EAST
HANOVER, N.J., May 10, 2023
/PRNewswire/ -- FGI Industries Ltd. (Nasdaq: FGI) ("FGI" or
the "Company"), a leading global supplier of kitchen and bath
products, today announced results for the first quarter 2023.
FIRST QUARTER 2023 HIGHLIGHTS
(As compared to the first quarter of 2022)
- Total revenues of $27.2 million,
(37.7%) y/y
- Gross profit of $7.2 million,
(4.3%), Gross margin of 26.5%, +925 bps y/y
- Net loss of ($0.3) million
- Adjusted net loss of ($0.2)
million
- Adjusted operating income of $0.1
million
MANAGEMENT COMMENTARY
"We were very pleased with our continued strong operational
execution during the first quarter in what remains a very
challenging market environment," stated David Bruce, President and Chief Executive
Officer of FGI. "We reported a record first quarter gross margin of
26.5%, which was up 925 basis points compared to the prior-year
period despite the ongoing customer de-stocking and uneven demand
trends witnessed during the quarter. The inventory
correction that has been a headwind to our revenue growth over the
last year has persisted into 2023, with the macro uncertainty
adding another layer of pressure as many large customers are taking
a very cautious stance and looking to reduce inventories to levels
below historical averages. This is expected to prolong the
de-stocking headwinds, particularly in the pro channel where the
inventory correction will likely extend into at least the second
quarter. However, we remain confident in the progress we are
making on our organic growth initiatives through our Brands,
Products, and Channels (BPC) strategy, which combined with our
strong execution should result in profitable growth once channel
inventory levels normalize."
"While the uncertain demand environment, persistent inflation,
and destocking headwinds are pressuring results in the near-term,
we continue to take a long-term approach and remain focused on
executing against our key strategic initiatives," noted Bruce. "We
were very excited to see our strategic focus pay off during the
first quarter, as we were awarded several new product programs with
key retail partners that will be key contributors to organic growth
in the coming quarters. It is also important to note that
during challenging market periods, we benefit from our diversified
product portfolio and long-standing customer relationships.
Many industry participants are facing challenges due to consumers
trading down to lower priced products, but we are well-positioned
given our 'good, better, best' product portfolio and our strong
private-label offering, which is benefitting from the recent
trends. In addition, our long-term customers look to FGI for
support during difficult times, and as a result, we have not
suffered any product or customer losses."
"The supply chain inefficiencies and inflationary pressures
resulted in challenges to our working capital usage during 2022,
but our strict financial discipline has resulted in significantly
improved free cash flow conversion in recent quarters, putting us
in a strong financial position at the end of the first quarter,"
stated Perry Lin, Chief Financial
Officer of FGI. "We reported a cash balance of $7.4 million at March 31,
2023, which, combined with our borrowing capacity, provided
us with total liquidity of $22.5
million at the end of the quarter, allowing us ample
financial flexibility to support our organic growth initiatives and
the ability to pursue strategic M&A."
"We will continue to invest in our internal growth initiatives
and focus on our operational execution, which should position the
Company for long-term success as market conditions stabilize,"
continued Bruce. "Our strong performance as it relates to our
BPC strategy is a testament to our commitment to innovation and
customer satisfaction, and we are confident in our ability to
capitalize on these successes and continue delivering value to our
customers. While the uncertain demand outlook will likely
extend the inventory correction, we remain confident in our
strategy and our ability to execute, and as a result, we continue
to expect full-year 2023 revenues of $145
million to $163 million,
adjusted operating income of $6.0
million to $6.8 million and
adjusted net income of $4.2 million
to $4.7 million."
STRATEGIC UPDATE
FGI intends to drive long-term shareholder value through
execution of its Brands, Products and Channels strategy to drive
organic growth, enhanced financial performance, and efficient
capital deployment. Some of the key accomplishments during
the first quarter 2023 were as follows:
- BPC Strategy: While near-term market fundamentals have
been challenging, FGI has continued to invest in its BPC strategy,
and the benefits of this strategy were evident during the first
quarter, as the Company received several contract awards.
-
- The company secured an agreement with a large Canadian retailer
for a refresh of its in-store sanitaryware line, including two new
toilets, with new product roll-out expected to commence in
September 2023.
- FGI won several programs for its shower business, positioning
the company for continued growth. Notably, FGI added an online
shower door program for an existing large Canadian retail partner
which is expected to commence in June
2023. Additionally, FGI is set to revolutionize the customer
in-store experience with a unique program for a large U.S. retailer
that enables store associates, along with the customer, to
collaboratively design & immediately quote and take orders for
custom shower doors. FGI's new online shower door configuration
tool will allow for a seamless shopping experience and is expected
to add incremental higher-margin shower door sales. Finally, FGI
was recently awarded a national in stock program for its shower
wall systems, as well as an online shower base program, with a
large U.S. retailer, which will begin with a roll-out of up to 300
locations in the second half of 2023. This program will feature new
and unique finishes which further expands the shower wall program's
industry leading design portfolio.
- FGI also continues to experience strong reception for its
custom kitchen program. After a successful Kitchen & Baths show
in January, the Company has added an additional 34 dealers to the
portfolio, bringing the total dealer count to 159 at the end of the
first quarter 2023, with additional dealer growth expected to
continue.
- Enhanced Financial Performance: FGI continued its strong
operational execution during the first quarter, which resulted in
another period of strong gross margin performance. Gross margin was
26.5% during the first quarter of 2023, up from 17.3% in the same
period last year and up nearly 300 basis points sequentially
despite the normal first quarter seasonal revenue decline. While
the Company does not expect to sustain the first quarter gross
margin levels for the full year, FGI is positioned for strong gross
margin improvement in 2023, as compared to the full year 2022,
owing to a more favorable revenue mix, lower freight costs, and the
benefit of pricing increases implemented in 2022.
- Efficient Capital Deployment: FGI will continue to
prioritize capital deployment in support of its core organic growth
opportunities. Additionally, with total liquidity of $22.5 million at March 31,
2023, the Company has the financial flexibility to pursue
opportunistic bolt-on acquisition opportunities to supplement its
organic growth strategy.
FIRST QUARTER 2023 RESULTS
Revenue totaled $27.2 million
during the first quarter of 2023, a decrease of 37.7% compared to
the prior-year period, driven by continued inventory de-stocking
across all segments and geographies, partially offset by growth in
Other product categories, primarily the custom kitchen cabinetry
business. Currency was a 1.1% headwind to revenue growth
during the first quarter.
- Sanitaryware revenue was $15.4
million during the first quarter of 2023, down from
$26.8 million in the prior-year
period. The revenue decline was due to ongoing inventory
de-stocking, primarily in the pro channel, as customers are
becoming increasingly cautious regarding inventory levels, with
some large customers reducing their inventory levels to below
historical average levels.
- Bath Furniture revenue was $5.0
million during the first quarter of 2023, a decline from
revenue of $10.1 million in the
prior-year period. As previously noted, our Bath Furniture business
has been experiencing significant de-stocking, and customers
continued to decrease inventory levels amidst some modest softening
in overall demand from the prior year period.
- Shower Systems revenue was $5.0
million during 1Q23, down from $6.0
million last year. The decline in shower systems revenue is
expected to be temporary, as momentum in the business remains
strong, highlighted by several awards with national retailer
partners that we expect to roll out in the second half of
2023.
- Other revenue was $1.8 million
during the first quarter, up from $0.7
million in the prior year, driven by growth in the custom
kitchen cabinetry business.
Gross profit was $7.2 million
during the first quarter of 2023, a decrease of only 4.3% compared
to last year, as the revenue headwinds experienced during the
quarter, were offset by a shift in the revenue mix towards the
higher-margin shower systems and custom kitchen cabinetry
businesses. Gross profit margin improved to 26.5% during the
first quarter of 2023, up 925 basis points from the prior-year
period. In addition to the more favorable mix, gross margins
also benefitted from price increases implemented during 2022 and
lower freight costs. During the first quarter of 2023, the
Other category, primarily shower systems and kitchen cabinetry,
accounted for 25% of revenues, up from 15% last year.
Operating income was approximately break-even during the first
quarter of 2023, at a loss of $3,000,
down from income of $0.7 million in
the prior-year period. Operating income during the first
quarter of 2023 included non-recurring expenses of $0.1 million for business expansion expense and
IPO-related legal expense. Excluding these one-time expenses,
adjusted operating income was $0.1
million during the first quarter. The decline in
operating income was a result of the lower gross profit and an
increase in operating expenses tied to growth initiatives, as the
Company continues to invest in its BPC growth strategy despite the
short-term revenue pressures. The increase in operating
expenses resulted from marketing spending for new product
initiatives, expenses for the Kitchen & Bath trade show, costs
to support the Australia and UK
expansions, and expenses tied to the new kitchen business
development opportunity. As a result, operating margin was
0.0% during the first quarter, down from 1.6% in the same period
last year.
The Company reported a GAAP net loss of ($0.3) million, or ($0.03) per diluted share during the first
quarter of 2023, versus net income of $0.5
million, or $0.05 per diluted
share, in the same period last year. Net income for the first
quarter of 2023 included after-tax expenses of $0.1 million related to business expansion
expense and IPO-related legal expense. Net income for the first
quarter of 2022 included after-tax expense of $0.2 million related to non-recurring IPO-related
compensation expense. Excluding these items, adjusted net
loss for the first quarter of 2023 was ($0.2) million, or ($0.02) per diluted share, versus adjusted net
income of $0.7 million, or
$0.07 per diluted share, for the same
period last year.
FINANCIAL RESOURCES AND LIQUIDITY
As of March 31, 2023, the Company
had $7.4 million of cash and cash
equivalents, total debt of $8.4
million and $15.1 million of
availability under its credit facilities net of letters of credit.
Combined with cash and cash equivalents, total liquidity was
$22.5 million at March 31, 2023.
FINANCIAL GUIDANCE
FGI believes the long-term outlook for the repair and remodel
markets remains attractive, and the Company continues to be
encouraged by the progress achieved on its organic growth
initiatives through the BPC strategy. The Company has made
excellent progress on its margin improvement initiatives, and
management continues to expect repair and remodel industry volumes
to decline in the mid-to-high single digits and inventory
de-stocking to continue into 2023. As a result, the Company
reiterates its fiscal 2023 guidance as follows:
- Total Revenue of $145 million and
$163 million
- Total Adjusted Operating Income of $6.0
million and $6.8 million
- Total Adjusted Net Income of $4.2
million to $4.7 million
The Company's 2023 guidance includes roughly $0.5 million of costs related to investments in a
new kitchen program. Guidance for adjusted operating income
and adjusted net income is presented on an adjusted basis and
excludes non-recurring items. All guidance is current as of
the time provided and is subject to change.
FIRST QUARTER CONFERENCE CALL
FGI will conduct a conference call on Thursday, May 11 at 8:00
am Eastern Time to discuss the quarterly results.
A webcast of the conference call and accompanying presentation
materials will be available in the Investor Relations section of
the Company's corporate website at
https://investor.fgi-industries.com. To listen to a live
broadcast, go to the site at least 15 minutes prior to the
scheduled start time in order to register and download and install
any necessary audio software.
To participate in the live teleconference:
Toll
Free:
|
|
1-844-826-3035
|
International
Live:
|
|
1-412-317-5195
|
To listen to a replay of the teleconference, which will be
available through May 25, 2023:
Domestic
Replay:
|
|
1-844-512-2921
|
International
Replay:
|
|
1-412-317-6671 13727517
|
Conference
ID:
|
|
10178012
|
ABOUT FGI INDUSTRIES
FGI Industries Ltd. (Nasdaq: FGI) is a leading global supplier
of kitchen and bath products. For over 30 years, we have built an
industry-wide reputation for product innovation, quality, and
excellent customer service. We are currently focused on the
following product categories: sanitaryware (primarily toilets,
sinks, pedestals and toilet seats), bath furniture (vanities,
mirrors and cabinets), shower systems, customer kitchen cabinetry
and other accessory items. These products are sold primarily for
repair and remodel activity and, to a lesser extent, new home or
commercial construction. We sell our products through numerous
partners, including mass retail centers, wholesale and commercial
distributors, online retailers and specialty stores.
Non-GAAP Measures
In addition to the measures presented in our consolidated
financial statements, we use the following non-GAAP measures to
evaluate our business, measure our performance, identify trends
affecting our business and assist us in making strategic decisions.
Our non-GAAP measures are: Adjusted Operating Income, Adjusted
Operating Margins and Adjusted Net Income. These non-GAAP financial
measures are not prepared in accordance with generally accepted
accounting principles in the United
States ("GAAP"). They are supplemental financial measures of
our performance only, and should not be considered substitutes for
net income, income from operations or any other measure derived in
accordance with GAAP and may not be comparable to similarly titled
measures reported by other entities. We define Adjusted Operating
Income as GAAP income from operations excluding the impact of
certain non-recurring expenses, including expenses related to
COVID–19 protocols, non-recurring compensation expenses related to
our IPO, and one-time anti-dumping penalty expenses. We define
Adjusted Net Income as GAAP net income excluding the tax-effected
impact of certain non-recurring expenses and income such as
expenses related to COVID–19 protocols, unusual litigation fees and
non-recurring compensation expenses related to our IPO. We define
Adjusted Operating Margins as adjusted income from operations
divided by revenue.
We use these non-GAAP measures, along with U.S. GAAP measures,
to evaluate our business, measure our financial performance and
profitability and our ability to manage expenses, after adjusting
for certain one-time expenses, identify trends affecting our
business and assist us in making strategic decisions. We believe
these non-GAAP measures, when reviewed in conjunction with U.S.
GAAP financial measures, and not in isolation or as substitutes for
analysis of our results of operations under U.S. GAAP, are useful
to investors as they are widely used measures of performance and
the adjustments we make to these non-GAAP measures provide
investors further insight into our profitability and additional
perspectives in comparing our performance over time on a consistent
basis. With respect to the Company's expectations of its future
performance, the Company's reconciliations of full year 2023
Adjusted Operating Income and 2023 Adjusted Net Income are not
available, as the Company is unable to quantify certain amounts to
the degree of precision that would be required in the relevant GAAP
measures without unreasonable effort.
FORWARD-LOOKING STATEMENTS
This release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
The use of words such as "anticipate," "expect," "could," "may,"
"intend," "plan", "see" and "believe," among others, generally
identify forward-looking statements. These forward-looking
statements include, among others, statements regarding FGI's
guidance, the Company's growth strategies, outlook and potential
acquisition activity, the effect of the COVID-19 pandemic and the
associated impact on the national and global economy, the company's
planned product launches and new customer partnerships, the effect
of supply chain disruptions and freight costs and estimates of
customer de-stock and timing of market recoveries. These
forward-looking statements are based on currently available
operating, financial, economic and other information, and are
subject to a number of risks and uncertainties. Readers are
cautioned that these forward-looking statements are only
predictions and may differ materially from actual future events or
results. A variety of factors, many of which are beyond our
control, could cause actual future results or events to differ
materially from those projected in the forward-looking statements
in this release. For a full description of the risks and
uncertainties which could cause actual results to differ from our
forward-looking statements, please refer to FGI's periodic filings
with the Securities & Exchange Commission including those
described as "Risk Factors" in FGI's annual report on Form 10-K for
the year ended December 31, 2022, and
in quarterly reports on Form 10-Q filed thereafter. FGI does not
undertake any obligation to update forward-looking statements
whether as a result of new information, future events or otherwise,
except as may be required under applicable securities laws.
FGI
INDUSTRIES LTD. UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
|
As of
|
|
As of
|
|
|
March 31, 2023
|
|
December 31, 2022
|
|
|
USD
|
|
USD
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
|
Cash
|
|
$
|
7,380,212
|
|
$
|
10,067,428
|
Accounts receivable,
net
|
|
|
12,106,710
|
|
|
14,295,859
|
Inventories,
net
|
|
|
9,876,132
|
|
|
13,292,591
|
Prepayments and other
current assets
|
|
|
2,928,377
|
|
|
2,588,081
|
Prepayments and other
receivables – related parties
|
|
|
5,304,314
|
|
|
5,643,649
|
Total current
assets
|
|
|
37,595,745
|
|
|
45,887,608
|
|
|
|
|
|
|
|
PROPERTY AND EQUIPMENT,
NET
|
|
|
1,308,697
|
|
|
1,269,971
|
|
|
|
|
|
|
|
OTHER ASSETS
|
|
|
|
|
|
|
Operating lease
right-of-use assets, net
|
|
|
16,263,039
|
|
|
9,815,572
|
Deferred tax assets,
net
|
|
|
1,365,703
|
|
|
1,265,539
|
Other noncurrent
assets
|
|
|
2,172,009
|
|
|
2,128,240
|
Total other
assets
|
|
|
19,800,751
|
|
|
13,209,351
|
Total
assets
|
|
$
|
58,705,193
|
|
$
|
60,366,930
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
|
Short-term
loans
|
|
$
|
8,426,548
|
|
$
|
9,795,052
|
Accounts
payable
|
|
|
8,159,699
|
|
|
14,718,969
|
Accounts payable –
related parties
|
|
|
568,406
|
|
|
104,442
|
Income tax
payable
|
|
|
163,801
|
|
|
33,350
|
Operating lease
liabilities – current
|
|
|
1,191,178
|
|
|
1,543,031
|
Accrued expenses and
other current liabilities
|
|
|
3,003,691
|
|
|
3,580,359
|
Total current
liabilities
|
|
|
21,513,323
|
|
|
29,775,203
|
|
|
|
|
|
|
|
OTHER
LIABILITIES
|
|
|
|
|
|
|
Operating lease
liabilities – noncurrent
|
|
|
14,611,015
|
|
|
7,847,317
|
Total
liabilities
|
|
|
36,124,338
|
|
|
37,622,520
|
|
|
|
|
|
|
|
COMMITMENTS AND
CONTINGENCIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
Preference Shares
($0.0001 par value, 10,000,000 shares authorized, no shares issued
and outstanding as
of March 31, 2023 and 2022)
|
|
|
—
|
|
|
—
|
Ordinary shares
($0.0001 par value, 200,000,000 shares authorized, 9,500,000 and
7,000,000 shares issued
and outstanding as of March 31, 2023 and 2022)
|
|
|
950
|
|
|
950
|
Additional paid-in
capital
|
|
|
20,579,580
|
|
|
20,459,859
|
Retained
earnings
|
|
|
3,376,545
|
|
|
3,679,920
|
Accumulated other
comprehensive loss
|
|
|
(1,376,220)
|
|
|
(1,396,319)
|
Total shareholders'
equity
|
|
|
22,580,855
|
|
|
22,744,410
|
Total liabilities and
shareholders' equity
|
|
$
|
58,705,193
|
|
$
|
60,366,930
|
|
The accompanying notes
are an integral part of these consolidated financial
statements.
|
FGI
INDUSTRIES LTD.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE
INCOME
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
|
|
March 31,
|
|
|
|
2023
|
|
2022
|
|
|
|
|
USD
|
|
|
USD
|
|
REVENUES
|
|
$
|
27,162,266
|
|
$
|
43,575,239
|
|
|
|
|
|
|
|
|
|
COST OF
REVENUES
|
|
|
19,960,108
|
|
|
36,050,653
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT
|
|
|
7,202,158
|
|
|
7,524,586
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
Selling and
distribution
|
|
|
4,711,089
|
|
|
4,677,352
|
|
General and
administrative
|
|
|
2,142,245
|
|
|
1,842,807
|
|
Research and
development
|
|
|
351,751
|
|
|
313,681
|
|
Total operating
expenses
|
|
|
7,205,085
|
|
|
6,833,840
|
|
|
|
|
|
|
|
|
|
(LOSS) INCOME FROM
OPERATIONS
|
|
|
(2,927)
|
|
|
690,746
|
|
|
|
|
|
|
|
|
|
OTHER (EXPENSES)
INCOME
|
|
|
|
|
|
|
|
Interest
income
|
|
|
1,375
|
|
|
31
|
|
Interest
expense
|
|
|
(249,637)
|
|
|
(131,752)
|
|
Other (loss) income,
net
|
|
|
(19,557)
|
|
|
98,845
|
|
Total other
(expenses), net
|
|
|
(267,819)
|
|
|
(32,876)
|
|
|
|
|
|
|
|
|
|
(LOSS) INCOME BEFORE
INCOME TAXES
|
|
|
(270,746)
|
|
|
657,870
|
|
|
|
|
|
|
|
|
|
PROVISION FOR INCOME
TAXES
|
|
|
|
|
|
|
|
Current
|
|
|
132,765
|
|
|
171,499
|
|
Deferred
|
|
|
(100,136)
|
|
|
(43,822)
|
|
Total provision for
income taxes
|
|
|
32,629
|
|
|
127,677
|
|
|
|
|
|
|
|
|
|
NET (LOSS)
INCOME
|
|
|
(303,375)
|
|
|
530,193
|
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE
(LOSS) INCOME
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
|
20,099
|
|
|
(57,180)
|
|
|
|
|
|
|
|
|
|
COMPREHENSIVE (LOSS)
INCOME
|
|
$
|
(283,276)
|
|
$
|
473,013
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER
OF ORDINARY SHARES
|
|
|
|
|
|
|
|
Basic
|
|
|
9,500,000
|
|
|
8,833,333
|
|
Diluted
|
|
|
9,508,750
|
|
|
10,941,667
|
|
|
|
|
|
|
|
|
|
EARNINGS PER
SHARE
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.03)
|
|
$
|
0.06
|
|
Diluted
|
|
$
|
(0.03)
|
|
$
|
0.05
|
|
|
|
The accompanying notes
are an integral part of these unaudited condensed consolidated
financial statements.
|
|
FGI
INDUSTRIES LTD. UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
For the Three
Months Ended March 31,
|
|
|
|
2023
|
|
2022
|
|
|
|
USD
|
|
USD
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
|
(303,375)
|
|
$
|
530,193
|
|
Adjustments to
reconcile net income to net cash used in operating
activities
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
35,560
|
|
|
68,957
|
|
Share-based
compensation
|
|
|
119,720
|
|
|
39,812
|
|
Provision for doubtful
accounts
|
|
|
56,932
|
|
|
67,644
|
|
Provision of (reversal
of) defective return
|
|
|
460,258
|
|
|
(284,548)
|
|
Foreign exchange
transaction gain (loss)
|
|
|
33,906
|
|
|
(20,460)
|
|
Deferred income
taxes
|
|
|
(100,164)
|
|
|
(32,708)
|
|
Adjustment for Right
of use assets
|
|
|
(89,093)
|
|
|
—
|
|
Changes in operating
assets and liabilities
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
1,671,959
|
|
|
5,942,915
|
|
Inventories
|
|
|
3,416,460
|
|
|
(317,256)
|
|
Prepayments and other
current assets
|
|
|
(340,296)
|
|
|
(1,055,788)
|
|
Prepayments and other
receivables – related parties
|
|
|
339,335
|
|
|
(4,200,435)
|
|
Other noncurrent
assets
|
|
|
(43,769)
|
|
|
(606,253)
|
|
Income
taxes
|
|
|
130,451
|
|
|
(616,952)
|
|
Right-of-use
assets
|
|
|
385,477
|
|
|
313,929
|
|
Accounts
payable
|
|
|
(6,559,270)
|
|
|
(8,085,105)
|
|
Accounts
payable-related parties
|
|
|
463,964
|
|
|
—
|
|
Operating lease
liabilities
|
|
|
(332,006)
|
|
|
(311,233)
|
|
Accrued expenses and
other current liabilities
|
|
|
(576,669)
|
|
|
(499,440)
|
|
Net cash used in
operating activities
|
|
|
(1,230,620)
|
|
|
(9,066,727)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
Purchase of property
and equipment
|
|
|
(74,173)
|
|
|
(24,383)
|
|
Net cash used in
investing activities
|
|
|
(74,173)
|
|
|
(24,383)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
Net (repayments of)
proceeds from revolving credit facility
|
|
|
(1,368,504)
|
|
|
1,664,130
|
|
Net proceeds from
issuance of ordinary shares in IPO
|
|
|
—
|
|
|
12,370,800
|
|
Excess payment over
carrying value on long-lived assets acquisition from common-control
affiliate
|
|
|
|
|
|
|
|
Net cash (used in)
provided by financing activities
|
|
|
(1,368,504)
|
|
|
14,034,930
|
|
|
|
|
|
|
|
|
|
EFFECT OF EXCHANGE RATE
FLUCTUATION ON CASH
|
|
|
(13,919)
|
|
|
(34,378)
|
|
|
|
|
|
|
|
|
|
NET CHANGES IN
CASH
|
|
|
(2,687,216)
|
|
|
4,909,442
|
|
CASH, BEGINNING OF
YEAR
|
|
|
10,067,428
|
|
|
3,883,896
|
|
CASH, END OF
YEAR
|
|
$
|
7,380,212
|
|
$
|
8,793,338
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL CASH FLOW
INFORMATION
|
|
|
|
|
|
|
|
Cash paid during the
period for interest
|
|
|
(250,263)
|
|
|
(130,954)
|
|
Cash paid during the
period for income taxes
|
|
|
(2,263)
|
|
|
(784,689)
|
|
|
|
|
|
|
|
|
|
NON-CASH INVESTING AND
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
New addition on
Right-of-use assets
|
|
|
(7,444,961)
|
|
|
|
|
|
|
The accompanying notes
are an integral part of these unaudited condensed consolidated
financial statements.
|
|
Non-GAAP Measures
The following table reconciles Income from Operations to
Adjusted Operating Income and Adjusted Operating Margins, as well
as Net income to Adjusted Net Income for the periods presented.
|
|
For the three
months ended
|
|
|
|
|
March 31,
|
|
|
|
|
2023
|
|
2022
|
|
|
(Loss) Income from
operations
|
|
$
|
(2,927)
|
|
$
|
690,746
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Non-recurring
IPO-related compensation
|
|
|
—
|
|
|
232,312
|
|
|
IPO legal
fee
|
|
|
50,000
|
|
|
|
|
|
Business expansion
expense
|
|
|
61,772
|
|
|
|
|
|
Adjusted income from
operations
|
|
|
108,845
|
|
|
923,058
|
|
|
Revenue
|
|
$
|
27,162,266
|
|
$
|
43,575,239
|
|
|
Adjusted operating
margins
|
|
|
0.4
|
%
|
|
2.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three
months ended
|
|
|
|
|
March 31,
|
|
|
|
|
2023
|
|
|
2022
|
|
Net (Loss)
Income
|
|
$
|
(303,375)
|
|
$
|
530,193
|
|
Adjustments:
|
|
|
|
|
|
|
|
Non-recurring
IPO-related compensation
|
|
|
—
|
|
|
232,312
|
|
IPO legal
fee
|
|
|
50,000
|
|
|
|
|
Business expansion
expense
|
|
|
61,772
|
|
|
|
|
Total
|
|
|
(191,603)
|
|
|
762,505
|
|
Tax impact of
adjustment at 18% effective rate
|
|
|
(21,125)
|
|
|
(41,816)
|
|
Adjusted net (loss)
income
|
|
$
|
(212,728)
|
|
$
|
720,689
|
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/fgi-industries-announces-first-quarter-2023-results-301821344.html
SOURCE FGI Industries Ltd.