FGI Industries Reports 12.4% Revenue Growth to $131.8 Million, Faces $1.7 Million Net Loss

FGI Industries Ltd. reported a revenue increase of 12.4% for the fiscal year ending December 31, 2024, reaching $131.8 million, compared to $117.2 million in 2023. This growth was primarily driven by higher sales in the sanitaryware, shower systems, and custom kitchen cabinetry categories. Despite the revenue growth, the company experienced a net loss of $1.7 million, a significant decline from a net income of $0.6 million in the previous year. The loss was attributed to increased operating expenses, including a 28.3% rise in selling and distribution costs and a 21.1% increase in general and administrative expenses, reflecting inflationary pressures and investments in growth initiatives.

In terms of operational developments, FGI Industries has focused on expanding its product offerings and market presence. The company introduced a new product category for shower systems, which saw a 27.6% revenue increase to $25.5 million. Additionally, revenue from custom kitchen cabinetry surged by 50.9%, indicating successful market penetration and product adoption. The company also reported a 10.5% increase in revenue from the U.S. market, which accounted for 62.5% of total sales, while Canadian sales rose by 13.1%. The company is actively pursuing geographic expansion, with new agreements in India, Eastern Europe, and the UK.

Strategically, FGI Industries is implementing a "BPC" (Brands, Products, Channels) growth strategy aimed at enhancing its brand presence and expanding its product categories. The company has entered into a five-year licensing agreement for advanced toilet technology and is focusing on increasing its share of branded products, which typically yield higher margins. However, the company faces challenges, including reliance on a limited number of key customers and suppliers, with its top ten customers accounting for 69% of total sales in 2024.

Looking ahead, FGI Industries anticipates continued revenue growth driven by its strategic initiatives and product innovation. The company has reported total liquidity of $15.6 million as of December 31, 2024, which it believes will support its organic growth strategy. However, management has acknowledged the need for additional cash resources in the future to address potential changes in business conditions and to pursue investment opportunities. The company is also focused on improving its internal controls, having identified material weaknesses in its financial reporting processes, and is actively working on remediation efforts to enhance operational efficiency.