FGI Industries Ltd.

Good morning, ladies and gentlemen, and welcome to the FGI Industries, Inc. Second Quarter 2024 Results Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, August 8th, 2024. I would now like to turn the conference over to Jay Chung, Vice President of Investor Relations at FGI Industries. Please go ahead.

Thank you. Welcome to FGI Industries' 2024 Second Quarter Results Conference Call. Leading the call today are President and CEO David Bruce and Chief Financial Officer Perry Lin. 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. 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 FCC. 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. Today's call will begin with a performance review and strategic update from Dave Bruce, followed by a financial review from Perry Linton. At the conclusion of these prepared remarks, we will open the line for questions. With that, I'll turn the call over to Dave.

Thank you, Jay. Good morning, everyone, and thank you for joining our call today. I am pleased to share our second quarter results reflected the strategic investments we've made in our organic growth initiatives across our brands, products, and channels for BPC strategy. FGI reported total revenue of $29.4 million in the quarter, representing a year-over-year increase of 0.6%. Gross profit was $9 million, reflecting growth of 11.9% compared to our prior year. Gross margin improved to 30.5%, an increase of 310 basis points compared to the second quarter of 2023. The industry outlook remains relatively flat overall, with our customers forecasting minimal growth in 2024. During the second quarter, some of our shipments experienced extended lead times and delays due in part to our transition to SAP enterprise software and continued industry-wide import logistics challenges. This impacted our second quarter results. Freight rates have more than doubled since December 2023, and we are closely tracking prices for the remainder of 2024. We expect to fulfill the delayed shipments in the second half of the year. Sanitary ware revenue declined 8% year-over-year in the quarter. We remain optimistic about flush guard in the second half of 2024. We continue to shift towards lower-priced offerings in our bath furniture segment and are excited about our assortment and new programs that are more aligned with market pricing and design trends. The shower systems business benefited from new customer programs reporting an increase in revenue of 37% compared to the same period last year. In custom kitchen cabinetry, Covered bridge revenue increased 66% in the quarter, driven by continued strong dealer and customer expansion across the U.S. Isla Porter, our digital-only custom kitchen joint venture, is setting the stage for its official launch. Isla Porter aims to establish a relationship with the premium designer community with on-trend products via an AI-backed digital sales platform. Our geographic expansion plans in Europe and India hold significant promise of driving growth. During the quarter, we opened an office in a showroom in India and engaged new distribution partners in the burgeoning bath market. Our strategic growth initiatives are progressing well and are expected to fuel above-market organic future growth. I commend our FGR team for their dedication to our long-term objectives, positioning the company for success in 2024 and beyond. With that, I'll hand it over to Perry for a more detailed financial review.