## FGI Industries Reports Strong Third Quarter 2024 Revenue Growth, Driven by Strategic Investments
EAST HANOVER, N.J., Nov. 11, 2024
– FGI Industries Ltd. (FGI), a leading global supplier of kitchen and bath products, today announced impressive results for the third quarter of 2024. The company experienced a remarkable 20.6% year-over-year surge in total revenue, reaching $36.1 million. This robust performance underscores FGI’s commitment to strategic investments in brands, products, and channel strategies, effectively positioning the company ahead of the overall market’s relatively flat outlook.Key Highlights of the Third Quarter 2024:
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Total revenue of $36.1 million, a 20.6% increase year-over-year.
This growth was driven by strong performance across all business segments and geographies, including the US, Canada, and Europe.*
Gross profit of $9.3 million, representing an 18.9% year-over-year increase.
This reflects growth in FGI’s higher-margin products.*
Gross margin of 25.8%, a decline of 40 basis points compared to the third quarter of 2023.
This decline was attributed to a higher mix of Sanitaryware and Bath Furniture, coupled with increased freight costs in these segments.*
Operating loss of ($0.1) million and net loss attributable to shareholders of ($0.6) million.
This loss reflects the company’s investment in growth initiatives, including expansion in the kitchen cabinet business and distribution in Canada.*
Adjusted operating income of $0.1 million and adjusted net loss attributable to shareholders of ($0.1) million.
This adjusted figure excludes certain non-recurring expenses, providing a clearer picture of the company’s underlying operational performance.Management Commentary:
Dave Bruce, President and CEO of FGI, expressed his enthusiasm for the company’s achievements, stating, “FGI’s third quarter revenue increased significantly compared to the third quarter 2023 due to growth across all our businesses and geographies. Revenue grew 21%, 9% and 39% in the quarter for the US, Canada and Europe markets, respectively. Sanitaryware and Bath Furniture reversed year-over-year declines in the second quarter and grew 3% and 64%, respectively, in the third quarter. Shower Systems revenue increased 45% year-over-year as demand trends remained steady and sales of both existing and new products drove growth. Our Covered Bridge custom cabinet segment continues to show strong growth increasing 93% over the prior year period.” He added, “We are excited about our new product introductions and continue to invest in our brands and our future growth initiatives in our core businesses.”
Perry Lin, Chief Financial Officer of FGI, elaborated on the company’s financial strategy, stating, “Even as total revenue increased 20.6% year-over-year, operating expenses increased 27.6% year-over-year to $9.4 million. The increase in operating expenses was due primarily to investing for future growth in our kitchen cabinet business, which includes Covered Bridge and Isla Porter, and investing in distribution for our Canada business. FGI ended the third quarter with total available liquidity of $16.3 million. We believe the best use of our capital is for internal investment and this will remain our priority in the near term.”
Segment Performance:
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Sanitaryware
revenue reached $21.5 million in the third quarter, up from $20.7 million in the previous year.*
Bath Furniture
revenue significantly increased to $4.2 million, compared to $2.5 million in the same period last year. This growth is attributed to the company’s successful shift towards market-aligned program pricing and design.*
Shower Systems
revenue reached $7.1 million in the third quarter, demonstrating a 45% year-over-year increase. The sustained positive demand trends were further bolstered by new customer programs.*
Other Revenue
primarily from Kitchen Cabinets, reached $3.3 million, a substantial increase from $1.7 million in the prior year. This growth is driven by strong dealer and customer expansion across the United States.Financial Resources and Liquidity:
As of September 30, 2024, FGI held $3.0 million in cash and cash equivalents, total debt of $12.5 million, and $13.3 million in credit facility availability (net of letters of credit). Total liquidity amounted to $16.3 million.
Financial Guidance:
The company revised its fiscal 2024 guidance as follows:
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Total revenue:
$127 – $131 million (previously estimated at $115 – $128 million)*
Adjusted operating income:
($1.0) to $0.0 million (previously estimated at $2.8 to $3.8 million)*
Adjusted net income:
($1.0) to $0.0 million (previously estimated at $1.2 to $2.0 million)Conference Call:
On Tuesday, November 12 at 9:00 am Eastern Time, FGI will host a conference call to discuss the quarterly results. Interested parties can access the webcast and accompanying presentation materials in the Investor Relations section of the company’s corporate website at https://investor.fgi-industries.com.
About FGI Industries:
FGI Industries Ltd. (FGI) is a leading global supplier of kitchen and bath products. With a legacy of over 30 years, FGI has established a reputation for product innovation, quality, and exceptional customer service. The company specializes in sanitaryware, bath furniture, shower systems, customer kitchen cabinetry, and other related accessories. These products are primarily sold for repair and remodel projects, and to a lesser extent, new home or commercial construction. FGI distributes its products through a network of partners, including mass retail centers, wholesale and commercial distributors, online retailers, and specialty stores.
Non-GAAP Measures:
FGI utilizes non-GAAP measures, such as Adjusted Operating Income, Adjusted Operating Margins, and Adjusted Net Income, in addition to the measures presented in its consolidated financial statements. These non-GAAP measures are supplemental financial measures and should not be considered substitutes for GAAP measures. FGI believes these non-GAAP measures provide investors with a more comprehensive understanding of the company’s performance and assist in comparing its performance over time.
Forward-Looking Statements:
This release contains forward-looking statements. These statements are based on current information and are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Investors should refer to FGI’s periodic filings with the Securities & Exchange Commission for a full description of these risks and uncertainties.
FGI Industries Ltd. Contact:
Investor Relations
(888) 734-4744
investor.relations@fgi-industries.com
