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FGI Industries Ltd. (NASDAQ:FGI), a $4.89 million market cap company specializing in heating equipment and plumbing fixtures, has announced a change in its independent registered public accounting firm. According to InvestingPro data, the company operates with significant debt burden and currently shows weak financial health metrics. On Monday, the company was informed by Marcum LLP, its former accountant, of its resignation following Marcum’s attest business acquisition by CBIZ (NYSE:CBZ) CPAs P.C. on November 1, 2024. Subsequently, FGI Industries’ Audit Committee approved the engagement of CBIZ as the new independent registered public accounting firm.
The reports from Marcum for the fiscal years ending December 31, 2024, and 2023, contained no adverse opinions or disclaimers and were not qualified on any accounting principles. However, during the 2024 assessment of internal controls over financial reporting, FGI identified material weaknesses related to the segregation of duties, management review controls, and oversight of loan covenants. These control issues are particularly significant given the company’s debt-to-equity ratio of 1.25 and its challenges in making interest payments, as highlighted by InvestingPro analysis.
FGI Industries has provided Marcum with the contents of this announcement prior to filing with the U.S. Securities and Exchange Commission (SEC) and has received a letter from Marcum confirming their agreement with the statements made. This letter, dated April 22, 2025, has been filed with the SEC as part of the company’s formal disclosure.
The company, listed on The Nasdaq Stock Market LLC under the ticker symbols (NASDAQ:FGI) for its ordinary shares and NASDAQ:FGIWW for its warrants, has not sought CBIZ’s advice on any accounting principles or auditing issues in the past two fiscal years through April 22, 2025. There were no disagreements or reportable events that would have influenced the company’s decision-making process during this period.
This transition comes after FGI Industries’ internal controls review revealed a need for stronger oversight in certain financial areas. The appointment of CBIZ marks a new chapter in the company’s efforts to enhance its financial reporting practices. With annual revenue of $131.82 million and a stock price decline of 51% over the past year, the company faces significant challenges. InvestingPro subscribers can access 14 additional key insights and a comprehensive analysis of FGI’s financial health through the Pro Research Report. Information regarding this change is based on a press release statement.
In other recent news, FGI Industries reported its fourth-quarter 2024 earnings, showing mixed results with a significant revenue increase but an earnings per share (EPS) miss. The company achieved a revenue of $35.6 million, surpassing expectations of $32.29 million, marking a 15% year-over-year growth. However, the EPS came in at -$0.04, falling short of the projected $0.05. Despite the revenue growth, FGI Industries’ profitability did not meet market expectations, attributed to aggressive investments in growth. Benchmark analysts maintained a Speculative Buy rating on FGI Industries but revised the price target from $2.50 to $2.00, reflecting a more cautious outlook. The analysts also adjusted the EPS estimate for fiscal year 2025 to a loss of $0.05 per share, down from a previously expected gain of $0.10. The company continues to focus on its Building Products Corporation (BPC) growth strategy, which has been gaining traction despite challenges in the Repair and Remodeling sector. FGI Industries projects 2025 revenue between $135 million and $145 million, with adjusted operating income ranging from -$2 million to +$1.5 million.
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