Greystone Logistics Inc., which injection molds pallets from 100 percent recycled plastics, generated record sales for its fiscal year 2019, ending May 31 — soaring 46 percent from the year before.
However, President and CEO Warren Kruger said machinery automation and mold issues hit the company's profit margin.
Greystone's fiscal 2019 sales hit $71 million, compared with 2018 sales of $48.6 million. Net profit was $1.37 million, a 2 percent increase from the year earlier net profit of $1.24 million.
"Greystone's growth has been phenomenal with record-breaking sales during the corporate year ending May 31, 2019," Kruger said in a statement announcing the financial results on Sept. 3. "Existing customers and new clients have driven sales of our top-line pallets, but margin erosion continues to be a concern and profits are not where they should be. We had unusual machine and mold issues during the second half of our corporate year that did not allow us to optimize product throughput, thus driving up costs on a per-unit basis."
Kruger said he is "extremely disappointed that the robot installation on two of our production lines that we contracted for has been delayed as critical aspects of the process were under-engineered by our provider. We must deliver additional tools to our employees to enhance their work experience and make us more cost-efficient. A series of initiatives are being implemented, and we are driven to improve our efficiency and thus increased income levels."
Greystone Logistics is traded over the counter. The company, based in Tulsa, Okla., does manufacturing in Bettendorf, Iowa.
Greystone announced Aug. 5 that it signed a $6.8 million purchase order with a national food and agribusiness company for plastic pallets over the next 12 months.
In the year-end numbers announcement, Kruger said the company's relationship with a national pallet leasing company has driven dramatic growth in a broad range of end markets.
"This exposure is adding new users from referrals within multiple industries, thus mitigating specific customer concentrations," he said. "We anticipate sales of our new automotive and super-sack pallets to add to this diversification."