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 full year ended December 31, 2013.
Mr. Dan O’Brien, CEO states, “In 2013, cost of goods sold was higher than in previous years and we were not able to raise prices to all of our customers as quickly as we would have liked to. Combined with slightly lower total sales, the result was lower operating cash flow compared to 2012 [non-GAAP].” Mr. O’Brien continues, “Raw material prices have eased so far in 2014 and we are focusing additional efforts on recouping and increasing sales revenue in order to resume the quick growth experienced in 2010 through 2012.”
- Sales for the full year 2013 were $15,801,596, down 4%, when compared to $16,400,107 for full year 2012. The result was an after tax GAAP accounting net income of $1,821,634, or $0.14 per weighted average share, compared to an accounting net loss of $1,084,447, or $0.08 per weighted average share in full year 2012.
- Non-GAAP operating cash flow: (for details see the following table). For the 12 months ending Dec. 31, 2013, net income (loss) reflects $899,450 of non-cash charges, Income Tax Recovery of $134,720, Exclusive Distributor fee of $250,000, gain on sale of equipment of $2,057, interest income of $2,000 and when non-cash items, items not related to current operations of the Company, are removed the Company shows positive operating cash flow of $533,407 or $0.04 per share. This compares with 2012 operating cash flow of $1,364,621, or $0.10 per share
- The financials show a significantly higher accounting net income in 2013 versus 2012. This is largely due to a deferred tax recovery of $2,408,395 which has been realized as an asset on the Balance Sheet. The Deferred asset is the result of the commencement of the expensing of the Alberta factory against the Company’s US income. Past and current factory construction and operating expenses not yet applied against FSI’s US income will now be carried forward to reduce the NanoChem Division’s revenue for income tax purposes.
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. In past years, the NanoChem Division sales have been less volatile quarter over quarter, however due to increasing sales to agriculture, revenue seasonality may become larger.
Conference call
** CEO, Dan O’Brien has scheduled a conference call for 11:00am EST, 8:00am PST, Tuesday April 01, 2013 to discuss the financials. To attend this call, dial 1-877-941-0844 (or 1-480-629-9835). The conference call title, ‘Full Year 2013 Financials’ maybe requested **
The above information and following table contain supplemental
information regarding income and cash flow from operations for the 3 &
12 months respectively ended Dec. 31, 2013 and 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 & 12 Months Ended Dec. 31 (12
Months Operating Cash Flow)
(12 month audited / 3 month
unaudited)
3 and 12 month revenue ended Dec. 31 | |||||||||||
2013 | 2012 | ||||||||||
3 month | 3 month revenue | ||||||||||
Revenue NON-GAAP | $ | 3,431,433 | $ | 3,846,275 | |||||||
12 month revenue | |||||||||||
12 month | |||||||||||
Revenue GAAP | $ | 15,801,596 | $ | 16,400,107 | |||||||
Net income (loss) GAAP | $ | 1,821,634 | a | $ | (1,084,447) | a | |||||
Net income (loss) per share GAAP | $ | 0.14 | a | $ | (0.08) | a | |||||
12 month weighted average shares used in computing per share amounts – basic GAAP | 13,169,991 | 13,169,991 | |||||||||
The following calculations begin with: Net income (loss). GAAP | 12 month Operating Cash Flow ended Dec. 31 | ||||||||||
Operating cash flow (12 month). NON-GAAP – Excludes:
item “a” as | $ | 533,407 | b | $ | 1,364,621 | c | |||||
Operating Cash flow per share (12 months) – basic. NON-GAAP
- Excludes: | $ | 0.04 | b | $ | 0.10 | c | |||||
Non-cash Adjustments (as per Consolidated Statement of Cash Flow) | $ | (899,450) | d | $ | 1,325,577 | d | |||||
12 month basic weighted average shares used in computing per share
amounts | 13,169,991 | 13,169,991 |
Notes: certain items
not related to “operations” of the Company have been excluded as follows:
a)
Significant information. Expensing of the Alberta factory against
US income began in 2013. This resulted in a much lower income tax
expense as well as a deferred tax recovery asset recognized on the
balance sheet for 2013. This created a significant difference in the net
income (loss) posted in 2012 versus 2013.
b) NON-GAAP-
amount excludes certain non-cash items (depreciation, stock compensation
expenses, deferred and income tax recovery) as well as a gain on sale of
equipment ($2,057), interest income ($2,000), and income tax recovery
($134,720). This is a 12 month number as per the financials.
c)
NON-GAAP amount excludes certain non-cash items (depreciation, stock
compensation expenses, and deferred income tax recovery) as well as
interest income ($759), gain on sale of equipment ($2,217), and income
tax ($1,126,468). This is a 12 month number as per the financials.
d)
NON-GAAP amount represents depreciation, stock based compensation write
down of inventory and deferred income tax recovery per the Consolidated
Statement of Cash Flow.
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
statement 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.
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please reply to: alishap@flexiblesolutions.com
To
find out more information about Flexible Solutions and our products,
please visit www.flexiblesolutions.com
Contacts:
Jason Bloom,
250-477-9969
TF: 800-661-3560
Info@flexiblesolutions.com