FGI Industries .(FGI) - 2025 Q1 - Quarterly Report

Revenue Performance - Revenue for the three months ended March 31, 2025, increased by $2.5 million, or 8.0$33.2 million compared to $30.8 million for the same period in 2024[160] - Revenue from sales of sanitaryware decreased by 1.7$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$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]