Armlogi expands operations with additional warehouses, reporting increased revenue but also significant net losses in fiscal 2025.
Quiver AI Summary
Armlogi Holding Corp. announced its fiscal 2025 second-quarter financial results, highlighting a significant expansion in its warehousing capabilities, with warehouse operations increasing from 9 to 10 locations and total warehouse space expanding from 2 million to over 3.5 million square feet, particularly in key areas such as California, Georgia, and Illinois. For the three months ending December 31, 2024, total revenue rose by 21.8% to $51.1 million, driven by increased transportation and warehousing services, although the company faced a net loss of $1.7 million compared to a profit of $3.7 million the previous year, primarily due to rising costs and underutilization of new facilities. Over the first half of fiscal 2025, revenue increased by 12.5% to $93.6 million, but total costs surged by 37.5%, resulting in a net loss of $6.3 million compared to a net income of $6.5 million for the corresponding period in 2023. The company's CEO emphasized the significance of their expansion and ongoing efforts to optimize operations amidst challenges from increasing freight costs.
Potential Positives
- Warehouse expansion from 9 to 10 locations demonstrates the company's capacity for growth in logistics operations, increasing total space from 2 million to over 3.5 million square feet.
- Total revenue for the second quarter shows a significant increase of $9.1 million, or 21.8%, indicating strong business performance compared to the previous year.
- A 25.7% increase in revenue from warehousing services, attributed to new warehouse acquisitions, highlights the growing demand for the company's logistics solutions.
- Entered into a $50 million Standby Equity Purchase Agreement, providing potential for increased capital to support further growth and operational improvements.
Potential Negatives
- Despite an increase in total revenue, the company's net loss for the second quarter was $1.7 million, a significant decline from the net income of $3.7 million during the same period the previous year.
- The overall gross profit margin dramatically decreased from 18.3% in Q2 2023 to just 0.9% in Q2 2024, indicating substantial operational challenges.
- Costs of sales surged by 47.6%, primarily driven by higher freight expenses linked to increased UPS shipping charges, raising concerns about cost management and profitability sustainability.
FAQ
What was the revenue increase for Armlogi in Q2 fiscal 2025?
Total revenue increased by $9.1 million, or 21.8%, to $51.1 million compared to Q2 fiscal 2024.
How many warehouses does Armlogi operate now?
Armlogi expanded from 9 to 10 warehouses, increasing its total warehouse space to over 3.5 million square feet.
What were the main drivers of revenue growth for Armlogi?
Revenue growth was driven by transportation and warehousing services, supported by the addition of new warehouse locations.
What challenges did Armlogi face in the latest quarter?
Challenges included increased UPS surcharges and underutilization of newly leased facilities, affecting gross profit margins.
When will Armlogi'searnings conference calltake place?
Theearnings conference callis scheduled for 8:00 AM Pacific Time on February 14, 2025.
Disclaimer: This is an AI-generated summary of a press release distributed by GlobeNewswire. The model used to summarize this release may make mistakes. See the full release here.
Full Release
Expanded from 9 to 10 warehouses throughout the first half of fiscal year 2025
Total warehouse space increased from 2 million to over 3.5 million square feet
Major presence in California, Georgia (Savannah), and Illinois (St. Louis Metro Area)
WALNUT, Calif., Feb. 14, 2025 (GLOBE NEWSWIRE) -- Armlogi Holding Corp. (“Armlogi” or the “Company”) (Nasdaq: BTOC), a U.S.-based warehousing and logistics service provider that offers a comprehensive package of supply-chain solutions related to warehouse management and order fulfillment, today announced financial results for its fiscal 2025 second quarter and first half ended December 31, 2024. Today, the Company filed its Quarterly Report on Form 10-Q with the U.S. Securities and Exchange Commission.
Financial Results for the Three Months Ending December 31, 2024:
Total revenue increased by $9.1 million, or 21.8%, to $51.1 million during the three months ended December 31, 2024, compared to $42.0 million for the same period in 2023.
Revenue from our transportation services increased by $6.2 million, or 20.8%, to $36.1 million during the three months ended December 31, 2024, compared with $29.9 million during the three months ended December 31, 2023, due to the addition of new warehouse locations, which has enabled an increase in shipment volume compared to the same period in 2023. This segment comprises reselling third-party carrier services to our customers.
Revenue from our warehousing services increased by $3.1 million, or 25.7%, to $15.0 million during the three months ended December 31, 2024, compared with $11.9 million during the three months ended December 31, 2023, driven by the addition of new warehouses acquired in the last fiscal quarter. This segment comprises inventory management and storage offerings.
Revenue from other services decreased by $0.2 million, or 96%. This segment is primarily comprised of customs brokerage services.
Costs of sales increased by $16.3 million, or 47.6%, to $50.7 million during the three months ended December 31, 2024, compared with $34.3 million during the same period in 2023. The increase was driven by a rise in freight expenses due to higher UPS shipping charges and increases in lease expenses, employee salary and benefits, and temporary labor costs, as we expanded our warehouse and operations team to support growth.
Our freight expenses, lease expenses (primarily warehouse operating lease expenses), temporary labor expenses, warehouse expenses, and salary and benefits increased by $8.3 million, $2.7 million, $2.9 million, $1.2 million, and $0.7 million, respectively, during the three months ended December 31, 2024, compared to the same period in 2023. The increases in lease expenses were due to the additional operating leases acquired in the last and current fiscal quarter. The increases in freight expenses were due to the increase in UPS expenses. The increases in temporary labor expenses, warehouse expenses, and salary and benefits were due to the expansion of the warehouse operations.
Our overall gross profit margin decreased from 18.3% for the three months ended December 31, 2023, to 0.9% for the same period in 2024, primarily due to the increase in the surcharge by UPS and the decreases in customer order volume, as well as some of the recently leased warehouses that are not fully utilized.
Our net loss for the three months ended December 31, 2024, was $1.7 million, compared with the net income of $3.7 million for the same period in 2023, representing a decrease of $5.4 million.
Financial Results for the Six Months Ending December 31, 2024:
Total revenue increased by $10.4 million, or 12.5%, to $93.6 million during the six months ended December 31, 2024, compared to $83.2 million for the same period in 2023.
Revenue from our transportation services increased by $5.0 million, or 8.3%, to $64.6 million during the six months ended December 31, 2024, compared to $59.6 million during the six months ended December 31, 2023, due to the addition of new warehouse locations which has enabled an increase in shipment volume compared to the same period in 2023.
Revenue from our warehousing services increased by $5.7 million, or 24.7%, to $29.0 million during the six months ended December 31, 2024, compared to $23.2 million during the six months ended December 31, 2023, driven by the addition of new warehouses acquired in the last fiscal quarter.
Revenue from other services decreased by $0.4 million, or 93.7%. Other revenue mainly consisted of revenue from our customs brokerage services.
Costs of sales increased by $26.4 million, or 37.5%, to $96.7 million during the six months ended December 31, 2024, compared with $70.3 million in the same period in 2023. The increase was driven by a rise in freight expenses due to higher UPS shipping charges and increases in lease expenses, employee salary and benefits, and temporary labor costs as we expanded our warehouse and operations team to support growth.
Our freight expenses, lease expenses (primarily warehouse operating lease expenses), temporary labor expenses, warehouse expenses, and salary and benefits increased by $11.5 million, $4.8 million, $5.7 million, $1.8 million and $1.6 million, respectively, during the three months ended December 31, 2024, compared to the same period in 2023. The increases in lease expenses were due to the additional operating leases acquired in the last and current fiscal quarter. The increases in freight expenses were due to the increase in UPS expenses. The increases in temporary labor expenses, warehouse expenses, and salary and benefits were due to the expansion of the warehouse operations.
Our overall gross profit margin decreased from 15.5% for the six months ended December 31, 2023 to 3.3% for the same period in 2024, primarily due to the increase in the surcharge by UPS and the decreases in customer order volume, as well as some of the recently leased warehouses that are not fully utilized.
Our net loss for the six months ended December 31, 2024, was $6.3 million, compared with the net income of $6.5 million for the same period in 2023, representing a decrease of $12.8 million.
Liquidity
As of December 31, 2024, we had a balance of cash and restricted cash of $7.4 million, compared with a balance of $10.0 million as of June 30, 2024.
Net cash used in operating activities was $9.2 million for the six months ended December 31, 2024, compared to net cash provided by operating activities of $3.5 million for the same period in 2023, representing a $12.8 million decrease in the net cash inflow provided by operating activities.
Net cash used in investing activities was $1.0 million for the six months ended December 31, 2024, primarily attributable to $2.1 million cash used for the purchase of property and equipment, $1.0 million cash used for loans extended to others, and $2.0 million proceeds received from loan repayments.
Net cash provided from financing activities was $7.7 million for the six months ended December 31, 2024, which was primarily attributable to the net effects of: (i) $0.4 million lent to related parties; (ii) $8.1 million of proceeds from advance payment from the Standby Equity Purchase Agreement (described below).
Operational Highlights
Warehouse Expansion & Facilities
Expanded trucking department through increased staffing and equipment to serve major clients, including Amazon
Leased a new 60,000 sq ft warehouse in City of Industry, CA, to support trucking operations and partnership with Massimo Group.
Opened SAV1 warehouse at Port of Savannah, which quickly became the Company's busiest facility with 70% occupancy
Leased 480,000 sq ft warehouse in Ontario, CA, with 46 dock doors and advanced logistics technology
Technology & Operations
Incorporated a fleet of electric forklifts across California warehouses as part of the Low Carbon Fuel Standard program
Implemented PortPro transportation management software for trucking operations
Enhanced warehousing management system to optimize inventory management and warehouse operations
Upgraded application programming interface to version 3.5 and integrated with Temu platform, handling over 3,000 orders daily
Financing Arrangements
Entered into a $50 million Standby Equity Purchase Agreement (SEPA) with YA II PN, Ltd and up to $21 million in convertible promissory notes, closing two $5 million tranches of pre-paid advances under the SEPA
Management Commentary
Aidy Chou, Chairman and Chief Executive Officer of Armlogi, commented, “While our significant warehouse expansion and enhanced operational capabilities demonstrate our commitment to long-term growth, we experienced challenges this quarter from increased UPS surcharges and underutilization of our newer facilities. We expect the expansion of our footprint to 3.5 million square feet and our presence in key logistics hubs to position us well for the future, but we intend to focus intently on optimizing our operations and improving facility utilization rates in the near term. Our investments in electric fleets, warehouse management systems, and new transportation partnerships underscore our commitment to sustainable, technology-driven growth. Looking ahead, we anticipate taking decisive steps to address our margin compression while continuing to build the infrastructure needed to serve our growing customer base.”
Conference Call & Audio Webcast
Armlogi’s management team will hold anearnings conference callat 8:00 AM Pacific Time (11:00 AM Eastern Time) on Friday, February 14, 2025, to discuss the Company’s financial results and provide an overview of the Company’s operations. Aidy Chou, Chairman and Chief Executive Officer, and Scott Hsu, Chief Financial Officer, will lead the conference call with other company executives available to answer questions.
To access the call by phone, please dial 1-800- 445-7795 (international callers, please dial 1-785-424-1699) approximately 10 minutes before the start of the call. Refer to conference ID: ARMLOGI. **NOTE: THIS CONFERENCE ID WILL BE REQUIRED FOR ENTRY
A live audio conference call webcast will be available online at
https://viavid.webcasts.com/starthere.jsp?ei=1707817&tp_key=62a55be146
.
About Armlogi Holding Corp.
Armlogi Holding Corp., based in Walnut, CA, is a U.S.-based warehousing and logistics service provider that offers a comprehensive package of supply-chain solutions relating to warehouse management and order fulfillment. The Company caters to cross-border e-commerce merchants looking to establish overseas warehouses in the U.S. market. With eleven warehouses covering over three and a half million square feet, the Company offers comprehensive one-stop warehousing and logistics services. The Company’s warehouses are equipped with facilities and technology for handling and storing large and bulky items. For more information, please visit
www.armlogi.com
.
Safe Harbor Statement
This press release contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions. The forward-looking events discussed in this press release and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties, and assumptions about us.
Company Contact:
info@armlogi.com
Investor Relations Contact:
Matthew Abenante, IRC
President
Strategic Investor Relations, LLC
Tel: 347-947-2093
Email:
matthew@strategic-ir.com
(tables follow)
ARMLOGI HOLDING CORP. CONDENSED CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2024 AND JUNE 30, 2024 (US$, except share data, or otherwise noted) | |||||||
December 31, 2024 | June 30, 2024 | ||||||
US$ | US$ | ||||||
Unaudited | Audited | ||||||
Assets | |||||||
Current assets | |||||||
Cash | 5,118,815 | 7,888,711 | |||||
Accounts receivable and other receivable, net | 31,204,112 | 25,465,044 | |||||
Other current assets | 1,905,457 | 1,624,611 | |||||
Prepaid expenses | 879,768 | 1,129,435 | |||||
Loan receivables | 3,812,293 | 1,877,131 | |||||
Total current assets | 42,920,445 | 37,984,932 | |||||
Non-current assets | |||||||
Restricted cash | 2,259,932 | 2,061,673 | |||||
Long-term loan receivables | — | 2,908,636 | |||||
Property and equipment, net | 11,796,130 | 11,010,407 | |||||
Intangible assets, net | 75,051 | 92,708 | |||||
Right-of-use assets – operating leases | 105,512,506 | 111,955,448 | |||||
Right-of-use assets – finance leases | 235,447 | 309,496 | |||||
Other non-current assets | 915,199 | 711,556 | |||||
Total assets | 163,714,710 | 167,034,856 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Liabilities: | |||||||
Current liabilities | |||||||
Accounts payable and accrued liabilities | 5,533,126 | 7,502,339 | |||||
Contract liabilities | 1,248,844 | 276,463 | |||||
Income taxes payable | — | 57,589 | |||||
Due to related parties | — | 350,209 | |||||
Accrued payroll liabilities | 389,070 | 405,250 | |||||
Commitment fee payable | 250,000 | — | |||||
Convertible notes | 7,664,657 | — | |||||
Operating lease liabilities – current | 25,021,785 | 24,216,446 | |||||
Finance lease liabilities – current | 117,500 | 155,625 | |||||
Total current liabilities | 40,224,982 | 32,963,921 | |||||
Non-current liabilities | |||||||
Operating lease liabilities – non-current | 90,172,693 | 93,126,092 | |||||
Finance lease liabilities – non-current | 135,441 | 169,683 | |||||
Deferred income tax liabilities | — | 1,536,455 | |||||
Total liabilities | 130,533,116 | 127,796,151 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity | |||||||
Common stock, US$0.00001 par value, 100,000,000 shares authorized, 41,677,147 and 41,634,000 issued and outstanding as of December 31 and June 30, 2024, respectively | 417 | 416 | |||||
Additional paid-in capital | 15,718,863 | 15,468,864 | |||||
Retained earnings | 17,462,314 | 23,769,425 | |||||
Total stockholders’ equity | 33,181,594 | 39,238,705 | |||||
Total liabilities and stockholders’ equity | 163,714,710 | 167,034,856 | |||||
ARMLOGI HOLDING CORP. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2024 AND 2023 (US$, except share data, or otherwise noted) | |||||||||||||||
Three Months Ended December 31, 2024 | Three Months Ended December 31, 2023 | Six Months Ended December 31, 2024 | Six Months Ended December 31, 2023 | ||||||||||||
US$ | US$ | US$ | US$ | ||||||||||||
Unaudited | Unaudited | Unaudited | Unaudited | ||||||||||||
Revenue | 51,143,682 | 42,004,083 | 93,625,578 | 83,249,928 | |||||||||||
Costs of sales | 50,660,690 | 34,326,234 | 96,749,376 | 70,345,647 | |||||||||||
Gross profit (loss) | 482,992 | 7,677,849 | (3,123,798 | ) | 12,904,281 | ||||||||||
Operating costs and expenses: | |||||||||||||||
General and administrative | 2,659,156 | 2,919,547 | 6,327,981 | 4,827,703 | |||||||||||
Total operating costs and expenses | 2,659,156 | 2,919,547 | 6,327,981 | 4,827,703 | |||||||||||
Income (loss) from operations | (2,176,164 | ) | 4,758,302 | (9,451,779 | ) | 8,076,578 | |||||||||
Other (income) expenses: | |||||||||||||||
Other income, net | (564,656 | ) | (446,179 | ) | (1,770,321 | ) | (988,394 | ) | |||||||
Loss on disposal of assets | 43,625 | — | 43,625 | — | |||||||||||
Finance costs | 79,989 | 13,351 | 88,997 | 26,738 | |||||||||||
Total other (income) expenses | (441,042 | ) | (432,828 | ) | (1,637,699 | ) | (961,656 | ) | |||||||
Income (loss) before provision for income taxes | (1,735,122 | ) | 5,191,130 | (7,814,080 | ) | 9,038,234 | |||||||||
Current income tax expense | — | 1,229,121 | — | 1,878,426 | |||||||||||
Deferred income tax (recovery) expense | (75,882 | ) | 217,184 | (1,506,969 | ) | 660,207 | |||||||||
Total income tax (recovery) expenses | (75,882 | ) | 1,446,305 | (1,506,969 | ) | 2,538,633 | |||||||||
Net income (loss) | (1,659,240 | ) | 3,744,825 | (6,307,111 | ) | 6,499,601 | |||||||||
Total comprehensive (loss) income | (1,659,240 | ) | 3,744,825 | (6,307,111 | ) | 6,499,601 | |||||||||
Basic & diluted net (loss) earnings per share | (0.04 | ) | 0.09 | (0.15 | ) | 0.16 | |||||||||
Weighted average number of shares of common stock-basic and diluted | 41,642,442 | 40,000,000 | 41,638,221 | 40,000,000 | |||||||||||
ARMLOGI HOLDING CORP. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED DECEMBER 31, 2024 AND 2023 (UNAUDITED) (US$, except share data, or otherwise noted) | |||||||
For The Six Months Ended December 31, 2024 | For The Six Months Ended December 31, 2023 | ||||||
US$ | US$ | ||||||
Unaudited | Unaudited | ||||||
Cash Flows from Operating Activities: | |||||||
Net income (loss) | (6,307,111 | ) | 6,499,601 | ||||
Net loss from disposal of fixed assets | 43,625 | 6,895 | |||||
Depreciation of property and equipment and right-of-use financial assets | 1,290,471 | 919,273 | |||||
Amortization | 17,659 | 17,659 | |||||
Non-cash operating leases expense | 4,358,758 | 3,155,637 | |||||
Accretion of convertible note | 72,184 | — | |||||
Current estimated credit loss | 228,363 | (24,563 | ) | ||||
Deferred income taxes | (1,536,455 | ) | 660,207 | ||||
Interest income | (63,233 | ) | (54,374 | ) | |||
Changes in working capital: | |||||||
Accounts receivable and other receivables | (5,967,431 | ) | (7,651,253 | ) | |||
Other current assets | (280,846 | ) | (358,368 | ) | |||
Other non-current assets | (203,643 | ) | — | ||||
Prepaid expenses | 249,667 | 652,335 | |||||
Accounts payable & accrued liabilities | (1,969,214 | ) | (2,022,280 | ) | |||
Contract liabilities | 972,381 | (244,403 | ) | ||||
Income tax payable | (57,589 | ) | 1,706,868 | ||||
Accrued payroll liabilities | (16,180 | ) | 231,701 | ||||
Net changes in derecognized ROU and operating lease liabilities | (63,874 | ) | — | ||||
Net cash (used in) provided from operating activities | (9,232,468 | ) | 3,494,935 | ||||
Cash Flows from Investing Activities: | |||||||
Purchase of property and equipment | (2,070,770 | ) | (2,948,594 | ) | |||
Loan disbursement | (1,000,000 | ) | (1,000,000 | ) | |||
Proceeds from loan repayments | 2,036,705 | — | |||||
Proceeds from sale of property and equipment | 25,000 | — | |||||
Net cash used in investing activities | (1,009,065 | ) | (3,948,594 | ) | |||
Cash Flows from Financing Activities: | |||||||
Proceeds received from related parties | — | 1,012,353 | |||||
Deferred issuance costs for initial public offering | — | (282,742 | ) | ||||
Repayment to related parties | (350,209 | ) | — | ||||
Net proceeds from Standby Equity Purchase | 8,092,473 | — | |||||
Repayment of finance lease liabilities | (72,368 | ) | (83,196 | ) | |||
Capital contributions from stockholders | — | 265,000 | |||||
Net cash provided by financing activities | 7,669,896 | 911,415 | |||||
Net increase (decrease) in cash and restricted cash | (2,571,637 | ) | 457,756 | ||||
Cash and restricted cash, beginning of year | 9,950,384 | 6,558,099 | |||||
Cash and restricted cash, end of six months periods | 7,378,747 | 7,015,855 | |||||
The following table provides a reconciliation of cash and restricted cash reported within the Consolidated Balance Sheets that equal the totals of the same amounts shown in the Consolidated Statements of Cash Flows: | |||||||
Cash | 5,118,815 | 4,954,182 | |||||
Restricted cash – non-current | 2,259,932 | 2,061,673 | |||||
Total cash and restricted cash shown in the Consolidated Balance Sheet | 7,378,747 | 7,015,855 | |||||
Supplemental Disclosure of Cash Flows Information: | |||||||
Cash paid for income tax | (87,074 | ) | (171,559 | ) | |||
Cash paid for interest | (16,813 | ) | (26,738 | ) | |||
Non-cash Transactions: | |||||||
Right-of-use assets acquired in exchange for operating lease liabilities | 6,184,333 | 37,607,178 | |||||
Decrease in right-of-use assets due to remeasurement of lease terms | 884,394 | — | |||||
Shares issued to settle commitment fee | 250,000 | — | |||||
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