Q2 2021 Flexible Solutions International Inc Earnings Call

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Yeah.

Thanks for calling maybe a conference I D. Please.

Okay.

Yes, it's the F S. A second quarter 2021 financial results.

Alright, one moment now.

Aye.

I'm not sure.

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2021 financial results.

Right are you sure it's for today the 16th.

Yes, that's what it says here.

What company is hosting this call.

Let me see.

Our flexible solutions international.

Oh, okay.

Flexible solutions international.

Yes, correct.

10 minutes Alright, great I've found you called May have your name.

Correct, Yes. This is Rachel Smith.

And your company Ms Smith.

I'm of ore that AI E R. A.

Thank you man, we've just started to have a good day.

Thank you too.

E mail or fax copies can be requested from Jason Bloom, Jason add flexible solutions Dot com.

Thank you the floor is open for questions and correlate.

Would you please give the instructions.

At this time, if you would like to ask a question. Please press star and one on your Touchtone phone you may remove yourself at any time from the queue by pressing the pound key.

Once again Thats star one to ask a question.

We will take our first question from me.

Raymond Hal.

From comprehensive.

Please go ahead morning, Dan.

Good morning, Dan how are you.

I'm well how are you down there in Atlanta.

I'm good thanks as warm.

Cup.

Couple of questions for you.

The new equipment.

Know that most of the Capex I guess it was last year that has gone live this year and more so next year and you said, we will produce substantial revenue is that revenue that is.

New revenue or is that revenue is just taking from some other.

Component of the business.

No. It's a combination of the largest proportion of it will be new revenue from new business and.

To a small extent a relatively.

We will be able to reduce our reliance on toll manufacturing.

So it will cut our costs for our existing product.

Product lines.

So that's how we're utilizing the equipment.

Okay.

Dan.

Secondly, any thoughts on timeline are about the reinstatement of the dividend.

Yeah.

It would be nice to have a date in mind, but every time, we seem to think we're getting out of something we thought we were coming out of Covid. We may be going back in we thought that last year that COVID-19 was not going to have massive effects on shipping and lo and behold this year.

We were told that every containers in their own country, and it's going to be a year or more before they get it organized.

I wouldn't.

I'm I'm positively.

In favor.

Our board is in favor of reinstating a dividend, but the timing is going to have to wait.

Right.

And I'm not prepared to make a guess at this point.

That's fine.

Theres Midlands or are there any.

Striction zone, the Midlands line of credit.

That would prevent you from doing so.

We would have to.

Let them know of our intentions, but our loans and line of credit or they do not have a negative covenant against.

A dividend.

Okay, great. Thank you that's all I've got thanks.

Thanks Ray.

Okay.

Yeah.

Once again.

Is star one to ask a question and we will take our next question from William Okonski from Greenwich Global. Please go ahead.

Hey, Dan.

The supply chain issues, you talked about how big of an impact do you think we're looking at I mean, because your you mentioned topline hits from delays and then.

Margin hits on you having to eat some cost I mean, how big of a net impact do you think this is going to be on at least the second half of the year.

Well, it's a good morning Bill.

Oh I can point to the fact that it it would seem likely that our earnings for Q2 would have been about a penny higher.

So I.

I think that's the general area of damage that we're taking is there's about a penny per quarter. In these in these two categories now I wouldn't want to be held to that estimate it could be a little higher.

Or some of these issues could drop away a little more rapidly.

Hum.

But I don't think you'd be wrong in estimating anywhere from a half a cent to a sad to have.

We're not being beaten up and and knocked unconscious.

We are being slowed down and our growth plans.

Okay.

Okay.

With regard to the Florida LLC you know they had big growth last year, and we were kind of expecting that this year and they're down a little bit first half this year versus first half last year any expectations, if theyre going to have growth or even be able to you know.

Exceed 2020 revenue.

Our strong expectations. They were damaged in the first half of this year by the drought in Brazil, and a slow ordering out of that country is as a result.

Their second half is likely to more than make up for the slow first half and yes as the speech says I'm I'm expecting growth out of them in the second half.

And I'm expecting the growth for the year to be positive for the year as a whole.

Okay.

And last question about why goes I haven't seen any of the terms of that investment.

A $1 million and now are you guys obligated to put any more in and that million dollars has gone towards equity in legals.

Can you disclose the percentage of your own of that.

Well I can answer the question, but probably not exactly as usual.

We do have one part one no we do not have any further obligations.

Logos is obligated to.

Continue the development to two completion.

Part two.

We invested in the form of us safe.

Rich.

Has kept the value of logos that no more than $150 million, so depending on what their next capital raise prices.

Whether it's at 150 or higher.

We will have one 150 of their equity if it is below a $150 million capital.

I'm, sorry are below $150 million.

Business valuation in the next in their next capital raise.

Our equity would be.

Valued.

As a percentage of what that number is so let's take a number like 100 million for ease of calculation in my head.

There are a million would represent 1% of like all of us in the event that you did a capital raise with a.

An imputed value of their company of $100 million.

Okay perfect perfect. Thanks, Dan.

Good to talk to you Bill.

It appears we have no further questions at this time.

Carl I would you would you please and the conversation and or shall I, just thank everybody in and hit over.

This does conclude today's program. Thank you for your participation you may disconnect at any time.

Alright, Thank you very much thank you.

Yeah.

Yeah.

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