Flexible Solutions International (FSI) 15 Aug 242024 Q2 Earnings call transcript

Good day, everyone, and welcome to today's Flexible Solutions International Second Quarter 2024 Financials. [Operator Instructions] It is now my pleasure to turn the conference over to Dan O’Brien.

Thank you, Madison. Good morning. This is Dan O’Brien, CEO of Flexible Solutions. provision. harbor safe The Litigation forward-looking of statements. Securities safe provides harbor for Reform Private XXXX Act a The the involve Certain historical statements events, facts, contained are of statements herein, forward-looking with which respect and uncertainties. risks are not occurrence which to

with positively Commission. to may Information various company's time factors could in either potential is company filed negatively affect by the These forward-looking the impacted the detailed or Exchange statements that be Securities factors. and concerning from reports time

QX for product XXXX. start, to what the will call Welcome our in company the our conference to comment like and we in financials speech. our I the lines, To discuss of occur FSI I'd with XXXX. second remainder on the think part condition might along of

XX% division fertilizer reduce dryer valuable many N XX NCS using NCS, started last revenue. we TPA Savr FSI's food-grade are called acid, toll XX, operations installed several division, SUN makes to soil. polyaspartic NCS short, NanoChem a spray nitrogen polymer the This for which and the loss XXXX, also over from years. manufactures The represents In biodegradable thermal uses. with of used

is increase It by fertilizer available longer crop the to to agriculture plants acts use. soil, between used ions ions crystal the yield. growth in other fertilizer remaining in slowing and the TPA in significantly results for the

aid. of treating sold of and is a pipes a treatment prevent products TPA version to biodegradable In water from mineral water in a stability as sold as Food also TPA chemical. oilfield a scale. a is division, liquid with is And way biodegradable special TPA as our cleaning plugging ingredient

through from Savr at a runoff. nitrogen nitrogen are leaching. by SUN N to loss that be soil reducing XX is enzymes and soil Nitrogen XX Savr evaporation can breakdown, evaporation, is attack cause products. while nitrogen and critical conserve from bacterial used N fertilizer bacterial that SUN XX conservation XX lost effective

products. Food

received we've food-grade Our qualified, Illinois our and FDA plant is certification.

sales on which in-house. We to that customer full quarter. good on full that the developed the commercialized in the for orders QX, product food based the polyaspartates was will XXXX. exceed normal year contributed substantially And for indicated has fully have had product This year results

we solid in QX. So and QX performance expect

NCS of with final received be at at orders. stages X now X pipeline in will has revenue orders We least a potential, each to that X-figure products products, of prior purchase the XXXX. these believe purchase for

our agriculture. sells the and other ENP sales of is crop into turf revenue. focused division. into greenhouse, row ENP NCS while markets, represents on most ENP golf

some expect QX. concentrated growth with XXXX, revenue growth in We ENP the in and QX

Florida, for LLC investment. carried is better on quarter. carried in through results through The in this the countries. into agriculture sales investment international The multiple profitable was And -- focused QX second the into QX. in QX company LLC

the the and per end sold we for X asset year million Subsequent of for $XXX,XXX to this $X quarter, of cash years.

any competitors. million. extend to Our supplier being LLC even better years, the was exclusive price an hope contract longer us than as retained and we total purchase X intend has $X.X for -- by The

to grow to expect sales We XXXX. the LLC in

well, the probable, inflation international in are recent The sales decisions in XXXX positive by impact and it rates but inflation. may to recognized are Agricultural a think most but early through the Florida, at the on still in be rate of increasing We remains selling U.S. reasonably XXXX LLC. that growth take products of not reduction in crop place have the prices QX. will

they based even products are POs order, TPA any QX, sales were stable may of is for ] schedule, [ customers' on sure further to throughout the grow gas in industrial and and continue and of this are likely The XXXX. grow received Food sales Oil, division. in to if development. our

materials recover raw we've from available our customers to XXXX, a imported for rebates tariffs are applied the have Since because export tariff. several included them. not the China of International charged XX% Tariffs.

difficult affecting quarter. are The than to grows initial are even our extremely negatively. $X tariffs though due million, years obtain, and X dollar goods, cost well us excess The submitted to entitled The of is our them. in our We cash we total and amount applications are back rebates to of flow more it ago. profits each

until succeed We our recovering will we funds. persevere in

historic on Shipping the of Shipping Raw material products materials higher increases, even reverting shipped than takes appear are increasing along use. COVID. None for do but to are ones, times prior inflation-related with prices stable to it's are be but and several our not routes inflation. not and always or Passing months, the Sea small levels. prices stable inventory. raw they're Instead, possible. to Shipping area. price we to through Red our reasonable customers

have this of resulted We which lower flow the year; year, operations facility our by believe sum R&D that streamlined and issues in [ factory in partly our The from and Illinois made. is moving Progress our -- ] completed for were exit resolved. closing lower QX. to faced last work being full the action we profits lower revenue, the costs all We building. Naperville Peru, cash

So QX. fully will in become the benefits evident

proceeding found are growth the expect market year. XXXX Some Nutraceutical have revenue possible. price sales, new year. and and the for of cash the been been in food opportunities Several large continue increases toward the the rest in flow we profit in will Therefore, have and

first drug for field. were more terms drug half XXX,XXX In options the company drug our the begins revenue successfully million unless In and the prospective than The XXXX, a company the Board set consultants $XXX compounder vest grants. granted per year. usual. reaches as operating vesting of in to and many general, employees for activity granted compounding grants. will these Option option medical none harsh

employee attained, also grants. not the The annual for the should said small consultant other will shareholders It the grants than company our believes expect is that well Board be that vesting dilution. if be compensated does further

is GLP-X progression FSI. The drug production compounding drug industry line. for a logical

further available for production lines became we our by derisk prior expenditure by and low Only drugs the can at if We partners. we will to So price, proceed. an securing extremely injectable we sufficiently looking to for it. derisk entry bought intend sales possible when

FSI skills has developed certification the our to We've manufacturing progressed operate last division, grade that in clean-room operations. to Food the to and the [ food X as ] transferable of years. production and practice Nutrition drug we're good from comfortable our over skills are environments part

very executives highly drug serviced and profitable Senior also of line the opportunity no potential But drugs. guarantee their we're partners. time in we a portions by injectable revenue customers own. can and if Other succeeding searching be are for profit is categories that weight-loss for do, large diabetes, there production There's either. spending we

costs and Highlights spread over revenue expect results. -- that our in wage and resumed and the growth to of costs are with the in FSI low critical spent these profits, sales a economize incremental are areas and XXXX financial subsidiaries where more to more obtaining We during success we QX examine Even at possible. base but in the show course dollars. year. the to better new all other rate, will our is continue food ensure its industry of

'XX. to a share $XX.XX Profits. or in share million to a million profit compared QX Sales million a compared for X% to in XXXX. or $X.XX quarter the $X.XX QX of a QX $X.XX profit of increased XXXX shows $XX.XX $XXX,XXX

progress noncash non-GAAP a removed clarity. and number, it's with useful flow. show cash to This items Operating for is our

first the million it For $X.XX up of from the XXXX, a million half share, $X.X in $X.XX was share XXXX. a or $X.XX of half or first

debt. Long-term

loans. of down pay to to it the terms continue according the We

LLC Additional XXX in of land of called turn, invested factory space Illinois. purchased Mendota we XX% the in that, quarter second in Illinois. building a XX large an of In XXXX, Mendota, on to acquire acres

be for rental. all feet The operations feet that ENP are our found. for The XX,XXX when tenants rented remaining suitable use of XXX,XXX determined this is or to moved division We available feet have square building. square XXX,XXX square has will

is purposes. capital all adequate Working for our

have We our with subsidiaries. our with confident we of can for ENP Stock lines execute NCS plans capital. that existing Yards We're and the Bank credit

the floor And speech fax will set and by text will Jason us, open The copies Bloom XXth, questions. available filing The that is jason@flexiblesolutions.com. from be for or please? Madison, www.sec.gov e-mail can on you. you of X-K this Friday, requested up an as for Thank tomorrow, be

we first And with Tim Van Clemens. from take Instructions] Clarkson question [Operator will our

Tim Clarkson. Dan, this is

You're I know I -- do amazing have business. to you're that less I guy, is to going to on. pretty get to into you chance too at at a know? more this What admit. of or mean, is it some likely? point, the able be Great discussions. this still looking things drug I into you've it you're had likely mean, it soon Or getting going

We're is in the to forward not to compliment. for than drug It's date, there need Tim, forever. more too we're place and soon have a future. order a predict going that the is But store in to industry. in access This we thanks the for to going capital move a machinery

will to LLC to who we years allow save forward. our us invest like a an like earnings to So partner or would several find a for in have structure move to

up, more us very also drug big will going it. and waiting have because well. division Food customers. people, We're time. our got to but it's and and the the good And concentrate equipment we're quite rooms, for as is we going sky will making running and We're to saving and in blue operational clean test while assume blue we to Nutrition that a all that's The work sky, ones, it take some meeting far very Nutrition on of that and accessible on samples Food opportunities period

Right.

expertise the just end. your TPC, from into is agricultural So the food that using? you're chemical using you're specialty that back chemical the the that going just Is you're to food business, and bringing

TPA.

the it or Anyhow, of it as the names or improving a a value and -- preservative is that both? so have is TPA. function flavor the letters Everything confused, does and -- -- value in of confused. terms

prevents crystals in is bringing process. shipping, to big wine it as the X reduces there down to prior deal. as fluids stabilization various No, to X to of down to precipitation for and it juices X things That's And beer. result, need Celsius chill holding to it the fruit X which or from days showing a liquids a the of cost

format. chemical fruit anything, affect a We or can industries. And that's do does that the valuable and a for stabilizing not with beer wine a that TPA juice, the effect change the

this approved safe has as And FDA already additive? Sure. a the

Absolutely. Europe. ES, SA ] and And [

Right.

Okay. And at Or going is a proprietary can providing a this you it? company do to this name so be sample I that have that's point? of

be them and sampled to all, our us a I you you products. won't if with vintage company select and proprietary were It's that later until than XXXX allows dozen would have the drank definitely a say released other to. wines would nice But

a $XXX in the -- market? it potential Cool. Cool. of too? would that, market? Or of this is And million know be to terms mean, what Is early size this too I

It's But probably market million X to have test, we an And one in are product. that ] produced. orders. purchase being that as for a I speech, more we're $X already products mentioned million $XX for waiting just the [

Cool. It's very impressive.

visit like to, you I'd there at So Canada. in out some point,

things list my of on to that's So do.

other with on carry So questions.

[Operator question Instructions] take Greenridge will Global. And with next Gregozeski from William we our

Dan, And kind do that? press it. talk surprised of there's their Florida, big LLC pretty Can they can release you you for kind about plans sale. of The have you what to are? of about that anything on then the why and buyer if share implied the plans decided

can on at? looking you color give what any they're If

group relationship find [ were particularly one at that a but we was tree our ] supply our and the It's skill good in additional supplier, decision exclusive close just we've of are and them. not was the was them manufacturing retained. adept helping which greatest that sets. We on our Bill, -- and wonderful customers not with that agreement, were value

through So growing fair allowing was to adding executive was a that to a when be the and he our ability going suggested to significant a by apparent which offer profit will and main when them; fair company, to price offered profit a who be joining company significant going making losing was anything. a and a new to full the sales, with not the that entering were ownership his owner, sales a wanted an in sales goal it we be customer then grow made

So it wasn't a difficult decision.

Okay.

the wine. cash? talked for Okay. last the then the about plans any the drug and you on question know business I And

that. the any or of for that You need plan put Is lot to it something to there in Food else? business cash a

we but will bit It At job. the this for back because we'll And get sit bit. I think move point, around little do sit yes, field, X-month we'll if it's bill rates. to drug the at and for will look useful the invested into a not it a back be treasury little enough

the it. So unless you can start usually don't finish we job,

bit. spare the ] be it's next going least the -- at to yes, little capital for So [

Okay.

On the year? say those in the option $XXX in you million did revenue per grants vest prepared you mentioned remarks, at

Yes. revenue, And free revenue. don't very not specifically, $XXX ride million on to get our they in -- existing drug

Right, Yes. right.

Okay.

gross margins this bit. mid- XXs a with how a prices forward? the quite can were anomaly up kind is Or more expect the just they shook of range On of on existing Is business, going quarterly out? we to a that upper

say that work to partial go where of our it. have we cycles to I'd is very product through large anomaly. way through this buy a We and amounts have

have to We raise prices. and try

selling in we our our our will now shrinking, next be Sometimes But is prices. don't of and we'll matching what level have we inventory win, at sometimes prices what and inventory know our we to price inventory lose. success

the we in a in as mix -- the have I thing well. which was terms achieve. probably That of top what good, quarter can was -- margins. again, product mix of big product ones But is This very end is this which

bringing And significant Bill, to difficulty the going margins [ funds. the in higher change Those at again operating Nutrition levels. ] because and getting in two greater more operating we Food of of grade start once and contracts, have it's

So I a to target range somewhere we're of moving now. the where this, but it's hate like going in being at be

Okay.

been maybe corn like in are those rough it some how mentioned sales, a sounded seeing Okay. bad or that bright you as And correlated you're least But your not sales is kind the your business, year. then this for the on of at you've assessment? Ag said are. have with And past, spots fair prices pretty

It's haven't a fair badly. done assessment. And we

such out, relatively them that I as was our think sales if do not we you is break much, feeling flat. look which agricultural at it our is

are through able customers they're not systems. push more the our not just away, So walking to

so That's XXXX operate buy is they wherever can the their the ingredients I to buy and with season about And think that we'll managed my the organize early prices whether lives are. have point see appropriate. when growers want they they crop

think So a it's positive not look, I a but one. positive highly forward

further have turn program this now I for And back it time. remarks. O'Brien to we that appears the Dan questions will at closing no

summer. no good Thank you, Have than The closing all is rest to of Madison. forward have remarks say call to other talking Well, about I you over. a to months. in looking X your

Solutions for Financials. today's you Flexible your you. participation. International Thank XXXX this does conclude Second Quarter Thank

time. You may at any disconnect