Financial Data and Key Metrics Changes - Sales for Q3 2025 increased by 13% compared to Q3 2024, reaching $10.56 million versus $9.31 million [13] - Q3 2025 recorded a loss of $503,000 or $0.04 per share, compared to a profit of $612,000 or $0.05 per share in Q3 2024 [13][14] - Operating cash flow for the first nine months of 2025 was $4.26 million or $0.34 per share, down from $5.91 million or $0.47 per share in 2024 [15] Business Line Data and Key Metrics Changes - The Nanocam Division (NCS) represents the majority of revenue, focusing on biodegradable polymers and agricultural products [3] - The EMP Division, which focuses on greenhouse, turf, and golf markets, experienced strong revenue in Q3 and is expected to continue in Q4 [9] - The food-grade operations have begun generating revenue, with a five-year contract expected to yield a minimum of $6.5 million per year [4][5] Market Data and Key Metrics Changes - International agriculture sales are expected to return to growth in 2026, although the U.S. market remains under pressure due to low crop prices and rising costs [10] - The current tariff on imports of raw materials from China ranges from 30% to 58.5%, impacting margins and pricing strategies [11] Company Strategy and Development Direction - The company is focusing on expanding its food-grade product line and optimizing production in the U.S. while establishing a new factory in Panama for international sales [12][13] - Future customers will be selected to improve average margins, aiming for a target of 30%-35% in gross margins for new contracts [9][75] Management's Comments on Operating Environment and Future Outlook - Management expressed uncertainty about Q4 due to potential delays in starting production in Panama and revenue recognition from new contracts [14][30] - The company anticipates that profits will revert to past levels in Q1 2026 as food product revenue grows [14] Other Important Information - The company has substantial cash on hand and does not anticipate needing equity financing [7][16] - The new Panama facility is expected to enhance shipping efficiency and reduce exposure to U.S. tariffs [12] Q&A Session Summary Question: Are the margins for the new food contracts gross or net? - Management clarified that the expected margins of 22%-25% are gross margins before tax [18] Question: What is the anticipated net margin after tax? - The estimated net margin is around 14% after accounting for a 31% tax rate [19] Question: When will revenue from the January contract be recognized? - Revenue from the January contract is expected to begin in Q4 2025, with a guarantee for Q1 2026 [29] Question: What is the expected annual revenue run rate from the three contracts? - If all contracts are fully realized, the run rate could be between $50 million and $60 million by 2027 [31] Question: What were the one-time costs impacting Q3? - Management indicated that significant one-time costs related to the new contracts and the Panama facility contributed to the Q3 loss [55] Question: Will the EMP production move to Peru? - EMP production will remain outside of Peru, which will focus solely on food products [51]

Flexible Solutions International (NYSEAM:FSI) Q3 2025 Earnings Call November 17, 2025 11:00 AM ET Company ParticipantsGreg Hillman - SVP of Business DevelopmentDaniel O'Brien - President, CEO, CFO, CAO, and a DirectorTim Clarkson - Stock BrokerRaymond Howe - Investment Adviser and PresidentManny Stoupakis - Equity ResearchConference Call ParticipantsWilliam Grogesky - Research AnalystDavid Marsh - Equity Research AnalystOperatorGood day, everyone, and welcome to today's Flexible Solutions International's th ...