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Q3 2025 Lakeside Holdings Ltd Earnings Call

Henry Liu; Co-Founder, Chairman of the Board of Directors and Chief Executive Officer; Lakeside Holdings Ltd Operator Thank you for standing by and welcome to the Lakeside Holding Limited fiscal 2025 third quarter and nine month earnings conference call. Please note that today's call is being recorded. I will now turn the meeting over to Matthew Abanante, investor relations for Lakeside Holding Limited. Thank you and thanks to everyone joining us today for Lakeside Holding Limited's earnings conference call to discuss our financial results for the third quarter in nine months of fiscal year 2025. Please note that our earnings press release was issued last week, and our quarterly report on Form 10-Q was filed with the Securities and Exchange Commission. Both documents are available in the investor relations section of our website at Joining me on the call today is Henry Liu, Chief Executive Officer of Lakeside Holding Limited. Before we begin, I would like to review the safe harbor statement. Please be aware that today's discussion will contain forward-looking statements that reflect our current expectations and views of future events. These statements are subject to known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from those expressed or implied by the forward-looking statements. You can identify some of these forward-looking statements by words or phrases such as may, will, expect, anticipate, aim, estimate, intend, plan, believe, is, are likely to potential, continue, or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, and financial needs. These forward-looking statements involve various risks and uncertainties. For a detailed discussion of these risks and uncertainties, please refer to our filings with the SEC, including our annual report on Form 10-K and our quarterly reports on Form 10-Q. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. We qualify all of our forward-looking statements by these cautionary statements. And with that, I would like to hand the call over to Henry Liu, Chief Executive Officer of Lakeside. Henry, please go ahead. Henry Liu Good afternoon, Matt, and thank you everyone for joining us today. We appreciate you taking the time to participate in our physical 2025, third quarter and the nine month earnings conference call. This period has been a dynamic one for the site marked by challenges in our established markets and existing progress in our new strategic ventures. We are navigating a shifting global landscape with a clear focus on long term growth and the shareholder value. And I am pleased to share our progress and outlook with you, our valued shareholders. Reflecting on the first nine months of physical 2025, we reported total revenues of $11.48 million for the nine months ended March 31, 2025. Well, this represents a decrease from the $13.53 million record in the same period of last year. It's important to contextualize these figures. Our traditional cross-pounder free solutions operated through American Bey Logistics saw revenue of $10.76 million for the nine months. Compared to the $13.53 million in the premier year. This decline is primarily attributable to the normalization of global shipping demands and the persistent pricing pressures with the freight sector. Attended observed across the industry. For the third quarter, fiscally, total revenues were $3.18 million compared to the $4.46 million in the third quarter of 2024. With our cross-bound free solutions contributing $3.31 million. Despite these headwinds in the freight segrement, we are particularly encouraged by the initial performance and the strategic importance of our recent expansion into the pharma surgical distribution sector. Following our acquisition of Huan Pharmaceutical, Hubei company in November 2024, this new segrement has already begun to contribute our top line, generating $715,362 in revenue for the nine months ended in March 31, 2025 and $497,276 in the third quarter alone. This is a testament to the significant growth opportunities we see in Chinese pharmaceutical market. We are actively working to integregate Huiyu Pharmaceutical into our border operations, aiming to unlock synes and expand our service offerings. Our gross profit for nine months stood at $1.20 million, and for the third quarter, it was $0.72 million. The decrease from per year periods reflects the phhemoreal pressure in freight markets. Operating expense for the nine months total $5.6 million and for the third quarter, $1.8 million. These figures include investment related to our expansion, such as selling expense of $158,117 for nine month period period of like $103,630 for the third quarter, which were not present in the pre-year. As well as increase the general and administrative expense associated with our growth initiatives and the public company operations. Consequently, we record a loss from operation of $4.40 million from the nine months and $1.10 million for the third quarter. Our net loss attributable to the company for the nine months was $4.35 million or $0.58 per share. And for the third quarter, it was $1.07 million or $0.14 per share. Well, these results reflect the current market conditions and our ongoing investments. We are taking a proactive steps to manage cost, optimize our existing operations, and the drive towards profitably the successful completion of our initial public offering on July 1. 2024, which raised the growth process of aromatically $6.75 million, has prodded us with the necessary capital to fill our strategy initiatively. Initiatives Furthermore, the convertible debit financing agreement for up to $4.5 million announced in March 2025 will provide additional working capital to support the growth of our medical distribution business and for general corporate purpose, further strengthening our financial flexibility. Looking at a broader macroeconomic environment, we are closely monitoring developments in international trade relations, particularly the ongoing tariff discussions between the United States and China. Recent single signals suggest a potential easing of tensions with a tariff. Choose offering a degree of caution or optimism for the global markets. Well, the situation remains fluid and the current agreement is more of a oppose than a comprehensive resolution. Any execution is a positive sign for global trade flows. As a company with significant focus on the Asian Pacific markets, particularly the US China trade line, we will this development with hopefully a typicalation, a more stable and predictable trade environment would and adaptable benefit our cross-bound logistics operations and create a more favorable back back job for our extension efforts in China. We remain angio and prepared to adapt our strategies as the situation involves, always with the goal of the mitigating risk and capitalizing our emerging op opportunities. Our strategic objectives for the remainder of physical 2025 and beyond are clear. First, we are committed to aggressively expanding our footprint in China. Pharmaceutical distribution market. This involves integregating coupon film is suitable. Seamlessly, actively pursuing new distribution agreements and boarding our product portfolio. We are already progressing in discussion with major Pharmaceutical pro pro procedures such as Kelun pharmaceutical and are excited about the potential in this high growth sector. Second, we will continue to optimize our cross-bound logistics service. Well, the market is challenging. American Bear Logistics has a strong reputation and a resilient customer base. We will focus on providing high volume, customized solutions, and adapting the involving needs of our of our clients in Asian Pacific to US trade line. Third, we will diligently manage our capital and resources, ensuring that our investments are directed towards initial initiatives that promise the highest return and con contribute to suitable long term shareholder value. In condition while the past nine months have presented a complicated, complex operating environment, we are confident in our strategic direction. Diversing into the pharmaceutical sector, coupled with our established advertise in cross-boundary logistics and our strate and financial position post IPO positions lakeside for a promising future. We are building a more resilient and diversified business to capitalize on growth opportunities in cap markets. We remain optimistic about navigating the current challenges and delivering value to our shareholders. I want to thank our dedicated team for their hard work and commitment during this transformative period. I also want to thank our shareholders for your continued support and confidence in Lakeside. With that, I will now turn the call over the operator to begin the question and answer session. Thank you, Henry. We will now move to the question and answer portion of the call. Thank you to everyone who have submitted questions. Can you elaborate on the early synergies you're seeing from Huiyu Pharmaceutical and how you envision this segment driving Lakeside's growth in the rapidly expanding Chinese healthcare market, especially given your efforts with companies like Kloon Pharmaceutical. Henry Liu Thank you for that question. We are indeed very pleased with the initial contribution from Huiyu Pharmaceutical. Theoretically, this accusation is a Cornerstone of our diversification and growth strategy. The early synergies are manifesting in a few key areas. First, we are leveraging our existing logistics appetite to optimize Huan's supply chain and the distribution network with China, which is a complex but highly rewarding market. Second, our established relationships and understanding of the Asian Pacific religion are providing beneficial as we navigate the regulator landscape and build the partnerships. Our discussions with major players like Cunnam. Pharmaceutical are progressing. And these are aimed at securing significant distribution agreements that will allow us to tap into the substantial demand for high quality pharmaceutical products. The Chinese healthcare market is on a significant growth trajectory driven by an aging population, increasing health. Awareness and government investment in healthcare infrastructure. We believe Huiyu Pharmaceutical supported by lake size border cap capabilities and the financial strengths is Exceptionally well positioned to capture the meaningful. Share of this growth, becoming a significant divert to driver to revenue and profitability for Lakeside in coming years. We see this as a long term value character for our shareholders. Regarding the cross-border freight business, while the market has seen some headwinds, American Bear Logistics has a long standing presence. Can you speak to the specific strategies Lakeside is employing to maintain competitiveness and serve your customers effectively in the Asia Pacific to US trade lane during this period of market adjustment? Henry Liu That's a very relaxing question. The cross-bound freight market has certainly seen a shift from extraordinary conditions of the past few years. However, American beer logistics has a deep understanding of Asian Pacific to US trade line build over many years. Our strategy to maintain competitiveness focus on a few core pillars. First, we are emphasizing customized high volume logistics solutions rather than com competiting solar on price for the commanized freight. Our advertise in handling com complex shipments and providing end to end service is a key differentiator. Second, we are leveraging techno techno to enhance efficiency, improve visibility for our customers, and optimize our operations. This includes investment in our digital platforms and data analysis cap capabilities. Third, we are maintaining strong relationship with our carrier partners and customers, allowing us to adapt quickly to change needs and secure capacity. While the overall market has softened, there are still specific niches and customers agreements that require the speci specificize the service we offer. Our our focus is serving this sacraments is exceptionally well, managing our cost diligently and ensuring that American bear's logistics remain a reliable and profitable contributor to lakeside, even as we grow our pharmaceutical businesses. And our last question, can you share your long-term vision for the company and how the new pharmaceutical venture is expected to create sustained shareholder value over the next few years? Henry Liu Our long term vision for Lakeside is build up. Diversified and resilient global supply chain solutions provider with a strong presence in high growth markets, particularly in Asian Pacific region. The integration of our established cross-bound logistics advertise with our new rapidly expanding. The pharmaceutical distribution businesses in China is central to this region. We see these two segments as a complementary. The logistics business provides stable cash flow, deep market knowledge, and operational excellence. Well, the pharmaceutical business offers significant growth potential in non cyclical industry. Over the next few years, we aim to achieve several key milestone. Firstly, to significantly scale our Pharmaceutical distribution operations in China becoming a recognized player in the in that market. Secondly, To continue optimizing our logistic business, focusing on profitability and high value services. Thirdly, to explore further strategic opportunities, whether organic or inorganic and align with our core competencies and market focus. We believe this multi pronged approach will lead to more con cons consistent revenue growth, improved pro profitability with a stronger, more diversified business model. Our commitment is to translate this operational success into sustained long term value for our shareholders by growing our earnings, strengthening our market position and maintaining transparent communication about our progress. Thank you, Henry, and thank you everyone for participating on today's call. We look forward to providing additional updates in the near future. In the meantime, we can be reached at 347-947-2093 or you can email me at matthrew@ Thank you, everyone. Operator Ladies and gentlemen, this concludes our conference for today. Thank you for your participation. We may now disconnect.