To follow-up on the increase increase after the tariffs in drug and is expected to become much more competitive to Vietnam and other big manufacturing countries, Do you think it will positively affect the gross margin? Because I remember that during the highest demand, right, post COVID or during COVID, you had margin close to twenty percent. Now your gross margin is more like 15%, 16%.

What do you think is going to happen to your gross margin if, you know, you have a higher demand but limited capacity?

Gilbert Lee, Chief Financial Officer, Jerash Holdings: I believe the gross margin will definitely be improved because right now we're switching more and more over to what we call FOB business. In the past, when our capacity was not fully utilized, especially during our slow season, which is the second fiscal year, second half of the fiscal year, we tend to take on business that what we call Centimeters business, cut and make business. So for those business, we're just doing more simple styles, but higher volume because that is our or in our in our industry, it is the summer season. Okay? Our strength is in producing jackets, outerwear.

Those are more complicated styles that we can do the FOB business and gain more ASP and gain more margin. But now the situation has changed because we have more business than we can handle. So we will forego some of the or the majority of the Centimeters business and take on more FOB business. So naturally that will improve our ASP, that will improve our gross margin percentage. But at the same time, the market is getting more and more competitive.

Our buyers continue to put pressure on us to make us be more competitive in terms of pricing. So this overall there's some offsetting, but I believe going forward we will be able to maintain a pretty healthy gross margin. And with the hand sold business, because it's high volume, while we will be able to gain a pretty significant or pretty healthy gross margin. I think the efficiency will also help us to achieve a higher gross margin.

Igor Novgorodsev, Analyst, Lares Capital: Okay. Following up on that, you press release says that you're fully booked through December. So if you're fully booked, does it mean that you already know your gross margin for the rest of the year, or this is still somewhat up in the air? And also, I believe you projected the gross margin for the next quarter, but can you project the gross margin for the rest of the year or at least through December or you don't know yet?

Gilbert Lee, Chief Financial Officer, Jerash Holdings: Well, we are fully booked through the rest of the year, but there could still be changes. I think, Eric, maybe you can add to this. How do we what kind of changes do we still anticipate that could affect the overall margin that we project?

Eric Teng, Operations Lead in Jordan, Jerash Holdings: Okay. It will be more or less the same, actually. But usually, the buy price to garage, okay, each year two times orders. Okay. So now they are giving us the, I mean, the another batch of order, which is projection.

Usually, the confirmed PO will be sent to us maybe three to four months before. I mean, actual delivery, at least four months. So this is projection. That's why, okay, Gilbert can tell you, okay, up to the first quarter, what is our actual profit margin? Because it is already an actual order.

We have the pre order already. But for, I mean, September onwards, okay, we still are waiting for the official show PO from the buyer, although more or less the same. Okay. And there will be a little bit changes in sometimes the figure, but but the price usually will be the same. So so this is the reason why until December, we cannot give you an actual profit profit margin percentage, but it will be more or less the same as we project.

Sam Choi, Chairman and Chief Executive Officer, Jerash Holdings: And may I say, I mean, because of the tariff issue, there are already a trend that some customers are moving their sourcing from China or Southeast Asia to Jordan. And through that transition, Juress can pitch a more higher gross profit margin from those orders. Brand name like FootJoy or even like Walmart, you know, they're willing to place in a duty free country to secure their production and their supply. Yeah. And there's then so for that kind of order, Juress can pitch relatively higher margin and efficiency.

Yeah.

Igor Novgorodsev, Analyst, Lares Capital: My other question is, we obviously mentioned geopolitics several times during this call. And I understand that customers come to tour your factory and try samples and were interested, but how much do you think the persistent issues with Middle East political issues hold them back from, you know, working with you long term? Are they really concerned that something may be even worse in a year, or it's not something that is really comes into play?

Gilbert Lee, Chief Financial Officer, Jerash Holdings: Well, first, how the Middle East conflict will play out is anybody's guess. Of course. Yes. It so far, Jordan is still considered the the most peaceful and the safest country within the Middle East, even though it's in between Israel and Iraq and Iran. But Jordan is able to stay out of the conflict.

And the missiles are going around Jordan for those two countries to hit each other. So and US has the most interest in keeping Jordan to be a peaceful and safe place. Many countries, when they evacuate their citizens from Israel as they are doing right now, they actually move their citizens away from Israel into Jordan because they believe Jordan would be a safe haven for their citizens. Obviously, people cannot fly out of Israel. Tel Aviv is closed, shut down the airport.

So they have to get up to somewhere if they want to go back to their country. And the first choice is go to Jordan. And anyone who has visited Jordan, a lot of our new customers, once they came to Jordan, they would agree that this is a very safe and calm place. So unless they have never visited Jordan, they shouldn't have a concern of the safety and the continuity of doing business in Jordan.

Igor Novgorodsev, Analyst, Lares Capital: Okay. I mean, that's great to hear. My last question is also on geopolitics is how are you getting your supplies? Because at some point of time, a year ago, you had trouble because of Houthis getting your supplies, obviously, from Asia. Is that do you guys have alternatives?

You don't anticipate anything? Or how do you think about this? Because, you know, we we don't know what may happen in a few weeks that Hooties will become start targeting the ships. Or how do you guys think about that?

Gilbert Lee, Chief Financial Officer, Jerash Holdings: Yeah. Learning from that experience a year ago, which which mainly the fourth quarter of fiscal twenty twenty four and the first quarter of twenty twenty five, During that six month period was when we lost so much money because of this of the supply chain issue. We couldn't get containers into Jordan. We tried many different ways. Sometimes even have to air freight some very urgent fabrics or supplies into Jordan.

So that was what caused us to lost money in the fourth quarter of twenty four and the first quarter of twenty five. So we learned the lesson from this and now we have multiple alternatives of routes getting supplies and materials from Asia into Aqaba, into our, into the the port in Jordan. In addition to that, we have also strengthened our sourcing within the region, sourcing of fabrics and supplies in the countries like Turkey and Egypt, So that it will shorten the lead time of getting supplies in comparing to relying on the sourcing, relying on the supply chain from China or other Asian countries.

Igor Novgorodsev, Analyst, Lares Capital: Okay. That's great to hear. I don't have any more questions. Thank you. Thank you.

Thank you. You're welcome. Thank

Conference Operator: you very much. Well, we appear to have reached the end of our question and answer session. I will now hand back over to Sam for any closing comments.

Sam Choi, Chairman and Chief Executive Officer, Jerash Holdings: Thank you, Tammy, and thanks to all of you for joining us today. We are certainly in interesting times and appreciate your continued support. We look forward to speaking with you this quarter. Thank you very much.

Conference Operator: Thank Thank you. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. We thank you for your participation.

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