LAPOLLA INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, December 31,
2008 2007
------------ ------------
(Unaudited)
Assets
Current Assets:
Cash $ 68,046 $ 339,855
Trade Receivables, Net 7,925,266 3,350,154
Inventories 3,090,730 2,698,097
Prepaid Expenses and Other Current Assets 605,346 532,233
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Total Current Assets 11,689,388 6,920,339
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Property, Plant and Equipment, Net 2,477,864 2,626,068
Other Assets:
Goodwill 1,951,000 1,951,000
Other Intangible Assets 130,778 142,318
Deposits and Other Non-Current Assets 207,160 226,320
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Total Other Assets 2,288,938 2,319,638
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Total Assets $ 16,456,190 $ 11,866,045
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Liabilities and Stockholders' Equity
Current Liabilities:
Accounts Payable $ 5,307,044 $ 2,422,625
Accrued Expenses and Other Current
Liabilities 1,761,859 1,266,533
Loan Payable - Related Party 843,348 --
Current Portion of Convertible Term Note -- 589,761
Current Portion of Long-Term Debt 74,302 84,939
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Total Current Liabilities 7,986,553 4,363,858
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Other Liabilities:
Revolving Credit Note 3,713,715 4,879,152
Non-Current Portion of Convertible Term Note 565,260 775,185
Non Current Portion of Long-Term Debt 57,871 107,255
Non Current Portion of Liabilities from
Discontinued Operations -- 848
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Total Other Liabilities 4,336,846 5,762,440
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Total Liabilities 12,323,399 10,126,298
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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) and $62,500 aggregate liquidation
preference at June 30, 2008 and
December 31, 2007, respectively 55,035 55,035
Series D, 25,000 Shares Authorized;
8,176 Issued and Outstanding and
$8,176,000 aggregate liquidation preference
at June 30, 2008 and December 31, 2007 8,176 8,176
Common Stock, $.01 Par Value; 98,000,000
Shares Authorized; 61,944,803 and
59,125,700 Issued and Outstanding at
June 30, 2008 and December 31, 2007,
respectively 619,448 591,257
Additional Paid-In Capital 77,016,206 73,600,876
Accumulated (Deficit) (73,566,075) (72,515,597)
------------ ------------
Total Stockholders' Equity 4,132,790 1,739,747
------------ ------------
Total Liabilities and
Stockholders' Equity $ 16,456,190 $ 11,866,045
------------ ------------
LAPOLLA INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended June 30, Six Months Ended June 30,
-------------------------- --------------------------
2008 2007 2008 2007
------------ ------------ ------------ ------------
Sales $ 12,033,485 $ 9,519,871 $ 20,206,728 $ 16,789,193
============ ============ ============ ============
Cost of Sales 9,296,825 7,726,476 15,969,044 13,813,350
============ ============ ============ ============
Gross Profit 2,736,660 1,793,395 4,237,684 2,975,843
============ ============ ============ ============
Operating Expenses:
Selling, General and
Administrative 2,699,863 2,074,246 4,837,917 4,061,749
Professional Fees 198,506 104,027 415,289 136,646
Depreciation and
Amortization 45,484 60,886 90,969 126,580
Consulting Fees 23,212 14,729 35,546 40,309
Interest Expense 147,165 129,195 306,295 192,717
Interest Expense
- Related Party 39,272 -- 43,348 --
Interest Expense
- Amortization
of Discounts 46,935 36,435 91,263 53,084
(Gain) Loss on
Extinguishment
of Debt (481,833) -- (481,833) --
Other (Income)
Expense (50,633) (5,208) (50,633) (4,694)
============ ============ ============ ============
Total Operating
Expenses 2,667,971 2,414,310 5,288,161 4,606,391
============ ============ ============ ============
Net Income (Loss) 68,689 (620,915) (1,050,477) (1,630,548)
Plus: Dividends on
Preferred Stock (203,840) (203,840) (407,123) (407,680)
------------ ------------ ------------ ------------
Net (Loss)
Available to
Common
Stockholders (135,151) (824,755) (1,457,600) (2,038,228)
============ ============ ============ ============
Net (Loss) Per
Share-Basic and
Diluted $ (0.002) $ (0.015) $ (0.025) $ (0.038)
------------ ------------ ------------ ------------
Weighted Average
Shares Outstanding 59,227,776 53,612,251 59,209,198 53,598,584
------------ ------------ ------------ ------------
LAPOLLA INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended June 30,
--------------------------
2008 2007
------------ ------------
Cash Flows From Operating Activities
Net Loss $ (1,050,477) $ (1,630,549)
Adjustments to Reconcile Net (Loss) to Net Cash
(Used in) Operating Activities:
Depreciation and Amortization 192,464 145,633
Provision for Losses on Accounts Receivable 67,383 (129,315)
Amortization of Discount on Revolving Credit
and Convertible Term Notes 91,263 53,084
Share Based Compensation Expense 851,544 533,347
Gain on Extinguishment of Debt (481,833) --
Changes in Assets and Liabilities:
Trade Receivables (4,575,112) (2,055,000)
Inventories (392,633) (1,882,431)
Prepaid Expenses and Other Current Assets (73,113) (134,794)
Deposits and Other Non Current Assets (78,359) (131,960)
Accounts Payable 2,884,419 1,771,897
Accrued Expenses and Other Current
Liabilities 495,326 83,161
Other Liabilities (1,513,943) (435)
Net Operating Activities of Discontinued
Operations (848) (9,152)
============ ============
Net Cash (Used in) Operating Activities (3,583,919) (3,386,514)
============ ============
Cash Flows From Investing Activities
Additions to Property, Plant and Equipment (17,868) (1,409,996)
============ ============
Net Cash (Used in) Investing Activities $ (17,868) $ (1,409,996)
============ ============
Cash Flows From Financing Activities
Proceeds from Revolving Credit Note -- 4,000,000
Proceeds from Convertible Term Note -- 2,000,000
Principal Repayments on Convertible Term Note (400,000) --
Proceeds from Line of Credit -- 1,398,000
Payments to Line of Credit -- (2,405,120)
Proceeds from Loans Payable - Related Party 3,800,000 617,000
Payments to Loans Payable - Related Party -- (617,000)
Payments to Note Payable - Other -- (13,336)
Principal Repayments on Long Term Debt (60,022) (223,484)
Payment of Preferred Stock Dividends (10,000) --
Net Financing Activities of Discontinued
Operations -- (326,129)
============ ============
Net Cash Provided by Financing Activities 3,329,978 4,429,931
============ ============
Net (Decrease) In Cash $ (271,809) $ (366,579)
Cash at Beginning of Period 339,855 382,116
============ ============
Cash at End of Period $ 68,046 $ 15,537
============ ============
Supplemental Disclosure of Cash Flow
Information:
Cash Payments for Income Taxes $ -- $ --
Cash Payments for Interest $ 306,295 $ 192,715
Supplemental Schedule of Non Cash Investing and
Financing Activities:
Property, Plant and Equipment acquired from
Issuance of Long Term Debt $ -- $ 28,000
Common Stock Issued-Exercise of Warrants for
Principal Repayments to Revolving Credit
Note 67,500 --
Common Stock Issued-Exercise of Warrants for
Principal Repayments to Convertible Term
Note 33,766 --
Common Stock Issued-Exercise of Warrants for
Interest on Convertible Term Note 33,734 --
Common Stock Issued-Conversion of Convertible
Term Note for Principal Repayments to
Convertible Term Note 3,850 --
Common Stock Issued-Cancellation of
Indebtedness for Principal Repayments to
Loan Payable-Related Party 2,000,000 --
Common Stock Issued-Director Fees -- 28,440
LAPOLLA INDUSTRIES, INC.
BUSINESS SEGMENTS
(UNAUDITED)
Three Months Ended June 30,
--------------------------------------
2008
--------------------------------------
Foam Coatings Totals
------------ ------------ ------------
Sales $ 9,110,929 $ 2,922,556 $ 12,033,485
Cost of Sales 7,302,090 1,994,735 9,296,825
Gross Profit 1,808,838 927,822 2,736,660
Depreciation and Amortization 30,994 9,942 40,936
Interest Expense 132,519 42,509 175,028
Segment Profit (Loss) 297,669 493,709 791,378
Segment Assets (1) 10,768,487 5,340,668 16,182,989
Expenditures for Segment Assets $ -- $ 17,868 $ 17,868
Three Months Ended June 30,
-------------------------------------
2007
-------------------------------------
Foam Coatings Totals
----------- ----------- -----------
Sales $ 5,601,725 $ 3,918,146 $ 9,519,871
Cost of Sales 4,726,382 3,000,095 7,726,477
Gross Profit 868,811 924,583 1,793,394
Depreciation and Amortization 10,508 50,378 60,886
Interest Expense 97,461 68,169 165,630
Segment Profit (Loss) (189,740) (56,384) (133,356)
Segment Assets (1) 8,925,528 6,770,477 15,696,005
Expenditures for Segment Assets $ 845,751 $ 89,866 $ 935,617
LAPOLLA INDUSTRIES, INC.
BUSINESS SEGMENTS
(UNAUDITED)
Six Months Ended June 30,
-------------------------------------
2008
-------------------------------------
Foam Coatings Totals
----------- ------------ ------------
Sales $15,175,004 $ 5,031,724 $ 20,206,728
Cost of Sales 12,367,295 3,601,749 15,969,044
Gross Profit 2,807,709 1,429,975 4,237,684
Depreciation and Amortization 61,485 20,387 81,872
Interest Expense 248,336 82,343 330,680
Segment Profit (Loss) (67,332) 527,303 459,971
Segment Assets (1) 10,768,487 5,340,668 16,182,989
Expenditures for Segment Assets $ -- $ 17,868 $ 17,868
Six Months Ended June 30,
-------------------------------------
2007
-------------------------------------
Foam Coatings Totals
----------- ------------ -----------
Sales $10,125,114 $ 6,664,079 $16,789,103
Cost of Sales 8,731,950 5,081,400 13,813,350
Gross Profit 1,388,713 1,587,130 2,975,843
Depreciation and Amortization 21,960 104,620 126,580
Interest Expense 148,236 97,565 245,801
Segment Profit (Loss) (770,039) 46,276 (723,763)
Segment Assets (1) 8,925,528 6,770,477 15,696,005
Expenditures for Segment Assets $ 134,204 $ 284,751 $ 418,955
The following are reconciliations of reportable segment profit or loss, and
assets, to the Company's consolidated totals at:
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ ------------------------
Profit or Loss 2008 2007 2008 2007
----------- ------------ ----------- ------------
Total Profit or Loss
for Reportable
Segments $ 791,378 $ (133,356) $ 459,971 $ (723,763)
Unallocated Amounts:
Corporate Expenses (2) (722,689) (487,559) (1,510,448) (906,785)
Income (Loss) Before
Income Taxes $ 68,689 $ (620,915) $(1,050,477) $(1,630,548)
Assets June 30, December 31,
2008 2007
----------- ------------
Total Assets for
Reportable Segments (1) $16,085,471 $ 11,260,074
Other Unallocated
Amounts (3) 370,719 605,972
Consolidated Total $16,456,190 $ 11,866,045
(1) Segment assets are the total assets used in the operation of each
segment.
(2) Includes significant portions of non-cash items such as share based
compensation and the amortization of discounts associated with certain
debt instruments.
(3) Includes corporate assets which are principally cash and cash
equivalents.
Contact Information: LaPolla Industries, Inc. Contacts: Douglas J. Kramer, CEO Michael T. Adams, CGO (281) 219-4700 Public Relations Contacts: Kristin Sommers 5W Public Relations (212) 999-5585 ksommers@5wpr.com