BRITISH COLUMBIA, Canada--(BUSINESS WIRE)--FLEXIBLE SOLUTIONS INTERNATIONAL, INC. (NYSE Amex: FSI, FRANKFURT: FXT), is the developer and manufacturer of biodegradable polymers for oil extraction, detergent ingredients and water treatment as well as crop nutrient availability chemistry. Flexible Solutions also manufactures biodegradable and environmentally safe water and energy conservation technologies. Today the Company announces financial results for the second quarter (Q2) ended June 30, 2014.
Mr. Daniel B. O’Brien, CEO, states, “Disappointing revenue for the second quarter and first half of the year was offset by better cash management which was made possible by the decision to stop operations in Taber. The result was increased earnings on lower sales. Subsequent to the end of the quarter, we received news that a pilot WaterSavr program has started in Wichita Falls, Texas which, if successful could result in significant revenue in 2015.”
- Sales in the second quarter (Q2) were $4,286,731, down approximately 12% when compared to sales of $4,884,629 in the corresponding period a year ago. The financials give a Q2, 2014 accounting net income of $399,753 or $0.03 per share compared to an accounting net income of $70,169, or $0.01 per share in Q2, 2013.
- Basic weighted average shares used in computing per share amounts in Q2 were 13,169,991 for both 2014 and 2013.
- Non-GAAP operating cash flow: For the 6 months ending June 30, 2014, net income reflects $367,271 of non-cash charges (depreciation and stock option expenses), as well as net income tax ($98,709), interest expense ($52,772) items not related to operating or current operating activities. When these items are removed the Company shows operating cash flow of $762,927, or $0.06 per share. This compares with operating cash flow of $975,138, or $0.07 per share, in the corresponding 6 months of 2013 (see the table that follows for details of these calculations).
The NanoChem division continues to produce most of FSI’s revenue and cash flow. New opportunities are unfolding to further increase sales in this division.
Mr. O’Brien adds, “We are not satisfied with our first half revenue and are taking all reasonable steps to return to top line growth. Q3 2014 is likely to be similar to the year earlier in revenue terms, however, as agricultural preorders begin in late fall, we hope to see a resumption of top line growth in the fourth quarter.”
* CEO, Dan O’Brien has scheduled a conference call for 11:00am EST, 8:00am PST, Friday August 15th to discuss the financials. Call 1-888-461-2024 (or 1-719-325-2323). The conference call title, “Second Quarter Financials,” may be requested.*
The above information and following table contain supplemental information regarding income and cash flow from operations for the 6 months ended June 30, 2014. Adjustments to exclude depreciation, stock option expenses and one time charges are given. This financial information is a Non-GAAP financial measure as defined by SEC regulation G. The GAAP financial measure most directly comparable is net income. The reconciliation of each of the Non-GAAP financial measures is as follows:
FLEXIBLE SOLUTIONS INTERNATIONAL, INC.
|Consolidated Statement of Operations|
|For 3 Months Ended June 30 (6 Months Operating Cash Flow)|
|3 months ended June 30|
|Income before income tax - GAAP||$||498,462||$||82,169|
|Net income (loss) - GAAP||$ 399,753 a||$ 70,169 a|
|Net income (loss) per common share – basic. - GAAP||$ 0.03 a||$ 0.01 a|
|3 month weighted average shares used in computing per share amounts – basic.- GAAP||13,169,991||13,169,991|
6 month Operating Cash Flow
Operating Cash flow (6 months). NON-GAAP
|$||762,927||$ 975,138 b|
|Operating Cash flow per share excluding non-operating items and items not related to current operations (6 months) – basic. NON-GAAP||$||0.06||$ 0.07 b|
|Non-cash Adjustments (6 month) NON-GAAP||$||367,271||$||715,986 c|
|Shares (6 month basic weighted average) used in computing per share amounts – basic GAAP||13,169,991||13,169,991|
Notes: certain items
not related to “operations” of the Company have been excluded from net
income as follows.
a) Non-GAAP – as of January 2013 the accumulated loss and expenses resulting from the Alberta division can now be used to reduce taxable income from the Illinois division.
b) Non-GAAP - amounts exclude certain non-cash items: depreciation and stock option expense (2014 = $367,271, 2013 = $715,986), interest expense (2014 = $52,772, 2013 = $55,880), net income tax (2014 = $98,709, 2013 = $70,000), and gain on the sale of equipment(2014 = $0, 2013 = $2,057). See Operating Cash Flow for other adjustments.
c) Non-GAAP – amounts represent depreciation, stock option expense.
Safe Harbor Provision
The Private Securities Litigation Reform Act of 1995 provides a "Safe Harbor" for forward-looking statements. Certain of the statements contained herein, which are not historical facts, are forward looking statement with respect to events, the occurrence of which involve risks and uncertainties. These forward-looking statements may be impacted, either positively or negatively, by various factors. Information concerning potential factors that could affect the company is detailed from time to time in the company's reports filed with the Securities and Exchange Commission.
Flexible Solutions International
615 Discovery Street, Victoria, BC V8T 5G4 CANADA
Tel: 250 477 9969
Toll Free: 800 661 3560
Fax: 250 477 9912
To find out more information about Flexible Solutions and our products, please visit www.flexiblesolutions.com.