FGI Industries Ltd. Q1 FY2024 earnings call

• Positive first quarter results reflecting strategic investments in organic growth initiatives across BPC strategy.
• Growth across most businesses due to volume, sustained demand, and inventory level normalization.
• Bath Furniture has an upcoming assortment aligned with new market pricing and design trends.
• Shower Systems benefited from new customer program introductions.
• Pro Sanitaryware rebounded as inventory levels stabilized and order flow improved.
• Geographic expansion plans in India and the UK hold promise.
• Launch of Isla Porter, a high-end custom kitchen cabinetry business based on an innovative digital platform.

During the first quarter, most businesses showed growth, primarily fueled by volume and sustained demand. Sanitaryware and shower businesses had year-over-year growth. Bath Furniture faced subdued demand but has an upcoming assortment aligned with new market pricing and design trends. Shower Systems benefited from new customer program introductions, and pro Sanitaryware rebounded as inventory levels stabilized. Total revenue for the quarter was $31 million, a robust 13.2% increase year-over-year. Gross margin improved to 27.4%. Revenue contribution: While specific percentages aren't given, growth was seen in Sanitaryware, shower, and pro Sanitaryware segments, with Bath Furniture facing challenges but having a new assortment in the works.

• Guidance for 2024 remains unchanged with revenue in the range of $115 million to $128 million.
• Adjusted operating income is expected to be in the range of $2.8 million to $3.8 million.
• Adjusted net income is expected to be in the range of $1.2 million to $2 million. These guidance figures exclude certain nonrecurring items.

Q: Greg Gibas with Northland Securities asked about the maintained outlook, drivers of upside in Q1, and changes in quarterly cadence.

A: David Bruce responded that Q1 went as expected, with a nice rebound in pro Sanitaryware business and results from new shower program rollouts. Momentum into Q2 aligns with guidance, and order cadence and pipeline are positive.

Q: Greg Gibas then asked about high-level trends in key channels.

A: David Bruce mentioned moderation of inventory levels, which is a bright spot, with a more organic rebound on the pro side and optimism from builders' confidence in building recovery impacting the pro Sanitaryware business.