FGI Industries Ltd.

Good day and welcome to FGI Industries Inc. Second Quarter 2025 Results Conference Call. All participants will be in the listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 0. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on a touchtone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Jay Chung, Chief Financial Officer. Please go ahead.

Thank you. Welcome to FGI Industries' 2025 Second Quarter Results Conference Call. Leading the call today are Chief Executive Officer David Bruce and Chief Financial Officer Jay Chung. 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 SEC. 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 Jay Chung. 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 reflect the strategic investments we've made in our organic growth initiatives across our brands, products, and channels, or BPC strategy. FGI reported total revenue of $31 million in the quarter, representing a year-over-year increase of 5.5%. Gross profit was $8.7 million, a decrease of 2.9% compared to the prior year. Gross margin was 28.1% compared to 30.5% in the second quarter of 2024, a decline of 240 basis points due primarily to the ongoing tariff environment. FDI was impacted by an industry-wide pause during the quarter as customers evaluated the impact of tariffs on their businesses. FGI and our customers continue to evaluate a China Plus One strategy to diversify and broaden our geographic sourcing. The industry outlook remains uncertain due to tariffs, but our strategic investments in our brands, products, and channels have driven a revenue growth well above the market. FGI's second quarter revenue increased compared to the second quarter of 2024 due to the growth in our sanitary ware, bath furniture, and covered bridge cabinetry businesses while shower systems revenue declined. Revenue declined 0.4% in the U.S. and grew 2% and 36.7% in Canada and Europe, respectively. Sanitary wear revenue increased 4.3% year-over-year in the second quarter compared to the prior year period. Our bath furniture revenue increased 2.7% year-over-year as our shift to market-aligned program pricing and design drove new business wins. The shower systems business reported a decrease in revenue of 11.2%, even as demand trends remain positive. Other revenue, primarily covered bridge, increased 67.7% in the quarter, driven by continued order momentum, expanded geographies, and higher dealer count. Isla Porter, our digital custom kitchen joint venture, continues to establish relationships with the premium design community with on-trend products, via an ai-backed digital sales platform our geographic expansion in europe and india holds significant promise of driving growth in coming quarters 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 for the remainder of 2025 and beyond before i hand it over to jay I want to say a few words about tariffs. The increasing tariff environment in 2025 remains fluid. FGI is working with our suppliers and customers to support one another as we navigate the new normal together. We went through a similar process during the first Trump administration's tariff increases, so this is not new to us. We are confident that we can work through what comes, given the close relationships we have cultivated over the years with our vendors and customers. We are seeing the order pipeline recovering, even as some customers remain cautious due to the continued tariff uncertainty. With that, I'll hand it over to Jay for a more detailed financial review.