Flexible Solutions International (US:FSI)2025-11-17 17:00Financial Data and Key Metrics Changes - Sales for Q3 2025 increased by 13% compared to Q3 2024, reaching $10.56 million versus $9.31 million [12] - 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 [12][13] - 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 thermopolyaspartic acid (TPA) and nitrogen conservation products [3] - The EMP Division, which focuses on greenhouse, turf, and golf markets, experienced strong revenue in Q3 and is expected to continue this trend into Q4 [8][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 [9] - The current tariff on imports of raw materials from China ranges from 30% to 58.5%, impacting margins and pricing strategies [10] Company Strategy and Development Direction - The company is focusing on expanding food-grade production and optimizing operations in Panama to reduce costs and improve margins [11][12] - Future customers will be selected to increase average margins, aiming for a target of 30-35% [8][44] - The company plans to prioritize existing contracts and customer satisfaction before pursuing additional major projects [7] Management's Comments on Operating Environment and Future Outlook - Management expressed uncertainty about Q4 due to the timing of new contracts and operational readiness of the Panama facility [13][14] - There is an expectation for profits to revert to past levels in Q1 2026 as food product revenue grows [14] - The company anticipates that the transition to Panama will enhance competitiveness and potentially restore historic sales levels in oil and other industrial applications [35] Other Important Information - The company has substantial cash on hand and does not anticipate needing equity financing [6][15] - The new Panama facility is expected to begin production in Q4 2025, which will significantly impact international sales [11][12] Q&A Session Summary Question: Are the margins for the new food contracts gross or net margins? - The expected margins of 22-25% are gross margins before tax [17] Question: When will revenue from the January contract be recognized? - Revenue from the January contract is expected to begin in Q4, but there is a possibility it could slide into Q1 2026 [19][20] Question: What is the anticipated annual revenue run rate for the three contracts? - If all business is secured, the total run rate could be between $50 million and $60 million by 2027 [22] Question: What are the expected margins for future contracts? - The company aims for margins in the 30-35% range for future contracts [44] Question: What products are produced at the leased Mendota facility? - The leased facility produces all EMP products contributing to the EMP revenue [41]