By: AllPennyStocks.com News

Tuesday, May 1, 2012

Awareness of “going green” is spread across nearly all industries throughout the world from energy to automobiles and back again. Even the way that beer gets transported has joined the eco-friendly revolution. Lovers of the liquid gold can in part thank Tulsa, Oklahoma’s Greystone Logistics Inc. (OTCQB:GLGI) for beer making it to the shelves of their local stores in a way that saves trees and keeps landfills a little less filled. From a broader perspective, it’s interesting to note that more trucking companies are integrating green policies through companies like Balqon Corporation (OTCBB:BLQN) and their zero emission heavy-duty electric trucks. Although beer doesn’t spend much time on the rail, if it did, it could actually see green technologies in use every step of the way with Norfolk Southern Corp. (NYSE:NSC) working with Axion Power International Inc. (OTCBB:AXPW) on PbC battery-powered locomotives and switchers and Axion International Holdings Inc. (OTCBB:AXIH) providing the railroad industry with plastic composite railroad ties. A bit amazing how deeply alternative technologies are now penetrating the logistics industry. Greystone Logistics is a green manufacturing company that sells and leases high quality 100% recycled plastic pallets. Utilizing its proprietary blend of recycled petrochemical resins derived from many items, such as plastic bumpers from cars, pill bottles, shampoo bottles, and other plastics. The company provides logistical solutions needed by a wide range of industries such as food and beverage, automotive, chemical, pharmaceutical and consumer products. The plastic pallets last between 10 and 50 times longer than traditional wood pallets and, more importantly, are reprocessed into new plastic pallets at the end of their life.

Greystone only began selling these Intermediate Bulk Container (IBC) pallets last year and sales are booming. A major client is MillerCoors LLC, makers of many types of beer including the Miller and Coors lines as well as Molson, Keystone, Killians, Leinenkugel and Tenth and Blake Beer Company’s drinks in the crafts and import segment. MillerCoors not only uses the skids for can and bottle products, but is also replacing their wooden keg pallets with the innovative plastic pallets. To meet demand, over the last six months, Greystone has expanded its production capacity by implementing an additional mold and performing the necessary updates on existing machines to bolster production.

Details weren’t released, but Greystone said this morning that MillerCoors has placed another order for case good pallets.

Greystone looks to be turning the corner financially, even though it is carrying approximately $12 million in long-term debt on its books. According to its latest SEC filings, revenue increased to $16,872,981 in the nine month period ended February 29, 2012 compared to $14,253,173 during the same period in 2011. The new pallets could be the niche that drives sales and controls costs as pallet sales were $14,064,681 in fiscal year 2012 compared to $10,730,570 in fiscal year 2011 for an increase of $3,334,111. Importantly, cost of sales decreased from 92% in 2011 to 82% in 2012. Investors will certainly want to see this number to continue to contract, but it is moving in the right direction.

Greystone recorded net income of $914,939 in fiscal year 2012 compared to a net loss of $(947,894) in fiscal year 2011.

At only 9 cents per share and only having 26 million shares outstanding, Greystone is making headway with its business model. Should the company start to take a chunk out of the debt with their improved sales and efficiency – and perhaps land another major client – the company’s valuation could push its tiny $2.35 million market cap significantly higher. Proper due diligence is, as always, encouraged.

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