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, 2012.
Mr. Daniel B. O’Brien, CEO, states, “The increase in our non-GAAP operating cash flow over the previous year demonstrates the Company’s financial strength. With regard to revenue forecasting, given the news of an accelerated world economic slow down particularly in Europe and the Far East, it is simply too difficult and unrealistic to give accurate revenue guidance at this time. Never the less, full year 2012 revenue is expected to be higher than 2011 and revenue forecasts will be updated at each financial reporting date.” Mr. O’Brien continues, “As a result of the seasonality of the agriculture and swimming pool markets, FSI’s sales tend to be larger during the first half of the year, causing higher accounts receivable, and lower cash and inventory numbers. This does not affect the Company’s ability to grow given its strong working capital position including, a largely untapped, $6.4 million line of credit with a Chicago based bank.”
Note: as a result of the start up of the Alberta factory, a biomass expense is no longer given in the news release. Also, due to the generation of revenue from that facility, depreciation of the factory has begun results in a significantly higher non-cash accounting expenses in the financials.
- Sales in the first quarter (Q1) were $5,194,071, up approximately 19% when compared to sales of $4,357,467 in the corresponding period a year ago. The financials give a Q1, 2012 net profit of $222,660, or $0.02 per share compared to a net profit of $358,107, or $0.03 per share in Q1, 2011.
- Basic weighted average shares used in computing per share amounts in Q1 were 13,169,991 for 2012 and 13,592,698 for 2011. Note: a share buy back by the Company of close to 800,000 shares in Q1, 2011 is the reason for the reduced share count.
- Non-GAAP operating cash flow: For the 3 months ending March 31, 2012, net income reflects $338,882 of non-cash charges (depreciation and stock option expenses), income tax and other minor items not related to operating or current operating activities. When these items are removed, the Company shows operating cash flow of $1,121,542, or $0.8 per share. This compares with operating cash flow of $796,099, or $0.06 per share, in the corresponding 3 months of 2011 (see the table that follows for details of these calculations).
Mr. O’Brien comments, “Production from the Alberta plant will allow FSI, through the NanoChem division, to supply the only renewably-based poly-aspartic acid in the world. This will allow access to customers who demand this level of environmentally sound behavior as well as insulating the Company from future oil price shocks.”