EXHIBIT 99.1
NEWS RELEASE
August 14, 2019
FSI ANNOUNCES SECOND QUARTER, 2019 FINANCIAL RESULTS
Conference call scheduled for Thursday August 15, 2019, 11:00am Eastern time,
8:00 a.m. Pacific Time
See dial in number below
VICTORIA, BRITISH COLUMBIA, August 14, 2019 - 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 ended June 30, 2019.
Mr. Dan O'Brien, CEO comments, "Our bottom line was negatively impacted by a
significant bad debt charge and by additional tariffs on raw materials. We
intend to recover the bad debt through litigation and the tariffs through the
tariff drawback program, however, the timing of these recoveries is uncertain."
Mr. O'Brien continues, "All of our divisions and investments with exposure to
the agriculture markets were affected by the weather in the US and the
international uncertainties of trade. We expect that sales will recover in Q3
and Q4."
o Sales for the second quarter (Q2), 2019 were up approximately 63% to
$6,770,440 when compared to sales of $4,137,545 for Q2, 2018. The
result was an after tax GAAP accounting net loss of $27,733,0, or
$0.00 per weighted average share for Q2, 2019, compared to an after
tax GAAP accounting net income of $2,135,906, or $0.18 per weighted
average share for Q2, 2018. See 2019 past bad debt expense recognized
in Q2, 2019 as well as, insurance gain in Q2, 2018 of $1.72million.
These numbers are not related to Q2, 2019 or Q2, 2018 operating income
respectively.
o Basic weighted average shares used in computing earnings per share
amounts for the quarter were: 11,769,635 and 11,630,991 for Q2, 2019
and Q2, 2018 respectively.
o Non-GAAP operating cash flow: For the 6 months ending June 30, 2019,
net income reflects $373,351 of non-cash charges (depreciation and
stock option expenses), loss/gain on involuntary disposition, interest
income, interest expense, (gain)/loss on investment, write down of
inventory, deferred tax expense, and income tax. These items are items
not related to operating or current operating activities. When these
items are removed, the Company shows operating cash flow of $1,692,740
or $0.14 per share. This compares with operating cash flow of
$1,763,550 or $0.15 per share, in the corresponding 6 months of 2018
(See the table that follows for details of these calculations.
Anticipated tariff rebates are not included in the operating cash flow
number).
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..
* a conference call has been scheduled for 11:00 am Eastern Time, 8:00 am
Pacific Time, on Thursday August 15th , 2019. CEO, Dan O'Brien will be
presenting and answering questions on the conference call. To participate
in this call please dial toll free1-800-353-6461 (or +1-334-323-0501) just
prior to the scheduled call time. The conference call title, "Second
Quarter 2019 Financial Results," 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,
2019. 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:
1
FLEXIBLE SOLUTIONS INTERNATIONAL, INC.
Consolidated Statement of Operations
For 3 Months Ended June 30 (6 Months Operating Cash Flow)
(Unaudited)
--------------------------------------------------------------------------------
3 months ended March 31
2019 2018
---------------------------------
Revenue $6,770,440 $4,137,545
Income (loss) before income tax - GAAP $ 331,264 $2,293,161
Provision for Income tax net - GAAP $ (150,466) $ (157,255)
Net income (loss) - GAAP $ (27,733) $2,135,960
Net income (loss) per common share - basic. - $ 0.00 $ 0.18
GAAP
3 month weighted average shares used in 11,769,635 11,630,991
computing per share amounts - basic.- GAAP
6 month Operating Cash Flow
Ended June 30
---------------------------------
Operating Cash Flow (6 months). NON-GAAP $1,692,740 b,c $ 1,763,550 b
Operating Cash flow per share excluding
non-operating items and items not related to
current operations (6 months) - basic. $ 0.14 b,c $ 0.15 b
NON-GAAP
Non-cash Adjustments (6 month) GAAP $ 373,351 d $ 171,496 d
Shares (6 month basic weighted average) used 11,625,671 in computing per share
amounts - basic GAAP 11,737,635
Notes: certain items not related to "operations" of the Company have been
excluded from net income as follows.
a) Non-GAAP - Provision for Income tax less Deferred income tax recovery =
$529,546 less $125,999. See the financials for these numbers.
b) Non-GAAP - amounts exclude certain cash and non-cash items: depreciation and
stock option expense (2019 = $373,351, 2018 = $171,496), Gain on investment (
2019 = $259,514, 2018 = N/A), net gain/(loss) on involuntary disposition of
equipment (2019 = N/A, 2018 = $1,714,261), write down of inventory (2019 =
N/A, 2018 = N/A), interest income (2019 = $55,533, 2018 = $6,893), Interest
expense (2019 = $247,472, 2018 = $14,487) deferred tax (expense)/recovery
(2019 = $125,999, 2018 = N/A), and Income tax expense (2019 = $529,546, 2018
= $459,151). See the financial statements for all adjustments.
c) The revenue and gain from the 50% investment in the private Florida LLC
announced in January 2019 is not treated as revenue or profit from operations
by Flexible Solutions given the Company only purchased 50% of the LLC. The
profit is treated as investment income and therefore occurs below Operating
income in the Statement of Operations. As a result the $259,514 gain from
Flexible Solutions share in the LLC is removed from the calculation to arrive
at Operating Cash Flow.
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 statements 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
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.co
If you have received this news release by mistake or if you would like to be
removed from our update list please reply to: info@flexiblesolutions.com To find
out more information about Flexible Solutions and our products, please visit
www.flexiblesolutions.com.