[March 31, 2015] |
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Flexible Solutions Announces Full Year, 2014 Financial Results
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 and full year ended December 31, 2014.
Mr. Dan O'Brien, CEO states, "In 2014 we directed our energy toward
increasing sales and an orderly close of our aspartic acid project in
Alberta. In the second half of the year, revenue growth resumed and the
large increase in operating cash flow for the full year shows the
progress we have made in streamlining operations. We believe we executed
on our plan and intend to proceed the same way in 2015. We were
particularly pleased with the large WaterSavr sale in Texas and we hope
that sale was the first of many."
The Company recognized a $2.4million deferred income tax recovery in
2013 as a result of closing down the Alberta based aspartic acid
facility. The accounting adjustment to the Statement of Operations
resulted in a substantially higher net income than what the Company
actually earned in that year. One should consider this large adjustment
to the financial statements when comparing net income to latter or
previous years. See details below.
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Sales for the full year 2014 were $15,907,849, up 1%, when compared to
$15,801,596 for full year 2013. The result was an after tax GAAP
accounting net income of $403,345, or $0.03 per weighted average
share, compared to an accounting net income of $1,821,634, or $0.14
per weighted average share in full year 2013(see the bullet points
below to explain the significantly large net income number in 2013).
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Non-GAAP operating cash flow: (for details see the following table).
For the 12 months ending Dec. 31, 2014, net income (loss) reflects
$716,290 of non-cash charges, Income Tax expense of $422,044, and when
these items, items not related to current operations of the Company,
are removed the Company shows positive operating cash flow of
$1,541,679 or $0.12 per share. This compares with 2013 operating cash
flow of $533,407, or $0.04 per share
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The financials show a significantly higher accounting net income in
2013 versus 2014. This is largely due to a deferred tax recovery of
$2,408,395 which was realized as an asset on the Balance Sheet in
2013. 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. Also new sales opportunities have appeared in the WaterSavr
division as a result of the on going drought in the southern United
States. Many municipalities are water stressed and are seeking ways to
conserve water.
Conference call
** CEO, Dan O'Brien has scheduled a conference
call for 11:00am EST, 8:00am PST, Wednesday
April 01, 2013 to discuss the financials. To attend this call, dial 888-455-2296
(or 719-325-2432). The conference call title, 'Fourth
Quarter 2014 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, 2014 and 2013. 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 (News - Alert) 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)
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3 and 12 month revenue ended Dec. 31
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2014
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2013
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3 month
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3 month revenue
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Revenue NON-GAAP
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$ 3,957,623
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$3,431,433
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12 month revenue
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12 month
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Revenue GAAP
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$ 15,907,849
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$15,801,596
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Net income (loss) GAAP
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$ 403,345 a
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$ 1,821,634 a
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Net income (loss) per share GAAP
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$ 0.03 a
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$ 0.14 a
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12 month weighted average shares used in computing per share
amounts - basic GAAP
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13,169,991
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13,169,991
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The following calculations begin with: Net income (loss). GAAP
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12 month Operating Cash Flow
ended Dec. 31
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Operating cash flow (12 month). NON-GAAP - Excludes:
item "a" as indicated and as listed
in the Notes below.
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$ 1,541,679 b
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$ 533,407 c
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Operating Cash flow per share (12 months) - basic. NON-GAAP
- Excludes: item
"a" as indicated and as listed in the Notes below.
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$ 0.12 b
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$ 0.04 c
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Non-cash Adjustments (as per Consolidated Statement of Cash Flow)
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$ 716,290 d
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$ (899,450)d
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12 month basic weighted average shares used in computing per share
amounts - basic. GAAP
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13,169,991
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13,169,991
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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 2013 versus 2014. b) NON-GAAP -
amount excludes certain non-cash items: depreciation($789,733), stock
compensation expense($91,168), and deferred income tax recovery
($164,611), as well as interest income ($ N/A), gain on sale of
equipment ($ N/A), income tax expense ($422,044). This is a 12 month
number as per the financials. c) NON-GAAP - amount excludes
certain non-cash items: depreciation($1,298,616), stock compensation
expense($129,155), and deferred income tax recovery($2,408,395), and
write down of inventory($81,174), as well as interest income ($2,000) a
gain on sale of equipment ($2,057), income tax recovery ($134,720) and
exclusive distributor fee ($250,000). 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 Flows.
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.
Flexible Solutions International 206 - 920 Hillside Ave,
Victoria, BC V8T 1Z8 CANADA Company
Contacts
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Flexible Solutions International - Head Office
Jason Bloom
Tel: 250-477-9969
Tel: 800.661.3560
Email: [email protected]
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If you have received this news release by mistake or if you would like
to be removed from our update list please reply to: [email protected] To
find out more information about Flexible Solutions and our products,
please visit www.flexiblesolutions.com
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