- 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 $0.12 per share, in the corresponding 9 months of 2010 (see the table that follows for details of these calculations).
The NanoChem division continues to contribute most of our sales and cash flow and, new opportunities are unfolding to further increase sales in this division. NanoChem sales have become less seasonal than those of our WaterSavr and Flexible Solutions Ltd divisions. This has lead to less volatility in total revenue figures quarter over quarter. However, in the future, first half sales should be larger than second half. This is due to predicted growth in agricultural product sales, sales which are stronger in the first half of each year.* CEO, Dan O’Brien has scheduled a conference call for 11:00am EST, 8:00am PST, Tuesday Nov. 15th to discuss the financials. Call 1-480-629-9692 (or 1-877-941-9205), just prior to the scheduled call time. The conference call title, “ Third Quarter Financials,” may be requested. * The above information and following table contains supplemental information regarding income and cash flow from operations for the 3 & 9 months respectively ended Sept 30, 2011 and 2010. Adjustments to exclude depreciation, stock option expenses, one time charges and certain other expenses are given. This financial information is a non-GAAP financial measure as defined by SEC regulation G. The GAAP financial measure most directly comparable is net income . The reconciliation of each of the non-GAAP financial measures is as follows:
|FLEXIBLE SOLUTIONS INTERNATIONAL, INC. Consolidated Statement of Operations For 3 Months Ended Sept. 30 (9 Months Operating Cash Flow) (Unaudited)|
|3 months ended Sept. 30|
|Net income (loss) GAAP||$||(92,293||)||$||(155,415||)|
|Net income (loss) per common share – basic. GAAP||$||(0.01||)||$||(0.01||)|
|3 month weighted average shares used in computing per share amounts – basic. GAAP||13,169,991||13,962,567|
|9 month Operating Cash FlowEnded Sept. 30|
|Operating Cash flow (9 months). NON-GAAP||$||1,673,240 a||$||1,092,908 b|
|Operating Cash flow excluding non-operating items and items not related to current operations (9 months). NON-GAAP||$||2,324,209 c||$||1,737,521 d|
|Operating Cash flow per share excluding non-operating items and items not related to current operations (9 months) – basic. NON-GAAP||$||0.18 c||$||0.12 d|
|Non-cash Adjustments (9 month)||$||370,111 e||$||375,022 f|
|9 month basic weighted average shares used in computing per share amounts – basic GAAP||13,269,926||13,962,567|
|Notes: certain items, including items not related to operations or current operating activities of the Company, have been excluded from net income as follows: a NON-GAAP amount excludes certain non-cash items (depreciation and stock option expenses - $370,111), as well as interest income($53), and income taxes charged (of $882,634 - $20,000). This is a 9 month number as per financials. b NON-GAAP amount excludes certain non-cash items (depreciation and stock option expenses - $375,022), interest income as well as income taxes charged (of $491,220). This is a 9 month number as per financials. c NON-GAAP amount excludes certain non-cash items (depreciation and stock option expense - $370,111), as well as interest income($53) and certain items not related to operations or current operating activities; new factory construction and development costs and related interest expense ($650,969), and income tax ($882,634 - $20,000). d NON-GAAP amount excludes certain non-cash items (depreciation and stock option expense - $375,022), as well as interest income and certain items not related to operations or current operating activities; new factory construction and development costs and related interest expense ($644,613), and income tax expense (of $491,220). e NON-GAAP amount represents depreciation and stock option expenses. f NON-GAAP amount represents depreciation and stock option expenses.|
Flexible Solutions International 615 Discovery Street, Victoria, BC V8T 5G4 CANADAIf you have received this news release by mistake or if you would like to be removed from our update list please reply to: Laura@FlexibleSolutions.com To find out more information about Flexible Solutions and our products, please visit www.flexiblesolutions.com.