Good day, everyone. And welcome to the Flexible Solutions International Full Year 2018 Financial Results Conference Call. Today's conference is being recorded. At this time, I would like to turn things over to Dan O'Brien. Please go ahead, sir.

Thank you, Kelly. Good morning. This is Dan O'Brien, CEO of Flexible Solutions. 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 FSI conference call for full year 2018. Before concentrating on our financials, I'd like to speak about our product lines and what we think may occur over the next several quarters. The insurance compensation from our fire has been received in full, but the accounting and tax effects of the payments will continue to distort and complicate our financials for two or three more quarters. Our NanoChem Division, NCS represents most of the revenue of FSI. This division makes thermal polyaspartic acid, called TPA for short, a biodegradable polymer with many valuable uses. NCS also manufacturers SUN 27 and N Savr 30, which are used to reduce nitrogen fertilizer loss from soil. TPA is used in agriculture to significantly increase crop yield. The method of action is 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. The attraction between the TPA and the fertilizer ions also retains the nutrients closer to the plant roots, keeping fertilizer more easily available for crops to use results in better yield with the same level of fertilization. TPA and agriculture has a strong economic value for all links in the sales…

[Operator instructions] We will go first to Talha Ismail with Poplar Point Capital Management.

Just wondering, we saw that you guys also made few investments, small ones in the investments line item. You guys have Applied Holding Corp. and Trio Opportunity Corp. Just trying to understand what those were all about. I know they are pretty small. But I was just wondering what they were and what we can expect from them?

They are, one is an investment in a leased own housing funds, and it's got a relatively good return of 8% with the potential for a bump up every three years. And then the second one is an investment in a -- and it's very small one, the second one is an investment in a captive insurance company for the same group Trio. And again, good income, low risk and it is a place where some of our current excess capital can reside for a period of time. These are not core investments but they've been chosen by the board as an appropriate place to keep our money and have it earning money while we're waiting to see what else of real core value may occur.

We'll hear next from [Raymond Hall with CFP Inc].

Can you comment a little bit about the seasonality of the ENP business?

Yes, still learning everything about it, obviously, but it has a slightly weaker quarter in fourth, first and second quarters and third quarters are stronger. ENP, it's directly in our agricultural world but they aim much more -- they're much more focused on turf, golf courses and ornamentals, which are an area that our sales team is not skilled at, because it is not exactly the same as real crop agriculture. And what we found is that the ornamental and golf and turf people think that agriculture salesman don't know their business and frankly, vice versa. So, we're really pleased that ENP is targeting this high value marketplace for us and of course they utilize some of our products and their products, and so that's where the synergy comes in. Has that a good answer to your question?

Yes. Is it being managed autonomously or are there -- I know you had a gentleman that was running that business that continues to run it. But what I guess synergies or overlap is there, are they completely independent and doing their own thing?

No, there's overlap. The President of ENP is a man named, George Murray, and he is now able to integrate his research and development programs with the NanoChem research and development. The ability to share knowledge completely across between the two companies now that we're a majority owner has been very valuable in the starting the development of new product lines, and optimizing some of the ones that were already in place. Yes, it is accounted for its consolidation but because it's an LLC and there is another partner, we're being very, very careful never to use assets directly between the two companies. So for instance we do not share a forklift that would be unfair to the other partner. Is that clear?

Yes. And touch on the previous questions about some of the smaller investments made during the fourth quarter. Obviously, there is cash $7.8 million to $8 million of cash on the balance sheet. Is that a way of you still looking to possibly do some things and want to keep some dry powder, and that's a short term parking spot? Or I mean, obviously, I know we had the one-time dividend in March and started the semi-annual starting on April. Can you comment on the cash balances and going forward?

Obviously, with the taking a loan to buy ENP, if you set that against our cash balance and you take away the anticipated payment for dividends and the cash payment for the larger investment of the LLC in January, our cash has dropped substantially. But in each case, we believe that we have bought something worth far more than the cash. And I think I got across during the speech that we expect rapid growth this year and that the cash coffers will refill. But to answer the core question, yes, that's a parking spot. I would consider it more medium term than short term. It's quite rare companies like ours to find opportunities like the two we found within three months this year, or this past year. One of the things that we absolutely insist on because we have a lien management is that anything that we purchase or assimilate with has to bring exceptional management with it, and management that our management can get along with. I mean, sometimes people are brilliant that we can't get along with them and vice versa. So the point is that it may take some time before we find another opportunity. So we need to find good uses for the money where they all make decent recovery returns while we wait.

[Operation instructions] We'll hear next from William Gregozeski with Greenridge Global.

In regards ENP, what gross margins should we be looking for going forward? It looks like they've been quite high in the past. But what we should we look for going forward?

I don't see very much change. It's going to be difficult to pick out of our financials, because we are going to consolidate it and we are unlikely to break it apart, because as you know, competing companies look for your best customers and your best product lines and duplicate those ones first. They hardly ever duplicate your bad product lines. So we don't see change, either positive or negative, but it's not going to be something we comment on by numbers.

In regards to Florida Fertilizer LLC you acquired. What percentage did you acquire and how is that going to show up on the financial statements?

We acquired exactly 50% and we did not acquire control. We believe, subject to audit or review, because it's -- we aren't audited again for a year. But we believe that the auditors will treat it as an investment and it will show up as an investment and with the income being investment income, and of course revenue and then income without deduction, because of that situation. But until it's fully reviewed by the auditors, I think you should check that. As my opinion, I think it's a good opinion but I can't prove that it's absolutely true yet.

And the two additional payments that you would have for the EBITDA threshold, are those [indiscernible] 50% ownership you have now?

No, those are to -- they are only released if the numbers are made. So the selling party does not receive their money unless they hit their numbers. We keep the 50.

And last question is how did you guys decide on the $0.15 per share dividend?

Well, board meetings are not public. But the general feeling was this was something we could afford. It was a low enough number. So that with the expected growth we have coming at us, we would have a reasonable payout ratio and the ability subject to success of raising the dividend over time. So those were the thinking patterns that we were employing and $0.15 or a dividend that consumes about $2 million a year of profits seemed about right.

[Operator instructions] And Mr. O'Brien, we have no further questions. I'll turn things back to you.

Thank you, Kelly. Everybody, appreciate you joining us for this conference call and look forward to hearing from some of you on future calls. I take this moment to say thanks and goodbye.

And again, that does conclude today's conference. Thank you all for joining us.