FGI Industries Ltd (FGI) 2024 Q1 法說會逐字稿

Good day, and welcome to the FGI Industries Inc. first 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 Cheung, Vice President of FGI industries. Please go ahead.

美好的一天，歡迎參加 FGI Industries Inc. 2024 年第一季業績電話會議。（操作員說明）請注意此事件正在被記錄。現在我想把會議交給 FGI 工業副總裁 Jae Cheung 主持。請繼續。

Thank you. Welcome to FGI Industries 2024 first quarter results conference call. Leading the call today are President and CEO, David Bruce; Chief Financial Officer, Perry Lin

謝謝。歡迎參加 FGI Industries 2024 年第一季業績電話會議。今天主持會議的是總裁兼執行長 David Bruce；財務長 林佩里

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

昨天收盤後，我們發布了一份新聞稿，詳細介紹了我們最近的營運和財務表現。我想提醒您，管理層在今天的電話會議上的評論和對問題的回答可能包括前瞻性陳述，這些陳述本質上是不確定的，超出了公司的控制範圍。

Although these forward-looking statements are based on management's current expectations and beliefs, actual results may differ materially. For a discussion of some of the factors that could cause actual results to differ, please refer to the Risk Factors section of our latest filings with the SEC.

儘管這些前瞻性陳述是基於管理階層目前的預期和信念，但實際結果可能存在重大差異。有關可能導致實際結果不同的一些因素的討論，請參閱我們向 SEC 提交的最新文件中的風險因素部分。

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

此外，請注意，您可以在昨天發布的新聞稿和本簡報的附錄中找到歷史非公認會計準則財務指標的調節表，該附錄可在公司網站上找到。

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

今天的電話會議首先由 Dave Bruce 進行績效評估和策略更新，然後由 Perry Lin 進行財務評估。在準備好的發言結束後，我們將開放提問專線。

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

這樣，我會將電話轉給戴夫。

Thank you, Jae, and good morning, everyone, and thank you for joining our call today. I'm delighted to share our positive first quarter results, reflecting the strategic investments we've made in our organic growth initiatives across our brands, products and channels our OBPPC strategy.

謝謝 Jae，大家早安，謝謝您今天加入我們的電話會議。我很高興與大家分享我們第一季的正面業績，這反映了我們對品牌、產品和通路的有機成長計劃以及我們的 OBPPC 策略進行的策略性投資。

While the industry outlook anticipates modest declines in the R&R segment, we remain confident in our ability to outpace market trends through innovative products and programs. During the first quarter we witnessed growth across most of our businesses, primarily fueled by volume and sustained demand from end markets alongside gradual normalization of inventory levels.

儘管產業前景預計 R&R 領域將出現小幅下滑，但我們仍對透過創新產品和計畫超越市場趨勢的能力充滿信心。在第一季度，我們的大部分業務都實現了成長，這主要是由終端市場的銷售和持續需求以及庫存水準逐步正常化所推動的。

Notably, our sanitaryware and shower businesses demonstrated year-over-year growth. While our bath furniture segment faced subdued demand due to a shift towards lower-priced offerings, we are excited about our upcoming best furniture assortment, that is more aligned to new market pricing and design trends.

值得注意的是，我們的衛浴和淋浴業務呈現同比增長。雖然我們的浴室家具部門因為轉向低價產品而面臨需求疲軟，但我們對即將推出的最佳家具品種感到興奮，它更符合新的市場定價和設計趨勢。

Additionally, our shower systems business benefited from new customer program introductions. While the Pro sanitaryware business rebounded as inventory levels stabilize and order flow improved, we are particularly pleased with our operational performance reporting a total revenue of $31 million for the quarter, marking a robust 13.2% increase year over year.

此外，我們的淋浴系統業務也受惠於新客戶計畫的推出。雖然 Pro 衛浴業務隨著庫存水準穩定和訂單流改善而出現反彈，但我們對我們的營運業績感到特別滿意，報告本季總收入為 3,100 萬美元，比去年同期強勁增長 13.2%。

Our gross margin also improved to 27.4%, reflecting our sustained focus on higher margin products. As we continue to invest in our growth initiatives, we are encouraged by the positive momentum witnessed in the first quarter. Furthermore, our geographic expansion plans in India and the United Kingdom holds significant promise for driving growth.

我們的毛利率也提高至 27.4%，反映出我們對高利潤產品的持續關注。隨著我們繼續投資於我們的成長計劃，我們對第一季的積極勢頭感到鼓舞。此外，我們在印度和英國的地域擴張計劃為推動成長帶來了巨大的希望。

In India, we are optimistic about leveraging new distribution partners to establish our presence in the burgeoning bath market. We are also excited about the imminent launch of Ayala Porter, our high-end custom kitchen cabinetry business based on innovative digital platform with its emphasis on premium trendsetting products and cutting-edge AI software.

在印度，我們對利用新的分銷合作夥伴在蓬勃發展的沐浴市場中建立自己的地位持樂觀態度。我們也對即將推出的 Ayala Porter 感到興奮，這是我們基於創新數位平台的高端客製化廚房櫥櫃業務，重點是優質引領潮流的產品和尖端的人工智慧軟體。

I look forward to is poised to redefine cabinetry, personalization, convenience and design. Our strategic growth initiatives are progressing well and are expected to fuel above market organic growth in the future. I commend our FGI team for their dedication to our long-term objectives, positioning the company for success in 2024 and beyond.

我期待著重新定義櫥櫃、個人化、便利性和設計。我們的策略性成長計畫進展順利，預計未來將推動高於市場的有機成長。我讚揚我們的 FGI 團隊致力於實現我們的長期目標，幫助公司在 2024 年及以後取得成功。

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

這樣，我會將其交給佩里進行更詳細的財務審查。

Thank you, Dave, and good morning, everyone. I will begin by providing additional details on the quarter. And next, I will update you on our current liquidity and balance sheet. And finally, I will conclude with our guidance for the full year 2024.

謝謝戴夫，大家早安。我將首先提供有關本季度的更多詳細資訊。接下來，我將向您介紹我們目前的流動性和資產負債表的最新情況。最後，我將以我們對 2024 年全年的指導作為結束語。

For the first quarter 2024 revenue totaled $31 million, an increase of 13.2% compared to the first quarter of 2023, driven by continued momentum in our shower system business and a rebound in our Pro sanitary business. Our base furniture business continued to be weak but is showing signs of improvement.

受淋浴系統業務持續成長動能和專業衛浴業務反彈的推動，2024 年第一季營收總計 3,100 萬美元，較 2023 年第一季成長 13.2%。我們的基礎家具業務持續疲軟，但已顯示出改善的跡象。

As Dave mentioned, the best furniture market continues to be impacted by weaker demand, and the trade down to lower priced offerings. In response, we are launching mid-tier product to better address the current demand environment. Demand trends in the shower category remains steady. We continue to expect our new programs and products to continue driving growth in 2024.

正如戴夫所提到的，最好的家具市場繼續受到需求疲軟和低價產品交易的影響。作為回應，我們正在推出中階產品，以更好地滿足當前的需求環境。淋浴間類別的需求趨勢保持穩定。我們仍然預計我們的新計劃和產品將在 2024 年繼續推動成長。

Gross profit was $8.4 million in the quarter, an increase of 16.8% year-over-year, driven by growth in our higher margin products. Gross margin improved to 27.4% in the quarter compared to 26.5% the prior year. Our operating expense increased to $8.7 million from $7.2 million in the prior year due to that inflation and ongoing investment in our growth initiatives, including marketing spend for flash card either quarter and kitchen cabinetry.

在我們高利潤產品成長的推動下，本季毛利為 840 萬美元，年增 16.8%。本季毛利率從去年同期的 26.5% 提高至 27.4%。由於通貨膨脹和對我們的成長計劃的持續投資，包括每個季度閃存卡和廚房櫥櫃的營銷支出，我們的營運費用從上一年的 720 萬美元增加到 870 萬美元。

GAAP operating income was negative $0.3 million in the quarter, down from breakeven year-over-year. Higher operating expenses due to investing in our growth initiated accounted for a loss as overall revenue and gross margin were higher in the quarter.

該季度 GAAP 營業收入為負 30 萬美元，低於去年同期的損益兩平。由於本季整體收入和毛利率較高，因此對我們的成長進行投資而導致的營運費用增加導致了虧損。

Moving to our balance sheet at the end of the first quarter, FGI has $17.8 million of total liquidity, which we believe is more than sufficient to fund our growth initiated. The decline in total liquidity from year end 2023 was largely driven by an increase in working capital requirement, which is seasonally higher than in the first quarter of the year.

從第一季末的資產負債表來看，FGI 的流動資金總額為 1,780 萬美元，我們認為這足以為我們啟動的成長提供資金。自 2023 年底以來，流動性總額下降主要是由於營運資金需求增加所致，流動資金需求季節性高於今年第一季。

We are leaving 2024 guidance unchanged with revenue in the range of $115 million to $128 million, adjusted operating income in the range of $2.8 million to $3.8 million, and adjusted net income in the range of $1.2 million to $2 million. Please note that the guidance for adjusted operating income and adjusted net income excludes certain nonrecurring items. That completes our prepared remarks.

我們維持 2024 年指引不變，營收在 1.15 億美元至 1.28 億美元之間，調整後營業收入在 280 萬美元至 380 萬美元範圍內，調整後淨利潤在 120 萬美元至 200 萬美元範圍內。請注意，調整後營業收入和調整後淨利潤的指導不包括某些非經常性項目。我們準備好的發言就到此結束了。

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

接線員，我們現在已準備好進行通話的問答部分。

We will now begin the question-and-answer session. (Operator Instructions) Gregory Gibas, Northland Securities.

我們現在開始問答環節。（操作員指示）Gregory Gibas，北國證券。

Hey, good morning, David, Perry. Thanks for taking the questions and congrats on the results. I'm just, I guess, touch a little bit more on kind of your outlook remaining unchanged. Curious if you don't any phasing expectations, kind of implicit in that maintained range in all kinds of drivers of where there was some upside in Q1 and maybe if anything's changed on a quarterly cadence basis relative to your expectations?

嘿，早上好，大衛，佩里。感謝您提出問題並對結果表示祝賀。我想，我只是對你的觀點保持不變稍微多談一點。好奇您是否沒有任何階段性預期，隱含在第一季有一些上升空間的各種驅動因素​​的維持範圍內，也許相對於您的預期，每季節奏是否有任何變化？

Sure. Yeah. I it's a good question and good morning, Greg. Yeah, Q1 went as expected. I think we've talked previously, as we entered the year, we did expect some organic rebound. We didn't want to I've mentioned the word destocking anymore, and I think we've gotten past that. So we saw a nice rebound in our Pro sanitaryware business.

當然。是的。這是一個很好的問題，早安，格雷格。是的，第一季的進展符合預期。我想我們之前已經談過，當我們進入今年時，我們確實預計會出現一些有機反彈。我們不想再提到去庫存這個詞了，我想我們已經過去了。因此，我們看到專業衛浴業務出現了良好的反彈。

We're also seeing the results of some new implementation of our new shower program rollouts that we have had mentioned on some previous calls. So the momentum building in Q2 is as expected, it aligns with the guidance that we've put in place. That's why we haven't made any adjustments. And we continue to look forward to some of the additional new programs rollouts that we expect that will be executed primarily in the second half.

我們還看到了我們在之前的一些電話會議中提到的新淋浴計劃推出的一些新實施的結果。因此，第二季度的勢頭正如預期的那樣，與我們制定的指導方針一致。這就是為什麼我們沒有做出任何調整。我們繼續期待一些額外的新計劃的推出，我們預計這些計劃將主要在下半年執行。

So as of now, I would say our the cadence order cadence and pipeline are positive and we're looking forward to continuing in Q2.

因此，到目前為止，我想說我們的節奏訂單節奏和管道是積極的，我們期待在第二季度繼續。

Okay. Got it. And you alluded to it a little bit in your pro channel, but wondering if you just kind of discuss a high-level trend that you're seeing in your key channels on whether anything is kind of standing out or changing favorably or unfavorably?

好的。知道了。您在專業頻道中提到了一點，但想知道您是否只是討論您在關鍵頻道中看到的高級趨勢，即是否有任何事情突出或發生有利或不利的變化？

Yeah. I think what we're seeing we're seeing and hearing things. So we're starting to see a moderation of inventory levels, which is the bright spot. Again, we talked a lot last year about the heavy inventory positions that our customers faced, throughout the year. And a lot of that has moderated for the most part.

是的。我認為我們所看到的就是我們所看到和聽到的東西。因此，我們開始看到庫存水準有所放緩，這是一個亮點。去年，我們再次多次討論了客戶全年面臨的大量庫存狀況。其中很多已經得到緩和。

And I think, I mentioned on our last call, there's still some pockets in the market with individual customers or individual areas that but that base will be persistent. But for the most part, that's not going to be material on our business and so what we're seeing is we are seeing organic rebound on the pro side and there's some optimism there as well.

我認為，我在上次電話會議中提到，市場上仍然有一些個人客戶或個人領域，但這個基礎將是持久的。但在大多數情況下，這對我們的業務不會產生重大影響，因此我們看到的是，我們看到了積極方面的有機反彈，而且也存在一些樂觀情緒。

The pro are looking at the builder side of the business, especially in the second half and going into Q4 as positive. Some of the builders have discussed that in some of their reporting as far as their confidence in building recovery, and we're feeling some of that momentum on our Pro business.

專業人士正在關注建築商方面的業務，尤其是下半年和第四季度的積極情況。一些建設者在他們的一些報告中討論了他們對建立復甦的信心，我們在我們的專業業務中感受到了一些動力。

So I would say just generally on the sanitary ware side, I think the momentum with them due to the lack of the destocking that was going to it's going to rebound. And that's again, that's something that we have in our guide because it was it was sort of expected as we entered Q1 and Q2.

因此，我想說，在衛浴方面，我認為由於缺乏去庫存，它們的勢頭將會反彈。這又是我們指南中的內容，因為這是我們進入第一季和第二季時的預期。

Perfect. Appreciate the color there. And as it relates to maybe your gross margin expectations or how those friend or relative to Q1, should we think about kind of continued expansion just due to that product lines, this trend?

完美的。欣賞那裡的顏色。因為它可能與您的毛利率預期有關，或者與第一季的朋友或親戚的情況有關，我們是否應該考慮僅由於該產品線、這種趨勢而繼續擴張？

Yes, we can. We believe we will maintain in our gross margins, but we're pretty confident based on a lot of the new business and that we see coming our way that we'll be able to maintain those margins. And we've talked about this before, we will accelerate our overall gross margin dollars as we scale a lot of the higher-margin businesses like shower, which we're doing, but particularly kitchens in our not only the covered bridge kitchens, but also the new digital venture with Ayala Porter.

我們可以。我們相信我們將維持毛利率，但基於大量新業務，我們非常有信心，我們看到我們將能夠維持這些利潤率。我們之前已經討論過這一點，隨著我們擴大許多高利潤業務（例如我們正在做的淋浴），我們將加快我們的整體毛利率，特別是廚房，不僅是有頂橋廚房，而且還有與阿亞拉波特(Ayala Porter) 合作的新數位企業。

So as those scale, you're going to see continued margin dollar growth. And I think we've also mentioned as pro-business rebounds. And as we grow our sanitaryware business, while the sanitaryware business has lower gross profit percentages overall, we would expect, which is our mid-term or long-term goal, is to grow our EBITDA.

因此，隨著這些規模的擴大，您將看到利潤率持續成長。我想我們也提到了有利於商業的反彈。隨著我們衛浴業務的發展，雖然衛浴業務的整體毛利率較低，但我們預計，這是我們的中期或長期目標，是增加我們的 EBITDA。

Our EBIT percentage and our dollars our gross margin, right. So as you combine and the dollars from the from the sanitaryware business, along with the higher gross profit percentages from our kitchens, we think we're going to be able to have a healthy growth in the short to mid-term.

我們的息稅前利潤百分比和我們的美元毛利率，對吧。因此，當你結合來自衛浴業務的美元以及我們廚房更高的毛利百分比時，我們認為我們將能夠在中短期內實現健康成長。

Great. Appreciate the color. Thanks guys.

偉大的。欣賞顏色。多謝你們。

Sure.

當然。

This concludes our question-and-answer session. I would like to turn the conference back over to David Bruce for any closing remarks.

我們的問答環節到此結束。我想將會議轉回給大衛布魯斯發表閉幕詞。

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

感謝您今天的時間和興趣。感謝您對 FGI 的持續支持，祝您一切順利。如果我們在本季度沒有聯繫，我們期待在下一個季度的電話會議上與您交談。

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

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。