Half Year 2025 TOYO Co., Ltd Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Justin Smith - Maxim Group LLC - Analyst : Hi. Thank you, guys. Congratulations on the good quarter and first half of the year. My question was relating to gross profit margin you guys discussed. I saw that it briefly declined or very marginally declined year-over-year. But as the Ethiopia facility reaches scale and Houston production comes online, do you see any way where those gross margins start trending back higher up to where they were in the first half of '24? Or are some of these tariff-related costs sort of weighing on that and putting a cap on that? Unidentified Corporate Participant Hi Justin. Thank you for the question. Yes, our gross margin decreased slightly for the first half of the year, mainly for two reasons. Number one, the blend of the product destination for our product shift earlier this year was changed from last year. Last year, over 80% actually were shipped to US. And for the first half of the year, we have only 44% going to US. And with the change of the product blend, our margin was slightly affected. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 08, 2025 / 12:30PM, TOYO.OQ - Half Year 2025 TOYO Co., Ltd Earnings Call Secondly, also because we were in the process of ramping up of the production in Ethiopia. So the overall cost of the products was still in the process of being refined. So that's the two main reasons our gross margin is slightly lower than what it was last year. And going forward, with our efforts to refine our cost structure and sourcing strategy, we do hope to see our gross margin level to at least go back to what it was last year, Justin.