EXHIBIT 99.1
NEWS RELEASE
August 14, 2017
FSI ANNOUNCES Second Quarter, 2017 FINANCIAL RESULTS
Conference call scheduled for Tuesday August 15th, 11:00am Eastern time, 8:00am
Pacific Time See dial in number below
VICTORIA, BRITISH COLUMBIA, August 14, 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
second quarter (Q2) ended June 30, 2017.
Mr. Daniel B. O'Brien, CEO, states, "We are pleased that strong top line growth
was present for the quarter and hope it will continue. The accounting treatment
for cleanup after the fire makes the bottom line unflattering and we caution
that the effects of the fire will show up in our financials for several more
quarters - sometimes positive and other times negative." Mr. O'Brien continues,
"There were also raw material price increases in the quarter that affected net
profits. We will move toward passing these costs on over the next several
months."
o Sales in the second quarter (Q2) were $4,722,366, up approximately 26%
when compared to sales of $3,733,183 in the corresponding period a
year ago. The financials show a Q2, 2017 net income of $273,623, or
$0.02 per share, compared to a net income of $561,237, or $0.05 per
share, in Q2, 2016. Note: The financials give an expense, "loss on
involuntary disposition" of $326,570, or $0.03 per share, related to
the clean-up of the fire damaged site in Taber, Alberta in Q2, 2017.
This expense is covered by a significant insurance payout that was
listed as revenue in Q1 and as a net revenue number in the six month
Q2, "consolidated statement of operations.." (see "Gain on involuntary
disposition"). This clean-up expense is a non-operating expense, which
if added back to net income would result in net income of
approximately $600,193 or $0.05 per share. This is a non-GAAP number
and the demonstration of the adding back of this non-operating expense
to net income does not take into account additional income tax
expense, if any, that may reduce the effect of this adjustment.
Furthermore, as a result of the fire damage, any additional
significant insurance payouts or related expenses (such as write down
of inventory, short term loss of revenue, etc) will make year over
financial comparisons difficult in the short term.
o Basic weighted average shares used in computing earnings per share
amounts in Q2 were 11,465,606 and 11,427,991 for Q2, 2017 and Q2, 2016
respectively.
o Non-GAAP operating cash flow: For the 6 months ending June 30, 2017,
net income reflects $181,229 of non-cash charges (depreciation and
stock option expenses), income tax, as well as gain (loss) on
disposition (and involuntary disposition) of equipment, interest
income, write down of inventory, and income tax; which are items not
related to operating or current operating activities. When these items
are removed, the Company shows operating cash flow of $1,968,716, or
$0.17 per share. This compares with operating cash flow of $2,521,448,
or $0.22 per share, in the corresponding 6 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. Also new sales opportunities have
appeared in the WaterSavrTM division as a result of the ongoing drought in the
southern United States. Many municipalities are water stressed and are seeking
ways to conserve water.
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* a conference call has been scheduled for 11:00 am Eastern Time, 8:00 am
Pacific Time, on Tuesday August 15, 2017. CEO, Dan O'Brien will be presenting
and answering questions on the conference call. To participate in this call
please dial 1-800-533-7954 (or 1-785-830-1924) just prior to the scheduled call
time. The conference call title, "Second 2017 Financials," may be requested.
The above information and following table contain supplemental information
regarding income and cash flow from operations for the period ended June 30,
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 June 30 (6 Months Operating Cash Flow)
(Unaudited)
3 months ended June 30
2017 2016
---------------------------------
Revenue $ 4,722,366 $ 3,733,183
Income (loss) before income tax - GAAP $ 408,995 a $ 931,407
Provision for Income tax(net) - GAAP $ 135,372 $ 370,170
Net income (loss) - GAAP $ 273,623 a $ 561,237
Net income (loss) per common share - basic. - $ 0.02 a $ 0.05
GAAP
3 month weighted average shares used in 11,466,606 11,427,991 b
computing per share amounts - basic.- GAAP
6 month Operating Cash Flow
Ended June 30
---------------------------------
Operating Cash flow (6months). NON-GAAP $ 1,968,716 c $ 2,521,448 c
Operating Cash flow per share excluding
non-operating items and items not related to $ 0.17 c $ 0.22 c
current operations (6 months) - basic.
NON-GAAP
Non-cash Adjustments (6 month) GAAP $ 181,716 d $ 292,115 d
Shares (6 month basic weighted average) used
in computing per share amounts - basic GAAP 11,485,683 b 11,462,167
Notes: certain items not related to "operations" of the Company have been
excluded from net income as follows.
a) Non-GAAP -:: The financials give an expense of $326,570, or $0.03 per share,
related to the clean-up of the fire damaged site in Taber Alberta in Q2, 2017.
This is a non-operating expense, which if added back to net income would result
in net income of approximately $600,193 or $0.05 per share. This is a non-GAAP
number and the adding back of this expense to net income does not take into
account additional income tax expense, if any, that may result.
b) Also a share buyback of 1,175,000 shares took place in January 2016.
c) Non-GAAP - amounts exclude certain cash and non-cash items: depreciation and
stock option expense (2017 = $181,229, 2016 = $292,155), gain/(loss) on the
disposition of equipment (2017 = $2,245,718, 2016 = $1,914), write down of
inventory (2017 = $51,346, 2016 = N/A), interest income (2017 = $82, 2016 = $
N/A), deferred tax expense (2017 = $23,404, 2016 = $ N/A), and Income tax (2017
= $432,247, 2016 = $928,176). See the financial statements for all adjustments.
d) 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.
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Flexible Solutions International
206 - 920 Hillside Ave, Victoria, BC CANADA V8T 1Z8
Jason Bloom
Tel: 250 477 9969
Toll Free: 800 661 3560
Fax: 250 477 9912
E-mail: info@flexiblesolutions.com
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find out more information about Flexible Solutions and our products, please
visit www.flexiblesolutions.com.