15 May 2017
FSI Announces First Quarter, 2017 Financial Results
Conference call scheduled for Tuesday May 16th, 11:00am Eastern time, 8:00am Pacific Time
See dial in number below
VICTORIA, BRITISH COLUMBIA, May 15, 2017 – 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 first quarter (Q1) ended March 31, 2017.
Mr. Daniel B. O’Brien, CEO, states, “First quarter results were good considering the late spring in the US agriculture sector and the loss of swimming pool sales caused by the fire in Taber AB. The large increase in cash on the balance sheet is due to the one-time $4.2million insurance payout combined with retained earnings for the quarter. HeatsavrTM production has restarted, the fire site is clean and we are accepting bids for a new building.” CEO O’Brien adds, “Oil prices have been steady, supporting our estimate that we will see revenue growth for the remaining quarters of 2017.”
- Sales in the first quarter (Q1) were $4,663,708, down approximately 12% when compared to sales of $5,312,635 in the corresponding period a year ago. In part as the result of an insurance claim payout, the financials show a Q1, 2017 net income of $3,252,667, or $0.28 per share, compared to a net income of $741,794, or $0.06 per share, in Q1, 2016. Note: a share buyback of 1,750,000 shares took place in January 2016.
- Basic weighted average shares used in computing per share amounts in Q1 were 11,458,170 and 11,543,376 for both 2017 and 2016 respectively.
- Non-GAAP operating cash flow: For the 3 months ending March 31, 2017, net income reflects $103,857 of non-cash charges (depreciation and stock option expenses), Income tax, Deferred income tax, as well as Net gain or loss from insurance payout and/or write down of inventory, as well as Interest income; which are items not related to operating or current operating activities. When these items are removed, the Company shows operating cash flow of $1,155,828, or $0.10 per share. This compares with operating cash flow of $1,443,117, or $0.13 per share, in the corresponding 3 months of 2016 (see the table that follows for details of these calculations).
The NanoChem division continues to be the dominant source of revenue and cash flow for the Company. New opportunities continue to unfold in detergent, water treatment, oil field extraction and agricultural use to further increase sales in this division. In past years the NanoChem division sales have been less volatile quarter over quarter, however due to increasing sales to agriculture, revenue seasonality may become larger.
* a conference call has been scheduled for 11:00 am Eastern Time, 8:00 am Pacific Time, on Tuesday May 16, 2017. CEO, Dan O’Brien will be presenting and answering questions on the conference call. To participate in this call please dial 1-800-768-6544 (or 1-785-830-7990) just prior to the scheduled call time. The conference call title, “First Quarter 2017 Financials,” may be requested.
The above information and following table contain supplemental information regarding income and cash flow from operations for the 3 months ended March 31, 2017. 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)
3 months ended March 31 2017 2016 Revenue $4,663,708 $ 5,312,635 Income (loss) before income tax – GAAP $3,572,946 $ 1,299,800 Provision for Income tax(net) – GAAP $ 320,279 $ 558,006 Net income (loss) – GAAP $3,252,667 $ 741,794 Net income (loss) per common share – basic. – GAAP $ 0.28 a $ 0.06 a 3 month weighted average shares used in computing per share amounts – basic.- GAAP 11,458,170 a 11,543,376 a 3 month Operating Cash Flow
Ended March 31
Operating Cash flow (3months). NON-GAAP $1,155,828 b $1,443,117 b Operating Cash flow per share excluding non-operating items and items not related to current operations (3 months) – basic. NON-GAAP $ 0.10 a,b $ 0.13 a,b Non-cash Adjustments (3 month) GAAP $ 103,857 c $ 143,317 c Shares (3 month basic weighted average) used in computing per share amounts – basic GAAP 11,458,170 a 11,543,376 a
Notes: certain items not related to “operations” of the Company have been excluded from net income as follows.
a) Non-GAAP – A share buyback of 1,750,000 shares took place in January 2016. Shares outstanding at March 31, 2016 were 11,427,991. Also an insurance payout of $4,207,578 less the loss of the factory, as a result of the fire in the Taber, Alberta factory, raised net income by $0.22 per share. See the financials for details.
b) Non-GAAP – amounts exclude certain non-cash items: depreciation and stock option expense totaling (2017 = $103,857, 2016 = $143,317), Deferred tax expense (2017 = $23,404, 2016 = N/A), Income tax, (2017 = $296,875, 2016 = $558,006,), net gain/(loss) of building and equipment from the fire in Taber, Alberta (2017 = $2,572,288, 2016 = N/A) Interest income (2017 = $33, 2016 = $ N/A,), write down of inventory (2017 = $51,346, 2016 = N/A). See the financial statements for all adjustments.
c) Non-GAAP – amounts represent depreciation and stock compensation 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.