FGI Industries Ltd. (NASDAQ:FGI) Q1 2022 Results Earnings Conference Call May 12, 2022 8:00 AM ET Company Participants Paul Bartolai - Investor Relations David Bruce - President and Chief Executive Officer Perry Lin - Chief Financial Officer Conference Call Participants Reuben Gardner - The Benchmark Co. Greg Gibas - Northland Securities Operator Greetings. Welcome to the FGI First Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow ...

Revenue Performance - Revenues increased by $7.2 million, or 19.8%, to $43.6 million for the three months ended March 31, 2022, compared to $36.4 million for the same period in 2021[162]. - Sanitaryware sales accounted for 64.7% of total revenues, increasing by 23.6% to $28.2 million for the three months ended March 31, 2022[168]. - Bath Furniture sales decreased by 11.9% to $10.1 million, representing 23.3% of total revenues for the three months ended March 31, 2022[169]. - Revenues from other products increased by 152.9% to $5.3 million, driven by strong sales of Jetcoat Shower wall systems[170]. - For the three months ended March 2022, revenue was $43,575,239, an increase from $36,375,689 in the same period of 2021, representing a growth of approximately 19.1%[211]. Profitability - Gross profit increased by $0.2 million, or 2.8%, to $7.5 million, with gross profit margin decreasing to 17.3% due to higher raw material and freight costs[176][177]. - Income from operations decreased by 63.3% to $690,746 for the three months ended March 31, 2022, compared to $1,883,771 in 2021[162]. - Net income fell by 82.1% to $530,193 for the three months ended March 31, 2022, down from $2,961,414 in the same period last year[162]. - Adjusted income from operations for March 2022 was $923,058, down from $1,999,671 in March 2021, reflecting a decrease of about 53.8%[211]. - Adjusted net income for March 2022 was $804,321, compared to $1,114,714 in March 2021, showing a decrease of around 28%[211]. - Adjusted operating margins fell to 1.6% in March 2022 from 5.2% in March 2021, a decline of 3.6 percentage points[211]. Expenses - Selling and distribution expenses rose by $0.7 million, or 18.7%, to $4.7 million, attributed to increased sales and returning business activities to pre-COVID-19 levels[178]. - General and administrative expenses increased by $0.5 million, or 35.6%, to $1.8 million for the three months ended March 31, 2022, compared to the same period in 2021[179]. - Research and development expenses remained stable and are relatively immaterial to the company's financial statements[180]. - Non-recurring IPO-related compensation and stock-based compensation expense for March 2022 was $232,312, with no such expense reported in March 2021[211]. - COVID one-time expenses were recorded as $115,900 in March 2021, with no such expenses in March 2022[211]. Cash Flow and Debt - Cash and cash equivalents increased to $8.8 million as of March 31, 2022, from $3.9 million as of December 31, 2021[185]. - Net cash used in operating activities was approximately $9.1 million for the three months ended March 31, 2022, primarily due to a decrease in accounts payable of approximately $8.1 million[195]. - Net cash provided by financing activities was approximately $14.0 million for the three months ended March 31, 2022, which includes net proceeds from the IPO of $12.4 million[200]. - Total debt as of March 31, 2022, was represented by a credit facility with East West Bank, with an outstanding balance of $16.3 million[192]. - The interest rate on the East West Bank loan was 3.75% as of March 31, 2022, up from 3.50% as of December 31, 2021[190]. Future Outlook - The company expects to resume margin expansion in the latter half of 2022 as measures to offset supply chain disruptions take effect[156]. - The company may seek additional cash resources in the future for investments, acquisitions, or strategic cooperation[186]. - The tax impact of adjustments for March 2022 was $41,816, compared to a tax impact of $(281,700) in March 2021[211]. - The company recorded an income tax expense of $0.1 million for the three months ended March 31, 2022, down from $0.5 million for the same period in 2021, reflecting a decrease in reported income before taxes of $2.8 million, or 80.7%[182].

TABLE OF CONTENTS UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ☒ For the fiscal year ended December 31, 2021 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-41207 ☐ FGI Industries Ltd. (Exact Name of Registrant as Specified in Its Charter) Cayman Islands 98-1603252 (State or Other Jurisdict ...