HOUSTON, TX--(Marketwired - May 12, 2017) - FLAME SEAL PRODUCTS, INC. (
FLAME SEAL PRODUCTS, INC. (
From: Craig Keyser, CEO Subject: March 31, 2017 First Quarter Results and Corporate Update
Revenues for the quarter ended March 31, 2017 were $599,880, a $92,379 decrease or 13% compared to the March 31, 2016 quarter and sequentially 25% lower than the December 31, 2016 quarter.
Craig Keyser comments, "The first quarter of 2017 unfolded with a confluence of unexpected events which negatively impacted our results. Flame Seal's (FSP) largest customer in 2016 was recently divested by its parent. The acquiring company is in the process of working off inventory and assessing how to proceed which is disrupting our order flow from this customer. Another customer also temporarily suspended orders in the first quarter. New competition which emerged in the second half of 2016 has resulted in somewhat reduced margins and affected profitability. Management and the Board of Directors are acutely aware of rapidly-changing industry conditions and proactively evaluating appropriate steps to restore FSP's momentum. In the meantime, FSP's Research and Development efforts continue as we focus on the products and technologies that will dramatically increase sales and profits."
Operating Results
For the quarter ending March 31, 2017 FSP's net loss was $80,507. As noted previously, the majority of all technical resources are focused on the development and testing of new competitive products. The importance of these programs to the successful implementation of our strategic plans cannot be overstated. Two (2%) higher SG&A expenses over the comparable 2016 comparable quarter, in the presence of the revenue and gross profit decline, contributed to the expanded loss. FSP continues to invest in qualified personnel to improve future prospects.
Operations
During the first quarter of 2017 gross operating margins held steady at 52%, but at an unsatisfactory level as ratio of sales. FSP continues to operate with limited working capital which is further constrained by the recent downturn.
Balance Sheet Status
FSP's current ratio at 3.8 remains healthy. Its balance sheet contracted slightly in the first quarter as cash and receivables were marginally lower. As of March 31, 2017, FSP had 63,065,453 shares outstanding, a nominal increase of 200,000 shares in the quarter.
Craig Keyser notes, "The demands on our working capital will require prudent financial management in 2017 in light of current conditions."
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.
The above news release has been provided by the above company via the OTC Disclosure and News Service. Issuers of news releases and not OTC Markets Group Inc. are solely responsible for the accuracy of such news releases.
Investor Relations Contact: Richard Kaneb 949-233-3229 richardkaneb@gmail.com www.flameseal.com
