FGI Industries Ltd. Q4 FY2025 earnings call

• CEO David Bruce mentioned that second quarter results reflect strategic investments in organic growth initiatives across brands, products, and channels. - FGI and customers are evaluating China Plus One strategy to diversify sourcing. - Sanitary ware, bath furniture grew while shower systems declined. Other revenue, mainly covered bridge, saw significant growth. - Isla Porter joint venture is establishing relationships with premium design community. - Geographic expansion in Europe and India holds growth promise. - Working with suppliers and customers to navigate tariff environment. - Operating expenses increased due to investing in growth initiatives like Isla Porter and warehouse optimization.

FGI reported total revenue of $31 million in the second quarter of 2025, a year-over-year increase of 5.5%. Gross profit was $8.7 million, a decrease of 2.9% compared to the prior year. Gross margin was 28.1% compared to 30.5% in the second quarter of 2024. Sanitary ware revenue increased 4.3% year-over-year. Bath furniture revenue increased 2.7% year-over-year. Shower systems business reported a decrease in revenue of 11.2%. Other revenue, primarily covered bridge, increased 67.7% in the quarter.

• Revenue guidance: $135 to $145 million. - Adjusted operating income guidance: negative $2 million to positive $1.5 million. - Adjusted net income guidance: negative $1.9 million to positive $1 million. Guidance excludes certain non-recurring items.

• Industry outlook uncertain due to tariffs. - Customers paused orders during the quarter due to tariff uncertainty. - Challenges in navigating fluid tariff environment and diversifying global sourcing.

Q: Ruben Garner asked about customers pausing for tariffs, cause of pause and China Plus One strategy impact.

A: Tariffs caused uncertainty leading to order pause. China Plus One strategy will impact all businesses and diversify global sourcing.

Q: Greg Gebers followed up on navigating tariffs with vendors and customers.

A: Tariffs this time more uncertain, worked with suppliers and customers to adjust pricing.

Q: Greg asked about order pipeline improvement.

A: Order pipeline on positive trajectory, back to pre-tariff impact momentum with global sourcing initiatives accelerating.