EXHIBIT 99.1
NEWS RELEASE
August 14, 2018
FSI ANNOUNCES Second Quarter, 2018 FINANCIAL RESULTS
Conference call scheduled for Wednesday August 15th, 11:00am
Eastern time, 8:00am Pacific Time
See dial in number below
VICTORIA, BRITISH COLUMBIA, August 14, 2018 - 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, 2018.
Mr. Daniel B. O'Brien, CEO, states, "We are disappointed that we have not yet
returned to positive revenue growth. We see signs indicating we will be
successful over the next several months but those signs have yet to become firm
purchase orders." Mr. O'Brien continues, "International trade issues could
affect our business in the future. We have been planning to counteract negative
conditions as we identify them and hope that our planning will result in little
net cost to our Company."
o Sales in the second quarter (Q2) were $4,137,545, down approximately 12%
when compared to sales of $4,722,366 in the corresponding period a year
ago. The financials show a Q2, 2018 net income of $2,135,906, or $0.18 per
share, compared to a net income of $273,623, or $0.02 per share, in Q2,
2017. Note: Due to an insurance payout (net of tax) in Q2, 2018 of
$1,721,977 the financials show a net income of $2,135,906. If the insurance
payout were removed net income would be approximately $414,000 or $0.04 per
share (basic). This is a non-GAAP number Also, the Q2, 2017 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.
This expense is covered by a significant insurance payout that was listed
as revenue in Q1, 2017 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 for Q2 2017. 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 o
Basic weighted average shares used in computing earnings per share amounts
in Q2 were 11,630,991 and 11,465,606 for Q2, 2018 and Q2, 2017
respectively.
o Non-GAAP operating cash flow: For the 6 months ending June 30, 2018, net
income reflects $171,496 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 $1,749,063, or $0.15 per share. This compares
with operating cash flow of $1,968,716, or $0.17 per share, in the
corresponding 6 months of 2017 (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 Wednesday August 15, 2018. CEO, Dan O'Brien will be
presenting and answering questions on the conference call. To participate
in this call please dial 1 877-260-1479 (or 1 334-323-0522) just prior to
the scheduled call time. The conference call title, "Second Quarter 2018
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,
2018. 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
2018 2017
---------------------------------
Revenue $ 4,137,545 $ 4,722,366
Income (loss) before income tax - GAAP $ 2,296,161 a $ 408,995 a
Provision for Income tax(net) - GAAP $ 157,255 $ 135,372
Net income (loss) - GAAP $ 2,135,906 a $ 273,623 a
Net income (loss) per common share - basic. - $ 0.18 a $ 0.02
GAAP
3 month weighted average shares used in 11,630,991 11,465,606 b
computing per share amounts - basic.- GAAP
6 month Operating Cash Flow
Ended June 30
--------------------------------
Operating Cash flow (6months). NON-GAAP $ 1,749,063 c $ 1,968,716 c
Operating Cash flow per share excluding $ 0.15 c $ 0.17 c
non-operating items and items not related to
current operations (6 months) - basic.
NON-GAAP
Non-cash Adjustments (6 month) GAAP $ 171,496 d $ 181,229 d
Shares (6 month basic weighted average) used 11,625,671 11,462,167 b
in computing per share amounts - basic GAAP
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. . The financials also give a Q2, 2018 "Gain" as a result
of an insurance payout of $1,721,977 which is also non-operating income.
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 (2018 = $171,496, 2017 = $181,229), gain/(loss) on
the disposition of equipment (2018 = $1,714,261, 2017 = $2,245,718), write
down of inventory (2018 = N/A, 2017 = $51,346), interest income (2018 =
$6,893, 2017 = $82), deferred tax expense (2018 = N/A, 2017 = $23,404), and
Income tax (2018 = 459,151, 2017 = $432,247). 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
6001 54th Ave, Taber, Alberta, CANADA T1G 1X4
Company Contacts
Jason Bloom
Toll Free: 800 661 3560
Fax: 403 223 2905
E-mail: info@flexiblesolutions.com
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