- Sales in the second quarter (Q2) were $3,761,729, down approximately 4% when compared to sales of $3,930,075 in the corresponding period a year ago. The financials give a Q2, 2012 accounting net loss of $465,995, or $0.04 per share compared to an accounting net profit of $174,734, or $0.01 per share in Q2, 2011. Although the income tax expense taken in Q2, 2012 was only $120,000 compared to $295,000 in Q2, 2011, the depreciation expense increased from $82,193 in 2011 to $305,189 in 2012. The increase in depreciation was largely Canada based and not deductible from US income.
- Basic weighted average shares used in computing per share amounts in Q2 were 13,169,991 for 2012 and 13,169,991 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 in first half.
- Non-GAAP operating cash flow: For the 6 months ending June 30, 2012, net income reflects $676,426 of non-cash charges (depreciation and stock option expenses), as well as net income tax ($680,000), interest expense ($61,414) and other minor items ($2,578) not related to operating or current operating activities. When these items are removed the Company shows operating cash flow of $1,171,923, or $0.09 per share. This compares with operating cash flow of $1,423,196, or $0.11 per share, in the corresponding 6 months of 2011 (see the table that follows for details of these calculations).
The NanoChem division continues to produce most of FSI’s revenue and cash flow. New opportunities are unfolding to further increase sales in this division.* CEO, Dan O’Brien has scheduled a conference call for 11:00am EST, 8:00am PST, Wednesday August 15th to discuss the financials. Call 1-877-941-8609 (or 480-629-9692 ). The conference call title, “ Second Quarter Financials,” may be requested. * The above information and following table contain supplemental information regarding income and cash flow from operations for the 6 months ended June 30, 2012. Adjustments to exclude depreciation, stock option expenses and one time charges are given. This financial information is a Non-GAAP financial measure as defined by SEC regulation G. The GAAP financial measure most directly comparable is net income . The reconciliation of each of the Non-GAAP financial measures is as follows:
|FLEXIBLE SOLUTIONS INTERNATIONAL, INC. Consolidated Statement of Operations For 3 Months Ended June 30 (6 Months Operating Cash Flow) (Unaudited)|
|3 months ended June 30|
|Income before income tax - GAAP||$||(345,995)||$||469,734|
|Net income (loss) - GAAP||$||(465,995) a||$||174,734 a|
|Net income (loss) per common share – basic. - GAAP||$||(0.04) a||$||0.01 a|
|3 month weighted average shares used in computing per share amounts – basic.- GAAP||13,169,991||13,169,991|
|6 month Operating Cash Flow Ended June 30|
|Operating Cash flow (6months). NON-GAAP||$||1,171,923 b||$||1,423,196 b|
|Operating Cash flow per share excluding non-operating items and items not related to current operations (6 months) – basic. NON-GAAP||$||0.09 b||$||0.11 b|
|Non-cash Adjustments (6 month) NON-GAAP||$||676,426 c||$||235,266 c|
|Shares (6 month basic weighted average) used in computing per share amounts – basic GAAP||13,169,991||13,353,904|
|Notes : certain items not related to “operations” of the Company have been excluded from net income as follows. a) Non-GAAP – the relative lower Net income numbers for Q2, 2012 in comparison to Q2, 2011 are largely a result of the commencement of depreciation of the Alberta Factory, as well as the tax paid on revenue generated from the Illinois factory. Expenses resulting from the Alberta division can not be used to reduce taxable income in Illinois, USA. b) Non-GAAP - amounts exclude certain non-cash items: depreciation and stock option expense (2012 = $676,426, 2011 = $235,266), interest expense (2012 = $61,414, 2011 = $40,089), net income tax (2012 = 680,000, 2011 = $615,000), gain on the sale of equipment(2012 = $2,217) and interest income(2012 = $361). See Operating Cash Flow for other adjustments. c) Non-GAAP – amounts represent depreciation, stock option expense.|
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