Greystone Logistics Cuts Costs After Major Client Departure

Greystone Logistics Inc (GLGI) reported that fiscal year revenue ending May 31 declined by approximately $30 million year-over-year. The primary driver was the termination of an 11-year contract with iGPS in October, which removed roughly 800,000 pallets from the company’s growth trajectory. According to data provided in the earnings call highlights via GN markets/earnings, this single client loss accounted for about 1.2 million pallets annually and the bulk of the revenue decrease. The company responded to this contraction by laying off approximately 140 employees in December to align operating costs with reduced volume.

To preserve cash flow during this transition, Greystone negotiated a banking arrangement with IBC Bank that places the company in interest-only payment status for 2026. Capital expenditures have been restricted to maintenance-only levels, while the company has begun subleasing idle equipment in Palmyra, Missouri, to generate additional income. CEO Warren Kruger indicated that full financial recovery is not expected until calendar year 2027, reflecting a prolonged period of constrained profitability as the firm replaces lost sales volume.

Current Operational Constraints

The company’s largest remaining revenue stream, a relationship with Walmart valued at $50 million over the past five to six years, is currently behind schedule. Kruger attributed this delay to leadership changes at the retailer and the retirement of a key long-time contact. Meanwhile, the firm has entered the plastic reprocessing business, contracting to grind and granulate plastic for third parties. This sideline generates processing fees estimated between $4,000 and $5,000 per day per machine, serving as a partial offset to the void left by the iGPS departure.

New Product Development Pipeline

Greystone is actively pursuing new revenue sources to rebuild its customer base. A keg pallet designed for Yuengling is expected to launch in the fall, while a double-decker pallet for the concrete industry is under development. The company is also testing leasing and track-and-trace programs with multiple firms, with an anticipation that a large Midwestern client will finalize a leasing deal within 90 days. Additionally, Greystone is developing fire-retardant plastic pallets that have passed initial tests, aiming to achieve UL ratings required for potential supply to Costco.