Company Overview - FGI Industries Ltd. is a leading global supplier of kitchen and bath products with over 30 years of industry experience [3] - The company specializes in product categories such as sanitaryware, bath furniture, shower systems, kitchen cabinetry, and other accessories [3] - FGI's products are primarily sold for repair and remodel activities, with a smaller portion for new home or commercial construction [3] Financial Results Announcement - FGI Industries will issue its financial results for the fourth quarter and full-year 2024 after the market close on March 26, 2025 [1] - A conference call to discuss the quarterly results is scheduled for March 27, 2025, at 9:00 am Eastern Time [1] Investor Relations - A webcast of the conference call and presentation materials will be available on the company's Investor Relations website [2] - Details for participating in the live teleconference include toll-free and international numbers, as well as replay options available until April 10, 2025 [2]

Core Points - FGI Industries Ltd. will participate in the Benchmark Company's 13th Annual Discovery One-on-One Investor Conference on December 11, 2024, in New York City [1] - FGI executives will be available for one-on-one meetings with registered investors during the conference [2] Company Overview - FGI Industries Ltd. is a leading global supplier of kitchen and bath products with over 30 years of industry experience [3] - The company focuses on product categories including sanitaryware, bath furniture, shower systems, kitchen cabinetry, and accessory items, primarily for repair and remodel activities [3] - FGI sells its products through various channels, including mass retail centers, wholesale distributors, online retailers, and specialty stores [3]

Financial Data and Key Metrics Changes - FGI reported total revenue of $36.1 million in Q3 2024, representing a year-over-year increase of 20.6% [7] - Gross profit reached a record $9.3 million, growing 18.9% compared to the prior year [7] - Gross margin declined to 25.8% from 26.2%, a decrease of 40 basis points due to a higher mix of Sanitaryware and Bath Furniture and increased freight costs [7] - Operating expenses increased by 27.6% to $9.4 million from $7.3 million in the prior year, attributed to investments in growth initiatives [14] - GAAP operating income was negative $0.1 million, down from a positive $0.5 million in the prior year [15] - Total liquidity at the end of Q3 was $16.3 million, deemed sufficient to fund growth initiatives [16] Business Line Data and Key Metrics Changes - Revenue growth in the U.S., Canada, and Europe was 21%, 9%, and 39% respectively [9] - Sanitaryware revenue increased by 3% year-over-year, reversing a decline from the previous quarter [9] - Bath Furniture revenue surged by 64% year-over-year due to a shift towards lower-priced offerings [9] - Shower Systems business reported a revenue increase of 45%, driven by positive demand trends [10] - Covered Bridge revenue in custom kitchen cabinetry increased by 93%, supported by strong dealer and customer expansion [10] Market Data and Key Metrics Changes - The industry outlook remains relatively flat, with customers forecasting minimal growth in 2024 [8] - Despite a flat market, FGI's investments have driven revenue growth significantly above the market average [8] Company Strategy and Development Direction - FGI's strategy focuses on organic growth initiatives across brands, products, and channels, referred to as the BPC strategy [6] - The company is expanding geographically in Europe and India, which holds promise for future growth [11] - The digital custom kitchen joint venture, Isla Porter, is establishing relationships with the premium design community [11] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the industry outlook, with expectations of low single-digit growth for some customers [24] - The company is gaining market share in key categories, indicating that it is not solely reliant on overall market growth [24] - Management anticipates a return to gross margins above 27% as freight rates normalize and operational efficiencies improve [21][22] Other Important Information - The revised revenue guidance for 2024 is $127 million to $131 million, up from the previous range of $115 million to $128 million [16] - Adjusted operating income guidance has been revised to negative $1 million to breakeven, down from a previous range of $2.8 million to $3.8 million [16] Q&A Session Summary Question: Components of the growth year-over-year in the quarter - Management clarified that the growth was not a one-time event but a result of reengineering product assortments to meet market pricing trends [18] Question: Impact on gross profit margins - Management indicated that the lower gross margin was influenced by increased freight costs and promotional expenses related to new product launches, but they expect margins to improve [19][21] Question: Customer outlook for next year - Management described the outlook as cautiously optimistic, with expectations of muted growth in the industry but incremental sales growth for FGI [24]

Revenue Performance - Revenue increased by $6.2 million, or 20.6%, to $36.1 million for the three months ended September 30, 2024, compared to $29.9 million for the same period in 2023[171]. - For the nine months ended September 30, 2024, revenue rose by $9.9 million, or 11.5%, to $96.2 million from $86.3 million in the prior year[171]. - Revenue for the nine months ended September 30, 2024, was $96,223,647, an increase from $86,284,791 for the same period in 2023, representing an increase of 11.3%[217]. - Sanitaryware sales accounted for 61.6% of total revenue for the nine months ended September 30, 2024, with a revenue increase of 7.9% to $59.3 million[174]. - Bath furniture sales increased by 64.4% to $4.2 million for the three months ended September 30, 2024, but decreased by 8.3% to $11.3 million for the nine months[175]. - Shower systems revenue rose by 44.9% to $7.1 million for the three months ended September 30, 2024, and by 31.9% to $18.8 million for the nine months[176]. - Revenue from other products increased by 93.3% to $3.3 million for the three months ended September 30, 2024, and by 43.1% to $6.8 million for the nine months[177]. Profitability and Loss - The company generated a net loss of $698,248 for the three months ended September 30, 2024, compared to a net income of $343,492 for the same period in 2023, representing a decrease of 303.3%[168]. - Net loss for the nine months ended September 30, 2024, was $1.3 million, compared to a net income of $0.1 million for the same period in 2023[188]. - The company reported a net loss of $1,268,111 for the nine months ended September 30, 2024, compared to a net income of $525,189 for the same period in 2023[218]. Expenses - Selling and distribution expenses increased by 37.4% to $6.3 million for the three months ended September 30, 2024, compared to $4.6 million in the same period last year[168]. - Selling and distribution expenses increased by 32.6% to $18.7 million for the nine months ended September 30, 2024, driven by inflation and sales growth initiatives[184]. Gross Profit and Margin - Gross margin improved to 27.7% in the first nine months of 2024, up from 26.7% in the same period last year[164]. - The company reported a gross profit of $9.3 million for the three months ended September 30, 2024, an increase of 18.9% from $7.8 million in the same period last year[168]. - Gross profit for the nine months ended September 30, 2024, was $26.7 million, an increase of 15.8% compared to the same period in 2023[183]. Cash Flow and Liquidity - Total liquidity as of September 30, 2024, was $16.3 million, providing sufficient financial flexibility for organic growth strategies[164]. - As of September 30, 2024, the company had cash of $3.0 million and working capital of $12.7 million[189]. - Net cash used in operating activities for the nine months ended September 30, 2024, was approximately $8.0 million, compared to $2.0 million for the same period in 2023, indicating a significant increase in cash outflow[203][204]. - Net cash provided by financing activities was approximately $5.5 million for the nine months ended September 30, 2024, contrasting with a cash outflow of $1.8 million for the same period in 2023[207]. - The net cash used in investing activities was $2.0 million for the nine months ended September 30, 2024, compared to $0.9 million for the same period in 2023, indicating increased investment activity[206]. Debt and Financing - As of September 30, 2024, the outstanding balance of short-term loans was $9,161,641, an increase from $6,959,175 as of December 31, 2023, representing a 31.5% increase[196]. - The company may seek additional cash resources in the future for investments or acquisitions, depending on business conditions[190]. - As of September 30, 2024, borrowings under the CTBC Credit Line amounted to $2,297,464, up from $0 as of December 31, 2023[200]. - The company was not in compliance with certain financial covenants related to its debt to tangible net worth ratio as of September 30, 2024, and has requested a waiver from the lender[197]. - The interest rate on the loan as of September 30, 2024, was 7.75%, down from 8.25% as of December 31, 2023[195]. Strategic Initiatives - The company entered into a 5-year licensing agreement for an industry-leading overflow toilet technology, expected to enhance product offerings[164]. - The company plans to continue investing in research and development to drive product innovation in 2024[164]. - The company has signed agreements to expand into India, Eastern Europe, and the UK, indicating a focus on geographic expansion[164]. Capital Expenditures - Capital expenditures amounted to $2.0 million for the nine months ended September 30, 2024, compared to $0.9 million for the same period in 2023, reflecting a 122.2% increase[208].

Financial Performance - Total revenue for Q3 2024 was $36.1 million, representing a year-over-year increase of 20.6%[1] - Gross profit reached $9.3 million, an 18.9% increase compared to the prior year, with a gross margin of 25.8%, down 40 basis points year-over-year[1][6] - Operating loss was ($0.1) million, compared to an operating income of $0.5 million in Q3 2023, with adjusted operating income at $0.1 million[7][8] - Net loss attributable to shareholders was ($0.6) million, or ($0.06) per diluted share, compared to net income of $0.4 million, or $0.04 per diluted share, in the same period last year[8] - Revenue for Q3 2024 reached $36,099,179, a 20.5% increase from $29,932,612 in Q3 2023[21] - Net loss attributable to FGI Industries Ltd. shareholders for Q3 2024 was $(550,137), compared to a profit of $409,535 in Q3 2023[21] - For the nine months ended September 30, 2024, FGI Industries reported a net loss of $1,259,522 compared to a net income of $128,598 for the same period in 2023[22] - Adjusted net loss income for the nine months ended September 30, 2024, was $(280,227), compared to an adjusted net income of $836,562 for the same period in 2023[25] Revenue Breakdown - Sanitaryware revenue was $21.5 million, up from $20.7 million in the prior-year period, while Bath Furniture revenue increased to $4.2 million from $2.5 million[3][4] - Shower Systems revenue grew to $7.1 million, up from $4.9 million last year, driven by steady demand and new customer programs[5] - Revenue for the nine months ended September 30, 2024, was $96,223,647, compared to $86,284,791 for the same period in 2023, reflecting a growth of approximately 11%[24] Guidance and Future Outlook - The company revised its fiscal 2024 revenue guidance to $127-131 million, up from the previous estimate of $115-128 million[10] - Adjusted net income guidance for fiscal 2024 was revised to a range of ($1.0) to $0.0 million, down from the prior estimate of $1.2 to $2.0 million[10] - The company continues to invest in its brands and future growth initiatives, particularly in the kitchen cabinet business and distribution for the Canadian market[2][8] Liquidity and Assets - Total liquidity at the end of Q3 2024 was $16.3 million, consisting of $3.0 million in cash and cash equivalents and $13.3 million available under credit facilities[9] - Total current assets increased to $52,399,579 as of September 30, 2024, compared to $46,114,670 as of December 31, 2023, representing a 13.4% growth[20] - Total assets increased to $74,664,926 as of September 30, 2024, compared to $65,744,930 as of December 31, 2023, a growth of 13.8%[20] - Cash decreased to $3,044,662 as of September 30, 2024, down from $7,777,241 as of December 31, 2023, a decline of 60.9%[20] Expenses - Operating expenses for Q3 2024 totaled $9,374,048, a 27.6% increase from $7,347,597 in Q3 2023[21] - Research and development expenses for Q3 2024 were $451,975, slightly up from $423,697 in Q3 2023[21] - The company experienced a significant increase in depreciation, totaling $324,683 for the nine months ended September 30, 2024, up from $135,256 in the prior year[22] - The company reported a net cash used in investing activities of $2,044,264 for the nine months ended September 30, 2024, compared to $883,054 in the prior year[22] - The company incurred $1,374,500 in capital expenditures for property and equipment during the nine months ended September 30, 2024, compared to $274,971 in the previous year[22] Cash Flow - Cash used in operating activities for the nine months ended September 30, 2024, was $8,042,745, a substantial increase from $1,986,964 in the same period of 2023[22] - FGI Industries had cash and cash equivalents of $3,044,662 at the end of the period, down from $5,369,947 at the end of September 30, 2023[22] - The net proceeds from the revolving credit facility amounted to $5,526,322 for the nine months ended September 30, 2024, compared to a net cash used of $(1,832,849) in the same period of 2023[22] Foreign Exchange - FGI Industries reported a foreign exchange transaction loss of $(225,317) for the nine months ended September 30, 2024, compared to a loss of $(23,875) in the prior year[22]

Company Performance - FGI Industries Ltd. reported a quarterly loss of $0.01 per share, better than the Zacks Consensus Estimate of a loss of $0.03, and compared to earnings of $0.05 per share a year ago, indicating an earnings surprise of 66.67% [1] - The company posted revenues of $36.1 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 17.21%, and up from $29.93 million in the same quarter last year [2] - Over the last four quarters, FGI Industries has exceeded consensus EPS estimates two times and topped consensus revenue estimates twice [2] Stock Performance - FGI Industries shares have declined approximately 40.9% since the beginning of the year, contrasting with the S&P 500's gain of 25.7% [3] - The current consensus EPS estimate for the upcoming quarter is $0.05 on revenues of $31.6 million, while for the current fiscal year, the estimate is -$0.01 on revenues of $122.5 million [7] Industry Outlook - The Retail - Home Furnishings industry, to which FGI Industries belongs, is currently ranked in the bottom 13% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact FGI Industries' stock performance [5]

Company Performance - FGI Industries Ltd. reported total revenue of $36.1 million for Q3 2024, representing a year-over-year increase of 20.6% [1][2] - Gross profit reached a record $9.3 million, reflecting an 18.9% growth compared to the prior year, although gross margin decreased to 25.8%, down 40 basis points year-over-year [1][5] - The company experienced an operating loss of $0.1 million and a net loss attributable to shareholders of $0.6 million for the quarter [1][7] Revenue Breakdown - Revenue from Sanitaryware was $21.5 million, up from $20.7 million in the prior-year period [3] - Bath Furniture revenue increased to $4.2 million from $2.5 million year-over-year, while Shower Systems revenue rose to $7.1 million from $4.9 million [4][5] - Other revenue, primarily from Kitchen Cabinets, was $3.3 million, up from $1.7 million in the prior year [5] Operating Expenses and Losses - Operating expenses increased by 27.6% year-over-year to $9.4 million, primarily due to investments in growth initiatives [2][6] - Adjusted operating income was $0.1 million, with adjusted net loss attributable to shareholders of $0.1 million [1][6] Financial Guidance - The company revised its fiscal 2024 guidance, projecting total revenue of $127-131 million, up from a previous estimate of $115-128 million [9] - Adjusted operating income guidance was revised to a loss of $1.0 to $0.0 million, down from a previous estimate of $2.8 to $3.8 million [9] Liquidity and Financial Resources - As of September 30, 2024, FGI had total available liquidity of $16.3 million, including $3.0 million in cash and cash equivalents [8]

Company Overview - FGI Industries Ltd. is a leading global supplier of kitchen and bath products with over 30 years of industry experience [3] - The company specializes in product categories such as sanitaryware, bath furniture, shower systems, kitchen cabinetry, and accessory items [3] - FGI's products are primarily sold for repair and remodel activities, with a smaller portion for new home or commercial construction [3] Financial Results Announcement - FGI Industries will release its financial results for the third quarter of 2024 after market close on November 11, 2024 [1] - A conference call to discuss the quarterly results is scheduled for November 12, 2024, at 9:00 am Eastern Time [1] Conference Call Details - A webcast of the conference call and presentation materials will be available on the company's Investor Relations website [2] - Participants can join the live teleconference using the provided toll-free and international numbers [2] - A replay of the teleconference will be available until November 26, 2024 [2]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: June 30, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-41207 FGI Industries Ltd. (Exact name of registrant as specified in its charter) Cayman Islands 98-1603252 (S ...

FGI Industries Ltd. (NASDAQ:FGI) Q2 2024 Earnings Conference Call August 8, 2024 9:00 AM ET Company Participants Jae Chung - Vice President, Investor Relations David Bruce - President and Chief Executive Officer Perry Lin - Chief Financial Officer Conference Call Participants Reuben Garner - Benchmark Gregory Gibas - Northland Securities Operator Good morning, ladies and gentlemen, and welcome to the FGI Industries, Inc. Second Quarter 2024 Results Conference Call. [Operator Instructions] This call is being ...