HOUSTON, TX, United States, via ETELIGIS INC., 03/12/2015 – – 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: Craig Keyser, CEO
Subject: 2014 Results, Progress and 2015 Plan
Overview and Perspective:
2013 was the year of operational and management restructuring and financial stabilization. 2014 has been Flame Seal’s transition year as new management resolved several cumbersome legacy issues and continued its corporate cleanup. Flame Seal anticipates 2015 to be a breakout year on its journey to future success and profitability. New business initiatives, accelerating organic growth and new certifications are increasing revenue over an expanding base of new customers. Current internal projections are for over a fifty per cent (50%) increase in revenues and solid profitability, primarily driven by new business.
2014 in Review:
Over the past 18 months, Flame Seal has evolved into an efficient and focused organization. This is evident not only by the key improvements reported over the past year and during the recent shareholder meeting, but also by the plans reviewed in this message.
The company reduced costs significantly over the past 18 months. All non-essential expenses were eliminated, and we found ways to reduce many essential costs while maintaining operational integrity. In spite of the severe cost cutting, including major lay-offs, sales exceeded internal forecast by 1.2% and the prior period loss was reduced by 90%. Flame Seal is singly focused now on the track to profitability.
2012 to 2014 Financial Review:
The balance sheet is on much more solid footing at the end of 2014. The BOD continues to underwrite Flame Seal’s future success as the business plan put in place the last eighteen months starts to gain solid traction.
Since the end of 2013, Current Assets have increased to $325,664 from $195,612, which is a $130,052 or 66.5% increase while Current Liabilities have decreased to $160,614 from $522,904, which is a $386,485 or 73.9% reduction.
Over the course of 2014 our Current Position has staged a dramatic turnaround from a negative position of .35 at 2013’s close to positive 2.39 as of December 31, 2014.
In addition to the ongoing and current Preferred Share Offering, Flame Seal has raised substantial capital since December 31, 2014 from investors familiar with its turnaround story.
Proceeds from fundraising will be used to increase research and development, secure certifications in new markets, enhance the marketing budget to increase sales and to further repair the balance sheet.
Sales for 2014 were $1,857,799 versus sales of $1,913,017 for 2013 – a decrease of $55,218 or 2.8% but 1.2% over internal projections for this transition year.
The Company continues focusing on the expanding Thermal Barrier market as this segment represents the most direct opportunity for increased sales. To this end, ongoing testing and certifications are planned for 2015.
The Company is realigning its initiative in the wildfire protection industry with new partnerships and anticipates significant, ongoing participation in this market.
The Company has amended its financial reporting to properly reflect, in accordance with generally accepted accounting standards, the monthly allocation of interest and depreciation charges. Management’s actions taken since May 1, 2013 have significantly improved EBITDA. Accordingly, 2014 EBITDA is approaching positive at ($11,876). In the future EBITDA comparisons will be provided. Full financial reports may be found under the symbol FLMP at www.otcmarkets.com in the Filings and Disclosures section.
Earnings Comparisons on an Accrual Basis:
For the year 2014 FLMP lost $61,535, which is a $570,844 or 90.3% reduction from 2013 and $664,074 or 92.7% reduction from 2012. The dramatic reduction in operating costs has positioned Flame Seal for positive earnings and cash flow as revenues increase up in 2015 and beyond.
R&D and Certifications:
As highlighted in the message above, the company managed to invest significant resources in research and development, product testing, and certifications. The company improved its ability to perform internal fire evaluations and achieved several new certifications over new spray foam insulation brands in the thermal barrier market. The company also achieved a successful certification over recycled rubber for commercial applications. Finally, the company achieved a fire rating for the newly introduced Wild Fire Coating.
The company targeted R&D efforts on two key markets: intumescent coatings and wild fire protection. The result of these programs yielded new technology for both markets, which will play heavily into 2015 plans. In the review of 2014 sales, Flame Seal achieved marked success in the leather industry, where sales of leather products reached record levels while sales and marketing efforts into the wild fire market are showing encouraging promise.
Plan for 2015
The plan for 2015 leverages the effort and success achieved over the past year and is further directing resources on specific projects and market segments. The company will focus on the leather industry; the coating industry and, by extension, the thermal barrier segment; and the wild fire market. In this regard the Sales and Marketing Team has identified new opportunities in these areas, which will be developed as 2015 unfolds. In addition, a new marketing plan is being created to better utilize distributor partners and establish new partnerships going forward.
As to Research and Development; the company will expand its coating platform with the goal of introducing two new products into the market. These new products not only fulfill product niches, as requested by our current customers, but will allow the expansion of Flame Seal’s customer base by providing new and very competitive alternatives to the market. Concurrently, a crucial and integral plan for the company will be the expansion of its coatings production capabilities. This investment will allow for improved manufacturing capability and efficiency, flexible manufacturing planning and a reduction in lead times of coating products. The new process control and lab equipment associated with this larger-scale manufacturing unit will also enhance quality control and testing programs.
The company continues to invest in testing and certifications. These investments are essential to win new customers who require certifications by independent laboratories before they can buy Flame Seal products. In some cases, such as tests for Canadian markets, certification can make its proprietary coatings the only products certified for use in their market. The testing plans for the year will encompass not only existing technology but will also certify the newest Flame Seal technology.
Several new certification tests previously discussed will materially increase sales in 2015. As sales continue to increase, the company will move into profitability as well as increase cash flow from operations to fund additional investments in R&D and Testing Certifications. The hard work over the last eighteen months is evident in the results to date and we expect continued improvement in 2015.
The content of this release contains continued repetition of prior reporting as Flame Seal believes the historic strategic improvement in its prospects must be viewed and evaluated in proper perspective to appreciate and fully comprehend the full impact of its importance.
Unaudited financial statements are prepared by an independent accountant. Audited statements will be made available when accumulated surplus is deemed adequate and more pressing profit-generating 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://www.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
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SOURCE: Flame Seal Products, Inc.