Group 1 - FGI Industries Ltd. is part of the Retail-Wholesale group, which ranks 12 out of 16 in the Zacks Sector Rank [2] - FGI Industries Ltd. has a Zacks Rank of 1 (Strong Buy), indicating a favorable outlook for the stock [3] - The Zacks Consensus Estimate for FGI's full-year earnings has increased by 100% in the past quarter, reflecting improved analyst sentiment [4] Group 2 - FGI Industries Ltd. has returned 5.2% year-to-date, outperforming the Retail-Wholesale sector average return of 4.1% [4] - FGI belongs to the Retail - Home Furnishings industry, which is ranked 90 in the Zacks Industry Rank, while this industry has seen an average loss of 8.6% this year [6] - Tapestry, another stock in the Retail-Wholesale sector, has a year-to-date return of 41.2% and a Zacks Rank of 2 (Buy) [5][6] Group 3 - Both FGI Industries Ltd. and Tapestry are expected to continue their strong performance, making them noteworthy for investors in the Retail-Wholesale sector [7]

Financial Performance - First quarter revenue increased by 80% year-over-year, reaching $332 million, driven by growth in Bath Furniture and Covered Bridge[29, 37, 38] - Gross profit for the first quarter of 2025 was $89 million, a 58% increase compared to the previous year[40] - Adjusted Operating Income was $(13) million, as the company prioritized strategic initiatives[43] - Adjusted Net Income for the first quarter of 2025 was $(11) million, compared to $(02) million in the same period last year[46] - The company ended the quarter with $119 million of net debt and $143 million in total liquidity[30] Segment Performance - Sanitaryware revenue decreased by 17% year-over-year[47] - Bath Furniture revenue increased by 327% to $41 million[49] - Other revenue, primarily from custom kitchen cabinetry, increased by 1357% to $33 million[53] Guidance - The company projects net revenue between $135 million and $145 million, and adjusted net income between $(19) million and $10 million for 2025[58] Strategy and Outlook - The company is focused on its Brands, Products, Channels (BPC) growth strategy[7, 21, 61]

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].