FGIWW

• FGI's second quarter results reflect strategic investments in organic growth initiatives. - Impacted by industry-wide pause due to tariff uncertainty. - Working with customers and suppliers on China Plus One strategy for diversifying sourcing. - Isla Porter joint venture progressing with premium design community. - Geographic expansion in Europe and India holds growth promise.

• Revenue guidance: $135 million 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 nonrecurring items.

FGI reported total revenue of $31 million in the second quarter, 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. Sanitaryware revenue increased 4.3% year-over-year. Bath furniture revenue increased 2.7% year-over-year. Shower Systems business reported a 11.2% revenue decrease. Other revenue (covered bridge) increased 67.7% in the quarter. Revenue in the U.S. declined 0.4%, while growing 2% in Canada and 36.7% in Europe.

• Ongoing tariff uncertainty affecting customer orders and margin. - Fluidity in the tariff environment globally poses challenges.

Q: Customers kind of pausing for tariffs, cause?

A: Due to tremendous uncertainty around tariff levels initially, leading to orders being pulled in the quarter.

Q: China Plus One strategy scope?

A: Impacts all business segments, with active efforts to diversify global sourcing.

Q: Operating expenses and margin trend in H2?

A: Expenses managed carefully, margin expected to be in the upper 20s as new programs roll out.

Q: Tariff negotiations and effects?

A: Uncertainty longer, but adjustments with customers and new business wins continuing.

Q: Product program timing impact?

A: Some launches delayed in Q2, but pipeline recovering, baked into guidance.