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Key Takeaways FSI starts production for its second food-grade contract at the Illinois plant.The deal could bring $6.5M-$13M annually, scaling further through 2026.Contract includes five-year growth options and safeguards on tariffs and inflation.Flexible Solutions International, Inc. (FSI) , a developer and manufacturer of biodegradable polymers, environmentally safe water and energy conservation technologies, has announced the start of production for its second food-grade contract. This contract for the I ...

Group 1 - Flexible Solutions International, Inc. has commenced production for a food grade contract announced on August 11, 2025, with revenue expected to start in Q4 2025 and grow throughout 2026 as production scales to meet customer demand [2][3] - The CEO, Dan O'Brien, stated that full-scale production has begun and invoicing will start in Q4, with Q1 2026 sales projected to reach a minimum rate of $6.5 million per year for this customer [3] - The company specializes in biodegradable polymers for various applications, including oil extraction, water treatment, and crop nutrient availability, and is expanding into the food and nutrition supplement manufacturing markets [1][3] Group 2 - The company's subsidiary, NanoChem Solutions Inc., focuses on biodegradable, water-soluble products made from thermal polyaspartate (TPA) biopolymers, which have applications in scale inhibition, detergents, water treatment, and crop enhancement [3] - In 2022, Flexible Solutions entered the food and nutrition markets by obtaining FDA food grade approval for its Peru IL plant, indicating a strategic expansion into new sectors [3]

Company Overview - Flexible Solutions International Inc. (FSI) currently has a Momentum Style Score of B, indicating potential for strong performance based on recent price trends and earnings estimate revisions [3][12] - FSI has a Zacks Rank of 1 (Strong Buy), which is associated with a historical track record of outperforming the market [4][12] Performance Metrics - Over the past week, FSI shares have increased by 49.8%, while the Zacks Chemical - Specialty industry has decreased by 0.74% during the same period [6] - In a longer time frame, FSI's monthly price change is 82%, significantly outperforming the industry's 3.37% [6] - Over the past quarter, FSI shares have risen by 132.25%, and over the last year, they have increased by 201.51%, compared to the S&P 500's gains of 8.34% and 14.94%, respectively [7] Trading Volume - FSI's average 20-day trading volume is 106,289 shares, which serves as a useful indicator of market interest and price movement [8] Earnings Outlook - In the past two months, one earnings estimate for FSI has moved higher, increasing the consensus estimate from $0.22 to $0.31 [10] - For the next fiscal year, one estimate has also moved upwards, with no downward revisions noted [10]

Core Viewpoint - The article emphasizes the importance of confirming the sustainability of stock trends for successful short-term investing, highlighting that price movements should be supported by strong fundamentals and positive earnings estimates [1][2]. Group 1: Stock Performance - Flexible Solutions International Inc. (FSI) has shown a significant price increase of 94.5% over the past 12 weeks, indicating strong investor interest [4]. - FSI's stock has also increased by 57.4% in the last four weeks, suggesting that the upward trend is still intact [5]. - Currently, FSI is trading at 94.6% of its 52-week high-low range, indicating a potential breakout [5]. Group 2: Fundamental Strength - FSI holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [6]. - The stock has an Average Broker Recommendation of 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term price performance [7]. Group 3: Investment Strategy - The "Recent Price Strength" screen is a useful tool for identifying stocks like FSI that are on an uptrend with strong fundamentals [3]. - The article suggests that there are multiple stocks passing through this screen, providing additional investment opportunities for trend-focused investors [8].

Company Performance - Flexible Solutions International Inc. (FSI) has gained approximately 117.5% year-to-date, significantly outperforming the Basic Materials sector, which has seen an average gain of about 14.2% [4] - FSI currently holds a Zacks Rank of 1 (Strong Buy), indicating strong potential for future performance [3] - Over the past 90 days, the Zacks Consensus Estimate for FSI's full-year earnings has increased by 40.9%, reflecting improved analyst sentiment [4] Industry Context - FSI is part of the Chemical - Specialty industry, which consists of 37 individual stocks and currently ranks 163 in the Zacks Industry Rank [6] - Stocks within the Chemical - Specialty industry have gained about 8% year-to-date, indicating that FSI is outperforming its peers in this specific industry [6] - Hawkins (HWKN), another stock in the Basic Materials sector, has also shown strong performance with a year-to-date return of 36.9% and a Zacks Rank of 1 [5]

Financial Data and Key Metrics Changes - Sales for Q2 2025 increased by 8% compared to Q2 2024, reaching $11,370,000 compared to $10,530,000 [21] - Q2 2025 recorded a profit of $2,030,000 or $0.16 per share, compared to a profit of $1,290,000 or $0.10 per share in Q2 2024 [22] - The company recorded unusual R&D revenue of $2,500,000 in Q2 2025, which significantly contributed to the profit [22][34] Business Line Data and Key Metrics Changes - The NanoChem division (NCS) represents approximately 70% of the company's revenue, focusing on biodegradable polymers and nitrogen conservation products [4] - The E&P division is expected to continue growth in 2025, with early signs of improvement in Q3 [14] - The food division is anticipated to have lower margins initially due to tariff and inflation protection clauses in new contracts [13] Market Data and Key Metrics Changes - Agricultural products in the U.S. are under pressure, with crop prices not increasing at the rate of inflation, leading to uncertainty for growers [15] - Tariffs on imports of raw materials from China range from 30% to 68%, impacting costs and pricing strategies [16] - The company is transitioning production to Panama to mitigate tariff impacts and improve shipping efficiency [19] Company Strategy and Development Direction - The company is focusing on expanding its food grade operations and has secured a five-year contract with a minimum revenue of $6,500,000 per year [10] - Plans to develop a new facility in Panama to produce products for international customers, reducing exposure to U.S. tariffs [19] - The company aims to optimize food grade production in the U.S. while expanding its international sales capabilities [20] Management Comments on Operating Environment and Future Outlook - Management expects continued weakness in agriculture sales due to external pressures, but anticipates a return to growth in the second half of 2025 [15] - The company is confident in executing its plans without the need for equity financing, relying on existing capital and cash flow [26] - Management believes that the recent contracts and operational improvements will lead to increased revenue and profitability in the coming quarters [12] Other Important Information - The company has substantial cash on hand and access to unused lines of credit, ensuring adequate working capital for operations [8][26] - The transition to the Panama facility is expected to begin production in Q3 2025, with all equipment already on site [18] Q&A Session Summary Question: What is the business magic behind getting new food contracts? - The company emphasizes its role as a solution provider, focusing on R&D to meet customer needs [28][29] Question: How was the R&D contract treated in financials? - The R&D revenue was classified as a second line in revenue, indicating its significance to the quarter's performance [33][34] Question: What are the expected margins for the food contracts? - The company anticipates net margins before tax in the range of 22% to 25%, with a 31% income tax rate applicable [35] Question: How is the E&P division performing? - The E&P division is showing steady growth, while agriculture remains uncertain due to external factors [46][47] Question: Will the wine product move to Panama? - The wine product will remain in Illinois for now, as the Panama facility is not yet food grade certified [50]

分组1 - Flexible Solutions International Inc. (FSI) reported quarterly earnings of $0.15 per share, exceeding the Zacks Consensus Estimate of $0.06 per share, and showing an increase from $0.1 per share a year ago, resulting in an earnings surprise of +150.00% [1] - The company posted revenues of $11.37 million for the quarter ended June 2025, which was a 2.09% miss compared to the Zacks Consensus Estimate, and an increase from $10.53 million year-over-year [2] - The stock has gained approximately 108% since the beginning of the year, significantly outperforming the S&P 500's gain of 10% [3] 分组2 - The current consensus EPS estimate for the upcoming quarter is $0.05 on revenues of $11.57 million, and for the current fiscal year, it is $0.22 on revenues of $47.42 million [7] - The Zacks Industry Rank indicates that the Chemical - Specialty industry is currently in the bottom 30% of over 250 Zacks industries, suggesting potential challenges for stocks in this sector [8]

Core Viewpoint - Flexible Solutions International, Inc. reported its financial results for the second quarter of 2025, highlighting an increase in sales and net income despite facing challenges such as tariff increases and soft sales [2][3]. Financial Performance - Sales for Q2 2025 were $11,367,132, representing an increase of approximately 8% compared to $10,528,739 in Q2 2024 [7]. - Net income for Q2 2025 was $2,028,912, or $0.16 per basic share, compared to $1,289,796, or $0.10 per basic share in Q2 2024 [7]. - The increase in earnings was largely attributed to research and development services sales, with some related expenses recognized in previous quarters [7]. Operational Developments - The NanoChem division and ENP subsidiary remain the primary sources of revenue and cash flow for the company [4]. - The company is transitioning its legacy production to Panama for international customers while expanding its food-grade business in Illinois [3][4]. - New opportunities are emerging in various sectors, including detergent, water treatment, oil field extraction, and food and nutrition supplement manufacturing [4]. Cash Flow Analysis - For the six months ended June 30, 2025, the company reported an operating cash flow of $4,253,875, or $0.34 per basic share, compared to $3,853,907, or $0.31 per basic share in the same period of 2024 [7][9]. - The basic weighted average shares used in computing earnings per share were 12,647,532 for Q2 2025, up from 12,450,532 in Q2 2024 [7].

[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) Presents the unaudited condensed interim consolidated financial statements and management's discussion and analysis for the period ended June 30, 2025 [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements.) Presents unaudited condensed interim consolidated financial statements for Flexible Solutions International, Inc. as of June 30, 2025, and for the three and six-month periods then ended [Condensed Interim Consolidated Balance Sheets](index=5&type=section&id=%28a%29%20Unaudited%20Condensed%20Interim%20Consolidated%20Balance%20Sheets%20at%20June%2030%2C%202025%20and%20December%2031%2C%202024.) Total assets slightly decreased to $58.2 million, while total liabilities decreased to $15.7 million, leading to increased stockholders' equity Consolidated Balance Sheet Summary (in USD) | Balance Sheet Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $31,092,253 | $34,575,857 | | **Total Assets** | $58,234,048 | $59,968,579 | | **Total Current Liabilities** | $9,151,454 | $11,861,667 | | **Total Liabilities** | $15,654,667 | $18,602,553 | | **Total Stockholders' Equity** | $42,579,381 | $41,366,026 | [Consolidated Statements of Operations (Three Months)](index=6&type=section&id=%28b%29%20Unaudited%20Condensed%20Interim%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20%28Loss%29%20for%20the%20Three%20Months%20Ended%20June%2030%2C%202025%20and%202024.) Q2 2025 sales increased to $11.4 million, driven by new R&D services revenue, resulting in higher net income and diluted EPS Q2 Financial Performance (in USD) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Sales | $11,367,132 | $10,528,739 | | Gross Profit | $5,385,266 | $3,939,095 | | Operating Income | $3,297,114 | $1,970,912 | | Net Income (attributable to FSI) | $2,028,912 | $1,289,796 | | Diluted EPS | $0.15 | $0.10 | - A new revenue stream from research and development services contributed **$2.5 million** in sales for Q2 2025, which was not present in Q2 2024[15](index=15&type=chunk) [Consolidated Statements of Operations (Six Months)](index=7&type=section&id=%28c%29%20Unaudited%20Condensed%20Interim%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024.) H1 2025 sales decreased to $18.8 million, but gross profit increased, with net income remaining stable at $1.75 million First Half Financial Performance (in USD) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Total Sales | $18,840,824 | $19,753,611 | | Gross Profit | $7,336,830 | $6,759,462 | | Operating Income | $3,227,957 | $2,736,743 | | Net Income (attributable to FSI) | $1,751,178 | $1,747,022 | | Diluted EPS | $0.13 | $0.14 | [Consolidated Statements of Cash Flows](index=8&type=section&id=%28d%29%20Unaudited%20Condensed%20Interim%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024.) Cash from operations decreased to $4.7 million in H1 2025, with funds primarily used for capital expenditures, debt repayment, and dividends Cash Flow Summary for Six Months Ended June 30 (in USD) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash from Operating Activities | $4,738,637 | $5,309,855 | | Net cash from Investing Activities | ($1,331,042) | ($1,236,697) | | Net cash from Financing Activities | ($3,709,588) | ($2,633,885) | | **Net Change in Cash** | **($32,639)** | **$1,501,614** | [Consolidated Statements of Stockholders' Equity](index=9&type=section&id=%28e%29%20Unaudited%20Condensed%20Interim%20Consolidated%20Statements%20of%20Stockholders%27%20Equity%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024.) Stockholders' equity increased to $42.6 million by June 30, 2025, driven by net income and stock option exercises, offset by dividends - Total stockholders' equity increased to **$42,579,381** at June 30, 2025, up from **$41,366,026** at December 31, 2024[18](index=18&type=chunk) - The company paid dividends of **$1,274,753** during the first six months of 2025[18](index=18&type=chunk) [Notes to Financial Statements](index=11&type=section&id=%28f%29%20Notes%20to%20Unaudited%20Condensed%20Interim%20Consolidated%20Financial%20Statements%20for%20the%20Period%20Ended%20June%2030%2C%202025.) Provides detailed explanations of accounting policies, financial figures, and segment reporting for the interim consolidated financial statements - The company's business involves manufacturing and marketing specialty chemicals for water evaporation control (HEATSAVR®, WATERSAVR®) and thermal polyaspartate biopolymers (TPAs) for industrial and agricultural applications[23](index=23&type=chunk) - Revenue from research and development services is recognized over time as contractual performance obligations are satisfied[29](index=29&type=chunk) - The company's three primary customers accounted for **47%** of sales in the first six months of 2025, down from **50%** in the same period of 2024, with a single customer for R&D services accounting for **13%** of total sales[31](index=31&type=chunk) [Management's Discussion and Analysis (MD&A)](index=23&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operation.) Management discusses financial results for Q2 and H1 2025, covering sales performance, expenses, liquidity, and capital resources - The company operates through two main divisions: Energy and water conservation products (EWCP) and Biodegradable polymers (BCPA), which also includes nitrogen conservation products and R&D services[77](index=77&type=chunk)[78](index=78&type=chunk)[79](index=79&type=chunk) - Key factors expected to affect future results include crude oil prices, oil and gas industry activity, drought conditions for agricultural sales, and potential tariffs on materials from China[86](index=86&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) Product sales decreased in H1 2025, offset by new R&D services revenue, leading to increased gross profit percentage and mixed operating expenses Key Changes in Operations (Six Months Ended June 30, 2025 vs 2024) | Item | Change | Reason | | :--- | :--- | :--- | | EWCP & BCPA Product Sales | Decrease | Decreased customer orders | | R&D Services Sales | Increase | Successful project completed in 2025 | | Gross Profit % | Increase | Higher margin on R&D sales | | Consulting Expense | Decrease | Decreased reliance on consultants | | Professional Fees | Increase | Higher accounting and audit fees due to growth | | Interest Expense | Increase | Increased debt levels | - Customer concentration remains significant, with three customers accounting for **47%** of product sales in the first half of 2025, and a new R&D services customer (Company E) becoming a major revenue source[82](index=82&type=chunk)[83](index=83&type=chunk) [Capital Resources and Liquidity](index=26&type=section&id=Capital%20Resources%20and%20Liquidity) The company maintains strong liquidity with $21.9 million in working capital, primarily funding operations, capital expenditures, debt, and dividends Sources and Uses of Cash (Six Months Ended June 30) | Item (in USD) | 2025 | 2024 | | :--- | :--- | :--- | | Cash from operating activities | 4,738,637 | 5,309,855 | | Purchase of property and equipment | (1,331,042) | (1,663,697) | | Repayment of debt (net) | (2,576,556) | (1,039,438) | | Dividends paid | (1,274,753) | (1,255,053) | - Working capital was **$21,940,799** as of June 30, 2025, compared to **$22,714,190** at December 31, 2024[85](index=85&type=chunk) - The company does not anticipate any significant capital requirements for the twelve months ending June 30, 2026[87](index=87&type=chunk) [Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control - Based on an evaluation as of June 30, 2025, the Principal Executive and Financial Officer concluded that the company's disclosure controls and procedures are effective[89](index=89&type=chunk) - No changes occurred in the company's internal control over financial reporting during the three months ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, these controls[90](index=90&type=chunk) [PART II. OTHER INFORMATION AND EXHIBITS](index=28&type=section&id=PART%20II.%20OTHER%20INFORMATION%20AND%20EXHIBITS) Presents other required information and a list of exhibits filed as part of the Form 10-Q report [Other Information](index=28&type=section&id=Item%205.%20Other%20Information.) No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025 - No directors or officers adopted or terminated a Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025[92](index=92&type=chunk) [Exhibits](index=28&type=section&id=Item%206.%20Exhibits.) Lists certifications by executive and financial officers, along with Inline XBRL data files, as part of the Form 10-Q report List of Exhibits | Number | Description | | :--- | :--- | | 31.1 | Certification of Principal Executive Officer (Sarbanes-Oxley Act §302) | | 31.2 | Certification of Principal Financial Officer (Sarbanes-Oxley Act §302) | | 32.1 | Certification of Principal Executive and Financial Officer (Sarbanes-Oxley Act §906) | | 101 | Inline XBRL Documents | | 104 | Cover Page Interactive Data File |