Callan JMB Inc. (CJMB) Earnings Call Transcript & Summary

Good day, and welcome to the IAccess Alpha Virtual Best Ideas Fall Investment Conference 2025. The next presenting company is Callan JMB Inc. [Operator Instructions] I'd now like to turn the floor over to today's host, Wayne Williams, President, CEO and Chairman of the Board. Wayne, over to you.

Thank you very much. And thank you, everybody, that is attending this presentation. I appreciate the opportunity to share about Callan JMB and our projections for the rest of this year and going forward. So I'm just going to run through a quick slide presentation here. So I'd just bypass the disclaimer. So what you're looking at here is just management team. As said on the call, I'm the Chief Executive Officer, Chairman and the Founder of Callan JMB. Also on the call is Eric Kash, who is our Executive VP and Director. The further team members here, and I won't go into long details there, but Scott Bullard, William McBride. They've been with me in my private working life for almost 30 years. David Croyle is our Chief Medical Officer, and he is actually my brother-in-law and helped me start the company way back in 2007. And one of our recent additions is Christopher Shields, who came out of the public health emergency response and preparedness sector where he was a deputy commissioner in the City of Chicago. So that rounds out our senior folks. Our mission, real, straightforward, it's deliver reliability to our customers by anticipating, responding and overcoming the most complex situations with precision compassion. Nice words, but we basically get the job done, no matter what the emergency is, no matter what the challenges are, whether it's protecting product in a shipment movement or it's deploying COVID vaccines to some of the most remote areas within the U.S. or within the world. That's what our company is about. And you'll see that in some of the following slides here. We just recently went public. February of this year is when we decided to take the company public. The main reason for doing that is to expand our passion and our love and our capability of protecting people and products and doing the right thing for those type of activities that we so greatly rely on. So we have integrated logistics. So not only are we moving product, but we're storing it, we're managing. And we have visual oversight no matter where it goes. And that's on aircraft, that's on the ground. So GPS tracking, the temperatures, et cetera. We're experts in the supply chain field. The gentleman that I introduced, Scott Bullard, Bill McBride, myself, we started off at DoD working on how to deliver the anthrax vaccine to every military member around the world. And we wound up being the architects and the designers for the Strategic National Stockpile at CDC. So that's the level that we bring to this. And we're expanding our proven -- our successes. So in managing those critical assets, we had to design and develop thermal systems that would protect the product, and you'll see that as part of our approach. I'd like to point this slide out as kind of our hot button, this is what the company is about. You heard me mention the emergency preparedness and response. From there came the state-of-the-art thermal packaging. Now we don't make the shippers, okay? We push the envelope for those folks that do make those packaging platforms to bring them to the level that we need to support our customers with. And they're reusable. So we're a fully sustainable organization. We're a zero bio footprint, so we don't put things in the landfill. We repurpose those things that are no longer usable for their intended purpose. And we do that by utilizing the last 2 hot buttons. That's the fulfillment capability and then the technology that we wrap around that. We have Ship2Q, which is our reclamation process for our reusable shippers. And then we have Sentry, which is how we can see and manage those products or materials: their temperature, their physical location, humidity, et cetera. And you'll see that in some follow-on slides here. So our legacy business, I call that our sticky money, and that is in emergency preparedness and response. We have been doing this since 2009. We started off helping the City of Chicago with the H1N1 way back in 2009. We have been under contract with them ever since. We're in contract with the State of Texas, where we responded and were activated for COVID, and successfully managed that entire program. We're in Oregon, and then we're in other states as well. And we are expanding in that realm because they're taking our success of Chicago and duplicating that in other project areas. But the reason why I point this out, this is kind of our base, our sticky money, it's long-term contracts, they're not going away. So they allow us to operate and run the business as we then reach out and try to expand in those fields. From the emergency response and preparedness side of the house is where we really capitalize on the thermal packaging, and you'll see that here shortly. The next slide just gives you a quick representation of some of our trusted relationships. And as you can see, we've been at the federal level, the global level and, certainly, the commercial level, and continue growing that as we move forward. So I'd mentioned the emergence of our integrated thermal packaging. Again, we don't make the packaging, but we manage that. So I like to tell folks to look at this as kind of like a rental car platform. Most organizations have to go out and buy the shippers, they have to learn how to pack them, then their product out. And there's not a whole lot of help there. We're the other way around. We're a service company that literally leases these fleets, so these rental cars, if you will, to those organizations that want to be sustainable and they want state-of-the-art protection for their product. So we were heavy -- privately, before we went public, we were very heavily seated in the pharmaceutical space, emergency preparedness space. And then one of our goals when we went public was to expand in the food space. Now that's not necessarily moving the meals that you get at your home and everything like that. That is the samples that are being sent by the growers, the bakers and stuff to your grocery stores, to your restaurants, things like that, where they want them to arrive pristine so they know exactly what they're buying as a consumer of this product. So again, the thermal shippers, they're very specialized. They're completely reusable. They're using state-of-the-art technology. We proved ourselves by shipping to Iraq during the height of the gulf conflicts over there, where it was 120 degrees in the shade and took us 7 days to ship from Texas. It arrived, and they opened it up and it was a proof of concept. And they ate frozen ice cream that they can't even get their hands on, grown and made right there in Texas. So we know how to keep the product at the right temperature, the right protection, and that's what our customer base comes to us for. And they come to us because of the reliability, the product integrity, which is huge, which then, of course, reduces their risk or their financial burdens on losing the product. Real-time shipping tracking, so the customer can see exactly where this is at. So the organizations that we're working with, they like that because we can reroute that movement, whether it be blood products, vaccines, whatever it may be. We have an emergency operations center that can watch those. If the customer says, "Hey, I need this white glove. I need a little more hands on this during this movement." We're very flexible in the sense of the leasing piece. You do not have to buy the product. And there's organizations that might only have 15 shipments a week for 1 month, but then they ramp up to 100. Well, they typically have to buy all of those shippers for the worst-case scenario. This way, they're leasing it from us and not taking up that critical space within their organization, and very, very efficient when it comes to coast-to-coast distribution. To give you an idea of the volume that's out there, we're talking almost $44 billion in 2023 in the packaging world. And this graph just shows you some of the areas there. You can see that food is one of the largest areas. So that's why we're growing in there. But on the pharmacy side of the house, we're very well-seated in that field. Again, this goes into it, everybody has heard about the GLP-1s. These are just some of the product lines that are out there that are really looking for a clean and fixed-up solution. We've been in conversation with a lot of organizations that realize that the federal government is really starting to put the hammer down and tighten the screws. And so we're helping them migrate from older platforms into a new type of platform. And the GLP-1s or the 503As and the 503B market, those are your compound pharmacies, they're one of the biggest ones that need this type of capability from us. And that's what I mentioned here in this next slide. Just cognizant of our time, so I want to make sure I get to the Q&A. This is one of the newest pieces that we've added as a company. And those of you that have seen some of our press releases or have been watching us, the current administration, one of their biggest initiatives is onshoring or reshoring product that used to be made in the U.S. and is no longer. And one of those areas is the active pharmaceutical ingredients. It's a shame being the most powerful nation out there, but over 80% of the APIs are outside the U.S. And so that was the initiative, bringing it back. Why that's important is if you have a pandemic like COVID or, let's say, it's influenza, and you don't have the raw materials or the active pharmaceutical ingredients, we're relying on everybody else. And so President Trump has made this initiative that we need to get that back in the U.S. We were already working with companies in India that are interested in growing their business in the U.S. prior to the Trump administration's initiatives. And that's who we're helping to onshore, and bring them over here and give them kind of a turnkey process where we would literally help with the housing, help with the work visas, actually have the campus or the center of excellence where they would do this production and science and everything like that. So it's kind of a plug-and-play approach with them, and we're very excited with what we're getting out of these foreign countries that are showing that interest. Because we're approaching it much different than the ones that you've seen on the news. They're just saying, "We want you to come over and you figure it out." We're figuring out how to bring them all over, make it a smooth transition and then just grow with them as part of the community. Ship2Q, I briefly mentioned that. Ship2Q is our reclamation process, and that is a trademark. We are the only organization that deals in reusable packaging that has this level of assurance that the shipper and the product is as good or better than when it was made basically. And that's what Ship2Q brings to the table. It utilizes UV technology to kill all the biologics. So today, my reusable platform can ship, say, blood products. Tomorrow, it might be shipping finished goods or whatever it may be within the pharmaceutical side. This is just a slide or a short video, and I'm not going to show it due to the time, but I would highly encourage you all to go to our website. And you'll see there where we have these videos, and none of them are longer than, say, 2.5, 3 minutes. Some of them are 15 seconds, 40 seconds. But that gives you the visual results of what I just talked about basically. And so it really kind of helps you understand some of that process. The last piece that I wanted to talk about was the technology side of the house. Obviously, Ship2Q has some technology, but our Sentry is really what is paramount when it comes to product integrity, safeguarding mobile hospitals, generators, the whole nine yards. We are all connected to those now. So we know when they kick on. We know when the emergencies are happening, and we're able to respond appropriately depending on what the need might be. And that is all built in-house. It was from my military days, understanding what we needed and what we didn't need. There's a lot of your systems that you buy off the shelf everything, and we don't necessarily need everything to do our job. And so that was very important that we built that all in-house, which is a great asset to the company. This slide here, real quick, these are just case studies. The slide is available on the S-1. Very successful in Chicago. You never heard about Chicago during COVID. You heard about New York, Los Angeles, other areas. But Chicago was very successful. We had been there since 2009. And we rolled out a lot of assets that were needed for that. This just shows you a map of Texas. Literally, almost 1.7 million miles were driven to deliver across the entire State of Texas. So a very successful operation there as well. This is just some of the financial highlights that I know are very important to everybody here. Again, public for a very short period of time. We are growing. I still own, myself and my brother-in-law, we still own over 71% of the company. And so this just gives you an idea of where we're at today. And again, more financial highlights. I really want to get to the Q&A, so I will pull up the last the last slide here and just pause on it. So if there's any further questions after the Q&A, please feel free to reach directly to KCSA, that is our Investor Relations side, managing that.

So I see that there are some questions here. So let me get to the Q&A here real quick, and I will try to answer these to my best abilities. So you guys mentioned last week that Wainwright -- Wainwright -- sorry, was in Korea. Okay, during the conference call, yes. So at the Wainwright conference, I would imagine that Eric Kash had mentioned that I was in Korea. Yes. Korea is very interested in onshoring, not necessarily with us, there's several companies, but there are a few groups that I have met with that are very interested in onshoring. Now I will be honest with you, we are in a little bit of a pause because of what occurred in Georgia. Not that we're not going to do this. It's just we took a little bit of breather until the federal government figured out what happened there in Georgia with the workers there at the plant. It had to do with the work visa. But yes, we are definitely -- that is one of the countries that has been very interested in our approach for onshoring. And again, that is giving a complete turnkey process, working with them in Korea for the work visas and how do we bring them over and travel, if they have family, husband or wife and kids, what type of housing are we going to put them into. And I am right now in Alabama working through those processes for a campus that is the center of excellence. And that's our whole idea. I came from the military world, and I remember how nice it was when I got my orders to go to Germany and spent 3 years there, that there was a welcome packet. There was a sponsor that reached out to me. And so when we landed in Frankfurt, Germany, I wasn't scared that, "Oh my gosh, what am I doing over here?" There was a smooth transition bringing me into the fold of the German community, the workplace that I was at. And that's the experience that we want to give these companies that have graciously accepted bringing their business back to the United States. I hope that kind of helped with that question right there. The second question I have is, what industries and geographic areas is Callan JMB targeting for its growth? And why? Obviously, the onshoring is a huge piece. To be honest, it's a low-lying fruit. It was not necessarily in our original target when I was doing the roadshow. Our biggest growth on the roadshow side of the house was literally expanding what we are very successful with in preparedness and response. And bringing Christopher Shields on has helped that. He has set up numerous meetings with what's called the project areas. So the U.S. is broken into 64 project areas that the federal government funds to be prepared for emergencies, whether they are man-made, natural, et cetera. And because of his expertise and his experience of 35 years in that space, and being one of the most successful deputy commissioners with Chicago, the likes of New York and Los Angeles and other areas are reaching out and talking to him. And then we hope that's -- our goal is to expand in there as well. And then the second area I briefly had mentioned is really expanding in the packaging area. Because we added the food on there, it's a whole new product line. And that's where we see the growth here in the near future. Next question we've got here is, what is the opportunity for Callan JMB for the food sampling sector? So we had signed a contract with Keychain, and it's an organization that has over 30,000 members. And these are members that need solutions, whether they're a restaurant, whether they're growers, bakers, et cetera. And so Eric Kash has been heading that up, and he's had great meetings with those organizations. And there is a huge move in that space for sustainability because, right now, most people get their food in a styrofoam shipper, they have no way of getting rid of it. And so this gives that opportunity to -- for them to capitalize on what we've been very successful with in the pharmaceutical side of the house. Next question was, can you break down the business into 2 different segments? So the 2 segments basically are the packaging and sustainability solution and then preparedness and response. So then people will say, well, okay, but this onshoring, where does that fall? Well, right now, that's in the pharmaceutical space. So there's going to be a huge logistics arm for us, which is we will package and ship for them their materials out to the hospitals, to the big wholesale distributors, et cetera. So that's where really our 2 big sectors are at. The next question I have here is, how does Callan JMB support the emergency response sector? And what types of customers does it have in this area? So we have an array of customers. So during COVID, there were a lot of private companies that came to us that wanted to stay open, if you will, and protect their workforce. So WWE was one of those. The Sunbelt universities, we helped them with that. There was some foundations that came to us that wanted to protect their workforce. And then, of course, the big one is on the state, local and federal level, because there's federal mandates, if you will, or benchmarks that even small communities need to meet to protect their constituents, their town. And so we do an array of that, whether it's just sitting down and helping them draw out and write out an emergency response plan. Then sometimes you take that plan to the next level where we get material and we strategically store it for them. And then lastly, we do all the training and help them with that process. So there's a lot of opportunities there. Next question. Any updates on the UPS collaboration mentioned earlier? We are still in meetings with UPS. UPS, the medical side of the house, is they look at sustainability, they look at product integrity. They're like us, they're agnostic when it comes to the shipping system because they make their money on moving it. We make our money on managing it. And so there's been some nice collaboration there. UPS is a very big entity, so it just takes time to work through all of the -- making sure everybody sees and understands what's going on. They are very, very interested in our technology aspect, how we can actually watch the different routes and the processes and being more proactive, because we're using AI to say, "Hey, typically, this is a winter area," so you're going to have to add a little bit more heat or refrigerant depending on that. So that's where we are at with them. And then the last question, I believe I'm going to refresh one more, but I believe it's the last question that we have here. How much of thermal shipping would you say is reoccurring? And can you break down the different drivers by the end of the market? So everything that we do as a company is a reusable, reoccurring shipper. So we own a fleet of shippers, different sizes. And to give you an idea, one of my shippers I retired after 500 uses. That meant it went out 500 times and came back to us 500 times. It went through the reclamation process. So that shipper cost me, when I bought it years ago, was $100, okay? And everybody is renting that for around $35 to $38 depending on the zone. So you can see the reoccurring revenue, especially if you bring it back ground, so you bring it back slow boat, if you will. So yes, it is a very, very profitable business model because it's a constant reoccurring revenue. So I hope I answered that properly. I'm cognizant of time, and so -- and I know you all have to move on to some of the next ones there. So again, I really appreciate you taking the opportunity to listen to our story. And hopefully, you'll also look at being a part of the team and investing with us.

Thank you very much. This does conclude Callan JMB Inc. presentation. You may now disconnect. Please consult the conference agenda for the next presenting company.