FGI INDUSTRIES ANNOUNCES FIRST QUARTER 2025 RESULTS

PR Newswire

EAST HANOVER, N.J., May 13, 2025

EAST HANOVER, N.J., May 13, 2025 /PRNewswire/ -- FGI Industries Ltd. (Nasdaq: FGI) ("FGI" or the "Company"), a leading global supplier of kitchen and bath products, today announced results for the first quarter 2025.

FIRST QUARTER 2025 HIGHLIGHTS

(As compared to the first quarter of 2024)

   -- Total revenue of $33.2 million, +8.0% y/y 
 
   -- Gross profit of $8.9 million, +5.8% y/y 
 
   -- Gross margin of 26.8%, -60 bps y/y 
 
   -- Operating loss of $1.3 million and net loss attributable to shareholders 
      of $0.6 million 
 
   -- Adjusted operating loss of $1.3 million 
 
   -- Adjusted net loss of $1.1 million 

MANAGEMENT COMMENTARY

Dave Bruce, President and CEO of FGI, stated, "FGI reported total revenue of $33.2 million in the quarter, representing a year-over-year increase of 8.0%. Gross profit was $8.9 million, an increase of 5.8% compared to the prior year. The gross margin was 26.8%, a decline of 60 basis points compared to the first quarter of 2024 due, in part, to China related tariffs and higher freight costs. The industry outlook is uncertain due to tariffs but FGI's strategic investments in our brands, products and channels strategy is bearing fruit and driving revenue growth well above the overall market. FGI's first quarter revenue increased compared to the first quarter 2024 due to growth in our Bath Furniture and Covered Bridge cabinetry businesses. Revenue grew 8.0% in the U.S., 3.8% in Canada, and declined 2.8% in Europe market, respectively. Sanitaryware and Shower Systems revenue declined 1.7% and 1.3% year-over-year, respectively, in the first quarter. Bath Furniture and Covered Bridge revenue increased 32.7% and 135.7%, respectively, year-over-year. Covered Bridge continues to show strong growth due to continued order momentum, expanded geographies and higher dealer count. Isla Porter, our digital custom kitchen joint venture, continues to establish relationships with the premium design community with on-trend products via an AI-backed digital sales platform." Bruce continued, "We are excited about our new product introductions and continue to invest in our brands and our future growth initiatives in our core businesses.

"The increasing tariff environment in 2025 remains fluid. FGI is working with our suppliers and customers to support one another as we navigate these new dynamics together. We experienced a similar tariff process several years ago, so this is not new to us. We are confident that we can work through what comes given the close relationships we have cultivated over the years with our vendors and customers."

Perry Lin, Chief Financial Officer of FGI, commented, "Even as total revenue increased 8.0% year-over-year, operating expenses increased 16.6% year-over-year to $10.2 million. The increase in operating expenses was due to investing in initiatives related to our BPC growth strategy, Isla Porter, one-time costs related to optimizing our warehouse operations and investing in our India business. FGI ended the first quarter with total available liquidity of $14.3 million. We believe the best use of our capital is for internal investment and this will remain our priority in the near term."

FIRST QUARTER 2025 RESULTS

Revenue totaled $33.2 million during the first quarter of 2025, an increase of 8.0% compared to the prior-year period despite the on-going and fluid tariff environment.

   -- Sanitaryware revenue was $20.2 million during the first quarter of 2025, 
      an decrease from $20.5 million in the prior-year period. 
 
   -- Bath Furniture revenue was $4.1 million during the first quarter of 2025, 
      an increase from revenue of $3.1 million in the prior-year period. Our 
      shift to market-aligned program pricing and design outpaced our sales 
      expectations driven by new business wins. 
 
   -- Shower Systems revenue was $5.7 million during the first quarter of 2025, 
      a decrease from $5.8 million last year. 
 
   -- Other revenue, primarily from Kitchen Cabinets, was $3.3 million during 
      the first quarter, an increase from $1.4 million in the prior year, 
      driven by continued order momentum, expanded geographies and higher 
      dealer count. 

Gross profit was $8.9 million during the first quarter of 2025, an increase of 5.8% compared to the prior-year period. Gross profit margin decreased to 26.8% during the first quarter of 2025, down 60 basis points from the prior-year period due to the implementation of tariffs and higher freight costs.

Operating loss was $1.3 million during the first quarter of 2025, down from operating income of $0.3 million in the prior-year period. Operating loss during the first quarter of 2025 included non-recurring expenses of $0.1 million for business expansion expense and accruals for non-recurring IPO-related share-based compensation. Excluding these items, adjusted operating loss was $1.3 million during the first quarter. The decline in operating income and adjusted operating income from the prior year was a result of an increase in personnel costs, marketing and promotion expenses, warehouse expenses, and operating expenses tied to growth initiatives, as the Company continues to invest in its BPC growth strategy. As a result, operating margin and adjusted operating margin were (3.9%) and (3.8%) during the first quarter, respectively, down from (1.0%) and (0.6%) in the same period last year.

The Company reported GAAP net loss attributable to shareholders of $0.6 million, or net loss of $0.07 per diluted share during the first quarter of 2025, versus net income of $0.4 million, or $0.04 per diluted share, in the same period last year. Net loss for the first quarter of 2025 included after-tax expenses of $0.1 million related to business expansion expense and accruals for non-recurring IPO- related stock-based compensation. Net loss for the first quarter of 2024 included after-tax expense of $0.1 million related to business expansion expense and non-recurring IPO-related compensation. Excluding these items, adjusted net loss for the first quarter of 2025 was $1.1 million, or $0.11 per diluted share, versus adjusted net income of $0.2 million, or $0.02 per diluted share, for the same period last year.

Going forward, FGI will hold quarterly earnings calls only for the second and fourth quarters. The Company will continue to release results of operations via press releases and SEC filings on a quarterly basis as before. Inquiries may continue to be submitted to investorrelations@fgi-industries.com or by phone at 973-515-7190.

FINANCIAL RESOURCES AND LIQUIDITY

As of March 31, 2025, the Company had $1.2 million of cash and cash equivalents, total debt of $13.2 million and $13.0 million of availability under its credit facilities net of letters of credit. Total liquidity was $14.3 million at March 31, 2025.

FINANCIAL GUIDANCE

The Company provides its fiscal 2025 guidance as follows:

   -- Total net revenue of $135-145 million 
 
   -- Total adjusted operating income of $(2.0)-1.5 million 
 
   -- Total adjusted net income of $(1.9)-1.0 million 

Note that total adjusted operating income excludes certain non-recurring items and total adjusted net income excludes certain non-recurring extraordinary items and includes an adjustment for minority interest.

ABOUT FGI INDUSTRIES

FGI Industries Ltd. (Nasdaq: FGI) is a leading global supplier of kitchen and bath products. For over 30 years, we have built an industry-wide reputation for product innovation, quality, and excellent customer service. We are currently focused on the following product categories: sanitaryware (primarily toilets, sinks, pedestals, and toilet seats), bath furniture (vanities, mirrors and cabinets), shower systems, customer kitchen cabinetry and other accessory items. These products are sold primarily for repair and remodel activity and, to a lesser extent, new home or commercial construction. We sell our products through numerous partners, including mass retail centers, wholesale and commercial distributors, online retailers and specialty stores.

Non-GAAP Measures

In addition to the measures presented in our consolidated financial statements, we use the following non-GAAP measures to evaluate our business, measure our performance, identify trends affecting our business and assist us in making strategic decisions. Our non-GAAP measures are: Adjusted Operating Income, Adjusted Operating Margins and Adjusted Net Income. These non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles in the United States ("GAAP"). They are supplemental financial measures of our performance only, and should not be considered substitutes for net income, income from operations or any other measure derived in accordance with GAAP and may not be comparable to similarly titled measures reported by other entities. We define Adjusted Operating Income as GAAP income from operations excluding the impact of certain non-recurring income and expenses, including non-recurring compensation expenses related to our IPO, unusual litigation and business expansion expense. We define Adjusted Net Income as GAAP income before income taxes excluding the impact of certain non-recurring income and expenses, such as non-recurring compensation expenses related to our IPO, unusual litigation and business expansion expense, as well as income taxes at historical average effective rate and net income attributable to non-controlling shareholders. We define Adjusted Operating Margins as Adjusted Operating Income divided by revenue.

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