FGI INDUSTRIES ANNOUNCES FOURTH QUARTER AND FULL YEAR 2022 RESULTS.

EAST HANOVER, N.J: FGI Industries Ltd. (Nasdaq: FGI) ("FGI" or the "Company"), a leading global supplier of kitchen and bath products, today announced results for the fourth quarter and full-year 2022.

FOURTH QUARTER 2022 HIGHLIGHTS

(As compared to the fourth quarter of 2021)

Total revenues of $31.8 million, (39.1%) y/y

Gross profit of $7.5 million, gross margin of 23.7%, +920 bps y/y

Net income of $0.7 million, (32.1%) y/y

Adjusted net income of $1.0 million, +41.0% y/y

Adjusted operating income of $1.3 million, +89.4% y/y

FULL YEAR 2022 HIGHLIGHTS

(As compared to full year 2021)

Total revenues of $161.7 million, (11.1%) y/y

Gross profit of $31.5 million, gross margin of 19.5%, +180 bps y/y

Net income of $3.7 million, (53.5%) y/y

Adjusted net income of $4.2 million, (33.6)% y/y

Adjusted operating income of $5.7 million, (27.4)% y/y

MANAGEMENT COMMENTARY

"In our first year as a public company we made important progress on our strategic initiatives and executed extremely well operationally despite the challenges we faced in 2022, which included continued inflation, ongoing supply chain disruption, persistent global unrest and widespread customer de-stocking. As a result, we are in an attractive position as we enter 2023," stated David Bruce, President and Chief Executive Officer of FGI. "I am extremely proud of our team's strong operational performance during the fourth quarter, as we were able to generate significant year-over-year gross margin improvement and operating income growth despite customer de-stocking, which continued to pressure top-line results. The customer de-stocking during the fourth quarter was more significant than expected, which caused our fourth quarter revenues to fall short of our expectations. While we expect de-stocking to continue to be a headwind into the early part of 2023, we have started to see customers' inventory levels begin to normalize while order cadence slowly improved during the first two months of 2023. This recovery is more evident within the DIY channel as we expect de-stocking with our pro customers to extend further into the second quarter. We believe end customer demand has remained relatively stable, and with the ongoing momentum in our internal growth initiatives, we are well positioned for a return to revenue growth once channel inventory levels normalize in the second half of 2023."

"I am very excited by the continued execution against our strategic initiatives during 2022, driven in large part by our focus on our Brands, Products, and Channels Strategy, or what we refer to as BPC," noted Bruce. "During 2022, we continued to expand our Covered Bridge kitchen cabinetry business with significant growth in our dealer network and we also made further progress on our shower systems business. In addition, we launched several new product lines and brand initiatives during the year, and we were very excited by the reception many of these products received at the recent Kitchen and Bath show in Las Vegas, which is the premier kitchen and bath design event for our industry. These are just some of the exciting opportunities we are pursuing, and as we continue to execute on our BPC strategy, we believe we are well positioned to execute on our organic growth initiatives."

"We were able to generate year-over-year fourth quarter and...