Greetings. Welcome to the Jerash Holdings fiscal 2023 fourth quarter and full year financial results conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to your host, Roger Pondel, Investor Relations for Jerash Holdings. You may begin. Thank you, Holly. Good morning, everyone. Welcome to Jerash Holdings fiscal 2023 fourth quarter and year-end conference call. I'm Roger Pondel with PondelWilkinson, Jerash Holdings investor relations firm. It will be my pleasure momentarily to introduce the company's Chairman and CEO, Sam Choi; his Chief Financial Officer, Gilbert Lee; and Eric Tang, who leads the company's operations in Jordan, and today is calling in from Indonesia. 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 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-K and Form 10-Q, 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 could differ materially from these forward-looking statements, Jerash Holdings undertakes no obligation to update any forward-looking statements except, of course, as required by law. With that, it is my pleasure to turn the call over to Sam Choi. Sam? Hi. Thank you, Roger, hello, everyone. The retail sector is facing challenging times following the pandemic. Persistently rising interest rates, the inflationary impact, and other factors all are having an impact on consumer spending. Apparel brands have not been immune to today's environment, which for Jerash translates to smaller orders and the product mix shift to lower-margin goods and an impact on our fourth quarter results. Fourth quarter revenue also was negatively impacted by approximately $3 million of orders that were deferred by customers to the current first fiscal quarter. Nevertheless, during this period, we are continuing to focus on our initiatives to diversify Jerash customer base, both through our own marketing activities and through our recently signed joint venture with Busana Apparel Group. In March, we announced the Busana agreement to form a joint venture, which is progressing well in this formative stage. We have received positive feedback from Busana's global customers, with expressions of keen interest in geographically diversifying their production from Asia to Jordan to take advantages of duty-free agreements with the U.S. and other countries. In fact, discussions already have begun for costing and pricing of a number of styles with three potential joint venture customers, and we anticipate initial orders for the joint venture to start as early as the second half of the current fiscal year. On a positive front, our fiscal 23 initiative of diversifying Jerash customer base is paying off, having gained additional new global brand customers. We are making good progress ramping up production for Timberland. Moving into our new fiscal year, we are continuing to produce high-margin products for our new European-based apparel brand. I will now turn the call over to Eric Tang to talk about our operations, and then to Gilbert, who will then discuss financial results. Thank you, Sam. Hello, everyone. The fiscal year and final quarter were both busy and challenging as we endured and responded to changing and challenging market conditions, at the same time, trend for what we believe will be a productive future. Orders are still coming from our large global brand customer, the product mix has changed from the higher-margin goods, such as jackets, to lower-margin items. In part, the mix shift reflects the inflationary environment and changes in spending patterns at the consumer level. We were able to keep our facility running at full capacity, also by adding supplementary production for other customers, many of which are local. As I mentioned on our last call, we are maintaining active communication and outstanding relationships with all our customers, who appreciate Jerash's responsive service and are working closely with them to anticipate their needs going forward. In fact, production for one of our newest global branded customer, Timberland, which is a part of the VF Corporation brand, has now grown to be meaningful. Production demand from another long-term customer, G-III, has also been increasing, which further diversifies our customer and product mix. Longer term, as external market conditions improve, we believe we will be in an excellent position for growth. In that regard, we are cautiously moving forward with plans to develop the land we currently own to add more capacity, in part to accommodate anticipated new business from our Busana joint venture. Fortunately, we continue to receive inquiries from other premium brands as global trends remain to diversify supply chains away from Asia, especially China. We are actively aware that in addition to adding new customers and expanding our role with existing customers, it is critical to maintain tight cost control. We also are continuing our program of identifying new and cost-effective sourcing of fibers and other materials from new partners in the Middle East and North Africa, which will benefit Jerash and our customers. I will now turn the call over to Gilbert to discuss our financial results and the fiscal 2024 outlook. Gilbert, please. Thank you, Eric. Revenue for our fiscal 2023 fourth quarter amounted to $23.8 million, which was down about 23% from $30.9 million for the same period last year. The decrease primarily reflected lower sales from two major U.S. customers based on the changed economic environment and brisk consumer spending versus last year. Revenue also was negatively impacted by shipments of approximately $3 million of contracted orders being deferred by customers to the current first fiscal quarter. Gross profit was $2.5 million in the fiscal 2023 fourth quarter, compared with $4.7 million in the same period last year. The gross margin was 10.3%, compared with 15.1% a year ago, driven principally by a lower proportion of U.S. orders and the broader product mix shift. Operating expenses for the fiscal 2023 fourth quarter totaled $4.3 million, slightly decreased from last year, primarily because of smaller stock-based compensation expenses. SG&A expenses were slightly lower due to sales decline and partially offset by increased travel costs for migrant workers. Operating loss for the most recent fourth quarter was $1.8 million, compared with operating income of $126,000 for the same period last year. Total other expenses were $86,000 in the fiscal 2023 fourth quarter, compared with total other income of $148,000 in the last year's fourth quarter. Interest expenses were $268,000 versus $63,000 a year ago. Jerash sustained a net loss of $2 million, or $0.16 per share for the fiscal 2023 fourth quarter, compared with a net loss of $131,000 or $0.01 per share in the same period last year. The company's balance sheet and cash position remain strong, with $19.4 million of cash and net working capital of $42.8 million as of March 31, 2023. Inventory at fiscal 2023 year-end was $32.7 million, and we had about $2.2 million in accounts receivable. Net cash provided by operating activities was $10.8 million for the fiscal year-end March 31, 2023, compared with $9 million in the prior year. Based on the vagaries of the external environment, we're taking a conservative approach to guidance and are projecting revenue for fiscal 2024 first quarter and the full year to be maintained at a similar level as in fiscal 2023, with gross margin goal for the full year, for the full fiscal 2024, to be around 15%-16%. Our outlook is subject to final product mix of shipments as well as order flow from the new customers introduced through our joint venture with Busana. As of the end of our fiscal fourth quarter, 239,500 shares had been repurchased at market rates at a total price of $1.2 million, excluding broker commissions, under the share repurchase program authorized by the board in June 2022. The program expired on March thirty-first, 2023. On May 23, 2023, our board of directors approved a quarterly dividend of $0.05 per share, payable on June 9, 2023, to stockholders of record as of June 2, 2023. Despite the current retail environment, we are still receiving inquiries from new customers, which we are hopeful will turn into new business, and we look forward to an influx of new customers through our joint venture. At the same time, as Eric mentioned, we are closely monitoring and balancing our costs with the long-term growth planning for the not-too-distant future. With that, we will now open up the call for questions. Operator, may we have the first question, please? Certainly. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment while we poll for questions. Your first question for today is coming from Mike Baker at D.A. Davidson. Okay, thanks, guys. A couple questions. First, I'm just curious, why the deferral of $3 million? Is that... I mean, it doesn't sound like that's an economic issue if they're taking the product, but why did your customer decide to push it out 3 months? Well, I believe it was just a timing thing. A lot of times at the end of the month or at the end of the quarter, a lot of things can change, even though the orders may be scheduled to ship out by the end of the month. Sometimes because of the freight forwarder's scheduling, some of the containers may not make the cutoff. It happens a lot of the times. We just need to do a better job in forecasting. Okay. Do you have anything to add, Eric? Because just now my connection is not very good, as I'm in Indonesia. Mm-hmm. Oh, okay. The question was, how come there was a $3 million deferral of shipment at the end of last quarter? I said, it is mostly because of the timing and the freight forwarder scheduling of the shipments. Yeah. Actually, I would like to explain because when we are doing our forecast, even, okay, not as early as I mean the February, we still include one order of 400,000 pieces, Costco. Okay, it will generate a couple million revenue by the end of the last quarter. At the last moment, which is our last quarter, first week, okay, we were told by Costco that the inventory level is still high. They would like to defer this shipment to the next quarter or two months later. That's why, okay, we are keeping this ready garment in our warehouse for Costco. This is the main reason. Okay. O-okay. Thanks, Eric. That makes sense. Thank you. If I could ask a couple bigger picture questions. One, you know, it sounds like there's a lot of promising things going on in terms of new customers, new customers that you already have signed up, that are ramping or potentially new customers that are showing interest, plus what's going on with the JV. All that sounds good, yet the revenues, you know, are declining. I guess, is that just a timing thing? Can you sort of square that with the idea that, like, you know, you have all this new demand, yet it's not translating into sales yet. How long? You know, when can we expect that to occur, all that, you know, potential to show up in actual revenues on the P&L? Mike, I think very early on this fiscal year, we were talking about this year is going to be tough. The global economy is kind of everybody is fear of inflation as well as the fear of recession coming. Now, we don't know whether we're actually in the recession or not, but everybody thinks it's coming. People have stopped buying, especially buying the more high price products. People are still buying, but they're buying the less expensive products, and that was basically what VF has been telling us or has been telling the world, that there's, the sales in the higher premium products, such as TNF, The North Face, is going to be either flat or declining, but the lower price products on Timberland and Vans, they are growing. That happens or that translates to our business, too. We knew this year was difficult, but we also knew that we are onboarding quite a few new customers, such as HUGO BOSS, such as Timberland. Timberland was already on board, but we're growing Timberland tremendously. The volume gets into millions of pieces. The other Skechers is actually not as much as we anticipated. What was the other... Oh, G-III. G-III actually doubled their volume with us. We see a lot of positive things, but a lot of the garment manufacturers in Jordan or in anywhere else, Southeast Asia or whatever, they are seeing 30%-40% decline in their volume. We have always take the strategy as we knew more business is coming, the growth is coming, especially with signing this joint venture with Busana, but it takes time. It takes time for us to get the new customers on board. It takes at least a year based on our experience with Timberland and HUGO BOSS. It takes a long time to get them to approve the samples, check all the costs, and do the factory certification and all that. A lot of good things are happening. A lot of new customers are coming. We're doing pricing exercise for the Busana customers, and those are huge customers. We know it's going to take us at least 6 months to 1 year to get real impact. We don't want to reduce our capacity, on the contrary, we want to expand our capacity, which we spend quite a few million dollars in fiscal 2024 to expand our real estate, our factories, to allow more lines to be added. We don't want to send a lot of our workers home to the home country, which a lot of the other factories are doing, because we know it will be difficult to get them back when the business return. That's why the timing, what we're looking at, is still now that we are done with 2023. Looking at 2024, we know we can get the sales to be at the similar level, but the growth is not gonna come until later on in 2024. It will not be realized with the new Busana JV business, as well as some of the new customers that we are onboarding. Does that make sense? Yeah. Thank you for all that. I would like to add some new information to explain to the investor about our 2024 business. What Gilbert is saying is absolutely very accurate because we are doing maybe a lot of business with them before for The North Face. VF already told us that in 2024, they are also the trend is also they are reducing some of The North Face business to all apparel because of the spending pattern of the people in the United States. I asked VF, "Do we still need to keep the same capacity like before?" He said, "Certainly, Jerash is a very good factory. I don't like to lose Jerash capacity, for it is for the future." He's saying that although The North Face business is reduced, I'm going to give you, as Gilbert mentioned, more Timberland business. In 2023 fiscal year, all the year, because it's the first year we are doing Timberland, we have around 600,000 pieces all the year. The confirmed order and projection Timberland already gave Jerash for 2024 is over 1.3 million, which is 2 to 3 times more than before. At the same time, okay, one of the reputable bank in Germany, okay, which Gilbert just mentioned the name, also has tripled their business for high-end jacket, okay, and synthetic jacket with Jerash. The business volume, okay, from 2023, which is $2.5 million, maybe go up to $7 million-$8 million. Very important thing is Busana Group. I'm here in Indonesia because Busana Group is one of the biggest apparel in Indonesia. They have a very, very strong marketing team. They are doing brands all over the world for more than 50. We have signed a joint venture agreement. The purpose is, at least 50% of the customers, okay, want Busana to move the business to Jordan, which is a duty-free country, and to save the duty. Before, all the production is in China, also in Indonesia. We got the opportunity, which Busana is doing a marketing for Jerash joint venture to do more business in fiscal 2024. In the past week, I have visited more than 10 factories also, and, go meeting with the brands. They are coming from U.S. I am very confident that we will have good business with Busana. Currently, there are more than 11 brands who are very interested to give business to Jerash joint venture with Busana. It's a matter of time. Already within this 11 customer, we have already doing costing exercise for them for over 120 style. From this 120 style, there are 3 buyers, couple of days before, already bargained with our, the final price. Expected order, maybe like Gilbert mentioned, I don't know whether it will happen in the second quarter, but I'm confident that first quarter, definitely it will happen. Busana also thinking of, high business volume in Jordan together with the joint venture in Jerash. For me, okay, I'm confident for Jerash for 2024. Thank you. That's great. Great color on trends. With all that, one more question. Where are you with capacity utilization? I think you said you're still running at full capacity, and so do you need to build more capacity, and do you need to invest CapEx or, you know, any additional cost to build the capacity for all that demand that's coming? Well, we have never stopped. Actually, we don't need to increase our CapEx. This is what Busana thinks, because according to Busana investigation, 40% of Jerash order in 2023, as mentioned in the earnings script, are doing subcontract, and some of them are from local. Just we are earning some money to break the line even. If we are going to deliver this 40% capacity to do FOB order with together with Busana, it will be huge number of business. Busana look at this point, because they understand that the joint venture may not need to increase so much on the CapEx, and then can start using the 40% subcontract capacity to do FOB order. Right. We are also, we have always been preparing and planning to expand our capacity. This past fiscal year, we already did that internally by expanding one building to allow for more production lines. If we need additional capacity, we have that. We also have another piece of land that we are preparing to build as soon as the business with Busana comes in. It may take a year or maybe a year and a half to get that done, definitely by that time we will need additional capital to finance it. We have been looking in, at the bank, with other financing possibilities. Busana, if we do it with them, they will definitely also contribute according to the joint venture agreement. Yeah, to answer your question, we definitely are looking at a capacity expansion, but it is all dependent on the timing. Excellent. Thank you. I appreciate its color. Thank you. Sure. Thank you for your calling. Your next question for today is coming from Mark Argento at Lake Street. A lot of my questions have already been asked or covered in your commentary, but. Mm-hmm. I just wanted to better understand the... I know that the $3 million worth of revenue that got pushed out, was there, was that higher margin revenue that got pushed out? I think last quarter you guys were talking, you thought you'd be, you know, kind of in that mid-teens range on a gross margin basis. Just wanted to reconcile that a little bit. Well, like Eric said, the $3 million order that was pushed out was Costco orders. We do that Costco business with an importer. The margin on that order is not great. Like Eric said, throughout the, probably the latter half of fiscal 2023, we've been taking on a lot of this kind of subcontract and lower margin orders just so that we have fully utilized our capacity. Also about this $3 million value, which is in more 400,000 pieces. In the last moment, Costco asked us to push out to one or two months. Before this earnings calls, we also, our merchandiser also contact them to try to get some clear picture of how they are going to do with this 400,000 pieces. They said next month they are going to, I mean, send the final inspection team for first 100,000 pieces. They may not be shipping the whole quantity in one shipment, but definitely they will need the garment, they will split the shipment. Great. Then just quickly, in terms of Busana, when that business comes online, targeted gross margins for those types of products, are those higher-end type products? Or where, you know, where can we expect to see those coming at? Busana. It's doing a lot of different kind of products. Not like Jerash, we are doing mainly for the jackets and the polo. They are doing maybe more than 20, 30 kind of style, including different types of jackets, different kinds of shirt, and also different kinds of polo. Even they are doing with Macy's, big number of ladies dress, lady dress, which the FOB price is different. Meanwhile, they are also studying the opportunities of shifting some of this order or new kind of style to Jerash. Recently, our factory manager already start producing samples of the style Jerash did not do before. Busana is going to send to their end buyers whether Jerash is qualified. Just like Gilbert mentioned, our profitable brand in Germany, we are also doing the same. In the beginning, they give us small number to see if Jerash is qualified for this kind of synthetic jackets. After a couple of months, they think they feel comfortable that Jerash is qualified. Now they are sending big number for 2024. This will be the same as other new customer coming from Busana. I think, Mike, Mark's question was, more about what kind of margin are we expecting from the new business that comes through, with Busana. Is that right, Mark? I was just curious what kind of, you know, is it going to be kind of mid-teens? You know, I know typically, obviously, when, you know, you do the VF or the The North Face product, higher price point product, you guys are able to get a little better margin than, say, when you're doing T-shirts for Costco. I was just curious what your expectations were for, you know, the gross margin profile, the revenue, the business that you might book with Busana. Well, I think it is still up in the air because we're still doing the pricing exercise with them, and those are the products, like Eric said, maybe some of them we haven't done before. We don't really know, or we don't have a good grasp of what the cost is going to be. At this point, it is really difficult to say what we expect the gross margin is going to be. However, I believe the strategy for Busana business is that they will place the higher price, higher value kind of products, because they want to take the full advantage or the customers wanted to take the full advantage of the duty-free or free trade agreement, shipping out of Jordan to U.S. and Europe in order to save as much as the tariffs as possible. Yes. Actually, Busana also told me that this is their buyer's intention. Because of the duty savings, they are not going to transfer all the light cotton order, which they, the buyers can enjoy 9% duty saving. Instead, they are going to send, I mean, orders with a synthetic fabric, which the buyer can earn more than 33% of the duty saving. They will also give the joint venture a better price when they move the order to Jordan. Exactly. Great. That's helpful. Thank you. Thank you very much for your call. Once again, if there are any questions, please press star one. Your next question for today is coming from Aaron Grey at Alliance Global Partners. Hi, good morning. A lot covering, a lot of my questions already answered, but just one quick one for me, higher level. A lot of troubles, not just for you guys, but for a lot of your competitors, I'm sure. Would appreciate any color you might have in terms of the competitive environment and how it's changed the past few months since we last spoke about it. Now you're seeing any shakeout, closures, or more so just the operators lowering staff levels as you had mentioned previously. Thank you. You mean in the, in Jordan, in terms of our- Yes. Competitors? Jordan, China, and otherwise. Okay. Eric, you want to answer this question about our business environment in Jordan, what our competitors are facing, or maybe even in China or Southeast Asia area? Yes. Nowadays, there are a couple of reasons why most of the buyers are launching to Jordan and make exit from Southeast Asia country, particularly China. First of all, the China machine operators, all of them are earning, I think, at least $1,000 a month already. Even in Vietnam, okay, they are earning $500. In Jordan, because 70% of our workers, workforce are from migrant, from Bangladesh, from India, from Sri Lanka, multi-nationality. They are earning around $300 as the basic salary, including overtime. Yes, of course, we are providing them with accommodation, as stated, and food, everything. In general, it is our cost is still competitive. Bear in mind. Right. that when customer is transferring order from other countries, non-duty country to Jordan, they can earn as much as 33% of the duty saving. For example, one recuperable jacket brand, the FOB price is $50. 33% moving from China, Indonesia, to Jordan, a buyer can save $15 for the duty saving. It is a big money because otherwise the buyer has to pay if it produced in China or Vietnam or other Asia country. The buyer is pushing Busana to diversify, to transfer the order to Jordan, so that not only it will benefit the joint venture, it will also benefit the buyer also. What about the situation among the our competitors in Jordan? Obviously, they're paying comparable or similar wages to their workers. Because of the economic downturn- Yeah. -because of, losing customers, losing orders, I heard that Classic Fashion is laying off about 10,000 workers. These are the kind of- Yes - competitive environments, even within Jordan, that our competitors are facing. G-III is already doing much better because our business didn't really go down. Our sales was only down like 2%, 3% from last year. We maintained the same business, even though we couldn't keep the high-margin business. We substitute the high-margin business by taking in a lot more lower margin, but high volume business to keep our workers busy. Our competitors, some of them even closed their shops, some of them lay off a lot of people. That's really what is going on in the world of garment manufacturing. I guess maybe, Eric, you can talk a little bit more about that, as well as, what you see in Southeast Asia, and China, what all the other garment factories are doing. Because what I see here in the U.S. is that a lot of those garment factories, they are going all out to try to find business. Yes. Actually, all the apparels in the world, no matter it is in China, Southeast Asia, Central America, Jordan, because of the market is very weak in U.S. and Europe, that this is the reason why they reduced a lot of orders. by reducing a lot of orders, for example, it will affect, okay, their production capacity. If they don't have orders, they have to, I mean, absorb. If they are not going to reduce the workforce, they are going to absorb a lot of cost. For example, one, the biggest factory in Jordan is called Classic Fashion. Before, they have 30,000 workers, and they are concentrated on Walmart and JCPenney. because Walmart and JCPenney already closed some, many of their retail shops, and their amount of order has been reduced to 35%. This is a very significant number to this factory. This factory, everybody in Jordan understands, they are already sending 9,000 workers going back to the country, even though the contract is not finished. This is the what they are doing, correct. For G-III, we tend not to do so because I'm still, we are still confident that the market, okay, even though it will pick up slowly, we need another one year, I mean, to face the critical situation. Mm-hmm. With Senna joint venture coming, I'm sure that they can fill up our, most of our subcontract order capacity. This is the reason why G-III does not intend to reduce significantly our workforce. I appreciate that really detailed call on the environment. I'll go and jump back in the queue. Thank you. Thank you, Aaron. We have reached the end of the question and answer session, and I will now turn the call over to Sam Choi, CEO, for closing remarks. Thank you, operator, and thanks to all of you for joining us today and for your continuous support. G-III has a solid foundation from the company's leading industry position, its quality, loyal customer relationships, and strong balance sheet. Those attributes give us great confidence in the company's future, and that we will get through the current period in a position of strength. We look forward to speaking with you again soon and reporting on our progress. Thank you. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation. Thank you. Thank you very much. Thank you.