Flame Seal Products, Inc. Releases March 31, 2016 Results

HOUSTON TX--(Marketwired - May 6, 2016) - FLAME SEAL PRODUCTS, INC. (OTC PINK: FLMP) --

• Record First Quarter Sales
  
  
• R & D Investment Driving New Sources of Revenue
  
  
• Transitioning to a Diversified Manufacturer of Innovative Products
  
  
• Major Recurring Revenue Sources Multiply
  
  

FLAME SEAL PRODUCTS, INC. (OTC PINK: FLMP), a leading provider of Specialty Chemicals for the Passive Fire Protection Market, today issues the following update to its Stockholders.

From: Craig Keyser, CEO

Subject: March 31, 2016 First Quarter Results and Update 

Record Sales for March 31, 2016 Quarter

Revenues for the quarter ended March 31, 2016 were $692,259, a $220,361 increase or 47% over comparable 2015 quarter. Please note below the comparative sales quarters (ex other income) after new management assumption in May, 2013:

2016	$659,520
2015	$445,713
2014	$402,784

Craig Keyser states, "Flame Seal (FSP) is building on marketing momentum beginning last year with new products, expanding product penetration and new customers. We anticipate this growth to continue through 2016 with increased sales to new and existing customers, both domestic and foreign. We have recently begun sales to a multibillion international polymer materials company, which represents a major boost to our revenue base. It's very gratifying to see Flame Seal's teamwork pay off, especially with new product sales and new business representing 30% of total revenues."

OPERATING PROFIT

The increase in sales yielded a small operating loss of $13,975, based on Generally Accepted Accounting Principles (GAAP), due largely to non-recurring costs related to the settlement of legacy issues and other non-recurring expenses. In Q1 of 2015, FSP lost $25,165.

Gross Margins

During the first quarter of 2016 gross operating margins declined, which affected FSP's overall profitability. "Flame Seal encountered margin pressure due to smaller quantity (higher priced) purchases of raw materials as a result of working capital constraints and due to the normal transition of FSP customers to standard credit terms. FSP views the working capital constraints as temporary as increased sales lead to higher cash flow and the last of the legacy legal issues will be put behind us this year. Since the first quarter, we've received additional, substantial orders, which reinforce the trend and bolster our confidence in 2016's prospects and beyond. For the first time in FSP history we have a significant order backlog for the next three months. This is a dramatic improvement from previous years," said Craig Keyser.

Balance Sheet Status

FSP's balance sheet continued to improve this quarter as the current ratio remains strong at 3.87. Receivables remained healthy with daily sales outstanding (DSO) at 19 days. Flame Seal has no outstanding litigation issues as of March 31, 2016 to note on its balance sheet.

Physical Improvements and Research and Development

Flame Seal completed several enhancements to its production and laboratory testing facilities. The expansion of our Lab area is crucial for new product development and testing, enabling FSP's chemist to accelerate multiple initiatives. These projects are the first of several R&D and engineering programs that will continue into 2016 and beyond giving FSP the ability to service larger customers at lower cost. As new technologies and applications are tested and certified, FSP is winning new annuity customers. This process reflects our strategy of enhancing and adapting our technology to new uses and surfaces, achieving certified testing results, and using those results to create new annuity sales with new and existing customers. Keyser summarizes saying, "2015 proved to be a truly breakthrough year capping two years and eight months of restructuring and dedication to re-position Flame Seal. 2016 should reap the rewards of countless hours building the foundation on which to grow a truly successful business. I again want to thank the whole Flame Seal team for pulling together. Their commitment has been outstanding. I, also, want to thank all those shareholders who have believed in us."

About Flame Seal

Flame Seal Products, Inc., manufacturer of the world's number one fire prevention technology, was founded in 1992 as a research and development company focused on the investigation and application of passive Fire Prevention Technologies. FLAME SEAL PRODUCTS, INC. (FLMP) began trading its common stock on March 27, 2000. Flame Seal Products, Inc. is also the Transfer Agent of record. The company offers a wide variety of Code Driven solutions for a number of diverse applications and industries, and has developed three passive fire prevention technologies which are the basis for the company's products. For more information, go to: http://flameseal.com. Financial information on Flame Seal is available on otcmarkets.com -- symbol FLMP -- in the "Filing and Disclosure" section.

Safe Harbor Statement

Certain statements in this release may be "forward-looking" statements as defined in the Private Securities Litigation Reform Act of 1995. Such statements are subject to numerous risks and uncertainties. Actual results may vary significantly from the results expressed or implied in such statements. Factors that could cause actual results to materially differ from forward-looking statements include, but are not limited to, the Company's ability to meet the terms and conditions required to obtain its project financing, risks and delays associated with product development, risk of market acceptance of new products, risk of technology or product obsolescence, competitive risks, reliance on development partners and the need for additional capital. Flame Seal takes no obligation to update or correct forward-looking statements, and also takes no obligation to update or correct information prepared by third parties that are not paid for by Flame Seal.