News Release

May 14 2009

FSI ANNOUNCES FIRST QUARTER, 2009 FINANCIAL RESULTS

Conference call scheduled for Friday May. 15th, 11:00am Eastern time, 8:00am Pacific Time

See dial in number below

VICTORIA, BRITISH COLUMBIA, May 14, 2009 – FLEXIBLE SOLUTIONS INTERNATIONAL, INC. (NYSE Amex: FSI, FRANKFURT: FXT), a developer and manufacturer of biodegradable and environmentally safe, water and energy conservation technology, as well as anti-scalant and crop nutrient enhancement products, today announces financial results for the first quarter (Q1) ended March 31, 2009.

Mr. Daniel B. O’Brien, CEO, states, “The global economic slowdown continues, as the media informs us daily. This affects FSI in each of its division and market segments. However, despite continued inventory reduction and more aggressive just in time ordering from our customers, we still managed solid revenue and positive operating cash flow in Q1. Reduced volumes at the end of 2008 prevented us from selling all the high cost raw materials we had converted into finished goods and resulted in higher than predicted Cost of Goods Sold into the beginning of 2009. This pressure on margins finally relaxed in the second half of the quarter.”

      

 

Mr. O’Brien continues, ‘FSI’s sugar to aspartic acid plant, in Alberta, is much closer to completion. The steam permit we were waiting for has been issued and we are confident that we can begin commercial operation in September to coincide with the earliest possible availability of sugar beet juice from the 2009 crop. Production from the Alberta plant will allow FSI to supply the only renewably-based poly-aspartic acid in the world.This will allow access to customers who demand this level of enviromentally sound behavior as well as insulating the company from future oil price shocks.’ 

 

The NanoChem division continues to contribute most of our sales and cash flow, and new opportunities are unfolding to further increase sales in this division. NanoChem sales have been less seasonal than those of our WaterSavr and Flexible Solutions Ltd divisions. This has lead to less volatility in total revenue figures quarter over quarter. However, in the future, Q1 and Q2 sales may be much larger than sales in Q3 and Q4. This is largely due to potential growth in agricultural product sales (sales which tend to occur mostly in Q1 and Q2).

 

* CEO, Dan O’Brien has scheduled a conference call for 11:00am EST, 8:00am PST, Friday May 15th to discuss the financials. Call 1 877 675 4748 (or 1 719 325 4848). The confirmation code 8900047 may be requested *

(TABLE FOLLOWS)

The above information and following table contain supplemental information regarding income and cash flow from operations for the 3 months ended Mar. 31, 2009. 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 March 31 (3 Months Operating Cash Flow)

(Unaudited)

 

3 months ended March 31

 

2009

2008

Revenue

     $ 2,659,548

$3,498,473

Net income (loss) GAAP

     $   (133,229)

$    310,173

Net income (loss) per common share – basic. GAAP

     $         (0.01)

$          0.02

Net income (loss) excluding items not related to current operating activities - NON-GAAP

     $   (133,229)               

$    380,563 a                

Net income (loss) per common share (adjusted) – basic. NON-GAAP

     $         (0.01)

$          0.03 a

3 month weighted average shares used in computing per share amounts – basic. GAAP

     14,057,567

14,157,567

 

3 month Operating Cash Flow

Ended March 31

Operating Cash flow (3months). NON-GAAP

     $     33,146 b

$   517,344 c

Operating Cash flow excluding non-operating items and items not related to current operations (3 months). NON-GAAP

     $   180,322 d

$   670,303 e

Operating Cash flow per share excluding non-operating items and items not related to current operations (3 months) – basic. NON-GAAP

     $           0.1 d

$         0.05 e

Non-cash Adjustments (3 month)

     $   166,375  f

$   207,171  f

Shares (3 month basic weighted average)  used in computing per share amounts – basic GAAP

     14,062,567

14,057,567

Notes: certain items not related to “operations” of the Company have been excluded from net income as follows.

a) Non-GAAP - amounts exclude certain items not related to current operating activities (Loss on sale of equipment of $29,026 and Write down of equipment $41,440). See Operating Cash Flow for other adjustments.    

b) Non-GAAP - amounts exclude certain non-cash items (depreciation and stock option expense totaling $166,375)

c) Non-GAAP - amounts exclude certain non-cash items (depreciation, stock option expense, and assigned interest expense totaling $207,323)

d) Non-GAAP - amounts exclude certain non-cash items (depreciation and stock option expense totaling $166,375) as well as items unrelated to current operating activities (new factory construction and related Interest expense totaling $147,176).

e) Non-GAAP amounts exclude certain non-cash items (depreciation, stock option expense, and assigned interest expense totaling $207,171) and items unrelated to current operating activities (new factory construction, loss on sale of equipment, and write down of inventory  totaling $152,959).

f) Non-GAAP – amounts represent depreciation, stock option expense, and assigned interest expense