[Financial Highlights](index=1&type=section&id=Financial%20Highlights) FGI Industries experienced a Q4 revenue decline but significant gross profit and margin expansion, with full-year revenue dropping while gross profit slightly increased and margins substantially improved Q4 2023 Financial Highlights (vs Q4 2022) | Metric | Value | Change | | :--- | :--- | :--- | | Total Revenues | $31.0 million | -2.6% | | Gross Profit | $9.0 million | +20.1% | | Gross Margin | 29.2% | +549 bps | | Net Income | $0.5 million | - | | Adjusted Net Income* | $0.5 million | - | | Adjusted Operating Income* | $1.4 million | - | Full-Year 2023 Financial Highlights (vs Full-Year 2022) | Metric | Value | Change | | :--- | :--- | :--- | | Total Revenues | $117.2 million | -27.5% | | Gross Profit | $32.1 million | +1.8% | | Gross Margin | 27.4% | +788 bps | | Net Income | $0.6 million | - | | Adjusted Net Income* | $1.0 million | - | | Adjusted Operating Income* | $2.8 million | - | [Management Commentary and Outlook](index=1&type=section&id=Management%20Commentary%20and%20Outlook) Management reported a challenging 2023 with a strong Q4 finish, achieving record gross margins, and anticipates above-market growth in 2024 driven by new programs - Despite a challenging 2023 marked by uneven demand and inventory de-stocking, the company finished the year with improved order trends in Q4 and expects momentum to continue into 2024[3](index=3&type=chunk) - A strategic focus on higher-margin products led to a record quarterly gross margin of **29.2%** in Q4, an increase of **549 basis points** year-over-year, with full-year gross margin increasing by **788 basis points**[3](index=3&type=chunk)[5](index=5&type=chunk) - The company maintained strong financial discipline, ending the year with **$24.4 million** in total liquidity, which it plans to prioritize for internal investment and potential strategic M&A[5](index=5&type=chunk) Fiscal Year 2024 Guidance | Metric | Guidance Range | | :--- | :--- | | Total Revenue | $115 million to $128 million | | Adjusted Operating Income | $2.8 million to $3.8 million | | Adjusted Net Income | $1.2 million to $2.0 million | [Strategic Update](index=2&type=section&id=Strategic%20Update) FGI is executing its BPC strategy, achieving geographic expansion and dealer network growth in 2023, with 2024 priorities focused on new product launches and digital business expansion - Entered a 5-year licensing agreement for FlushGuard™ Overflow Technology and secured product placements with major commercial distributors[6](index=6&type=chunk) - Expanded geographically with new agreements in India, Eastern Europe, Australia, and the UK[6](index=6&type=chunk) - The premium Covered Bridge kitchen cabinetry brand added **203 new dealers** in 2023, reaching a total of **302 active dealers**[9](index=9&type=chunk) - Key priorities for 2024 under the BPC strategy include launching value-priced bath furniture, expanding products with FlushGuard technology, and introducing the Isla Porter digital custom kitchen cabinetry business[9](index=9&type=chunk) [Financial Performance Analysis](index=3&type=section&id=Financial%20Performance%20Analysis) Q4 revenue declined due to Bath Furniture weakness, offset by Shower Systems growth, while gross profit and margin significantly improved, and the company maintained strong liquidity [Fourth Quarter 2023 Results](index=3&type=section&id=Fourth%20Quarter%202023%20Results) Q4 revenue showed mixed segment performance, with strong Shower Systems growth offsetting Bath Furniture decline, leading to improved gross profit and net income Q4 2023 Revenue by Segment (vs Q4 2022) | Segment | Revenue (Q4 2023) | YoY Change | Commentary | | :--- | :--- | :--- | :--- | | Sanitaryware | $20.6 million | +1.8% | Normalizing order patterns | | Bath Furniture | $2.5 million | -59.0% | Macro headwinds and trade-down | | Shower Systems | $5.7 million | +55.3% | New programs gaining momentum | | Other (Kitchen Cabinetry) | $2.1 million | +23.5% | Continued dealer growth | - Q4 gross profit increased **20.1%** to **$9.0 million**, with gross margin improving **549 basis points** to **29.2%**, driven by a mix shift to higher-margin products and lower logistics costs[8](index=8&type=chunk) - GAAP net income for Q4 2023 was **$0.5 million**, or **$0.05 per diluted share**, compared to $0.7 million, or $0.08 per diluted share, in Q4 2022[11](index=11&type=chunk) [Financial Position and Liquidity](index=4&type=section&id=Financial%20Position%20and%20Liquidity) The company maintained a strong liquidity position at year-end 2023, characterized by substantial cash and available credit facilities Liquidity Position as of December 31, 2023 | Item | Amount | | :--- | :--- | | Cash and cash equivalents | $7.8 million | | Total debt | $7.0 million | | Availability under credit facilities | $16.6 million | | **Total Liquidity** | **$24.4 million** | [Financial Statements](index=7&type=section&id=Financial%20Statements) Consolidated financial statements show increased total assets, a significant full-year revenue decline, reduced net income, and positive cash flow from operations [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) The balance sheet reflects an increase in total assets and shareholders' equity, alongside a rise in total liabilities by year-end 2023 Selected Balance Sheet Items (As of Dec 31) | Account | 2023 ($) | 2022 ($) | | :--- | :--- | :--- | | Total current assets | 46.1 million | 45.9 million | | Total assets | 65.7 million | 60.4 million | | Total current liabilities | 28.0 million | 29.8 million | | Total liabilities | 41.7 million | 37.6 million | | Total shareholders' equity | 24.0 million | 22.7 million | [Consolidated Statements of Income](index=8&type=section&id=Consolidated%20Statements%20of%20Income) The income statement shows a significant full-year revenue decline and reduced net income, despite a slight increase in gross profit Full-Year Income Statement Summary (Years Ended Dec 31) | Account | 2023 ($) | 2022 ($) | | :--- | :--- | :--- | | Revenues | 117,241,604 | 161,718,543 | | Gross Profit | 32,077,282 | 31,509,005 | | Income from Operations | 2,304,443 | 5,091,978 | | Net Income | 579,564 | 3,679,920 | | Diluted EPS | 0.07 | 0.39 | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The cash flow statement indicates positive cash generation from operating activities, offset by investing and financing outflows, resulting in a net cash decrease Cash Flow Summary (Year Ended Dec 31, 2023) | Activity | Net Cash Flow ($) | | :--- | :--- | | Operating Activities | 1,389,699 | | Investing Activities | (942,614) | | Financing Activities | (2,835,876) | | **Net Change in Cash** | **(2,290,187)** | [Non-GAAP Financial Measures](index=5&type=section&id=Non-GAAP%20Financial%20Measures) FGI utilizes non-GAAP measures like Adjusted Operating Income and Net Income to present core performance, showing declines in both for full-year 2023 compared to 2022 - The company uses non-GAAP measures to evaluate its business by excluding non-recurring expenses such as those related to its IPO, legal fees, and business expansion costs[19](index=19&type=chunk) Reconciliation of GAAP to Non-GAAP Measures (Full-Year Ended Dec 31) | Metric | 2023 ($) | 2022 ($) | | :--- | :--- | :--- | | GAAP Income from Operations | 2,304,443 | 5,091,978 | | **Adjusted Income from Operations** | **2,840,401** | **5,873,129** | | GAAP Net Income | 579,564 | 3,679,920 | | **Adjusted Net Income** | **1,014,226** | **4,320,464** |

EAST HANOVER, N.J., March 18, 2024 /PRNewswire/ -- FGI Industries Ltd. (Nasdaq: FGI) ("FGI" or the "Company"), a leading global supplier of kitchen and bath products, today announced that it will issue financial results for the fourth quarter and full-year 2023 after the market close on Wednesday, March 20, 2024.  Management will conduct a conference call on Thursday, March 21, 2024, at 9:00 am Eastern Time to discuss the quarterly results. A webcast of the conference call and accompanying presentation mate ...

FGI Industries, Ltd. (Nasdaq: FGI) launches Flush Guard™ Anti-Overflow Toilets, with a patented drain system designed to prevent overflows. Introducing Flush Guard™ “the cure to Overflowbia,” FGI launched this breakthrough toilet technology at KBIS (the Kitchen & Bath Industry Show) in Las Vegas on February 27, 2024. As the tagline states, now people can “Go in Peace." To learn more visit FlushGuardToilets.com. (Graphic: Business Wire)FGI Industries, Ltd. (Nasdaq: FGI) launches Flush Guard™ Anti-Overflow To ...

PART I- FINANCIAL INFORMATION [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements.) This section presents the unaudited condensed consolidated financial statements for FGI Industries Ltd as of September 30, 2023 [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets and liabilities increased, driven primarily by a significant rise in operating lease right-of-use assets and liabilities Balance Sheet Highlights | Balance Sheet Highlights | Sep 30, 2023 (Unaudited) | Dec 31, 2022 (Audited) | | :--- | :--- | :--- | | **Total Current Assets** | $47,058,126 | $45,887,608 | | **Total Assets** | **$66,946,951** | **$60,366,930** | | **Total Current Liabilities** | $29,840,835 | $29,775,203 | | **Total Liabilities** | **$43,761,551** | **$37,622,520** | | **Total Shareholders' Equity** | **$23,185,400** | **$22,744,410** | [Unaudited Condensed Consolidated Statements of Income and Comprehensive Income](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) Revenues and net income declined significantly for both the third quarter and the first nine months of 2023 compared to the prior year Income Statement (Q3) | Income Statement (Q3) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | **Revenues** | $29,932,612 | $38,544,062 | | **Gross Profit** | $7,829,287 | $8,040,610 | | **Income from Operations** | $481,690 | $1,668,292 | | **Net Income Attributable to FGI** | $409,535 | $1,272,142 | | **Diluted EPS** | $0.04 | $0.13 | Income Statement (Nine Months) | Income Statement (Nine Months) | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | **Revenues** | $86,284,791 | $129,928,316 | | **Gross Profit** | $23,041,847 | $23,986,149 | | **Income from Operations** | $1,059,038 | $4,088,387 | | **Net Income Attributable to FGI** | $194,641 | $2,972,865 | | **Diluted EPS** | $0.02 | $0.32 | [Unaudited Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities improved, but the company's overall cash balance decreased by $4.7 million in the first nine months of 2023 Cash Flow Summary (Nine Months) | Cash Flow Summary (Nine Months) | Ended Sep 30, 2023 | Ended Sep 30, 2022 | | :--- | :--- | :--- | | **Net cash used in operating activities** | $(2,595,047) | $(6,331,971) | | **Net cash used in investing activities** | $(274,971) | $(1,350,974) | | **Net cash (used in) provided by financing activities** | $(1,832,849) | $10,721,169 | | **Net Changes in Cash** | $(4,697,481) | $2,097,123 | | **Cash, End of Period** | $5,369,947 | $5,981,019 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, financial components, and significant risks such as customer and vendor concentration - The company is a global supplier of kitchen and bath products for the repair and remodeling (R&R) market[25](index=25&type=chunk) - The company faces **significant customer and vendor concentration risk**, with two customers accounting for a combined 34% of revenues and one vendor accounting for 54.5% of purchases[156](index=156&type=chunk)[159](index=159&type=chunk) - A subsidiary holds an **$18 million line of credit** with East West Bank, with an outstanding balance of $8.0 million as of September 30, 2023[100](index=100&type=chunk)[101](index=101&type=chunk)[103](index=103&type=chunk) - The company completed its IPO in January 2022, raising **net proceeds of approximately $12.4 million**[113](index=113&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management analyzes a significant revenue decline due to weaker demand, offset by improved gross margins from favorable product mix and lower costs [Results of Operations](index=36&type=section&id=Results%20of%20Operations) Q3 revenue fell 22.3% YoY to $29.9 million, while gross margin improved significantly due to pricing, product mix, and lower freight costs Revenue by Product (Q3 2023 vs Q3 2022) | Revenue by Product (Q3 2023 vs Q3 2022) | 2023 | 2022 | % Change | | :--- | :--- | :--- | :--- | | Sanitaryware | $20.7M | $25.5M | (18.6%) | | Bath Furniture | $2.5M | $5.6M | (54.9%) | | Shower System | $4.9M | $5.4M | (9.4%) | | **Total** | **$29.9M** | **$38.5M** | **(22.3%)** | Revenue by Geography (Nine Months 2023 vs 2022) | Revenue by Geography (Nine Months 2023 vs 2022) | 2023 | 2022 | % Change | | :--- | :--- | :--- | :--- | | United States | $54.9M | $80.9M | (32.1%) | | Canada | $23.1M | $35.4M | (34.7%) | | Europe | $8.2M | $13.3M | (38.5%) | | **Total** | **$86.3M** | **$129.9M** | **(33.6%)** | - **Gross profit margin improved to 26.2%** for Q3 2023, up 530 basis points from 20.9% in Q3 2022, driven by a shift to higher-margin products and lower logistics costs[185](index=185&type=chunk) - Operating expenses increased in Q3 2023, with **Selling and Distribution up 7.1%** and **General and Administrative up 26.1%** due to incremental public company and legal costs[188](index=188&type=chunk)[189](index=189&type=chunk) [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains liquidity through cash from operations and credit facilities, with $5.4 million in cash as of September 30, 2023 - As of September 30, 2023, the company had **cash of $5.4 million** and **working capital of $17.2 million**[197](index=197&type=chunk) - The outstanding balance on the East West Bank credit facility was **$8.0 million** as of September 30, 2023, with no borrowings under the HSBC Canada facility[203](index=203&type=chunk)[207](index=207&type=chunk) [Non-GAAP Measures](index=43&type=section&id=Non-GAAP%20Measures) The company uses non-GAAP measures like Adjusted Net Income to exclude non-recurring expenses for performance evaluation Reconciliation (Q3 2023) | Reconciliation (Q3 2023) | GAAP | Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | **Income from operations** | $481,690 | $121,489 | $603,179 | | **Net income** | $343,492 | $98,528 | $442,020 | [Quantitative and Qualitative Disclosures About Market Risk](index=44&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) Disclosure is not provided as it is not required for smaller reporting companies - Disclosure is not required for smaller reporting companies[224](index=224&type=chunk) [Controls and Procedures](index=44&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management concluded disclosure controls were not effective due to material weaknesses in internal control over financial reporting - Management concluded that **disclosure controls and procedures were not effective** as of September 30, 2023[228](index=228&type=chunk) - Identified material weaknesses include issues in the **IT security environment**, insufficient documentation of financial processes, and **inadequate segregation of duties**[232](index=232&type=chunk) - Remediation initiatives include hiring additional accounting personnel, establishing an internal audit function, and forming a cybersecurity committee[231](index=231&type=chunk) PART II- OTHER INFORMATION [Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings.) The company is involved in ongoing litigation against Tangshan Ayers to protect an exclusivity agreement with a key manufacturer - The company is involved in litigation with Ayers Bath (USA) Corporation to protect an exclusivity agreement with manufacturer Huida, with a hearing scheduled for January 18, 2024[236](index=236&type=chunk)[237](index=237&type=chunk) [Risk Factors](index=46&type=section&id=Item%201A.%20Risk%20Factors.) No material changes to the risk factors disclosed in the 2022 Annual Report on Form 10-K have been reported - **No material changes** have occurred to the risk factors included in the 2022 Form 10-K[238](index=238&type=chunk) [Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=47&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities.) The company details its January 2022 IPO, which raised net proceeds of approximately $12.4 million with no change in intended use - The company's IPO on January 27, 2022, generated **net proceeds of approximately $12.4 million**, and the planned use of these proceeds has not materially changed[239](index=239&type=chunk)[241](index=241&type=chunk)

Washington, D.C. 20549 FORM 10-Q Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION (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, 2023 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 ...

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: March 31, 2023 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 ( ...

FGI Industries Ltd. (NASDAQ:FGI) Q1 2023 Earnings Conference Call May 11, 2023 8:00 AM ET Company Participants Paul Bartolai - Managing Director, Vallum Capital Advisors David Bruce - President and Chief Executive Officer Perry Lin - Chief Financial Officer Conference Call Participants Greg Gibas - Northland Securities, Inc. Operator Good morning and welcome to the FGI Industries, Inc., First Quarter 2023 Earnings Call. All participants will be in listen only-mode. [Operator Instructions] After today’s pres ...

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, 2022 ☐ 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 ...

Financial Data and Key Metrics Changes - Revenue for Q4 2022 totaled $31.8 million, a decrease of 39% compared to the prior year, primarily due to ongoing inventory destocking and softening customer demand [29][12] - Gross margin improved to 23.7% in Q4 2022, up from 14.5% in the same period last year and 20.9% in Q3 2022, driven by pricing benefits, favorable mix, and lower freight costs [14][38] - Adjusted operating income for Q4 was $1.3 million, up 89% from the prior year, with an adjusted operating margin of 3.2%, compared to 1.4% in the same period last year [39] Business Line Data and Key Metrics Changes - Sanitaryware revenue was $20.2 million in Q4 2022, down from $34.2 million in the prior year, largely due to channel inventory reduction [35] - Bath Furniture revenue decreased to $6.1 million from $12.6 million year-over-year, continuing to face pressure from destocking [36] - Other revenue remained flat at $5.4 million, with expectations for growth in the shower system business in 2023 [37] Market Data and Key Metrics Changes - The new housing market is under pressure, with new home sales down over 20% recently, while the repair and remodel market has remained stable [17][18] - The overall R&R industry volume is expected to decline in the mid- to high single digits during 2023 due to elevated mortgage rates and inflation pressures [20][44] Company Strategy and Development Direction - The company is focused on three key initiatives: driving organic growth through the BPC strategy, operational improvements, and efficient capital deployment [21] - Significant progress was made in expanding the custom kitchen cabinetry business and the shower systems business, with continued investments in these areas [23][24] - The company plans to maintain a disciplined approach to capital allocation, focusing on organic growth initiatives while evaluating potential acquisitions [28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term outlook for the industry despite current headwinds, with expectations for a return to organic growth once inventory levels normalize [11][13] - The company anticipates continued challenges in the early part of 2023 due to inventory destocking but is encouraged by improving order cadence [12][50] - Management highlighted that nearly 40% of homes do not have a mortgage, which may mitigate the impact of rising interest rates on consumer spending [19] Other Important Information - As of December 31, 2022, the company had $10.1 million in cash and cash equivalents, total debt of $9.8 million, and total liquidity of $23.8 million [41][42] - The company expects capital spending needs to remain around 1% of revenue, indicating a solid liquidity position to fund growth initiatives [42] Q&A Session Summary Question: Outlook on top line and destocking impact - Management confirmed that the mid- to high single-digit market declines do not include the impacts of destocking, which is expected to be an additional challenge in the first half of 2023 [49][51] Question: Revenue benefit from kitchen investment - Management indicated that no revenue from the new kitchen investment is included in the 2023 guidance, as it is primarily an investment year [52] Question: Pricing and inflation impact - Management noted that while inflationary pressures were significant last year, they do not anticipate additional inflation and are seeing positive sentiment towards private label brands [53][54] Question: Cadence of destocking and recovery - Management expects destocking to normalize in the second half of the year, with retail showing signs of recovery earlier than the pro market [56][58] Question: Gross margin drivers - Management highlighted that growth in higher-margin categories like shower systems and kitchen products will continue to drive gross margin expansion [62] Question: Supply chain disruptions - Management stated that supply chain disruptions have moderated and are now close to pre-pandemic levels, with improved ordering and delivery cadence [64][69]

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: September 30, 2022 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 98-16032 ...