LaPolla Delivers 14% Sales Growth in Foam Business
LAPOLLA INDUSTRIES, INC. CONSOLIDATED BALANCE SHEETS As of December 31, -------------------------- 2007 2006 ------------ ------------ Assets Current Assets: Cash $ 339,855 $ 382,116 Trade Receivables 3,350,154 3,595,431 Inventories 2,698,097 2,882,236 Prepaid Expenses and Other Current Assets 532,233 537,254 ------------ ------------ Total Current Assets 6,920,339 7,397,037 ------------ ------------ Property, Plant and Equipment 2,626,068 1,489,639 Other Assets: Goodwill 1,951,000 1,951,000 Other Intangible Assets 142,318 165,396 Deposits and Other Non-Current Assets 226,320 149,236 ------------ ------------ Total Other Assets 2,319,638 2,265,632 ------------ ------------ Total Assets $ 11,866,045 $ 11,152,308 ------------ ------------ Liabilities and Stockholders' Equity Current Liabilities: Accounts Payable $ 2,422,625 $ 5,069,478 Accrued Expenses and Other Current Liabilities 1,266,533 1,091,947 Line of Credit -- 1,007,120 Current Portion of Convertible Term Note 589,761 -- Current Portion of Long-Term Debt 84,939 97,589 Current Portion of Liabilities from Discontinued Operations -- 232,479 ------------ ------------ Total Current Liabilities 4,363,858 7,498,613 ------------ ------------ Other Liabilities: Revolving Credit Note 4,879,152 -- Non Current Portion of Convertible Term Note 775,185 -- Non Current Portion of Long-Term Debt 107,255 202,923 Non Current Portion of Liabilities from Discontinued Operations 848 103,650 ------------ ------------ Total Other Liabilities 5,762,440 306,573 ------------ ------------ Total Liabilities 10,126,298 7,805,186 ------------ ------------ Commitments and Contingencies (Note 13) Stockholders' Equity: Preferred Stock, $1.00 Par Value; 2,000,000 Shares Authorized, of which Designations: Series A Convertible, 750,000 Shares Authorized; 62,500 Issued and Outstanding (Less Offering Costs of $7,465) for 2007 and 2006, respectively; $62,500 aggregate liquidation preference for 2007 and 2006, respectively. 55,035 55,035 Series D, 25,000 Shares Authorized; 8,176 Issued and Outstanding for 2007 and 2006, respectively; $8,176,000 aggregate liquidation preference for 2007 and 2006, respectively. 8,176 8,176 Common Stock, $.01 Par Value; 65,000,000 Shares Authorized; 59,125,700 and 53,574,251 Issued and Outstanding for 2007 and 2006, respectively. 591,257 535,743 Additional Paid-In Capital 73,600,876 70,201,151 Accumulated (Deficit) (72,515,597) (67,452,982) ------------ ------------ Total Stockholders' Equity 1,739,747 3,347,123 ------------ ------------ Total Liabilities and Stockholders' Equity $ 11,866,045 $ 11,152,308 ------------ ------------ LAPOLLA INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS Year Ended December 31, ---------------------------------------- 2007 2006 2005 ------------ ------------ ------------ Sales $ 31,840,799 $ 30,314,736 $ 20,179,263 ------------ ------------ ------------ Cost of Sales 26,967,721 25,496,901 17,017,566 ------------ ------------ ------------ Gross Profit 4,873,078 4,817,835 3,161,697 ------------ ------------ ------------ Operating Expenses: Selling, General and Administrative 8,448,037 7,108,942 5,719,156 Professional Fees 556,286 221,666 493,149 Depreciation and Amortization 190,410 198,113 103,310 Consulting Fees 173,717 136,049 182,026 Interest Expense 710,370 136,847 78,411 Interest Expense - Related Party 21,841 146,096 237,760 Other (Income) Expense (164,968) (3,211) (22,611) ------------ ------------ ------------ Total Operating Expenses 9,935,693 7,944,502 6,791,201 ------------ ------------ ------------ Operating (Loss) $ (5,062,615) $ (3,126,667) $ (3,629,504) Income (Loss) From Discontinued Operations, Net of Income Tax Benefit - Deferred -- 313,972 131,971 ------------ ------------ ------------ Net (Loss) $ (5,062,615) $ (2,812,695) $ (3,497,533) Plus: Dividends on Preferred Stock (817,600) (175,262) -- Net (Loss) Available to Common Stockholders $ (5,880,215) $ (2,987,957) $ (3,497,533) ------------ ------------ ------------ Net Income (Loss) Per Share-Basic and Diluted Continuing Operations $ (0.110) $ (0.056) $ (0.069) Discontinued Operations -- 0.006 0.003 ------------ ------------ ------------ Net (Loss) Per Share $ (0.110) $ (0.050) $ (0.067) ------------ ------------ ------------ Weighted Average Shares Outstanding 53,677,675 53,414,914 50,538,175 LAPOLLA INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31, 2007 2006 2005 ------------ ------------ ------------ Cash Flows From Operating Activities Net (Loss): Continuing Operations $ (5,062,615) $ (3,126,667) $ (3,629,504) Discontinued Operations 0 313,972 131,971 Adjustments to Reconcile Net (Loss) to Net Cash (Used in) Operating Activities: Depreciation and Amortization 268,604 95,019 158,532 Provision for Losses on Accounts Receivable (45,866) 157,715 53,771 Amortization of Discount on Convertible Term and Revolving Credit Notes 263,553 -- -- Share Based Compensation Expense 1,186,595 384,475 327,169 Stock Based Operating Expenses -- 153,640 550,991 Changes in Assets and Liabilities: Trade Receivables 291,143 456,785 (2,059,564) Inventories 184,140 (1,488,633) (814,037) Prepaid Expenses and Other Current Assets 5,021 (241,697) (249,004) Deposits and Other Non Current Assets (77,083) (1,128) (82,573) Accounts Payable (2,646,853) 994,532 1,779,945 Accrued Expenses and Other Current Liabilities 174,586 (1,045,833) 1,704,603 Other Liabilities (216) (2,319) 317,807 Net Operating Activities of Discontinued Operations (9,152) (330,069) (905,059) ------------ ------------ ------------ Net Cash (Used in) Operating Activities (5,468,143) (3,680,208) (2,714,952) ------------ ------------ ------------ Cash Flows From Investing Activities Additions to Property, Plant and Equipment (1,381,955) (654,005) (713,847) Payment for Acquired Company, Net of Cash Acquired -- -- (1,933,748) ------------ ------------ ------------ Net Cash (Used in) Investing Activities $ (1,381,955) $ (654,005) $ (2,647,595) ------------ ------------ ------------ Cash Flows From Financing Activities Proceeds from the Issuance of Preferred Stock -- 200,000 -- Proceeds from Revolving Credit Note 5,000,000 -- -- Proceeds from Convertible Term Note 2,000,000 -- -- Principal Repayments to Convertible Term Note (200,000) -- -- Proceeds from Line of Credit 1,398,000 8,310,120 -- Payments to Line of Credit (2,405,120) (7,324,816) (197,336) Proceeds from Loans Payable - Related Party 3,386,224 5,479,445 4,302,500 Payments to Loans Payable - Related Party (1,838,800) (576,445) -- Proceeds from Note Payable - Other -- 3,813,336 1,693,211 Payments to Note Payable - Other -- (5,493,211) -- Principal Repayments on Long Term Debt (191,270) 81,068 (59,672) Payment of Preferred Stock Dividends (15,068) -- -- Net Financing Activities of Discontinued Operations (326,129) (173,789) -- ------------ ------------ ------------ Net Cash Provided by Financing Activities 6,807,837 4,315,708 5,738,703 ------------ ------------ ------------ Net Increase (Decrease) In Cash (42,261) (18,505) 376,156 Cash at Beginning of Year 382,116 400,621 24,465 ------------ ------------ ------------ Cash at End of Year $ 339,855 $ 382,116 $ 400,621 ------------ ------------ ------------ Supplemental Disclosure of Cash Flow Information: Cash Payments for Income Taxes $ -0- $ -0- $ -0- Cash Payments for Interest 447,317 161,661 78,411 Supplemental Schedule of Non Cash Investing and Financing Activities: Property, Plant and Equipment acquired via Issuance of Long Term Debt $ 34,989 $ 105,952 $ 317,807 Conversion of Loans Payable - Related Party to Note Payable - Related Party -- 3,000,000 -- Conversion of Note Payable - Other to Note Payable - Related Party -- 3,000,000 -- Common Stock Issued for Director Fees and Other Compensation 27,521 233,640 350,250 Common Stock Issued upon Cancellation of Indebtedness 1,571,841 -- 7,217,375 Common Stock Issued as Payment for Accrued Preferred Stock Dividends 788,859 -- -- Preferred Stock Issued upon Cancellation of Indebtedness -- 7,903,000 -- Preferred Stock Issued as Payment for Accrued Preferred Stock Dividends -- 73,000 -- Warrants Issued in conjunction with Issuance of Convertible Term and Revolving Notes 555,902 -- --
Contact Information: Company Contacts: Douglas J. Kramer CEO Paul Smiertka CFO Michael T. Adams CGO (281) 219-4700 Investor Relations Contacts: Jody Burfening Lippert/Heilshorn & Associates (212) 838-3777 jburfening@lhai.com