0001004878-22-000004.txt : 20220401
0001004878-22-000004.hdr.sgml : 20220401
20220401171754
ACCESSION NUMBER: 0001004878-22-000004
CONFORMED SUBMISSION TYPE: 8-K
PUBLIC DOCUMENT COUNT: 3
CONFORMED PERIOD OF REPORT: 20220401
ITEM INFORMATION: Results of Operations and Financial Condition
ITEM INFORMATION: Other Events
ITEM INFORMATION: Financial Statements and Exhibits
FILED AS OF DATE: 20220401
DATE AS OF CHANGE: 20220401
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: FLEXIBLE SOLUTIONS INTERNATIONAL INC
CENTRAL INDEX KEY: 0001069394
STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS CHEMICAL PRODUCTS [2890]
IRS NUMBER: 911922863
STATE OF INCORPORATION: NV
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 8-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-31540
FILM NUMBER: 22799386
BUSINESS ADDRESS:
STREET 1: 2614 QUEENSWOOD DR
CITY: VICTORIA B C
STATE: A1
ZIP: V8N 1X5
BUSINESS PHONE: 2504779969
MAIL ADDRESS:
STREET 1: 2614 QUEENSWOOD DR
CITY: VICTORIA BC CANADA
STATE: A1
ZIP: V8N 1X5
8-K
1
form8k202yrend4-22.txt
8-K YEAR END RESULTS
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported): April 1, 2022
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
-------------------------------------
(Exact name of Registrant as specified in its charter)
Alberta 001-31540 71 163 0889
--------------- ------------- -------------
(State or other jurisdiction (Commission File No.) (Employer
of incorporation) Identification No.)
6001 54 Ave.
Taber, Alberta, Canada T1G 1X4 (Address of
principal executive offices, including Zip Code)
Registrant's telephone number, including area code: (250) 477-9969
--------------
N/A
-------------------------------
(Former name or former address if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligations of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-14(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Name of exchange
Title of each class Trading Symbol on which registered
------------------- -------------- ---------------------
Common Stock FSI NYSE American
Indicate by check mark whether the registrant is an emerging growth company as
defined in Rule 405 of the Securities Act of 1933 (ss.203.405 of this chapter)
or Rule 12b-2 of the Securities Exchange Act of 1934 (ss.204.12b-2 of this
chapter.
Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has
elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the
Exchange Act. [ ]
Item 2.02. Results of Operations and Financial Condition
On March 29, 2022, the Company issued a press release announcing its
financial results for the year ended December 31, 2021.
Item 8.01 Other Events
On December 31, 2021 the Company held a conference call to discuss its
financial results for the year ended April 1, 2021, as well as other information
regarding the Company.
Item 9.01 Exhibits
Exhibit
Number Description of Document
------- -------------------------
99.1 March 29, 2022 Press Release
99.2 Text of conference call speech by Dan O'Brien.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: April 1, 2022
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
By: /s/ Daniel B. O'Brien
----------------------------------------
Daniel B. O'Brien, President and Chief
Executive Officer
EX-99
2
form8k202ex9914-22.txt
99.1 PRESS RELEASE
[GRAPHIC OMITTED][GRAPHIC OMITTED]
NEWS RELEASE
March 29, 2022
FSI ANNOUNCES FULL YEAR, 2021 FINANCIAL RESULTS A
Conference call is scheduled for Friday April 1st, 2022, 11:00am
Eastern time, 8:00am Pacific Time
See dial in number and explanation below
VICTORIA, BRITISH COLUMBIA, March 29, 2022 - 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
full year ended December 31, 2021.
Mr. Daniel B. O'Brien, CEO, states, "We are very pleased with the results for
2021. In addition to the 10% revenue increase, profits were up 16% and operating
cash flow increased by 24%. These results were achieved in a year when shipping
costs quintupled and raw materials prices increased very rapidly. It's due to
the skill and hard work of the whole FSI team that we were so successful."
Mr. O'Brien continues, "In 2021, we engaged with new prospective customers and
introduced additional products to existing customers. We anticipate that much of
this preparation will result in new sales in 2022. We estimate that we will
exceed last years growth and profit results in the 22 year."
o Sales for the Full Year were $34,416,335, up approximately 10% when
compared to sales of $31,407,454 in the corresponding period a year
ago. The financials show a Full Year, 2021 net profit of $3,449,162,
or $0.28 per share, compared to a net income of $2,977,050, or $0.24
per share, in Full Year, 2020. Note: the financials do not take into
account potential tariff rebates that are currently being applied for.
The tariffs were charged on some raw materials used to manufacture
products that were shipped in from 2019 through 2021.
o Basic weighted average shares used in computing earnings per share
amounts were 12,316,254 and 12,240,641 for full year, 2021 and full
year, 2020 respectively..
o Non-GAAP operating cash flow: For the 12 months ending December 31,
2021, net income reflects $1,176,047 of non-cash charges
(depreciation, stock option expenses), as well as Gain (loss) on sale
of land, Gain (loss) on disposition of equipment, Gain (loss) on
investment, Interest expense, Interest income, write down of
inventory, Income tax expense/recovery, and pre tax Net income
attributable to non-controlling interests. These are items not related
to current operating activities. When these items are removed, the
financials show operating cash flow of $5,645,095 or $0.46 per share.
This compares with operating cash flow of $ 4,514,182, or $0.37 per
share in the corresponding 12 months of 2020 (see the table that
follows for details of these calculations).
The NanoChem division and ENP subsidiary continue to be the dominant sources of
revenue and cash flow for the Company. New opportunities continue to unfold in
detergent, water treatment, oil field extraction, turf, ornamental and
agricultural use to further increase sales in these divisions.
Conference call A conference call has been scheduled for 11:00 am Eastern Time,
8:00 am Pacific Time, on Friday April 1st, 2022. CEO, Dan O'Brien will be
presenting and answering questions on the conference call. To participate in
this call please dial 1-866-518-6930 (or 1-203-518-9713) just prior to the
scheduled call time. To join the call participants will be requested to give
their name and company affiliation. The conference ID: SOLUTIONS and or call
title Flexible Solutions International - Full Year 2021 Financials will be
requested
The above information and following table contain supplemental information
regarding income and cash flow from operations for the period ended December 31,
2021. 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 Full Year Ended December 31 (12 Months Operating Cash Flow)
(Unaudited)
--------------------------------------------------------------------------------
12 months ended December 31
2021 2020
---------------------------------
---------------------------------
Revenue $ 34,416,335 $ 31,407,454
Income (loss) before income tax - GAAP $ 6,650,756 $ 5,190,975
Provision for Income tax - net - GAAP $ (2,356,499) $ (1,607,441)
Net income (loss) - GAAP $ 3,449,162 $ 2,977,050
Net income (loss) per common share - basic. -
GAAP $ 0.28 $ 0.24
12 month weighted average shares used in
computing per share amounts - basic.- GAAP 12,316,254 12,240,641
12 month Operating Cash Flow
Ended December 31
---------------------------------
---------------------------------
Operating Cash Flow (12 months). NON-GAAP $5,645,095a,b,c $ 4,514,182a,b,c
Operating Cash Flow per share excluding
non-operating items and items not related
to current operations (12 months) - basic.
-NON-GAAP 0.46a,b,c 0.37a,b,c
Non-cash Adjustments (12 month) -GAAP $1,176,047d $ 1,007,684d
Shares (12 month basic weighted average)
used in computing per share amounts - basic
-GAAP 12,316,254 12,240,641
--------------------------------------------------------------------------------
Notes: certain items not related to "operations" of the Company's net income are
listed below.
a) Non-GAAP - Flexible Solutions International purchased 65% of ENP in 4th
quarter, 2018 (October 2018). Therefore Operating Cash Flow is adjusted by the
pre tax Net income or loss of the non-controlling interest in ENP. An adjustment
to Operating cash flow has been made to account for the use of a pre tax amount
versus an after tax amount which was originally used in that year.
b) Non-GAAP - amounts exclude certain cash and non-cash items: Depreciation and
Stock compensation expense (2021 = $1,176,047, 2020 = $1,007,684), Interest
expense (2021 = $199,930, 2020 = $260,657), Interest income (2021 = $77,999,
2020 = $53,101), Gain on investment (2021 = $507,143, 2020 = $877,358), gain on
sale of equipment (2021 = N/A, 2020 = 9,490), Gain on sale of property (2021 =
$44,330, 2020 = N/A), Gain on acquisition of ENP Realty (2021 = N/A, 2020 =
$133,341), Deferred income tax recovery (expense) (2021 = ($363,317), 2020 =
($409,553)), Income tax (2021 = $1,993,182, 2020 = $1,197,888), and pretax Net
income attributable to non-controlling interests (2021 = $1,214,206, 2020 =
871,844). *See the financial statements for all adjustments.
c) The revenue and gain from the 50% investment in the private Florida LLC
announced in January 2019 is not treated as revenue or profit from operations by
Flexible Solutions given the Company only purchased 50% of the LLC. The profit
is treated as investment income and therefore occurs below Operating income in
the Statement of Operations. As a result, the gains from all investments (2021 =
$507,143, and 2020 = $877,358), including those from the Florida LLC, are
removed from the calculation to arrive at Operating Cash Flow.
d) Non-GAAP - amounts represent depreciation and stock compensation expense.
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
6001 54th Ave, Taber, Alberta, CANADA T1G 1X4
Company Contacts
Jason Bloom
Toll Free: 800 661 3560
Fax: 403 223 2905
E-mail: info@flexiblesolutions.com
--------------------------
If you have received this news release by mistake or if you would like to be
removed from our update list please reply to: info@flexiblesolutions.com
To find out more information about Flexible Solutions and our products, please
visit www.flexiblesolutions.com.
EX-99
3
form8k202ex9924-22.txt
99.2 SPEECH
FY 2021
Good morning. I'm Dan O'Brien, CEO of Flexible Solutions.
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 statements 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.
Welcome to the FSI conference call for Full Year 2021.
Before discussing our financials, I'd like to update our Company condition and
our product lines along with what, in our opinion, might occur in early 2022.
Covid virus: The NanoChem Subsidiary, the ENP Subsidiary and the Florida LLC
investment are all engaged in producing for the agriculture and/or the cleaning
products sectors. Therefore, we are considered essential services and are likely
to remain so even if restrictions are reinstated. Virtually all our employees
are fully vaccinated. Covid will have effects on our supply chains out of Asia
that may cause delays from time to time.
Our NanoChem division: NCS represents more than 1/2 of the revenue of FSI. This
division makes thermal poly-aspartic acid, called TPA for short, a biodegradable
polymer with many valuable uses. NCS also manufactures SUN 27(TM) and N Savr
30(TM) which are used to reduce nitrogen fertilizer loss from soil.
TPA is used in agriculture to significantly increase crop yield. It acts by
slowing crystal growth between fertilizer ions and other ions in the soil
resulting in the fertilizer remaining available longer for the plants to use.
TPA is also a biodegradable way of treating oilfield water to prevent pipes from
plugging with mineral scale. TPA's effect is that it prevents the scaling out of
minerals that are part of the water fraction of oil as it exits the rock
formation. Scale must be prevented to keep the oil recovery pipes from clogging.
SUN 27(TM) and N Savr 30(TM) are nitrogen conservation products. Nitrogen is a
critical fertilizer that can be lost through bacterial breakdown, evaporation
and soil runoff.
SUN 27(TM) is used to conserve nitrogen from attack by soil bacterial enzymes
while N Savr 30(TM) is directed toward reducing nitrogen loss through leaching
and evaporation.
ENP Division: ENP represents most of our other revenue. ENP is focused on sales
into the greenhouse, turf and golf markets, while, our NCS sales are into row
crop agriculture. Q4 was strong, as hoped. Q1 has started well and we expect
similar growth in 2022 as was experienced in 2021.
The Florida LLC investment: Once again, this investment was profitable. The
Company is focused on international sales into multiple countries all of which
are facing different issues and responding in varied ways. Q4 2021 was less than
hoped for, however, we have seen a very strong rebound in Q1 2022. Indications
are that growth by the LLC in the 30% range is possible for 2022 as a whole.
Strategic investment in Lygos: In December 2020, FSI invested $500,000 in Lygos
in return for equity. We made a second investment of $500,000 in June 2021.
Lygos is using the investment to complete development of a microbial route to
aspartic acid using corn sugar as a feedstock. FSI would be the major user of
aspartic acid derived this way and believes that sustainable aspartic acid would
allow us to obtain large new customers and develop valuable new products. Lygos'
scientific team have already successfully developed other organic acids and
cannabinoids from sustainable feedstock and are recognized as one of the world
leaders in synthetic biology by their peers in the industry and academia. We
have high confidence in their ability to achieve sustainable aspartic acid
through a fermentation route. Once the economic microbial route is fully
developed, we plan to work with Lygos to build capacity and produce aspartic
acid which we can then polymerize into sustainable polyaspartates.
Q1 and 2 2022
TPA, SUN 27(TM) and N Savr 30(TM) for agricultural use have peak uptake in Q1
and Q2. This year is somewhat different due to high crop and fertilizer prices.
We are seeing increased interest in our products and stronger ordering.
Maintaining inventory to service customers will be key to maximizing sales and,
as one would expect, shipping delays are not helping. To date, our preordering
of inventory has made sure that no sales have been lost.
Oil, gas and industrial sales of TPA experienced increased sales in late Q4 21
and into Q1 22. This is driven by shortfalls of competing products and high oil
prices. This is likely to continue through the first half of 22 but we do not
consider it a permanent effect at this time.
Tariffs: Since Sept 30th 2018, several of our raw materials imported from China
have included a 10% additional tariff which rose to 25% in 2019. US customers
received price increases from us as this inventory entered production.
International customers are not charged the tariffs because we have applied for
the export rebates available to recover the tariffs. The accumulating tariff
payments to the Government are affecting our cost of goods, our cash flow and
our profits negatively until the rebates are received. Rebates can take many
months to arrive; we submitted our completed applications more than 3.5 years
ago. The total dollar amount due back to us now exceeds $1 MM and continues to
increase. The rebates will increase profitability and cash flow while decreasing
cost of goods for the future quarters in which the rebates are received. In
early July, we received a response to our revised application of January 2021.
We learned five months ago that our application has been sent to a government
lab so that our formula-based calculations can be verified. There is no time
frame available for completion of this step.
Shipping and Inventory: Ocean shipping from Asia to the US and ocean shipments
from the US to international ports continue to take much longer and prices per
container are more than triple normal. Land transport inside the US is also
taking much longer than usual and pricing is extremely high as well. We are
doing our best to cope with shipping issues by ordering far ahead but we warn
that some disruption will be unavoidable and some of the extra costs will have
to be borne by us in order to retain customers.
Raw material prices have also increased substantially over the last 6 months.
Passing price increases along to customers can take several months and result in
temporarily constrained margins. A large proportion of these adjustments were
begun in late Q4 2021 and not completed until early March this year. Our Q4
profits show the effect of raw material costs advancing far quicker than selling
prices can be revised. This effect will be less visible in Q1 2022 but still
present, while we expect profits to return to normal levels for the rest of
2022. We expect revenue, operating cash flow and profit to grow as fast or
faster than it did in 2021.
Highlights of the financial results:
We are very pleased with the results for 2021. Revenue, profits and operating
cash flow were all up significantly. These results were achieved in a year when
shipping costs quintupled and raw materials prices increased very rapidly. It's
due to the skill and hard work of the whole FSI team that we were so successful.
Throughout 2021, we engaged with new prospective customers and introduced
additional products to existing customers. We anticipate that much of this
preparation will result in new sales in 2022. We estimate that we will exceed
last years growth rate in all the above metrics for the coming year.
Sales for the year increased 10% to 34.4 million, compared with $31.4 million
for full year 2020. The increased sales are mostly the result of new business
with a small portion attributable to price increases.
Profits: The result is a profit of $3.45 million or 28 cents per share in 2021,
up 16% from a gain of $2.98 million or 24 cents per share, in 2020.
Operating Cash Flow: This non-GAAP number is useful to show our progress with
non-cash items removed for clarity. For 2021 it was $5.65 million or 46 cents
per share up 24% from $4.51 million or 37 cents per share in the 2020 period.
Long term debt: We continue to pay down our long-term debt according to the
terms of the loans.
Working capital is adequate for all our purposes and is increasing continuously
as we book retained profit from sales. We also have lines of credit with Midland
States Bank for the ENP and NCS subsidiaries. We are confident that we can
execute our plans with our existing capital. The equity investment in Lygos was
made with cash on hand through FSL, our Canadian operating company.
The text of this speech will be available as an 8K filing on www.sec.gov by
Monday, April 4th. Email or fax copies can be requested from Jason Bloom at
Jason@flexiblesolutions.com. Thank you, the floor is open for questions.