William Grogesky

William Grogesky of Greenbridge Capital asked for an estimate of the impact of one-time expenses related to Panama and food products on the Q3 2025 expense line. He also inquired about the EMP division's strong Q3 performance, its expected trend for Q4 and future halves, and the outlook for growth in core Nanochem product lines (oil, industrial) in 2026. Finally, he asked about the rationale behind the Mendota facility sale and leaseback and if EMP production would ever move to Peru.

Answer

Daniel O'Brien, President, CEO, CFO, CAO, and a Director, offered to provide specific numbers for one-time expenses via email, but noted they were responsible for a very large percentage of the Q3 loss. He highlighted EMP's strong Q3, attributing it to sales in the vibrant greenhouse, turf, and golf markets, and predicted a strong Q4, with second halves generally stronger than first halves due to customer early-buy trends. For core Nanochem, O'Brien stated that competitiveness from the Panama factory would determine growth in oil and industrial applications, and Flexible Solutions remains opportunistic. He explained the Mendota sale and leaseback was to limit risk, remove landlord responsibilities, and free up bandwidth, confirming that EMP production would remain there, while Peru would focus solely on food products.

William Grogesky inquired about the specific financial impact of one-time expenses related to the Panama factory and food product ramp-up on Flexible Solutions International's Q3 2025 results. He also asked about the sustainability of the EMP division's strong Q3 performance, the growth prospects for core Nanochem products (oil and industrial applications) in 2026, and the strategic rationale behind the Mendota facility sale and leaseback.

Answer

President and CEO Daniel O'Brien stated he would provide specific numbers for one-time expenses via email but confirmed they were responsible for a significant portion of the Q3 loss, noting weakness in traditional agriculture offset by EMP strength. He indicated that EMP's Q3 was strong, Q4 would also be strong, and the second half of the year would consistently be stronger due to customer early buys. O'Brien expressed uncertainty about Nanochem's growth in oil/industrial applications, pending Panama's operational impact. He explained the Mendota sale was to limit risk and focus bandwidth, with the leased-back 60,000 sq ft dedicated to EMP production, while Peru would focus solely on food products.