FLEXIBLE SOLUTIONS INTERNATIONAL, INC. (NYSE AMEX: FSI, FRANKFURT: FXT), is the developer and manufacturer of biodegradable polymers for oil extraction, detergent ingredients, water treatment and crop nutrient availability chemistry, as well as biodegradable and environmentally safe water and energy conservation technologies. Today the Company announces financial results for the Third quarter (Q3) ended Sept. 30, 2011.
Mr. Daniel B. O’Brien, CEO, states, “Revenue growth continues to be very strong. We are pleased with our financial progress given the strength of the non-GAAP operating cash flow and GAAP operating income numbers given below and in the following table. Flexible Solutions would have posted a positive net income from operations for the quarter if not for the income tax expense and the expensing of the sugar to aspartic acid factory construction in Alberta, Canada.” Mr. O’Brien continues, “We will continue to execute our long-term strategy of reducing cost of raw materials by manufacturing them in house.”
- Sales in the third quarter (Q3), were $3,861,195, up 44% when compared to sales of $2,676,921, in the corresponding period a year ago. The result was a GAAP accounting net loss of $92,293, or $0.01 per basic weighted average shares for Q3, 2011, compared with a net loss of $155,415, or $0.01 per basic weighted average share, in Q3, 2010. A combination of a much higher income tax expense recognized in Q3, 2011 ($247,634) versus Q3, 2010 ($9,140) , higher raw material cost from China, as well as the mix of products sold were the main factors that resulted in a negative net income in Q3.
- GAAP operating income for the third quarter of 2011 was positive $155,288 compared to negative $146,275 for a net positive change of $301,563. This illustrates the cost control exercised throughout operations.
- Basic weighted average shares used in computing per share amounts in Q3 were 13,169,991 for 2011 and 13,962,567 for 2010. A share buy back of 792,576 shares in Q1, 2011 is the reason for the reduction of shares outstanding.
- Non-GAAP operating cash flow: For the 9 months ending Sept. 30, 2011, net income reflects $370,111 of non-cash charges (depreciation and stock option expenses), net income tax expense of $862,634, and new factory construction and development costs and related interest expense of $650,969. These items are either non-cash items or items not related to operations or current operating activities. When these items are removed, the Company shows operating cash flow of $2,324,209, or $0.18 per weighted average share. This compares with operating cash flow of 1,737,521, or $0.12 per share, in the corresponding 9 months of 2010 (see the table that follows for details of these calculations).
Per the News Release of November 3 rd, successful commercial production has begun at the sugar to aspartic acid plant in Taber, Alberta. The Company will scale up production in this facility over the coming months and the output will be shipped to the Company’s Illinois factory for conversion into thermal polyaspartate (TPA).
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