FGI Industries (FGI) 12 Nov 242024 Q3 Earnings call transcript

Good day, and welcome to the FGI Industries Third Quarter 2024 Results Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Jae Chung, Vice President of FGI Industries. Please go ahead.

Thank you. XXXX Results Industries Call. FGI to Third Conference Quarter Welcome

after CEO, on which, of are like and questions We Leading yesterday release by are financial and remind outside their company's responses to may today operational and control. call our would that issued market David recent management's detailing press nature, Lin. conference the call I and results. include Perry President the Bruce; and closed Officer, Chief a the commentary you to today's forward-looking statements, uncertain Financial

based Although statements management's forward-looking beliefs, these and actual may are on materially. current differ expectations results

the of For to discussion actual Risk results factors differ, some a with that the could our cause SEC. of the of Factors refer please section to filings latest

that the of measures reconciliations note website. please appendix historical issued and find on can the in this in you available company's financial of is yesterday the release press which non-GAAP presentation, Additionally,

update a the Today's Bruce, conclusion with At will call prepared a will of Lin. followed open begin and these performance for remarks, from review Perry questions. line by we Dave financial from the strategic review

I'll that, turn over the Dave. With to call

you, thank joining call share organic or strategy. growth you I brands, and everyone, morning, our our products strategic to Jae. results channels our BPC am made for pleased reflect quarter in our Good today. third the Thank we've and investments initiatives across

mix higher increase costs a year. Furniture million, XX.X%, reported Cover XX.X%. in million XXXX, growing third FGI the representing prior Bath in XX.X% to the the to profit Furniture, year-over-year part segments. compared and compared of freight points basis XX the was and Gross of Bridge to compared of higher a $XX.X Sanitaryware was decline total revenue due record Bath and XX.X% of of a Gross quarter, quarter margin a to $X.X in

FGI's third well forecasting our our across market. third quarter all in XXXX geographies. the growth investments our significantly compared businesses remains revenue The driven growth with industry overall increased flat above and minimal to have outlook customers growth quarter relatively to the but XXXX, due revenue

Revenue respectively. decline quarter period. X% compared Sanitaryware the in the grew third the prior to reversing prior the Europe increased markets, and the year-over-year quarter XX%, X% U.S., in quarter, and in Canada the XX% revenue for year

revenue year-over-year Our XX% trends Bath our market pricing offerings aligned Furniture the that towards new increased are shift programs gain lower-priced as traction. with design and and more

increased and The In Shower customer remain in across an reported Systems business driven new in continued XX% strong by dealer trends revenue cabinetry, quarter, of increase driven custom XX% programs. demand the by revenue the kitchen Bridge U.S. as Covered expansion positive, customer

digital establishing our relationships to joint products Porter, premium platform. via design an off with sales start, venture strong Isla a community is on-trend digital the with kitchen AI-backed custom

of quarters. significant India geographic promise Europe plans hold Our in and growth expansion coming in driving

growth initiatives company beyond. well of FGI Our dedication are I are their the growth. success remainder strategic expected positioning fuel to commend our XXXX and team long-term objectives, to progressing our the future and above-market for for organic for

Perry I'll more detailed over hand for review. With that, a to it financial

the morning, good I by on and on liquidity by will Dave, current followed Thank sheet. everyone. update balance begin additional our you, and details quarter, providing an

full with conclude the will I for year XXXX. guidance Finally, our

$X.X million, XXXX. XX.X% increase Gross mentioned, XXXX, of an third an was quarter, of in Dave totaled compared quarter profit third quarter revenue million to As the $XX.X year-over-year. record of for the the increase XX.X% a

the margin compared declined to XX.X% Our the to gross XX.X% year. quarter prior in in

Isla Cover in prior million $X.X and kitchen to in operating to expense cabinet Porter investment our Our from $X.X Canada for includes Bridge business, business. million the in due ongoing our the investing XX.X% growth initiative year distribution increased and in which

margin million expense the and in million income investing $X.X in Lower gross from a $X.X loss. negative prior positive higher in quarter, accounted due our initiative GAAP growth operating for down was the to year. operating the

had quarter, growth in to initiative. total end third the is liquidity, $XX.X our million of which sufficient At balance our more sheet. than fund Moving to FGI we believe

to updating as the is operating $X from are $X.X revised is guidance to $X million new the million million our $X.X range to to follows: our the million million previous compared new of $XXX of net the to million $XXX breakeven range guidance from $X.X breakeven guidance $X income revenue the previous XXXX previous negative negative is million; We million; of to guidance adjusted to million guidance income $XXX adjusted million. $XXX

Adjusted minority adjusted interest. items. net operating certain income income note includes excludes nonrecurring the an for certain and Please excludes nonrecurring items guidance that for adjustment

concludes prepared question-and-answer the we call. portion of now are Operator, our remarks. our That ready for

first the comes The Garner And Benchmark Reuben Company. Instructions] with [Operator question from

much offering could product if year-over-year us that certainly grew of Bath was outperformance? Furniture? think components Wondering you it of the the How help was the with new of a quarter? within growth that How I in the I mean, market you down and XX%. the much still

that a follow-ups. I've Or of Was item? onetime stocking benefit got couple an And kind that a away? ongoing that goes of is

No sure. question. Good Yes, problem.

We we've to ticket, So nice recently quarters, the suffered in it's retail pricing been higher is that reengineering talked couple on had or market, more has we've last no, higher about, really in more about talking not bounce meet which the based last so. what which of trends furniture assortment the a year a revenue the onetime event. of

comp same into assortment, results. taking new fully we we're We're to to start And we've that see We're been adding to would had of new getting and mix. product continue diligently see as by the we to this change a placement. expect couple type customers business. starting large the of growth share. that We've do the some And working new also

quarter XX.X%. Or it down? on anything that the was profit And that or think about with can XX.X% Okay. -- dragged kind it I this of new mix? the it portfolio way the in to that talk you think is there quarter then the impact margins? was Is In new gross about unique

There to in were was continue. change margins a -- to previous don't what QX expect we quarters. fully these Mostly quarter we margin We get anticipate that where in in things. would drove larger did you couple did were this the the been the results, Yes. saw we impacted of margin. They shipments ocean business, in higher gross cabinet have up spike. QX. saw going They And have year. from in One, freight rates you were our as kitchen which back

we the the had growth furniture products As in in. well brought and as other that bathroom

of So XX-plus the have cadence some back that going margin. going into impacted get promotional to we freight. confident there bathroom gross new time, at same range margin. launching we're that was in with very that the gross QX with margin for which where were we on were associated with And impact some furniture, the the there to costs we're But

revenue Okay. you've then does -- the outperformed that on profitability from -- mean guide between your I And that mean, so the that's primary front. difference

raised quarter -- comes freight You new there profitability that promotional of promotional and The was piece your that by -- sort guide. piece the guess, was new in revenue change I Is impacted in and -- some before? the last expected side even driven that post that? Or wins component the entirely not the

Yes.

to ways look think there's I X at So this.

to was again, were XX.X%. number, So on whatever number spiked don't from get normalizing -- to we're to our perspective, freight that QX. rates it mix. anticipate like margin based That's XX-plus at as XX.X% a back -- gross we're with freight be And said, very they I looking as that we going in confident

expect, is -- bottom last But we expect right? of impacted calls, which that I and to I on talking a this fully the mentioned we our our about also So we'll line, one think able you're leverage our operating be think I costs. expense, lot operating of

in what have, businesses impacted areas really such be to, are new the us, investing, the term, good in growth, short near in midterm, line. expect the that which kitchen particularly we our and and critical as Isla operating we'll continue leverage expense leverage the to We able term in short have investment and been And which large our which some ratio, reduce Porter for the we has fully negatively of here. term, is bottom the

the gross gross But as is to to results turn now starting side, will you're and on revenue positive dollars. impact in drive margin profit see, starting which

in a we continued the little perspective. of -- freight of a bit core So with key feel and growth on margin our twofold the quarter, what are categories investments blip as costs that in our promotional some thing it's well gross the as

I Great. rates months at I'm to least Or today have near it in mean, the What year? the Okay. but seems optimism over I the for that customers? could going kind early, the last of lot industry muted it a question of meaningful have for direction. gone coming is there for more from the it? you it's at but Is other are there that picture know outlook customers way right next term, actually in big in. of couple was that thoughts increasing your to optimism -- initial as I think your look sense 'XX still rates sneak impact, do a saying one

do is looking potential some industry customers, believe there's comps our some of I say would for of our growth good think cautious next at optimism. single-digit to you're low muted X I a I term. year.

starting business some categories share we business do with however, key us, -- in we're do we For the of to that take in.

sales. the market goes, necessarily because And gaining tied so new not where only we're incremental to we're

the activity that a -- that which to the would should answer just improve, about think I of improvements. spur we some beyond seems rates, question, the think everybody optimistic rates it market will But expecting. incremental I cautiously is growth that and industry we're bit if little And expects

Congrats on the progress.

I further turn question-and-answer back Bruce session. over any to conference questions, for concludes closing David this to no remarks. like our With the would

speaking time today. don't on we support your look Stay during And call. FGI. for we next connect of appreciate you you We forward Thank interest with if your to quarterly well. the our and continued quarter,

for has now concluded. conference today's you Thank presentation. attending The

You disconnect. may now