FGI Industries .(US:FGI)2025-08-13 20:17Revenue Performance - Revenue increased by $1.6 million, or 5.5%, to $31.0 million for the three months ended June 30, 2025, compared to $29.4 million for the same period in 2024[145]. - Total revenue for the three months ended June 30, 2025, was $30.998 million, a 5.5% increase from $29.371 million for the same period in 2024[150]. - Revenue from sanitaryware sales accounted for 58.3% of total revenue for the three months ended June 30, 2025, with a 4.3% increase to $18.1 million[146]. - Bath furniture sales increased by 2.7% to $4.1 million for the three months ended June 30, 2025, accounting for 13.3% of total revenue[147]. - Revenue from sales of Shower Systems decreased by 11.2% to $5.2 million for the three months ended June 30, 2025, compared to $5.9 million for the same period in 2024[148]. - Revenue from sales of other products increased by 67.7% to $3.5 million for the three months ended June 30, 2025, compared to $2.1 million for the same period in 2024[149]. - Revenue for the six months ended June 30, 2025, was $64,210,808, compared to $60,124,468 for the same period in 2024, indicating a growth in revenue[187]. Profitability and Margins - Gross margins improved to 26.9% in 2024 and 27.4% in 2023, up from 19.5% in 2022, reflecting a focus on higher-margin products[139]. - The company expects to maintain gross margins in line with 2024 and 2023 levels[139]. - Gross profit was $8.7 million for the three months ended June 30, 2025, a decrease of 2.9% compared to the same period in 2024[153]. - Adjusted Operating Margins for the six months ended June 30, 2025, were -3.3%, compared to -0.9% in the prior-year period, reflecting a decline in operational efficiency[187]. Financial Position and Liquidity - Total liquidity as of June 30, 2025, was $16.4 million, providing financial flexibility for organic growth strategies[139]. - As of June 30, 2025, the company had approximately $2.5 million in cash and cash equivalents and $12.6 million outstanding under its credit facilities[161]. - The company was not in compliance with certain financial covenants related to its debt coverage ratio as of June 30, 2025[162]. - The company expects to improve liquidity and reduce its cost structure through various actions, including lease terminations and cost control initiatives[163]. Expenses and Losses - Net loss for the three months ended June 30, 2025, was $1.36 million, a significant increase from a net loss of $23,415 in the same period of 2024[143]. - Net loss was $1.4 million for the three months ended June 30, 2025, compared to a net loss of $23,000 for the same period in 2024[160]. - The company reported a net loss of $2,234,256 for the six months ended June 30, 2025, compared to a net loss of $174,776 in the same period of 2024, indicating a significant increase in losses[187]. - Selling and distribution expenses decreased slightly by 0.8% to $6.2 million for the three months ended June 30, 2025[143]. - Selling and distribution expenses decreased by 0.8% to $6.2 million for the three months ended June 30, 2025, while increasing by 7.9% to $13.4 million for the six months ended June 30, 2025[154]. Cash Flow and Investments - Net cash provided by operating activities improved to $195,667 for the six months ended June 30, 2025, compared to a net cash used of $7,127,778 in the prior-year period, driven by a $3.9 million decrease in accounts receivable and a $1.3 million reduction in inventory[176]. - Net cash used in investing activities was $631,150 for the six months ended June 30, 2025, a decrease from $1,859,419 in the same period of 2024, reflecting a more conservative pace of capital investments[177]. - Capital expenditures amounted to $631,150 for the six months ended June 30, 2025, down from $1,859,419 in the same period of 2024, with no significant capital expenditures expected in the immediate future[179]. - Net cash used in financing activities totaled $1,943,867 for the six months ended June 30, 2025, compared to $2,733,024 provided in the prior-year period, indicating net repayments on revolving credit facilities[178]. Strategic Initiatives - The company has entered into a 5-year licensing agreement for an industry-leading overflow toilet technology, marketed as FLUSH GUARD Overflow Technology[139]. - The company plans to continue investing in research and development to drive product innovation in 2025[139]. - New product lines, including anti-overflow toilets and custom kitchen cabinetry, have begun generating increased revenue[172]. Accounts Payable and Tax Benefits - The company experienced a $2.1 million increase in accounts payable, which supported operating cash flow during the period[176]. - A higher deferred tax benefit of $1.0 million reduced the non-cash tax burden during the period, contributing to the improvement in operating cash flow[176].