FLEXIBLE SOLUTIONS INTERNATIONAL INC Segments Disclosure

17. SEGMENTS AND SIGNIFICANT CONCENTRATIONS

 

The Company operates in two segments:

 

(a) Energy and water conservation products (as shown under the column heading “EWCP” below), which consists of a (i) liquid swimming pool blankets which save energy and water by inhibiting evaporation from the pool surface, and (ii) food-safe powdered form of the active ingredient within the liquid blankets and which are designed to be used in still or slow moving drinking water sources.

 

(b) Biodegradable polymers, also known as TPA’s (as shown under the column heading “BCPA” below), used by the petroleum, chemical, utility and mining industries to prevent corrosion and scaling in water piping. This product can also be used in detergents to increase biodegradability and in agriculture to increase crop yields by enhancing fertilizer uptake.

 

The third product line is nitrogen conservation products used for the agriculture industry. These products decrease the loss of nitrogen fertilizer after initial application and allows less fertilizer to be used. These products are made and sold by the Company’s TPA division.

 

The Company also manufactures food grade products that are made and sold by the TPA division.

 

The Company’s reportable segments are strategic business units that offer different, but synergistic products and services. They are managed separately because each business requires different technology and marketing strategies. The economic factors that impact the nature, amount, timing, and uncertainty of revenue and cash flows vary among the Company’s operating segments and the geographical regions in which they operate. This operating segment structure is used by the Chief Operating Decision Maker (“CODM”), who has been determined to be the Chief Executive Officer, to make key operating decisions and assess performance of the Company. The CODM evaluates segment operating performance, and makes resource allocation and performance evaluation decisions, based on gross profit and net operating income.

 

Year ended December 31, 2024:

SCHEDULE OF REPORTABLE SEGMENTS 

		EWCP				BPCA				Other (1)				Consolidated
Sales		$	759,549			$	37,475,311			$	-			$	38,234,860
Cost of sales			350,345				24,644,616				-				24,994,961
Gross profit			409,204				12,830,695				-				13,239,899
Wages and administrative salaries			90,043				3,653,182				-				3,743,225
Office & Miscellaneous			45,327				759,410				570				805,307
Other segment items (2)			57,056				2,699,196				419,709				3,175,961
Net operating income			216,778				5,718,907				(420,279	)			5,515,406
Interest expense			309				609,956				-				610,265
Depreciation and amortization (included in COGS)			15,298				1,942,178				-				1,957,476
Capital expenditures			-				4,964,736				-				4,964,736
Assets (3)			2,588,731				56,415,104				964,744				59,968,579

 

Year ended December 31, 2023:

 

		EWCP				BPCA				Other (1)				Consolidated
Sales		$	572,845			$	37,751,961			$	-			$	38,324,806
Cost of sales			359,429				27,522,292				-				27,881,721
Gross profit			213,416				10,229,669				-				10,443,085
Wages and administrative salaries			92,302				3,772,359				-				3,864,661
Office & Miscellaneous			46,968				465,535				393				512,896
Other segment items (2)			79,809				2,109,582				376,581				2,565,972
Net operating income			(5,663	)			3,885,680				(376,975	)			3,503,042
Interest expense			387				498,279				-				498,666
Depreciation (included in COGS)			17,411				1,668,908				-				1,686,319
Capital expenditures			-				4,990,675				-				4,990,675
Assets (3)			3,889,596				50,627,932				953,527				55,471,055

 

(1)

Other is not considered an operating segment and includes expenses and income not identifiable to an operating segment and is not included in operating segment results

 

(2)

Other segment items for each reportable segment includes insurance, consulting, research, and professional fees.

 

(3)

Segment assets include cash, term deposits, accounts receivable, inventory, prepaid expenses, property, equipment and leaseholds, right of use assets, security deposits, intangible assets, and goodwill.

 

 

Sales by territory are shown below:

 SCHEDULE OF REVENUE GENERATED IN UNITED STATES AND CANADA 

		2024				2023
Canada		$	400,693			$	755,844
United States and abroad			37,834,167				37,568,962
Total		$	38,234,860			$	38,324,806

 

The Company’s long-lived assets (property, equipment, leaseholds, right of use assets, intangibles, and goodwill) are located in Canada and the United States as follows:

 SCHEDULE OF LONG-LIVED ASSETS ARE LOCATED IN CANADA AND UNITED STATE 

		2024				2023
Canada		$	116,496			$	142,577
United States			21,683,963				17,958,778
Total		$	21,800,459			$	18,101,355

 

Three customers accounted for $20,779,311 (54%) of sales made in 2024 (2023 - $20,482,798 or 53%).