FLAME SEAL PRODUCTS, INC. (OTC Pink: FLMP) (PINKSHEETS: FLMP), a leading provider of Specialty Chemicals for the Passive Fire Protection Market, today issues the following update to its Stockholders.
From: The Board of Directors
Subject: March 31, 2014 Progress and Financial Report
As a direct result of the 2013 restructuring by the Board of Directors, Flame Seal announces its first quarterly profit.
With its costs now under control, management is concentrating on increasing the top line while bringing its next generation products to market. The transition will accelerate in 2014 as Flame Seal brings this new technology to market.
Craig G. Keyser is named Chief Executive Officer
Bruce Rutherford, Chairman of the Board of Directors, is pleased to announce the permanent appointment of Craig G. Keyser as Chief Executive Officer (CEO) as of April 25, 2014. Prior to this, Mr. Keyser has been operating as interim CEO as well as Chief Operating Officer (COO) and Chief Marketing Officer. Mr. Keyser has over thirty (30) years of experience in the chemical industry starting in the Process Development Laboratory in 1981 with Rohm and Haas, moving up the sales and marketing ladder with them, becoming a Regional Manager at Bayer and Vice President with Atlas Refinery before joining Flame Seal in 2008.
Mr. Rutherford states, "Needless to say, Craig is a very capable, energetic, results-focused leader. He has been instrumental in Flame Seal's transformation. He has what we need to make Flame Seal a very profitable company."
Mr. Keyser states, "I am honored to be entrusted by the Board of Directors with such an important responsibility. Our management team has made significant progress since last May exemplified by the first quarter of 2014. We have achieved this small but nonetheless real profit by restructuring the entire company and focusing on providing value to our customers. The principal constraint on future growth is the requirement for capital to invest in our new technology and to secure additional testing and certifications."
To address the capital constraint, Flame Seal will soon be offering a convertible preferred stock issue paying a 5% dividend in cash. The Preferred shares will be offered first to our shareholders, and if not fully subscribed by existing shareholders, to third parties. Proceeds from the issue will be used to increase research and development, secure certifications in new markets, beef up our marketing budget to increase sales and to further repair our balance sheet.
March 31, 2014 Financial Review
Earnings on an Accrual Basis:
For the quarter ending March 31, 2014 Flame Seal made $ 24,204 on sales of $461,602. Revenues were in line with the 2014 plan. Many expenses have been permanently eliminated from the income statement. Flame Seal has brought its cost structure and resulting cash flow into alignment.
The balance sheet continues to be burdened by substantial obligations incurred prior to May 2013. Although the balance sheet has been improved dramatically, further improvements will take more time and capital, in part, because the BOD decided to devote available cash flow to support sales, marketing programs and new product developments.
Further improvements in the balance sheet will allow us to become more quickly responsive to large customers and more attractive to key suppliers. From December 31, 2013 thru March 31, 2014, Current Assets increased by $195,039 while Current Liabilities decreased by $ 31,274.
-In the March 31, 2014 quarter, our Current Ratio improved to 79.4% from 37.4% on December 31, 2013 - an encouraging accomplishment.
Net cash increased by $187,622 resulting in net cash as of March 31, 2014 of $220,062. During the quarter, members of Board of Directors provided additional loan funding to the Company of $231,399 to improve the cash and current position as well as reduce payables and enable bulk purchases of raw materials. Flame Seal views such material commitments as a vote of confidence in its future.
Sales and Technology Review
Sales for the March 31, 2014 quarter were $461,602, which, while stated as meeting internal projections, continue on a modest pace due to R & D constraints, marketing limitations and the need for multiple certifications and new product testing.
New products launches such as the recently announced Wild Fire initiative and purchase commitments from new customers could significantly boost revenue this year. Management is concentrating on developing long-term customer relationships with steady, recurring order flow.
The Company also is focusing on the expanding Thermal Barrier market as this segment continues to present the opportunity for increased sales. To this end and subject to securing a permanent capital infusion form the planned Preferred Stock Offering, more testing and certifications are planned for 2014. These certifications are absolutely necessary to expand our sales from current levels.
March 31, 2014 financial reports in table form are available on OTC Markets -- www.otcmarkets.com -- under the FLMP symbol.
The content of this release continues to contain repetition of previously released statements. Flame Seal is, also, aware that its website --www.flameseal.com -- is not up to date. When more pressing priorities are met, management intends to update it to become an information resource for current and prospective customers and investors, as well as suppliers and the media. Additionally, we reiterate that Flame Seal's unaudited financial statements are prepared by an independent Certified Public Accountant. Audited statements will be made available when we accumulate adequate surplus and more pressing priorities have been met. The objective is clarity, transparency, consistency and timely factual reporting for our owners, the shareholders.
Respectfully Submitted By the Board of Directors
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
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.
Mobile 949-233-3229 - preferred
SOURCE: Flame Seal Products, Inc.