Flexible Solutions (FSI) Q2 Earnings & Revenues Lag Estimates

Flexible Solutions International Inc. (NYSE:FSI) recorded a net loss of around $0.03 million or break-even per share in second-quarter 2019, compared with a profit of roughly $2.1 million or 18 cents per share a year ago. The results missed the Zacks Consensus Estimate of earnings of 6 cents.

The company’s bottom line in the reported quarter was hurt by a significant bad debt charge and additional tariffs on raw materials. The company also faced challenges from the poor spring weather in the central United States.

Revenues

The company reported revenues of around $6.8 million for the quarter, up roughly 63% year over year. It missed the Zacks Consensus Estimate of $8.4 million.

Sales from the company’s Energy and Water Conservation (EWCP) products for the quarter increased roughly 31% year over year on higher customer orders.

Sales from the Biodegradable Polymers (BCPA products) went up year around 65% over year in the quarter, driven by growth in most product lines and contributions of the ENP acquisition.

Financials

Flexible Solutions ended the quarter with cash and cash equivalents of roughly $5.4 million, down around 48% year over year. Long-term debt was $3.7 million at the end of the quarter.

Outlook

The company said that it plans to recover the bad debt through litigation and the tariffs through the tariff drawback program. It, however, noted that the timing of these recoveries is uncertain.

Flexible Solutions also stated that all of its divisions and investments that have exposure to the agriculture markets were impacted by the poor weather in the United States and trade uncertainties. The company expects sales to recover in the third and fourth quarters.

Price Performance

Shares of Flexible Solutions are up around 88.9% year to date, outperforming the industry’s rise of roughly 15.3%.

Zacks Rank & Stocks to Consider

Flexible Solutions currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks worth considering in the basic materials space include Kinross Gold Corporation (NYSE:KGC) , NewMarket Corporation (NYSE:NEU) and SSR Mining Inc. (NASDAQ:SSRM) .

Kinross has projected earnings growth rate of 150% for the current year and carries a Zacks Rank #1 (Strong Buy). The company’s shares have surged around 67% in a year’s time. You can see the complete list of today’s Zacks #1 Rank stocks here.

NewMarket has an expected earnings growth rate of 16.2% for the current year and carries Zacks Rank #1. Its shares have gained around 19% in the past year.

SSR Mining has an estimated earnings growth rate of 165.2% for the current year and carries a Zacks Rank #2 (Buy). Its shares have rallied roughly 79% in the past year.

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