Good morning, ladies and gentlemen, and welcome to the Jerash Holdings Fiscal 2023 second quarter financial results call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Roger Pondel, Investor Relations for Jerash Holdings. Sir, the floor is yours. Thank you very much, Ali, and good morning, everyone. Good evening, I guess to some of you. We have a truly global call. Welcome to Jerash Holdings Fiscal 2023 second quarter conference call. I'm Roger Pondel with PondelWilkinson, Jerash's investor relations firm. It will be my pleasure momentarily to introduce the company's chairman and Chief Executive Officer, Sam Choi, his Chief Financial Officer, Gilbert Lee, and Eric Tang, who leads the company's operations in Jordan. Before I turn the call over to Sam, I wanna 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 Jerash Holdings most recent Form 10-K and Form 10-Q, 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 company filings made with the SEC from time to time. Actual results could 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? Thank you, Roger, and hello, everyone. General market conditions throughout the global retail sector continue to be impacted by inflationary pressure, higher interest rates and inventory levels, and we also are feeling the impact. Orders received during the current fiscal year from our major customers have generally been smaller. With our product mix shift more toward lower average selling price compared with last fiscal year. Also, from a year-over-year comparative perspective, last year was unusually strong due to pent-up demand following the peak of the pandemic. Revenue for the fiscal 2023 second quarter was lower than originally expected by approximately $4 million due to shipment postponements as retailers sell through their excess inventories. Nevertheless, as I mentioned last quarter, we see fiscal 2023 to be both a transitional and opportunistic year for Jerash. We are making excellent progress with our initiative to expand and diversify our global brand customer base. Production for two of our newest customers, Timberland and Skechers, already has begun. Initial shipment to both are beginning in the current third quarter. Also, we are continuing to receive inquiries from other major global brands, and we believe these prospective customers will play an important role for Jerash next year. We also are pursuing opportunities to gain visibility with high-profile customer brands in other segments of apparel manufacturing, which we believe will further diversify our customer base in the years to come. Just yesterday, we signed our memorandum of understanding for a joint venture company with Busana Apparel Group, one of the world's largest garment manufacturers and exporters, with certain manufacturing facilities in Indonesia and Ethiopia. Busana is well-known for its high-quality woven apparel production, specializing in technical garments, active sportswear, and formal wear. We also are gaining visibility into the aesthetic, athleisure wear and technical clothing segments from Busana's customers that are expressing interest to geographically diversify their production in Jordan, which has long-standing duty-free export agreements with the U.S., EU and other countries. We will keep you apprised of our progress. I will now turn the call over to Eric Tang, who is based in Jordan, and then Gilbert Lee will cover our financial results and discuss details of our approach to guidance for fiscal 2023 third quarter. Hi, Eric. Thank you, Sam. Hello, everyone. With the challenging external retail environment, orders placed by our top global brand customers have been smaller, and the requested delivery schedules have been later than a year ago. We continue to actively communicate and maintain excellent relationship with each of our existing customer. We believe current trends will continue through fiscal 2023 as retailers sell through their excess inventories and work through economic and inflation recovery, which impacts both order fulfillment and delivery schedules. Fortunately, Jerash competitive advantage and visibility in the marketplace is enabling the company to continue to receive new production inquiries from premium brands as global brands trends continue to diversify supply chains away from Asia, especially China. On the new customer front, as Sam said, we launched production for Timberland and Skechers in the third quarter. We are pleased to be working with these well-known brands, although initial orders are for products generally lower margins and in relatively small quantities. Our first order from Timberland was shipped in late October. We also are working on test orders for two other VF brands and other additional leading global brand customers outside of the U.S. We are optimistic about diversifying our customer base, which we believe to be a healthy move for Jerash, and we are confident that over time, revenue from new global brands will grow in a meaningful way. Construction of a new dormitory for our multinational workforce is underway, but now delayed for a few months with the start of the rainy season. We plan to move approximately 1,500 of our multinational workers to this new dormitory during the first quarter of 2023. We will be saving approximately $500,000 in annual rental expense beginning next fiscal year. With that, I will turn the call to Gilbert to discuss our financial results and the fiscal 2023 outlook. Gilbert? Thank you, Eric. Revenue for our fiscal 2023 second quarter was $37.8 million, compared with $45.7 million in the same quarter last year. Inflationary pressures, along with higher interest rates and inventory levels, are affecting retailers, which took a toll on our performance. Revenue also was impacted by approximately $4 million in customer shipment postponements. Gross margin was 18.3% in the fiscal 2023 second quarter, compared with 22.1% in the same quarter last year. The decrease primarily was driven by the lower proportion of export orders that typically generate higher margins. Operating expenses totaled $4.3 million in the fiscal year 2023 second quarter, compared with $4.5 million in the same quarter last year. SG&A expenses remains elevated at $4.3 million in the fiscal 2023 second quarter, compared with $4.2 million in the same quarter last year. It was primarily due to our newly established Middle East and North Africa region sourcing team and expansion of our merchandising and sampling operations this year in Jordan. We have been receiving inquiries and positive feedback from customers for diversifying our material and supply sourcing to reduce the dependency on Asia, as well as shorten material lead times. This, in turn, will enable us to provide quicker responses to our customers, as well as open new opportunities to attract additional global brands. We're confident that our investments today in SG&A expenses will pay off considerably in the long run. Operating income amounted to $2.6 million in the fiscal 2023 second quarter versus $5.6 million in the same period last year. Interest expenses were $164 thousand in the fiscal 2023 second quarter, compared with $46 thousand in the same quarter last year. Net income for the fiscal 2023 second quarter was $1.8 million or $0.14 per share, versus $4.4 million or $0.39 per share in the same period last year. Comprehensive income attributable to Jerash Holdings common shareholder totaled $1.6 million in the fiscal 2023 second quarter, including a foreign currency translation loss of $216 thousand versus comprehensive income attributed to Jerash Holdings common shareholder approximately $4.4 million in the same period last year. Jerash's balance sheet and cash position remain strong with cash of $23 million and net working capital of $47.5 million as of September 30, 2022. Inventory was $36.4 million, and accounts receivable amounted to $4 million. Net cash provided by operating activities was $9.6 million for the six months ended September 30, 2022, compared with $10.2 million for the same period in fiscal 2022. The net change reflects working capital activity attributable to increases in inventory and accounts payable and a decrease in accounts receivable. We're taking a conservative approach to guidance given the inflationary environment that is affecting retail markets and consumer sentiment, along with a product mix shift to apparel items with lower margins and lower ASPs. For the fiscal 2023 third quarter, revenue is expected to be in the range of $33 million-$35 million, compared with $36.8 million last year. We also are expecting margins to be lower at 16%-18% on average for the full year. As Sam and Eric pointed out, we view fiscal 2023 to be transitional and opportunistic for Jerash. Since last year, we were unable to accommodate new customer orders when capacity demands from our top global customers were at such exceptionally high levels. We continue to focus on growing our customer base and pursuing other opportunities to enhance our competitive advantage, product capabilities, and offerings. We will continue to closely monitor developments over the next few months and plan to provide an update on our next call. On November 4, our board of directors approved a regular quarterly dividend of $0.05 per share, payable November 28 to stockholders of record as of November 18, 2022. On June 13, 2022, Jerash's board authorized a $3 million share repurchase program. The share repurchase program will be in effect through March 31, 2023. To date, approximately 105,000 shares have been repurchased at an average price of approximately $5.20 per share, and we will remain active in the market in the months ahead. With that, we will now open up the call for questions. Operator, may we have the first question, please? Thank you, ladies and gentlemen. The floor is now open for questions, and if you have any questions, please press star one on your phone at this time. Our first question is coming from Michael Baker with D.A. Davidson. Sir, please go ahead. Thanks. Two sets of questions. First, just on inventory, both your own and what you're seeing from your customers. Your inventory is up significantly year-over-year and much higher growth rate than we've seen in the past. Can you talk about, you know, is there any risk in that inventory, or, you know, the complexion of that inventory? As it relates to your customers, I mean, I think everyone knows that retailers in the U.S. and probably globally, their inventories are too high, and so they're pushing back on orders. That's not new to anyone. I guess my question is- Mm-hmm. -in your view, how is the situation today versus, you know, three months ago or last time you reported? Are retailers working down that inventory at all in your view, or is it actually, you know, getting worse? Okay. First of all, on the inventory question, yes, inventory levels that we have on our books are higher than before, than normal. Comparing to the beginning of the year, our inventory is about $8 million higher. As we said, there are about $4 million worth of finished goods that was pushed over to the third quarter for shipment. That reflects, that our customers, their inventory levels are also very high, and they kind of just postpone the delivery of those, finished products. I think everybody is working off their high inventory level, and it will just take some time to get it down, given the current retail market situation and the global economy, that consumers are less willing to spend. Maybe Eric, you can talk a little bit about the situation, especially in Jordan comparing to- Okay. -three months ago when we reported. Okay, I refer to the three months ago when we reported. The situation now is getting a little bit worse in Jordan for all factories because, you know, almost all the factories are manufacturing for U.S. brand and 90% of their, I mean, their manufactured product is go to U.S. Now that, I have spoken to a lot of brands and a lot of factories, because of the high inventory level, they have cut down the order or they don't just place new orders. Many of our smaller factory, I mean the size may be only 100-200 workers in Jordan, they already closed down. Because they don't have their own direct order from the brands, they only rely on subcontract orders. Now, even the manufacturer, they don't have enough orders to fill up all the current capacity. How they can give subcontract orders to this small factory. That's why a lot of them are closing down. For most of the factories, nowadays, because they don't have enough work to fill up all the capacity, they are now working sometimes only five days a week instead of six. The working hours, some of them reduced from 12 - 10, and some reduced from 10 - 8, and some are even working seven hours a day. For Jerash, we are still trying to make use of our full capacities. We still have enough orders to fill our production lines. The situation which I spoken with many of the brands and the factories, okay, it will only reflect the real picture after the Christmas and New Year sale. All of them are saying the same thing. Yeah, I think that Eric is right. A lot of our customers, they're kind of waiting to see what's going to happen in this Christmas and Thanksgiving season to see how the sales are before they decide what to do. Definitely, they're sitting on quite a significant amount of inventory. Huh. Okay. Yeah. That's really helpful commentary. If I could ask one more, I guess, set of questions just relative to the- Mm-hmm. -to the model and expectations. You gave some color on how to expect the third quarter. I guess, you know, based on those comments you just made, should we expect the sales weakness to continue, you know, into the fourth quarter as well? I'm wondering if you're willing to comment on that, and then by implication, you know, what the full year 2023 revenue numbers should look like. Then the expenses being a little bit elevated, $4.5 million or so, do we expect that to continue for the next few quarters? It sounded like from your comments that that's a reasonable, you know, place to project the SG&A for the coming quarters. Well, first of all, the Q3 we have visibility on pretty much is going to be off from last year, probably by about 8% comparing to last year, Q3. For the full year, we're really still quite uncertain about what it's going to look like in Q4. We think it will continue to be weak, but we just don't know how weak it is going to be. We just want to be conservative. I don't think it is going to be. Well, definitely it's going to be down from previous year. The whole year we're not giving out any guidance, but I think it should be in line with pretty much our global brand customers' sales are declining. I think- Gilbert, one more thing I would like to give information is that there's a possibility that our last quarter may have some improvement, okay? I mean, I may not express that we think it is because we got some order confirmations recently that from VF, because one of their vendor in other country, okay, also duty-free country, they get some big financial problem. So VF is moving some of the orders from the country to Jordan. Okay, we are now giving up some extra capacity, giving them to VF to accommodate this new order, which is to be shipped before the 31st of March, which is the last quarter. Okay. Just to be conservative, I think Q4 is going to be down from last year. Understood. Yeah. Your second question about the SG&A and operating expenses, I think it will continue around the $4.3-$4.4 million level. We don't want to cut too much, especially on SG&A, because what we're investing right now is to expand our sourcing and merchandising, especially in our Jordan facilities, so that we can take advantage of sourcing from the MENA region as well as we're trying to attract European brand customers. I don't see that coming down significantly. Fair enough. Thank you. Sure. Thank you. Mm-hmm. Thank you. Our next question is coming from Mark Argento with Lake Street. Please go ahead. Good morning, guys. Just a couple quick questions. Just wanted to better understand. I know historically you guys have talked about how your capacity has been booked up. I assume, you know, you work with your customers, they book up, you know, they place orders with you, book up your capacity. You know, maybe you just walk me through how, you know, it sounds like you can manufacture product for them, but then they can decide when they take delivery. How much latitude do they have, you know, relative to kind of, you know, deciding when delivery is, when they wanna accept delivery of the product? Well, customers dictate when they want to take delivery. In times like this, they have the power to postpone the delivery because they don't want it to be on their books as finished goods inventory. That's why some of the shipments were pushed off to Q3 from Q2. We constantly, every week, communicate with our customers to update the delivery schedule. Because we have very good relationship with our customers like VF and New Balance, they try to work with us. They also understand our situation. For the products that we have produced, they will definitely take it. Sometimes they even pay for it in advance. It's just that they don't want us to ship until it's good for them. Anything to add, Eric? Yes. Our customer are really very loyal to us. Okay, they understand the apparel difficulty. Even, for example, one of the major customer, New Balance, they are very good. Okay, although they try to postpone some shipment to the next quarter, but they still intends to pay to us before the shipment because the delay is caused by them. Mm-hmm. Got it. All right. No, it's, that's helpful. Just quick question. The Busana, I think that's how you pronounce it, maybe talk a little bit about- Busana, yes -the relationship. Yeah. I mean, are they a partner, a competitor, or how should we think about that relationship? Actually, Busana is one of the largest apparel group in Asian countries. They have total more than 30 facilities in Indonesia and one in Africa. Their number of employees is around 28,000 people, with annual sales volume of more than $450 million. They are dealing with a lot of brands. Some of the brands or two or three brands are common brands we did together with Jerash. The purpose of them coming to have a joint venture with us, it's not they don't have business. They have too much business. All their business are concentrated in the Asian countries. Nowadays, they told me that the buyers are requesting them to go outside from, I mean, to move some of the business to a duty-free country, and Jordan is the best location that most of the brands are talking to them. This is the reason why they approach us, okay, and wants to set up a joint venture with us. Okay, and the customer, okay, the brands told Busana that if you are remaining staying in Asia and Indonesia, we cannot grow your business significantly anymore. If you are going to move to another country like duty-free, like Jordan, we can continue the growth. They are thinking that to establish a new factory in Jordan may need one or two years' time. They might as well to go with a very good factory in Jordan. They check, they do a lot of statistics and check with many sources that Jerash is one of the best in Jordan, so they approach us. Then they want to set up facility and move the business from some of the brands to Jordan, and then we can grow together. Yeah. Some of these global brands are customers that we have not done business with before. They are premium- Yeah -really, very popular brands, some in Asia, well, some in U.S. and some in Europe. I think this is a very good opportunity for us to be able to expand and diversify our customer base, partnering with Busana. How do you anticipate the JV would work, you know, at a high level economically? You know, what kind of margins do you think that business could generate for you? Well, right now all the details are still, we haven't really sat down and discussed with Busana how the detailed financials and investments and all those kind of things. Right now we have just come to an agreement to have a MOU signed. Then in the next six months, we will begin talking and looking at all kinds of ways to work together. At least three or four of their customers have already begun sending us samples and talking about styles and what we can make for them. That part is already ongoing. As soon as we have come to an agreement with Busana, I think we will start getting those new business very soon. Great. Last question for me. You know, the stock, you know, even after you trim up maybe the estimates a little bit here for the environment, what have you, it's still trading at low single digits on a EV and EBITDA basis, sort of valuation metric you want. It's incredibly cheap, especially, you know, you got a ton of cash on the balance sheet. I know you got the buyback and you bought a little bit of stock. You know, can we look for you guys to get a little more aggressive with that buyback? I can't assume there's a better use of capital than buying back your own stock at these levels. Well, with the trading volume, we can't really do a lot on the buyback. I think right now we have stopped because of the reporting, but even during the regular time for purchasing for repurchase, we could only do a few thousand shares a day, just because of the low trading volume. There are a lot of restrictions. We can't really do much on that. Plus, yeah. All right. Thanks, guys. Good luck the rest of the way this year. Mm-hmm. Thank you. Thank you. Our next question is coming from Aaron Grey with Alliance Global Partners. Please go ahead. Hi, good morning, and thank you for your question. First one for me. Sure. Yeah, absolutely. First one for me, want to talk about a little about diversification, particularly with, you know, new brands potentially coming on. You know, if you flip it from the brand perspective, you know, are you seeing the increased demand for them to wanna diversify, you know, their own manufacturers, especially given the current climate they're in with the, you know, excess inventory, and supply chain issues? Just a broader environment in terms of whether or not you're seeing more incoming or just the appetite for those bigger brands to then diversify. Thank you. Sure. I think for both sides, both for Jerash and also for all these new potential customers, this year is the perfect timing for exploring new relationships. First of all, we have the capacity to do the sampling, to do the trial orders for them. And they are actually to establish a new manufacturer, it takes quite a bit of time and energy. It's not something that is immediate. For now, they would send us some orders to try, and it takes time for us to make changes and make sure that everything meets their requirement. Then they will send audit team and do all kinds of due diligence. By the time we get everything done, it would be at least 6-12 months. We started doing these kind of things with Timberland about 12 months ago, actually, and we're just now starting to ship Timberland. It takes time and I think we're—we have been working with some really important brands, which I can't share the names at this time. I think after this year, all this will give us a lot of growth and opportunity for the next fiscal year. Great. Thanks for that color. That was really helpful. If I- Sure. Also with your own diversification in terms of, you know, your cost inputs, right? So think about the gross margins, right? So it's the pricing on one side, but, you know, given, it's probably more at the will of the bigger brands there. So think about the input cost. Can you talk about some initiatives you might have that are a little bit more under control in terms of what you could do to lower the cost of some of the raw materials, particularly as we go through the next year where you might have some more pricing pressure at the, at the higher levels? Thank you. Well, I think the inflationary level or the global inflationary pressure has some impact on our costs. However, I believe recently the logistics cost has come down significantly back to a more normal level. I think it just kind of offset each other, and we're not seeing much of an increase in terms of our costing. If we are able to maintain our facility to run at near full capacity level, I think we should be able to maintain a very efficient production cost. Besides, we're getting rid of some of the rent and lease costs, so hopefully that will help put more dollar to the bottom line. Eric and Sam, do you see any trend going whatever direction in terms of the supply chain or raw material costs? For Jerash, we are doing a lot of things trying to reduce the operating cost of the factory. For example, to move our migrant workers in the new dormitory, I mean, the first stage, we can save $ 500, 000. If we move all the migrant workers into the new dorm, we can save $1 million a year for the rental. Secondly, we already have discussed with the solar company to make the plans to make the solar panel for all our existing factories. I think we can save in each factory at least 40% of the cost of electricity. The cost of electricity in Jordan is much more compared with other countries, much more expensive. The erection of the new solar panel system in each factory can also help us to reduce some of the operating costs of the factory. Also we have some, I mean, the contingency plan that in case, okay, we don't have enough orders, okay, and while we want to keep the existing capacity in order to meet the future demands, okay, at the peak season, we can reduce some of the working hours. Okay. Actually, the extra 2 hours, okay, it's we request our brands to give approval to us for two more overtime, two hours overtime. If it is necessary, we can reduce one hour overtime, okay, in order to fill up all our capacity. This is all the options we are thinking about to reduce the operating cost of the factory. Mm-hmm. Okay. Okay, Okay, great. Thank you very much for the color then. I'll jump back into the queue. Thanks. Okay. Thank you. At this time, there are no more questions in queue, so I'll hand it back to Mr. Choi and management team for any closing comments. Oh, sorry. We have one question that's come in. Sorry. It's from Rommel Dionisio with Aegis Capital. Sir, please go ahead. Good morning. Thanks for taking my question. Gilbert, I think you talked about, and you've talked about in prior conference calls, looking at different sourcing for fabrics, potentially in the Middle East, like regions like Egypt. I wonder if you could just give us an update on that initiative and to the extent that you might be able to save some cost there as well. Thank you. Oh, yeah, absolutely. Thanks, Rommel. In fact, we have already started buying fabrics from Egypt and Turkey for some of our customers' programs. That has already begun. I don't know if it will save significant amount of cost, but it will definitely. Because China is definitely the lowest cost in terms of fabrics. If you add the shipping costs all the way from China or Asia, it kind of offset itself. I think the cost at the end of the day is kind of comparable sourcing from Egypt and from Turkey. Turkey is a little bit more expensive, but Turkey is good for its technical fabrics and more polyester, and Egypt is more cotton-based and much cheaper. However, the best advantage for us sourcing from the Middle East region is to shorten the lead time and be more reliable in terms of if there is any supply chain disruption. Yeah, that's the update that we have. We have already begun sourcing from the Middle East region, and it will grow. It will continue to grow. That has actually given us opportunities to work with some of the newer customers. Okay. Thanks very much. Thanks, Rommel. Thank you. I would now like to hand the call back to Mr. Sam Choi for closing comments. Thank you. Thank you, operator. Thanks again to all of you for joining us today. Our prospects remain healthy. As we traverse the current challenging environment, we very much appreciate your support and interest in our company. Please have a safe and healthy holiday season, and we look forward to speaking with you again soon. Thank you, everyone. Thank you. Thank you. Thank you, ladies and gentlemen, and this does conclude today's conference call. You may disconnect your lines at this time and have a wonderful day, and we thank you for your participation.