FALSE000186494300018649432024-11-112024-11-110001864943us-gaap:CommonStockMember2024-11-112024-11-110001864943us-gaap:WarrantMember2024-11-112024-11-11

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________________________
FORM 8-K
____________________________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): November 11, 2024
____________________________________________________
FGI Industries Ltd.
(Exact name of registrant as specified in its charter)
____________________________________________________
Cayman Islands001-4120798-1603252
(State or other jurisdiction of
incorporation)
(Commission
File Number)
(I.R.S. Employer
Identification No.)
906 Murray Road
East Hanover, NJ 07936
(Address of principal executive offices) (Zip Code)
(973) 428-0400
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
____________________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)
Name of each exchange
on which registered
Ordinary Shares, $0.0001 par value per shareFGIThe Nasdaq Stock Market LLC
Warrants to purchase Ordinary SharesFGIWWThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company x
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o


Item 2.02.   Results of Operations and Financial Condition.
On November 11, 2024, FGI Industries Ltd. (the “Company”) issued a press release reporting financial results for the third quarter ended September 30, 2024. A copy of the press release is furnished herewith under the Securities Exchange Act of 1934, as amended, as Exhibit 99.1 to this Form 8-K and is incorporated by reference into this Item 2.02 as if fully set forth herein.
Item 9.01.   Financial Statements and Exhibits.
(d)Exhibits.
Exhibit
NumberDescription
99.1
104Cover Page Interactive Data File formatted in Inline XBRL.


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
FGI Industries Ltd.
 
 
Date: November 12, 2024By:/s/ John Chen
Name: John Chen
Its: Executive Chairman


EXHIBIT 99.1
fgi-20240807xex99d1001.jpg

FGI INDUSTRIES ANNOUNCES THIRD QUARTER 2024 RESULTS

EAST HANOVER, N.J., November 11, 2024 – FGI Industries Ltd. (Nasdaq: FGI) (“FGI” or the “Company”), a leading global supplier of kitchen and bath products, today announced results for the third quarter 2024.

THIRD QUARTER 2024 HIGHLIGHTS
(As compared to the third quarter of 2023)

▪Total revenue of $36.1 million, +20.6% y/y
▪Gross profit of $9.3 million, +18.9% y/y
▪Gross margin of 25.8%, -40 bps y/y
▪Operating loss of ($0.1) million and net loss attributable to shareholders of ($0.6) million
▪Adjusted operating income of $0.1 million
▪Adjusted net loss attributable to shareholders of ($0.1) million

MANAGEMENT COMMENTARY

Dave Bruce, President and CEO of FGI, stated, “FGI reported total revenue of $36.1 million in the quarter, representing a year-over-year increase of 20.6%. Gross profit was a record $9.3 million, reflecting growth of 18.9% compared to the prior year. The gross margin was 25.8%, a decline of 40 basis points compared to the third quarter of 2023 due, in part, to a higher mix of Sanitaryware and Bath Furniture and higher freight costs in the Bath Furniture and Covered Bridge segments. The industry outlook remains relatively flat overall with our customers forecasting minimal growth in 2024 but FGI’s strategic investments in our brands, products and channels strategy is bearing fruit driving revenue growth well above the overall market. 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.” 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.”

Perry Lin, Chief Financial Officer of FGI, commented, “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.”

THIRD QUARTER 2024 RESULTS

Revenue totaled $36.1 million during the third quarter of 2024, an increase of 20.6% compared to the prior-year period due to growth across all our businesses and geographies.

•Sanitaryware revenue was $21.5 million during the third quarter of 2024, up from $20.7 million in the prior-year period.

•Bath Furniture revenue was $4.2 million during the third quarter of 2024, an increase from revenue of $2.5 million in the prior-year period. Our shift to market-aligned program pricing and design outpaced our sales expectations.



•Shower Systems revenue was $7.1 million during the third quarter of 2024, up from $4.9 million last year. Demand trends remain positive, further supported by our new customer programs.

•Other revenue, primarily from Kitchen Cabinets, was $3.3 million during the third quarter, up from $1.7 million in the prior year, driven by continued strong dealer and customer expansion across the US.

Gross profit was $9.3 million during the third quarter of 2024, an increase of 18.9% compared to last year, driven by growth in our higher margin products. Gross profit margin decreased to 25.8% during the third quarter of 2024, down 40 basis points from the prior-year period.

Operating loss was ($0.1) million during the third quarter of 2024, down from operating income of $0.5 million in the prior-year period. Operating loss during the third quarter of 2024 included non-recurring expenses of $0.1 million for business expansion expense and accruals for non-recurring IPO- related stock-based compensation. Excluding these items, adjusted operating income was 0.1 million during the third 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 (0.2%) and 0.2% during the third quarter, respectively, down from 1.6% and 2.0% in the same period last year.

The Company reported GAAP net loss attributable to shareholders of ($0.6) million, or ($0.06) per diluted share during the third quarter of 2024, versus net income of $0.4 million, or $0.04 per diluted share, in the same period last year. Net loss for the third quarter of 2024 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 third quarter of 2023 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 attributable to shareholders for the third quarter of 2024 was ($0.1) million, or ($0.01) per diluted share, versus adjusted net income attributable to shareholders of $0.6 million, or $0.06 per diluted share, for the same period last year.

FINANCIAL RESOURCES AND LIQUIDITY

As of September 30, 2024, the Company had $3.0 million of cash and cash equivalents, total debt of $12.5 million and $13.3 million of availability under its credit facilities net of letters of credit. Total liquidity was $16.3 million at September 30, 2024.

FINANCIAL GUIDANCE

The Company revises its fiscal 2024 guidance as follows:

•Revised total revenue of $127-131 million, up from the previous estimate of $115-128 million.
•Revised total adjusted operating income of ($1.0) to $0.0 million, down from the previous estimate of $2.8 to $3.8 million.
•Revised total adjusted net income of ($1.0) to $0.0 million, compared to the prior estimate of $1.2 to $2.0 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.

THIRD QUARTER CONFERENCE CALL

FGI will conduct a conference call on Tuesday, November 12 at 9:00 am Eastern Time to discuss the quarterly results.

A webcast of the conference call and accompanying presentation materials will be available in the Investor Relations section of the Company’s corporate website at https://investor.fgi-industries.com. To listen to a live broadcast, go to the site at least 15 minutes prior to the scheduled start time to register and download and install any necessary audio software.



To participate in the live teleconference:
Toll Free: 1-844-826-3035
International Live:1-412-317-5195

To listen to a replay of the teleconference, which will be available through November 26, 2024:
Domestic Replay: 1-844-512-2921
International Replay: 1-412-317-6671
Conference ID: 10193731

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 expenses, including non-recurring compensation expenses related to our IPO, unusual litigation and business expansion expense. We define Adjusted Net Income as GAAP net income excluding the tax-effected impact of certain non-recurring expenses and income such as unusual litigation fees and non-recurring compensation expenses related to our IPO. We define Adjusted Operating Margins as adjusted income from operations divided by revenue.

We use these non-GAAP measures, along with U.S. GAAP measures, to evaluate our business, measure our financial performance and profitability and our ability to manage expenses, after adjusting for certain one-time expenses, identify trends affecting our business and assist us in making strategic decisions. We believe these non-GAAP measures, when reviewed in conjunction with U.S. GAAP financial measures, and not in isolation or as substitutes for analysis of our results of operations under U.S. GAAP, are useful to investors as they are widely used measures of performance and the adjustments we make to these non-GAAP measures provide investors further insight into our profitability and additional perspectives in comparing our performance over time on a consistent basis. With respect to the Company’s expectations of its future performance, the Company’s reconciliations of full year 2024 Adjusted Operating Income and 2024 Adjusted Net Income are not available, as the Company is unable to quantify certain amounts to the degree of precision that would be required in the relevant GAAP measures without unreasonable effort.

FORWARD-LOOKING STATEMENTS

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The use of words such as “anticipate,” “expect,” “could,” “may,” “intend,” “plan”, “see” and “believe,” among others, generally identify forward-looking statements. These forward-looking statements include, among others, statements regarding FGI’s guidance, the Company’s growth strategies, outlook and potential acquisition activity, the macroeconomic instability and its associated impact on the national and global economy and the residential repair and remodel market, the company’s planned product launches and new customer partnerships, the effect of supply chain disruptions and freight costs and estimates of customer de-stock and


timing of market recoveries. These forward-looking statements are based on currently available operating, financial, economic and other information, and are subject to a number of risks and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results. A variety of factors, many of which are beyond our control, could cause actual future results or events to differ materially from those projected in the forward-looking statements in this release. For a full description of the risks and uncertainties which could cause actual results to differ from our forward-looking statements, please refer to FGI’s periodic filings with the Securities & Exchange Commission including those described as “Risk Factors” in FGI’s annual report on Form 10-K for the year ended December 31, 2023, and in quarterly reports on Form 10-Q filed thereafter. FGI does not undertake any obligation to update forward-looking statements whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
INVESTOR CONTACT
Jae Chung, VP Investor Relations
973-515-7190
investorrelations@fgi-industries.com


FGI INDUSTRIES LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
As of
September 30, 2024		As of
December 31, 2023
USDUSD
(Unaudited)
ASSETS
CURRENT ASSETS
Cash$3,044,662 $7,777,241 
Accounts receivable, net19,009,238 16,195,543 
Inventories, net13,785,509 9,923,852 
Prepayments and other current assets2,590,207 4,617,751 
Prepayments and other receivables – related parties13,969,963 7,600,283 
Total current assets52,399,579 46,114,670 
PROPERTY AND EQUIPMENT, NET2,957,231 1,910,491 
OTHER ASSETS
Intangible assets1,927,330 102,227 
Operating lease right-of-use assets, net13,488,342 15,203,576 
Deferred tax assets, net2,019,657 1,168,833 
Other noncurrent assets1,872,787 1,245,133 
Total other assets19,308,116 17,719,769 
Total assets$74,664,926 $65,744,930 
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Short-term loans$12,485,497 $6,959,175 
Accounts payable20,228,128 14,524,607 
Accounts payable – related parties5,053 735,308 
Income tax payable64,750 189,119 
Operating lease liabilities – current1,785,996 1,595,998 
Accrued expenses and other current liabilities5,134,193 4,039,499 
Total current liabilities39,703,617 28,043,706 
OTHER LIABILITIES
Operating lease liabilities – noncurrent12,057,751 13,674,452 
Total liabilities51,761,368 41,718,158 
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY
Preference Shares— — 
Ordinary shares956 955 
Additional paid-in capital21,414,428 20,877,832 
Retained earnings3,614,763 4,413,524 
Accumulated other comprehensive loss(1,511,788)(1,111,499)
FGI Industries Ltd. shareholders’ equity23,518,359 24,180,812 
Non-controlling interests(614,801)(154,040)
Total shareholders’ equity22,903,558 24,026,772 
Total liabilities and shareholders’ equity$74,664,926 $65,744,930 


FGI INDUSTRIES LTD.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
For the Three Months Ended
September 30,		For the Nine Months Ended
September 30,
2024202320242023
USDUSDUSDUSD
Revenue$36,099,179 $29,932,612 $96,223,647 $86,284,791 
Cost of revenue26,790,957 22,103,325 69,538,640 63,242,944 
Gross profit9,308,222 7,829,287 26,685,007 23,041,847 
Operating expenses
Selling and distribution6,284,932 4,572,593 18,676,665 14,084,200 
General and administrative2,637,141 2,351,307 7,542,019 6,746,055 
Research and development451,975 423,697 1,303,445 1,152,554 
Total operating expenses9,374,048 7,347,597 27,522,129 21,982,809 
(Loss) income from operations(65,826)481,690 (837,122)1,059,038 
Other income (expenses)
Interest income584 1,102 5,251 6,524 
Interest expense(366,420)(16,382)(893,721)(559,730)
Other income, net951 49,598 457,481 19,357 
Total other (expenses) income, net(364,885)34,318 (430,989)(533,849)
(Loss) income before income taxes(430,711)516,008 (1,268,111)525,189 
Provision for (benefit of) income taxes
Current518,585 225,127 857,293 539,681 
Deferred(251,048)(52,611)(865,882)(143,090)
Total provision for (benefit of) income taxes267,537 172,516 (8,589)396,591 
Net (loss) income(698,248)343,492 (1,259,522)128,598 
Less: net loss attributable to non-controlling shareholders(148,111)(66,043)(460,761)(66,043)
Net (loss) income attributable to FGI Industries Ltd. shareholders(550,137)409,535 (798,761)194,641 
Other comprehensive income (loss)
Foreign currency translation adjustment 47,269 (44,497)(400,289)(19,501)
Comprehensive (loss) income(650,979)298,995 (1,659,811)109,097 
Less: comprehensive loss attributable to non-controlling shareholders(148,111)(66,043)(460,761)(66,043)
Comprehensive (loss) income attributable to FGI Industries Ltd. shareholders$(502,868)$365,038 $(1,199,050)$175,140 
Weighted average number of ordinary shares
Basic9,563,9149,500,0009,565,5879,500,000
Diluted9,563,9149,786,5229,565,5879,822,847
(Loss) earnings per share
Basic$(0.06)$0.04 $(0.08)$0.02 
Diluted$(0.06)$0.04 $(0.08)$0.02 


FGI INDUSTRIES LTD.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30,
20242023
USDUSD
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income$(1,259,522)$128,598 
Adjustments to reconcile net (loss) income to net cash used in operating activities
Depreciation324,683 135,256 
Amortization1,818,366 1,247,096 
Share-based compensation536,597 331,893 
Provision for credit losses79,762 31,324 
Provision for defective return489,975 (710,643)
Foreign exchange transaction loss(225,317)(23,875)
Deferred income tax benefit(850,825)(143,090)
Changes in operating assets and liabilities
Accounts receivable(3,792,409)(1,627,547)
Inventories(3,861,657)3,658,593 
Prepayments and other current assets785,879 (1,250,806)
Prepayments and other receivables – related parties(5,960,704)(5,360,839)
Other noncurrent assets(627,654)568,820 
Income taxes(124,369)188,964 
Accounts payable5,703,521 (666,122)
Accounts payable - related parties(730,254)2,381,322 
Operating lease liabilities(1,443,510)(946,208)
Accrued expenses and other current liabilities1,094,693 70,300 
Net cash used in operating activities(8,042,745)(1,986,964)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment(1,374,500)(274,971)
Purchase of intangible assets(669,764)(608,083)
Net cash used in investing activities(2,044,264)(883,054)
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from (repayments of) revolving credit facility5,526,322 (1,832,849)
Net cash provided by (used in) financing activities5,526,322 (1,832,849)
EFFECT OF EXCHANGE RATE FLUCTUATION ON CASH(171,892)5,386 
NET CHANGES IN CASH(4,732,579)(4,697,481)
CASH, BEGINNING OF PERIOD7,777,241 10,067,428 
CASH, END OF PERIOD$3,044,662 $5,369,947 
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the period for interest$(881,759)$(560,314)
Cash paid during the period for income taxes$(961,890)$(350,500)
NON-CASH INVESTING AND FINANCING ACTIVITIES
New addition on Right-of-use assets$(16,807)$(7,644,734)
Acquisition of intangible asset partially through prior period advanced payment$(1,241,664)$— 


Non-GAAP Measures
The following table reconciles Loss (Income) from Operations to Adjusted Operating (Loss) Income and Adjusted Operating Margins, as well as (Loss) Income Before Income Taxes to Adjusted Net (Loss) Income for the periods presented.
For the Three Months Ended
September 30,		For the Nine Months Ended
September 30,
2024202320242023
USDUSDUSDUSD
(Loss) income from operations$(65,826)$481,690 $(837,122)$1,059,038 
Adjustments:
Non-recurring IPO-related stock-based compensation59,719 59,719 179,157 179,156 
IPO and arbitration legal fee— — — 50,000 
Business expansion expense61,770 61,770 185,310 185,312 
Adjusted (loss) income from operations$55,663 $603,179 $(472,655)$1,473,506 
Revenue$36,099,179 $29,932,612 $96,223,647 $86,284,791 
Adjusted operating margins (%)0.2 2.0 (0.5)1.7 
For the Three Months Ended
September 30,		For the Nine Months Ended
September 30,
2024202320242023
USDUSDUSDUSD
(Loss) income before income taxes$(430,711)$516,008 $(1,268,111)$525,189 
Adjustments:
Non-recurring IPO-related stock-based compensation59,719 59,719 179,157 179,156 
IPO and arbitration legal fee— — — 50,000 
Business expansion expense61,770 61,770 185,310 185,312 
Adjusted (loss) income before income taxes(309,222)637,497 (903,644)939,657 
Less: income taxes at 18% rate(55,660)114,749 (162,656)169,138 
Less: net loss attributable to non-controlling shareholders(148,111)(66,043)(460,761)(66,043)
Adjusted net (loss) income$(105,451)$588,791 $(280,227)$836,562 

v3.24.3
Cover
Nov. 11, 2024
Document Information [Line Items]  
Document Type 8-K
Document Period End Date Nov. 11, 2024
Registrant Name FGI Industries Ltd.
Entity Incorporation, State or Country Code E9
Entity File Number 001-41207
Entity Tax Identification Number 98-1603252
Entity Address, Address Line One 906 Murray Road
Entity Address, City or Town East Hanover
Entity Address, State or Province NJ
Entity Address, Postal Zip Code 07936
City Area Code 973
Local Phone Number 428-0400
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company true
Entity Ex Transition Period false
Amendment Flag false
Central Index Key 0001864943
Common Stock  
Document Information [Line Items]  
Title of 12(b) Security Ordinary Shares, $0.0001 par value per share
Trading Symbol FGI
Security Exchange Name NASDAQ
Warrant  
Document Information [Line Items]  
Title of 12(b) Security Warrants to purchase Ordinary Shares
Trading Symbol FGIWW
Security Exchange Name NASDAQ
FGI Industries (NASDAQ:FGIWW)
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