SOURCE: Flame Seal Products, Inc.

January 27, 2016 09:00 ET

Flame Seal Products, Inc. Reports 2015 Financial Results With Record Sales and First Annual Profit

HOUSTON, TX--(Marketwired - Jan 27, 2016) - 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: 2015 Year End Results and Progress Report

Flame Seal is pleased to announce record sales for 2015 and our first annual operating profit.

RECORD SALES IN 2015

Sales for the year ended 12/31/2015 were $2,481,670, a $623,871 increase or 34% over 2014 sales. When non-recurring revenue events are deducted from 2014 sales, product sales increased 41% year over year. Sales in the fourth quarter of the year were a record $747,597, 89% higher than the fourth quarter of 2014. Craig Keyser said, "Flame Seal is building on its sales momentum that began in the second quarter of 2015. We expect this growth to continue into 2016 with increased sales to recently acquired new customers in Canada, China and the U.S."

OPERATING PROFITS IN 2015

The increase in sales and strong margins drove Flame Seal to its first yearly operating profit, modest but, as a first, very significant. Profits for 2015 based on Generally Accepted Accounting Principles (GAAP) were $55,271 with 62,558,274 shares outstanding at 12/31/2015. In 2014 FLMP lost $61,535.

Gross Margins Stable

During 2015 gross operating margins were stable at 59%. "As our balance sheet has become stronger, we have been able to buy raw materials in larger quantities and at lower prices, with a corresponding positive affect on net profitability. This is part of our overall efforts to constantly improve our operating efficiency," said Craig Keyser.

Balance Sheet Improvement

FLMP's balance sheet continued to improve this year. The current ratio increased from 2.61 to 4.92 during the year largely due to the increase in accounts receivable. Yet, the weighted average age of FLMP's accounts receivable at the end of the year was less than 20 days, reflecting careful management of credit issues by the sales and management team. Operating debt was also reduced as some loans from Board of Directors were converted to common stock. Three legacy litigations issues were settled on favorable terms, eliminating all contingent liabilities from the balance sheet. More importantly, Flame Seal had no outstanding litigation issues at year end 2015.

2013 to 2015 Financial Review *

             
Category   2013   2014   2015
             
Revenue   $1,929,843   $1,857,799   $2,481,670
             
P & L   ($632,279)   ($61,535)   $55,271
             
Current Assets   $195,612   $325,664   $746,969
             
Current Liabilities   $522,904   $136,419   $151,901
             
Current Ratio   0.35   2.39   4.92
             
LT Liabilities   $965,363   $1,588,841   $1,059,624
             
Shares Outstanding   47,135,396   51,113,102   62,558,274
             

*Comparatives under new management as of May 1, 2013

Physical Improvements

Flame Seal completed several enhancements to its production facilities with the objective of increasing productive capacity and reducing the cost of production. These projects are the first of several engineering initiatives that will continue into 2016 and beyond giving FLMP the ability to service larger customers at lower cost.

Research, Development and Testing

Near the end of 2015 FLMP concluded a thorough search for a new chemist for our R&D and Testing program. That position was filled in December and we anticipate this new human resource will significantly advance our development of new product applications for our existing technology and development of new technologies with significant market value. As these new technologies and applications are tested and certified, FLMP expects new annuity customers and sales creation. "The return on this expense and investment in new laboratory facilities should be significant," said Keyser.

Keyser summarized by saying, "As we said last March 12th, we anticipated 2015 to be truly a breakout year for Flame Seal in many ways. I want to thank the whole Flame Seal team for pulling together and building a solid foundation for future success."

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.

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