FGI Industries Ltd. reported significant financial developments in its 10-Q filing for the third quarter of 2024. For the three months ended September 30, 2024, the company generated revenue of $36.1 million, a 20.6% increase from $29.9 million in the same period of 2023. For the nine months ended September 30, 2024, total revenue reached $96.2 million, up 11.5% from $86.3 million in the prior year. The growth was driven by increased sales across various product lines, particularly in sanitaryware, bath furniture, and shower systems.
Gross profit for the third quarter was $9.3 million, reflecting an 18.9% increase from $7.8 million in the prior year. However, total operating expenses rose significantly, leading to a net loss of $0.7 million for the quarter, compared to a net income of $0.3 million in Q3 2023. For the nine-month period, the net loss was $1.3 million, a decline from a net income of $0.1 million in the same period last year. The increase in operating expenses was attributed to higher selling and distribution costs, which rose by 32.6% to $18.7 million.
As of September 30, 2024, total assets increased to $74.7 million from $65.7 million at the end of 2023, while total liabilities also rose to $51.8 million from $41.7 million. Shareholders' equity decreased to $22.9 million from $24.0 million at the end of the previous fiscal year. The company reported a cash balance of $3.0 million, down from $5.4 million a year earlier.
Strategically, FGI Industries is focusing on product innovation and geographic expansion, including new markets in India and Eastern Europe. The company has implemented a "BPC" strategy aimed at driving organic growth and has entered into a licensing agreement for FlushGuard Overflow Technology.
In terms of operational challenges, FGI Industries faced increased cash outflows, with net cash used in operating activities amounting to $8.0 million for the nine months ended September 30, 2024, compared to $2.0 million in the same period of 2023. This was primarily due to increases in accounts receivable, inventories, and prepayments. The company also reported a material weakness in internal controls over financial reporting, which management is addressing.
Overall, while FGI Industries experienced revenue growth, it also faced challenges in profitability and operational cash flow, necessitating ongoing strategic adjustments.
About FGI Industries Ltd.
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