Investor First Quarter 2025 Presentation Disclaimer Certain matters discussed in this presentation contains forward-looking statements concerning our business, operations and financial performance and conditions, as well as our plans, objectives and expectations for our business operations and financial performance and condition. These statements may be preceded by, followed by or include the words "may," "expect," "will," "will likely result," "should," "estimate," "plan" and other similar expressions that ...

Revenue Performance - Revenue for the three months ended March 31, 2025, increased by $2.5 million, or 8.0%, to $33.2 million compared to $30.8 million for the same period in 2024[160] - Revenue from sales of sanitaryware decreased by 1.7% to $20.2 million, representing 60.7% of total revenue for the three months ended March 31, 2025[163] - Revenue from sales of other products increased by 135.7% to $3.3 million, driven by growth in custom kitchen cabinetry[166] - Revenue from the United States market was $21.2 million, representing a consistent 63.7% of total revenue for the three months ended March 31, 2025[167] - Revenue for the three months ended March 31, 2025, was $33.2 million, compared to $30.8 million for the same period in 2024, reflecting growth in new product lines[203] Profitability and Loss - The company incurred a net loss of $0.8 million for the three months ended March 31, 2025, compared to a net loss of $0.5 million for the same period in 2024[176] - The adjusted operating loss for the three months ended March 31, 2025, was $1.3 million, with adjusted operating margins at -3.8%[203] Expenses - Selling and distribution expenses rose by $1.0 million, or 16.8%, to $7.2 million, driven by expanded marketing efforts and higher personnel-related expenses[171] - General and administrative expenses increased by $0.4 million, or 18.3%, to $2.7 million, primarily due to inflationary pressures[172] - The company has implemented cost control initiatives across multiple departments to lower recurring operating expenses[188] Liquidity and Cash Management - Total liquidity as of March 31, 2025, was $14.3 million, providing sufficient financial flexibility for organic growth strategies[156] - Net cash used in operating activities was approximately $1.7 million for the three months ended March 31, 2025, a significant improvement from $8.0 million in the same period of 2024[192] - The company had approximately $1.2 million in cash and cash equivalents as of March 31, 2025, with $13.2 million outstanding under its credit facilities[177] - The company expects to improve liquidity and reduce its cost structure following the termination of a warehouse lease, which will lower ongoing fixed overhead expenses[179] Inventory and Working Capital - The company recorded a decrease in inventory by $1.4 million and a decrease in accounts receivable by $0.8 million, indicating improved working capital management[192] Strategic Initiatives - The company has entered into a 5-year licensing agreement for an industry-leading overflow toilet technology, expected to enhance product offerings[156] - The company is in discussions with lenders regarding covenant breaches related to its debt coverage ratio as of March 31, 2025[178] - Borrowings under the East West Bank credit facility amounted to $10.7 million as of March 31, 2025, up from $9.6 million at the end of 2024[184]

Revenue Performance - Total revenue for Q1 2025 was $33.2 million, an increase of 8.0% year-over-year[3]. - Revenue for Q1 2025 was $33,212,548, an increase of 8.5% compared to $30,753,519 in Q1 2024[24]. - Bath Furniture revenue increased by 32.7% to $4.1 million, while Covered Bridge cabinetry revenue surged by 135.7% to $3.3 million[3][8]. - Sanitaryware revenue decreased to $20.2 million, down from $20.5 million in the prior year[7]. - The company provided fiscal 2025 guidance with total net revenue expected to be between $135 million and $145 million[16]. Profitability and Loss - Gross profit reached $8.9 million, up 5.8% compared to the prior year, with a gross margin of 26.8%, down 60 basis points[3][6]. - Gross profit for Q1 2025 was $8,900,258, up from $8,413,483 in Q1 2024, reflecting a gross margin improvement[24]. - The company reported an operating loss of $1.3 million and a net loss attributable to shareholders of $0.6 million for Q1 2025[6][10]. - Net loss attributable to FGI Industries Ltd. shareholders was $629,092 in Q1 2025, compared to $412,189 in Q1 2024, indicating a worsening loss situation[24]. - Adjusted Operating Loss for Q1 2025 was $1,260,953, compared to a loss of $199,445 in Q1 2024, highlighting increased operational challenges[27]. - The company reported a comprehensive loss of $729,125 in Q1 2025, compared to $560,437 in Q1 2024, indicating increased overall financial strain[24]. - Adjusted Net Loss for Q1 2025 was $1,072,383, compared to $197,476 in Q1 2024, showing a significant deterioration in profitability[27]. Operating Expenses - Operating expenses increased by 16.6% year-over-year to $10.2 million, driven by investments in growth initiatives[4]. - Operating expenses increased to $10,181,117 in Q1 2025 from $8,734,417 in Q1 2024, primarily due to higher selling and distribution costs[24]. Cash Flow and Liquidity - Total liquidity as of March 31, 2025, was $14.3 million, consisting of $1.2 million in cash and cash equivalents and $13.0 million available under credit facilities[12]. - Cash used in operating activities was $1,651,686 in Q1 2025, a significant decrease from $7,989,899 in Q1 2024, indicating improved cash flow management[25]. - Total cash at the end of Q1 2025 was $1,226,365, down from $3,319,066 at the end of Q1 2024, reflecting ongoing liquidity pressures[25]. Strategic Initiatives - FGI continues to invest in new product introductions and growth initiatives, particularly in its digital custom kitchen joint venture, Isla Porter[3][4]. - The company is navigating a challenging tariff environment while maintaining strong relationships with suppliers and customers[4]. Foreign Currency Impact - The company experienced a foreign currency translation adjustment gain of $86,432 in Q1 2025, contrasting with a loss of $22,578 in Q1 2024, reflecting currency fluctuations[24].

Core Insights - FGI Industries Ltd. reported total revenue of $33.2 million for Q1 2025, marking an 8.0% increase year-over-year, driven by growth in Bath Furniture and Covered Bridge cabinetry businesses [2][4] - Gross profit reached $8.9 million, a 5.8% increase from the previous year, although gross margin declined to 26.8% due to tariffs and higher freight costs [5][6] - The company experienced an operating loss of $1.3 million, compared to an operating income of $0.3 million in Q1 2024, attributed to increased operating expenses [8][9] Financial Performance - Revenue breakdown: Sanitaryware revenue decreased to $20.2 million, Bath Furniture revenue increased to $4.1 million, Shower Systems revenue decreased to $5.7 million, and other revenue from Kitchen Cabinets rose to $3.3 million [7] - Operating expenses increased by 16.6% year-over-year to $10.2 million, driven by investments in growth initiatives and one-time costs [3][8] - The net loss attributable to shareholders was $0.6 million, or $0.07 per diluted share, compared to a net income of $0.4 million, or $0.04 per diluted share, in the same period last year [9][21] Market Dynamics - The company noted an uncertain industry outlook due to the ongoing tariff environment, but emphasized that strategic investments are yielding revenue growth above the overall market [2][3] - Revenue growth was observed in the U.S. (8.0%) and Canada (3.8%), while Europe saw a decline of 2.8% [2] - The company is focused on expanding its digital custom kitchen joint venture, Isla Porter, to enhance relationships with the premium design community [2] Liquidity and Capital Management - As of March 31, 2025, FGI had total liquidity of $14.3 million, with $1.2 million in cash and cash equivalents and total debt of $13.2 million [11] - The company plans to prioritize internal investments for future growth initiatives [3]

Revenue Performance - Revenue increased by $14.6 million, or 12.4%, to $131.8 million for the year ended December 31, 2024, compared to $117.2 million in 2023[228] - Revenue from sanitaryware accounted for 61.5% of total revenue in 2024, with sales increasing by 7.4% to $81.1 million[230] - Revenue from shower systems increased by 27.6% to $25.5 million for the year ended December 31, 2024, representing 19.4% of total revenue[232] - Revenue generated in the United States increased by 10.5% to $82.4 million, accounting for 62.5% of total revenue in 2024[234] - The Company reported revenue of $131,818,073 for the year ended December 31, 2024, compared to $117,241,604 for the year ended December 31, 2023, reflecting an increase of approximately 12.5%[292] Profitability and Loss - The company reported a net loss of $1.7 million for the year ended December 31, 2024, compared to a net income of $579,564 in 2023, representing a decline of 399.2%[226] - Adjusted Operating Loss Income for the year ended December 31, 2024, was $(1,613,635), compared to an Adjusted Operating Income of $2,840,401 for the year ended December 31, 2023[292] - Adjusted Operating Margins decreased to -1.2% in 2024 from 2.4% in 2023, indicating a decline in operational efficiency[292] - The Company incurred a loss before income taxes of $(2,282,098) in 2024, compared to income before income taxes of $1,387,788 in 2023[292] - Adjusted Net Loss Income for the year ended December 31, 2024, was $(939,648), a significant decrease from Adjusted Net Income of $1,731,512 in 2023[292] Expenses - Selling and distribution expenses increased by $5.7 million, or 28.3%, to $25.6 million for the year ended December 31, 2024, driven by higher personnel costs and expanded marketing activities[238] - Research and development expenses increased by 23.4% to $1.7 million for the year ended December 31, 2024, reflecting continued investment in product innovation[226] - Total other expenses decreased by approximately $0.7 million or 80.1%, to $0.2 million for the year ended December 31, 2024, from $0.9 million for the year ended December 31, 2023[242] - Business expansion expenses were recorded at $247,080 in 2024, consistent with $247,082 in 2023, indicating stable investment in growth initiatives[292] Cash Flow and Liquidity - Total liquidity as of December 31, 2024, was $15.6 million, providing sufficient financial flexibility for organic growth strategies[224] - As of December 31, 2024, the company had cash and working capital of $4.6 million and $10.4 million, respectively[245] - Net cash used in operating activities was approximately $7.4 million for the year ended December 31, 2024, reflecting strategic investments and working capital fluctuations[259] - Net cash provided by financing activities was approximately $7.5 million for the year ended December 31, 2024, compared to net cash used of $2.8 million in 2023[262] Capital Expenditures and Debt - Capital expenditures amounted to approximately $2.9 million and $1.8 million for the years ended December 31, 2024 and 2023, respectively[263] - The outstanding balance of the East West Bank loan was $9.6 million as of December 31, 2024, compared to $7.0 million in 2023[251] - The interest rate on the East West Bank loan was 7.25% as of December 31, 2024, down from 8.25% in 2023[250] - FGI Canada Ltd. has a line of credit agreement with RBC allowing for borrowing up to CAD7.5 million (USD5.2 million) as of December 31, 2024[252] - The CTBC Credit Line was increased to $3.0 million on January 14, 2025, from $2.3 million[256] Strategic Initiatives - The company entered into a 5-year licensing agreement for an industry-leading overflow toilet technology, expected to enhance product offerings[224] - The Company’s revenue recognition follows ASC 606, with revenue recognized upon transfer of control of goods or services to customers[274] - Payment terms for customers generally range from 15 to 60 days, impacting cash flow and revenue recognition timing[274] - The Company utilizes non-GAAP measures such as Adjusted Operating Income and Adjusted Net Income to provide additional insights into financial performance[288]

Core Insights - FGI Industries Ltd. reported fourth-quarter 2024 results with revenues exceeding estimates and showing year-over-year growth, although earnings declined due to new business costs and promotional expenses [1][3][6] Revenue Performance - Total revenues for Q4 2024 reached $35.6 million, surpassing the Zacks Consensus Estimate of $32.8 million by 8.5% and increasing 15% from the previous year [3] - For the full year 2024, total revenues increased by 12.4% year over year to $131.8 million [7] Segment Analysis - Revenues in the Sanitaryware segment rose 5.8% year over year to $21.8 million [4] - Bath Furniture revenues surged 40.2% year over year to $3.5 million, attributed to new business wins and market-aligned pricing [4] - Shower Systems segment revenues grew 17% year over year to $6.7 million, driven by steady demand and increased sales [4] - Other revenues, primarily from Kitchen Cabinets, increased by 68.3% year over year to $3.6 million, supported by order momentum and expanded dealer count [5] Operating Expenses and Margins - Total operating expenses for Q4 were $10 million, up 28.4% year over year, leading to a gross margin contraction of 460 basis points to 24.6% [6] - For the full year 2024, total operating expenses were $37.5 million, an increase from $29.8 million the previous year, with a gross margin of 26.9%, down 50 basis points year over year [7] Balance Sheet Overview - As of December 31, 2024, FGI Industries had a cash balance of $4.6 million, down from $7.8 million at the end of 2023 [8] - Total liquidity stood at $15.6 million, including $11 million available under credit facilities [8] - Total debt increased to $14.5 million at the end of 2024, up from $7 million a year ago [8] Future Outlook - FGI Industries expects net revenues for 2025 to be in the range of $135 million to $145 million [10]

Financial Data and Key Metrics Changes - FGI reported total revenue of $35.6 million in the fourth quarter, representing a year-over-year increase of 15% [8][16] - Gross profit was $8.7 million, a decrease of 3.2% compared to the prior year, with gross margin declining to 24.6% from 29.2%, a drop of 460 basis points [8][16] - Operating expenses increased by 28.4% to $10 million from $7.8 million in the prior year, primarily due to investments in growth initiatives [17] - GAAP operating income was negative $1.3 million in the quarter, down from a positive $1.2 million in the prior year [17] Business Line Data and Key Metrics Changes - Bath Furniture revenue increased by 40.2% year over year, driven by market-aligned pricing and new business wins [10] - Shower Systems business reported a revenue increase of 17%, supported by new customer programs and order growth [11] - Covered Bridge revenue in custom kitchen cabinetry increased by 68.3% due to order momentum and expanded geographies [11] Market Data and Key Metrics Changes - Revenue grew by 14.7% in the US, 9.9% in Canada, and 23.3% in Europe during the quarter [10] - Sanofi revenue increased by 5.8% year over year in the fourth quarter [10] Company Strategy and Development Direction - The company is focused on organic growth initiatives across brands, products, and channels, referred to as the BPC strategy [7] - Geographic expansion in Europe and India is seen as a significant growth driver for upcoming quarters [12] - The company is actively working to diversify sourcing in response to the increasing tariff environment [13][25] Management's Comments on Operating Environment and Future Outlook - The industry outlook is relatively flat, with minimal growth expected in 2025, but the company anticipates outpacing the market through its BPC strategy [9][27] - Management expressed confidence in new programs and business wins to drive growth despite a flat market [50][55] - Tariff pressures are acknowledged as a significant factor impacting the business outlook, with management taking a conservative approach in guidance [35][36] Other Important Information - The company has $15.6 million in total liquidity, deemed sufficient to fund growth initiatives [18] - Initial 2025 revenue guidance is set between $135 million and $145 million, with adjusted operating income guidance ranging from negative $2 million to positive $1.5 million [18] Q&A Session Summary Question: Impact of tariffs on the business - Management is working closely with suppliers and customers to mitigate tariff impacts and is diversifying sourcing to navigate the situation [22][24][25] Question: Outlook for operating income - The guidance includes tariff pressures, with a conservative approach taken due to the fluid nature of the situation [33][35] Question: Pricing strategies in response to tariffs - The company adjusts pricing as necessary and works with customers on timing and inventory mix to manage tariff costs [39][41] Question: Sourcing adjustments due to tariffs - The company is actively diversifying sourcing to mitigate tariff impacts, with ongoing adjustments being made [44][45] Question: Risks and upside in the R&R market - The overall R&R market outlook remains flat, but new programs and business wins are expected to buffer against this [49][50]

Financial Data and Key Metrics Changes - FGI reported total revenue of $35.6 million in the fourth quarter, representing a year-over-year increase of 15% [8][16] - Gross profit was $8.7 million, a decrease of 3.2% compared to the prior year, with gross margin declining to 24.6% from 29.2%, a drop of 460 basis points [8][16] - Operating expenses increased by 28.4% to $10 million from $7.8 million in the prior year, leading to a GAAP operating income of negative $1.3 million, down from a positive $1.2 million in the prior year [17] Business Line Data and Key Metrics Changes - Bath Furniture revenue increased by 40.2% year over year, driven by market-aligned pricing and new business wins [10] - Shower Systems business reported a revenue increase of 17%, supported by new customer programs and order growth [11] - Covered Bridge revenue in custom kitchen cabinetry increased by 68.3% due to order momentum and expanded geographies [11] Market Data and Key Metrics Changes - Revenue growth in the US, Canada, and Europe markets was 14.7%, 9.9%, and 23.3% respectively [10] - Sanofi revenue increased by 5.8% year over year in the fourth quarter [10] - The overall industry outlook remains relatively flat, with customers forecasting minimal growth in 2025 [9] Company Strategy and Development Direction - The company is focused on organic growth initiatives across its brands, products, and channels, referred to as the BPC strategy [7] - Geographic expansion in Europe and India is seen as a significant growth driver for upcoming quarters [12] - The company is actively working to diversify sourcing in response to the increasing tariff environment [13][25] Management's Comments on Operating Environment and Future Outlook - Management expects the industry to remain flat but is confident in the company's ability to outpace the market through new programs and initiatives [27][50] - The company is cautious about tariff pressures impacting business and has adjusted its guidance accordingly [36][50] - Management believes that new business wins and market growth will buffer against a flat market outlook [50] Other Important Information - The company has a total liquidity of $15.6 million, which is deemed sufficient to fund growth initiatives [18] - Initial guidance for 2025 includes revenue expectations of $135 to $145 million, with adjusted operating income guidance ranging from negative $2 million to positive $1.5 million [18] Q&A Session Summary Question: Impact of tariffs on the business - Management is working closely with suppliers and customers to mitigate tariff impacts and is diversifying sourcing to navigate the situation [22][24][25] Question: Outlook for operating income - The guidance includes tariff pressure, and management is being conservative in their outlook while optimistic about new growth initiatives [33][36] Question: Pricing strategies in a volatile tariff environment - The company adjusts pricing as necessary and works closely with customers to manage the impact of tariffs [39][41] Question: Sourcing adjustments due to tariffs - The company has been active in diversifying sourcing to mitigate tariff impacts, with ongoing adjustments being made [44][45] Question: Risks versus upside in the R&R market - The overall R&R market outlook remains flat, but new programs and business wins are expected to help the company outpace the market [49][50]

Revenue Performance - Total revenue for Q4 2024 was $35.6 million, representing a year-over-year increase of 15.0%[4]. - Full-year 2024 total revenue reached $131.8 million, an increase of 12.4% year-over-year, with gross profit of $35.4 million, up 10.4%[6]. - Revenue for the year ended December 31, 2024, increased to $131.82 million, up 12.5% from $117.24 million in 2023[27]. - Revenue for the three months ended December 31, 2024, was $35,594,426, an increase from $30,956,813 in the same period of 2023, representing a growth of approximately 15.5%[31]. - Sanitaryware revenue for Q4 2024 was $21.8 million, up from $20.6 million in the prior year, while Bath Furniture revenue increased to $3.5 million from $2.5 million[14]. - Shower Systems revenue grew to $6.7 million in Q4 2024, an increase from $5.7 million last year, driven by positive demand trends[14]. - The Other segment, including Covered Bridge, saw revenue increase by 68.3% year-over-year due to expanded geographies and higher dealer count[4]. Profitability and Loss - Gross profit for Q4 2024 was $8.7 million, a decrease of 3.2% compared to the prior year, with a gross margin of 24.6%, down 460 basis points year-over-year[4][8]. - Operating loss for Q4 2024 was $1.3 million, compared to operating income of $1.2 million in the prior year, with adjusted operating loss of $1.1 million[9][10]. - Net loss for the year ended December 31, 2024, was $1.73 million, compared to a net income of $579,564 in 2023[29]. - The company reported a comprehensive loss of $2.86 million for the year ended December 31, 2024, compared to a comprehensive income of $864,384 in 2023[27]. - Adjusted Operating Loss for the three months ended December 31, 2024, was $(1,140,980), compared to an income of $1,366,895 in the same period of 2023[31]. - Adjusted Net Loss for the year ended December 31, 2024, was $(939,648), a decline from an income of $1,731,512 in 2023[31]. - Net loss attributable to non-controlling shareholders for the year ended December 31, 2024, was $(533,188), compared to $(154,040) in 2023[31]. Expenses and Liabilities - Operating expenses for the year ended December 31, 2024, totaled $37.53 million, up 25.9% from $29.77 million in 2023[27]. - Total liabilities as of December 31, 2024, rose to $53.90 million, an increase of 29.1% from $41.72 million in 2023[25]. - The company experienced a significant increase in short-term loans, which rose to $14.50 million as of December 31, 2024, compared to $6.96 million in 2023, indicating increased leverage[25]. Cash and Liquidity - Total liquidity as of December 31, 2024, was $15.6 million, consisting of $4.6 million in cash and cash equivalents and $11.0 million available under credit facilities[12]. - Cash and cash equivalents at the end of 2024 decreased to $4.56 million from $7.78 million at the end of 2023, a decline of 41.5%[29]. - Total current assets as of December 31, 2024, increased to $52.90 million, up 14.5% from $46.11 million in 2023[25]. Future Guidance and Investments - The company provided fiscal 2025 guidance with total net revenue expected to be between $135 million and $145 million, and total adjusted operating income projected to be between $(2.0) million and $(1.5) million[15]. - FGI continues to invest in its brands and future growth initiatives, focusing on strategic investments in products and channels[4]. Research and Development - Research and development expenses increased to $1.70 million for the year ended December 31, 2024, compared to $1.38 million in 2023, reflecting a focus on innovation[27].

Core Insights - FGI Industries Ltd. reported a total revenue of $35.6 million for Q4 2024, marking a year-over-year increase of 15.0% [2][4] - The company experienced a gross profit of $8.7 million, which is a decrease of 3.2% compared to the previous year, resulting in a gross margin of 24.6%, down 460 basis points [5][6] - The overall industry outlook remains flat, but FGI's strategic investments are driving revenue growth above the market average [2][3] Fourth Quarter 2024 Highlights - Revenue growth was driven by increases in the US (14.7%), Canada (9.9%), and Europe (23.3%) markets [2] - Sanitaryware revenue reached $21.8 million, up from $20.6 million year-over-year, while Bath Furniture revenue surged by 40.2% [4][12] - The Other segment, including Covered Bridge, saw a significant revenue increase of 68.3% due to order momentum and expanded dealer count [2] Full-Year 2024 Highlights - Total revenue for the year was $131.8 million, reflecting a 12.4% increase from 2023 [5] - Gross profit for the year was $35.4 million, a 10.4% increase, with a gross margin of 26.9%, down 50 basis points [5] - The company reported an operating loss of $2.1 million and a net loss attributable to shareholders of $1.2 million for the full year [5] Management Commentary - The CEO emphasized the importance of strategic investments in brands and products, which are yielding positive results [2] - The CFO noted a significant increase in operating expenses by 28.4% year-over-year, primarily due to investments in growth initiatives [3] Financial Resources and Liquidity - As of December 31, 2024, FGI had total liquidity of $15.6 million, including $4.6 million in cash and cash equivalents [10] - The company ended the fourth quarter with total debt of $14.5 million [10] Financial Guidance - For fiscal 2025, FGI anticipates total net revenue between $135 million and $145 million, with adjusted operating income expected to range from $(2.0) million to $(1.5) million [13]