Flexible Solutions International (FSI) Q2 2024 earnings summary

Executive summary

• Q2 2024 sales increased 2% to $10.53 million, with profit rising to $1.29 million ($0.10/share) from $810,000 ($0.07/share) in Q2 2023, driven by TPA product orders, while EWCP sales declined.

• Operating cash flow for H1 2024 was $3.85 million ($0.31/share), up from $3.22 million ($0.26/share) in H1 2023.

• Gross profit margin improved to 37.4% in Q2 2024 from 29.4% in Q2 2023, as raw material costs declined and product mix shifted favorably.

• For the six months ended June 30, 2024, revenue was $19.8M (down from $20.2M in 2023), with net income attributable to controlling interest of $1.75M (up from $1.69M).

• Three primary customers accounted for 50% of sales in the first half of 2024, indicating significant customer concentration.

Segment performance

• NanoChem (NTS)/TPA division contributed about 70% of revenue, with strong performance in TPA-based products for agriculture, oil, and cleaning.

• Food division saw normal Q2 sales and expects full-year orders to exceed 2023, with a pipeline of five products nearing purchase orders.

• EnP/EWCP division focused on greenhouse, turf, and golf markets, with revenue growth anticipated in Q3 and Q4, though Q2 2024 revenue declined.

• Florida LLC investment was sold for $2 million cash and $800,000/year for five years, retaining an exclusive supply agreement.

• TPA segment continues to be the primary revenue and profit driver.

Financial highlights

• Q2 2024 sales: $10.53M (+2% year-over-year); six months: $19.8M (-2.1% year-over-year).

• Q2 2024 gross profit: $3.94M (up from $3.04M); six months: $6.76M (up from $6.12M).

• Q2 2024 operating income: $1.81M (up from $1.05M); six months: $2.40M (up from $2.23M).

• Special dividend of $0.10 per share paid in May 2024, totaling $1.26M.

• Cash and term deposits at June 30, 2024: $9.2M (up from $8.4M at June 30, 2023).