Everyone, and welcome to today's Flexible Solutions International Full Year 2024 Financials Conference Call. At this time, all participants are in a listen-only mode. Later, you'll have the opportunity to ask questions during the question-and-answer session. You may register to ask a question at any time by pressing the star and one on your telephone keypad. Please note this call is being recorded, and I'll be standing by should you need any assistance. It is now my pleasure to turn the conference over to Dan O'Brien. Please go ahead. Thanks, Jen. Good morning. This is Dan O'Brien, CEO of Flexible Solutions. The Safe Harbor Provision, the Private Securities Litigation Reform Act of 1995, provides a safe harbor for forward-looking statements. Certain of the statements contained herein, which are not historical facts, are forward-looking statements with respect to events, the occurrence of which involve risks and uncertainties. These forward-looking statements may be impacted either positively or negatively by various factors. Information concerning potential factors that could affect the company is detailed from time to time in the company's reports filed with the Securities and Exchange Commission. Welcome to the full year call. I'd like to discuss our company condition and our product lines first, along with what we think might occur in the first half of 2025. A substantial portion of this speech will address the recent food-grade product contract and our actions to limit tariffs on international sales. I'll comment on our financials in the second part of the speech. The NanoChem division, NCS, represents approximately 70% of FSI's revenue. This division makes thermal polyaspartic acid, called TPA for short. It's a biodegradable polymer with many valuable uses. NCS also manufactures SUN 27 and N Savr 30, which are used to reduce nitrogen fertilizer loss from soil. In 2022, NCS started food-grade full operations. TPA is used in agriculture to significantly increase crop yield. It acts by slowing crystal growth between fertilizer ions and other ions in the soil, resulting in the fertilizer remaining available longer for the plants to use. TPA is a biodegradable way of treating oilfield water to prevent scale. Preventing scale keeps oil recovery pipes from clogging. TPA is sold as a biodegradable ingredient in cleaning products and as a water treatment chemical. In our food division, a special version of TPA is sold as the stability aid. SUN 27 and N Savr 30 are nitrogen conservation products. Nitrogen is a critical fertilizer that can be lost through bacterial breakdown, evaporation, and soil runoff. SUN 27 conserves nitrogen from attack by soil bacterial enzymes that cause evaporation, while N Savr 30 is effective at reducing nitrogen loss from leaching. Food products. Our Illinois plant is food-grade qualified, and we've received our FDA and SQF certifications. We've commercialized one food product based on polyaspartates that was developed fully in-house. In January, we announced a significant food-grade contract. In order to achieve the objectives of that contract, there are certain steps that must first be completed. For example, we need to install new specialized equipment capable of manufacturing the product. In addition, we need to install a new clean room because our current clean rooms are not suitable for the processes. There will be CapEx associated with our efforts to earn this business, as our food-grade improvements over the last two years did not anticipate this particular product category. We estimate additional CapEx of approximately $4 million for equipment and plant improvements combined. We have substantial cash on hand in our U.S. subsidiaries and access to a mostly used LLC. There will be no equity financing needed. CapEx involving equipment and improvements requires lead time for delivery and installation time prior to testing, leading hopefully to purchase orders for production. These lead times are being reduced as much as we can control, and our estimate of the earliest that production could begin is Q4. After we're satisfied that we can manufacture the product at scale, and assuming that we can still meet our customers' pricing expectations, we then hope to receive purchase orders. As such, we believe that revenue could begin in Q4 and could reach significant levels by the start of 2026. Managing to earn these future purchase orders and hopefully growing them to the estimated maximum revenue of $30 million per year is the critical goal of the next four to six quarters. We hope to execute this to the customer's absolute satisfaction and obtain orders before taking on additional major projects. As part of the clean room and equipment expansion program, we expect to be able to quickly increase capacity by adding duplicate equipment. In addition, we have extra capacity in certain food product categories available and have done R&D towards significant business in several products. Therefore, we could accept new business from these potential customers, provided it does not interfere with our primary efforts. ENP division. ENP represents most of our other revenue, and ENP is focused on sales into the greenhouse, turf, and golf markets. NCS sells into row crop agriculture. The mild growth we predicted for the second half of 2024 occurred, and we expect this trend to continue in 2025, with the growth occurring in the second half of the year. The Florida LLC investment. The LLC was profitable for the 2024 year, but sales to them were lower. The customer—sorry, the company—is focused on international agricultural sales into multiple countries. Its management has advised us that they estimate a return to growth in 2025, which should translate into increased revenue for FSI. In third quarter 2024, we sold this asset for $2 million cash and $800,000 per year for five years, a total of $6 million. Our total purchase price was $3.5 million. The LLC has retained us as an exclusive supplier for five years, and we hope to extend the contract even longer by being better than any competitors. We also retain our rights to share in the LLC profits during the payout period, according to our remaining ownership ratio. The structure of the sale resulted in an accounting loss of $385,000 applied to 2024. As we begin receiving the deferred payments in Q4 2025 through 2029, the loss will change to a gain. This temporary accounting treatment reduced earnings for 2024 by $0.03 a share. Agricultural products in the U.S. are selling reasonably well, but crop prices are still not increasing at the rate of inflation. Growers are facing a conflict between rising crop costs and low crop prices. We feel that because our products help increase yield in some cases while reducing costs in others, that we may be successful in growing sales in 2025. We should mention that counter tariffs by countries affected by the U.S. tariff policies may affect U.S. grower profits and morale. Therefore, their willingness to buy inputs. As a result, the predictions are very difficult. Food division. Sales are projected to grow in 2025, depending on how early production of the new major product might begin and any increased uptake for our existing polymer food product. Tariffs. Since 2019, several of our raw materials imported from China have included a 25% tariff. International customers are not charged the tariffs because we've applied for the export rebates available to recover the tariffs. These tariffs are affecting our cost of goods, our cash flow, and our profits negatively. Rebates are extremely difficult to obtain, even though we are entitled to them. We submitted our initial applications more than five years ago. The total dollar amount due to us is well in excess of $1 million and grows each quarter. In December 2024, we hired a specialist consulting group to help us obtain the rebates due to us. It had become obvious that the rebates department of the U.S. government was not willing to work with us directly. Consultants will take 10% of what is recovered. A Panama factory for international sales. We are pleased to disclose our long-term response to U.S. tariff policy. We are developing a duplicate facility in the country of Panama that will be capable of producing nearly all the agriculture and polymer products we sell to international customers. We estimate that first production from this factory will begin in Q3 2025. Equipment is being shipped now, and installation will begin soon. CapEx and operational costs to develop the new plant have been funded by cash flow and retained earnings. There will be no need for debt or equity financing. Once operational, nearly all of our products for international sale will be made in Panama using raw materials sourced without the U.S. tariffs. We will no longer have to pay tariffs on materials for U.S.-made products that were destined for export and then spend years getting the rebates. There will also be advantages related to shipping. The new plant is 30 minutes from a port. Inbound raw materials and outbound finished goods will not have to be shipped across the U.S. to and from Illinois for our international customers. Delivery times will be shortened by many days. Reduced shipping times and removing our exposure to tariffs on international sales could allow us to increase sales to existing customers and obtain new customers over the next two years. Another important point is that moving agriculture and polymer production to Panama frees space at the Illinois plant so that food-grade production can be optimized and expanded substantially as customers are found. Shipping and inventory. Shipping prices are stable but still higher than prior to COVID. Shipping times are reasonable on the routes we use. None of our products or raw materials ship through the Red Sea area. We ordered extra inventory to position on U.S. soil ahead of January 2025. During the transition of agriculture and polymer production from Illinois to Panama, we may still need to bring some raw materials into the United States. We will have to pay tariffs on those materials and then apply for rebates. Raw material prices are stable but increasing slowly with inflation. Adding our price increases, even small inflation-related ones, along to our customers always takes time. We negotiate price raises whenever we can. GLP-1 drug production line. The drug compounding industry is a logical long-term progression for FSI. When a production line for injectable drugs became available at an extremely low price, we bought it. We intend to de-risk our possible entry by securing sales prior to further expenditure and by looking for partners. We will proceed only when we have reduced the risk sufficiently. FSI has progressed from good manufacturing practice to food-grade and SQF certification on end production over the last three years. We've developed the skills to build and operate clean room environments as part of our food nutrition division, and we're comfortable that our skills are transferable to drug operations. Our careful entry into this area allowed us to avoid the recent price drops and extra availability of GLP-1 drugs. We remain extremely positive about this opportunity, but finding advanced orders and a partner is critical to success and may take significant time. Highlights of the financial results. We maintained our revenue in 2024 with better profits than in 2023. There was weakness in sales to the Florida LLC in Q4, and our existing food customer engaged in inventory reduction. Absent these two variables, we would have recorded growth for the year. We anticipate a return to growth by the LLC and resumption of normal uptake by the food customer by Q2 2025. While there are many unknowns related to the new administration, we feel that we're well positioned to grow in 2025 with the growth concentrated in the second half. Sales for the year. They were flat compared with 2023, $38.23 million versus $38.32 million. Profits. 2024 showed a profit of $3.04 million, or $0.24 a share, compared to a profit of $2.78 million, or $0.22 per share in 2023. Note that 2024 profit would have been $0.27 except for the temporary accounting loss on the sale of the Florida LLC. Operating cash flow. This non-GAAP number is useful to show our progress, especially with non-cash items removed for clarity. In 2024, it was $7.08 million, or $0.57 per share, up from $4.60 million, or $0.37 per share in 2023. Additional factory space in Illinois. In the second quarter of 2023, we invested to acquire 80% of an LLC called 317 Mendota that purchased a large building on 37 acres of land in Illinois. We have determined that 240,000 sq ft is available for our use or for rental. The ENP division has moved all operations to 60,000 sq ft of this building. A second tenant moved in during 2024, and the remaining 130,000 sq ft will be rented when suitable tenants are found. Long-term debt. We continue to pay down our long-term debt according to the terms of the loan. The loan we used to buy our ENP division is paid in full June this year. Our three-year note for equipment is fully paid in December 2025. This will free up over $2 million in cash flow per year for other purposes. Working capital is adequate for all our purposes. We have lines of credit with Stock Yards Bank and for the ENP and NCS subsidiaries. We're confident that we can execute our plans with our existing capital. The text of this speech will be available as an 8-K filing on www.sec.gov by Thursday, April 3rd. Email or fax copies can be requested from Jason Bloom, jason@flexiblesolutions.com. Thank you. The floor is open for questions. Jen, will you please set that up? Thank you. At this time, we will open the question and answer session. If you would like to ask a question, please press star and one on your telephone keypad, and you'll be placed into the queue in the order received. You may remove yourself from the queue at any time by pressing pound and one. Once again, to ask a question, press star one now. Our first question will come from Tim Clarkson with Van Clemens & Co. Hey, Dan. Good results. Just a couple of questions. What's the deal with you do business in Panama, and if it comes from Panama, you don't get tariffs? Is that a special rule for Panama? The country Panama does not charge inbound tariffs at the same rate that the United States does. They are much, much lower. Our customers internationally are not, at this point, charging major tariffs for importing into their countries from Panama. We may pay some small amounts of tariffs, but they will be much closer to the 3.5% that is normal in the rest of the world trading programs. It is going to be a huge reduction in friction on our operations. Good move. I just want to reaffirm that on the new business, the new food business that you have these big contracts on, you expect gross margins to be better than your historical margins on the other stuff? We are not absolutely certain what the margins will be, and we are not absolutely certain that we will obtain the purchase orders. It is going to be in the same range. It's not going to be a serious improvement, and it won't be a negative, provided that we do obtain this business that we're working on. Right. What are the greatest challenges for you getting these orders finalized? To finalize it to the point where it becomes a true order and gets a purchase order that we then fill, we have to get the clean rooms, the new clean room built, the new equipment installed and tested, and we need to prove that it will scale. Finally, the customer has to be satisfied with the price. All those things, we're working on them, and we're very hopeful, but at this point, there is no guarantee. It's not a take-or-pay purchase order. It's business to be earned. Right. Now, the thing that drives the original decision to get this order is that you guys actually developed a unique proprietary product that hadn't been developed before. Is that a fair representation of what you guys did? No, I think I need to back you up or change the focus there. We had an initial food-grade product, the one that goes into wine and fruit juices. That one was developed in-house. It is part of our current sales and will continue to be so, and we'll continue to grow, we hope. The new contract product is something we've never made before, and we are being asked by the customer to switch our operations to be able to make their product. Okay. So it's their proprietary product that you're going to be the manufacturer of? Correct. Right. Right. How would you describe the particular excellence that you guys have that would want them to have you guys develop it rather than somebody else, for example? We are probably the only people in North America—well, maybe not the only people, but the only company inside America that was willing to make the changes to our operations, to spend the money to earn the business in the future. They were also extremely impressed with our food-grade and SQF operations because it is not just having the certification. When you are attempting to earn this type of business, there is an actual audit done by the potential customer. It was the fact that we were already operating in a manner that they could see was extremely high quality that is allowing them to treat us as their primary choice. I think the work we've done over the last several years has positioned us so that when a prospect comes in, they are immediately impressed by the cleanliness, the professionalism, the absolute addiction to doing it, not only correctly, but documenting it so that there will not be problems. That's just how we're setting ourselves up. Sure. Great. That's the end of my questions. Thanks, Dan. Thanks, Tim. Once again, if you would like to ask a question, please press star one at this time. It appears there are no further questions at this time. Mr. O'Brien, I'll turn the call back to you for any additional or closing remarks. Thanks, Jen. Thank you, everybody. We'll be reconvening in six weeks for Q1, but thanks very much for your time today and your support. I look forward to doing the best job I can. Thank you and goodbye. Thank you. This does conclude today's Flexible Solutions International Full Year 2024 Financials Conference Call. Thank you for your participation. You may now disconnect. The host has ended this call. Goodbye.