FGI Industries .(US:FGI)2024-05-10 20:31Revenue Performance - Revenues increased by $3.6 million, or 13.2%, to $30.8 million for Q1 2024 compared to $27.2 million in Q1 2023, driven primarily by increases in Sanitaryware and Shower System sales [165]. - Sanitaryware sales accounted for 66.7% of total revenues in Q1 2024, increasing by 33.6% to $20.5 million from $15.4 million in Q1 2023 [166]. - Shower System revenues increased by 14.5% to $5.8 million in Q1 2024, compared to $5.0 million in Q1 2023, supported by new product programs [169]. - Revenues from the U.S. market increased by 11.8% to $19.6 million in Q1 2024, accounting for 63.7% of total revenues [171]. - Canadian revenues grew by 20.9% to $7.9 million in Q1 2024, driven by recovery in the pro channel for Sanitaryware [172]. - Revenue for the three months ended March 31, 2024, was $30,753,519, an increase from $27,162,266 in the same period of 2023, representing an increase of approximately 9.4% [211]. Profitability and Margins - Gross margin improved to 27.4% in Q1 2024, up from 26.5% in Q1 2023, benefiting from a shift towards higher-margin products and lower logistics costs [174]. - The company expects gross margins to remain consistent with those generated during fiscal year 2023, with operating margin improvement driven by volume leverage [157]. - Adjusted (loss) income from operations for the three months ended March 31, 2024, was $(199,445), compared to an adjusted income of $168,564 in the same period of 2023 [211]. - Adjusted operating margins for the three months ended March 31, 2024, were (0.6)%, down from 0.6% in the same period of 2023, indicating a decline in operational efficiency [211]. Expenses - Selling and distribution expenses rose by 30.1% to $6.1 million in Q1 2024, reflecting increased personnel and marketing costs due to inflation [177]. - General and administrative expenses increased by $0.1 million, or 6.6%, to $2.3 million for the three months ended March 31, 2024, from $2.1 million for the same period in 2023 [178]. - Business expansion expenses for the three months ended March 31, 2024, were $61,770, slightly down from $61,772 in the same period of 2023 [211]. Cash Flow and Liquidity - Total liquidity as of March 31, 2024, was $17.8 million, providing sufficient financial flexibility for organic growth strategies [157]. - Cash and working capital as of March 31, 2024, were $3.3 million and $16.8 million, respectively, with an aggregate of approximately $4.5 million drawn on credit facilities during the same period [183]. - Net cash used in operating activities was approximately $8.3 million for the three months ended March 31, 2024, primarily due to an increase in prepayments and inventories [198]. - Net cash used in investing activities was $0.6 million for the three months ended March 31, 2024, attributed to purchases of property and equipment [200]. - Net cash provided by financing activities was approximately $4.5 million for the three months ended March 31, 2024, representing net proceeds from bank loans [201]. Net Loss and Financial Position - Net loss increased by $0.2 million, or 77.3%, to $0.5 million for the three months ended March 31, 2024, compared to a net loss of $0.3 million for the same period in 2023 [182]. - Adjusted net loss for the three months ended March 31, 2024, was $439,331, up from an adjusted net loss of $164,296 in the same period of 2023, reflecting a worsening financial position [211]. - The company recorded an income tax expense of approximately $22,000 for the three months ended March 31, 2024, down from $33,000 for the same period in 2023 [181]. - Total outstanding debt as of March 31, 2024, included approximately $9.9 million under the Credit Agreement and $1.5 million under the CTBC Credit Line [189][195]. - The company may require additional cash resources in the future for investments, acquisitions, or strategic cooperation, depending on business conditions [184].