#United States #logistics #Itasca #Supply Chain #Lakeside

Lakeside Holding Limited's Fiscal 2025 Second Quarter Insights

On February 14, 2025, Lakeside Holding Limited, a prominent U.S.-based company focusing on cross-border supply chain solutions, unveiled its financial performance for the second quarter and the first half of fiscal 2025, which concluded on December 31, 2024. The company operates through its two specialized subsidiaries, American Bear Logistics and Hupan Pharmaceutical (Hubei) Co., Ltd., targeting the rapidly expanding Asia-Pacific market.

Management's Outlook

Lakeside's Chairman and CEO, Henry Liu, addressed the challenges faced during the quarter, noting the industry's struggles but emphasizing the company’s strategic advancements aimed at long-term growth. Liu highlighted the expansion into pharmaceutical logistics via Hupan Pharmaceutical, partnerships with major e-commerce platforms, and the notable increase in operational capacity at the Dallas-Fort Worth facility as key moves to fortify their business. He expressed optimism, citing a substantial 29.4% revenue increase from Asia-based customers that validates their pivot to cross-border e-commerce.

Operational Achievements

E-Commerce and Cross-Border Logistics

• - New Partnerships: Secured a one-year agreement with a major Asian e-commerce platform and partnered with a global social media entity to enhance customs brokerage services.
• - Fulfillment Services: Launched a new Pick & Pack Fulfillment service to support a leading Chinese logistics partner.

U.S. Facility Expansion

• - Dallas-Fort Worth Operations: Increased operational space more than double, from 20,000 to 46,657 square feet, and augmented staffing to bolster operations.
• - Multi-Hub Strategy: Continued development of hubs in Chicago, Dallas-Fort Worth, and Los Angeles to optimize logistics efficiency.

Pharmaceutical Logistics Development

• - Acquisition of Hupan Pharmaceutical: Lakeside acquired Hupan Pharmaceutical for RMB 4.0 million (approximately $0.6M), anticipating a contribution of around $7 million annually. This acquisition includes licenses for drug distribution and partnerships with 15 major hospitals in Wuhan.
• - Strategic Partnerships: Collaborated with Sinopharm Group for essential medicine logistics, including a RMB 11.0 million (about $1.5 million) contract covering critical medicines like Sodium Bicarbonate and Glucose.

Financial Performance Summary

For the three months ended December 31, 2024:

• - Total Revenues: Experienced a drop of $1.5 million (31.3%) to $3.4 million compared to the previous year, primarily due to reduced volumes from cross-border airfreight solutions.
• - Sector-Specific Revenue Trends: Revenues from airfreight solutions declined 35.5%, while ocean freight solutions decreased by 24.2%. Notably, the distribution of pharmaceutical products registered initial revenues of $0.2 million.

Customer Revenue Insights

• - Asia-Based Customers: Contributed $2.75 million, accounting for 76.5% of the total revenue, marking a significant increase from last year's $2.6 million.
• - U.S.-Based Customers: Revenue plummeted 72.9% to $627,301, aligning with Lakeside’s strategic focus on Asia-based clients.

Challenges and Expenditures

Despite the growth in Asia, the overall gross loss amounted to $42,231, contrasting against a gross profit of over $1 million a year prior. Increased operational expenses, including general and administrative costs, surged by nearly 94% compared to last year due to recruiting and compliance with public company regulations.

Looking Ahead

Lakeside is poised for future growth, bolstered by its strategic partnerships and diversification in operations, particularly in the pharmaceutical sector. The management is optimistic about leveraging its enhanced logistics capabilities to capture the evolving demands of cross-border e-commerce, setting a strong foundation for the upcoming quarters.

Lakeside's management team will further discuss these results and future strategies in an upcoming conference call on February 17, 2025. Observers and investors are encouraged to dial in for insights on operational progress and anticipated market trends.