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
LaPolla Reports Third Quarter Profit
Foam Sales Soar 96% Despite Depressed Economic Conditions
| Source: LaPolla Industries, Inc.
HOUSTON, TX--(Marketwire - November 20, 2008) - LaPolla Industries, Inc. (OTCBB : LPAD )
("LaPolla"), a leading manufacturer and supplier of spray foam insulation
and coatings designed to reduce energy consumption in the commercial and
residential new construction and retrofit markets, today announced results
for the third quarter and nine months ended September 30, 2008.
"LaPolla continues to grow sales dramatically despite the current economic
crisis. Mainstream acceptance in conventional construction as well as
increased consumer demand for superior insulation, are at the forefront of
our charge. LaPolla has met steep declines in the housing market with
strong market share gains. Consumers at all levels are realizing that
insulation has an incredible impact on the conservation of energy and
reduction in costs," stated Douglas J. Kramer, CEO and President, of
LaPolla Industries, Inc.
Third Quarter Results
For the third quarter of 2008 total sales increased 66% to $13.9 million
compared to $8.4 million in the third quarter of 2007. Foam sales
increased 96% to record levels due to market share gains, primarily from
displacement of conventional insulation products like fiberglass with spray
foam insulation, despite steep declines in the new housing market.
LaPolla's acquisition of certain of AirTight SprayFoam's assets, effective
July 1, 2008, demonstrates our commitment to converting traditional
insulators to spray foam insulation, as Airtight SprayFoam is a turn-key,
equipment and business startup leader in the industry. Energy cost savings,
especially solutions utilizing green building materials, have become a
global priority. Coatings sales increased 5% as foam roofing products
continue to provide a pull through advantage for our energy efficient
coatings. Gross profit increased 50% to $2.6 million from $1.7 million in
the third quarter of 2007 primarily due the aggressive sales growth of our
foam products as well as a smaller increase in coatings volumes, partially
offset by rising raw material and freight costs. Operating expenses were
$2.6 million in the third quarter of 2008 compared to $2.5 million in the
same period last year, reflecting anticipated increases associated with our
aggressive growth in sales. Operations in the second quarter produced net
income of $25 thousand, or less than $.001 per share, compared to a net
loss of $777 thousand, or $.01 per share, for the same period in 2007.
Mr. Kramer further commented, "Our third quarter results are further
evidence of LaPolla's solid business plan and management's execution
ability. The acquisition of AirTight SprayFoam's assets during the quarter
is allowing us to more aggressively pursue conventional insulators
interested in converting to spray foam insulation to meet escalating demand
and growing market opportunities," concluded Mr. Kramer.
Nine Months Results
For the nine months ended September 30, 2008 total sales increased 36% to
$34.1 million compared to $25.2 million in the nine months ended September
30, 2008. Foam sales escalated 66% due to market share gains as trends
established earlier in the year have strengthened and our product lines
continue to gain acceptance in conventional construction. Coatings sales
declined 16% due to the 2007 divestiture of our retail coatings segment.
Gross profit increased 45% to $6.8 million from $4.7 million in the nine
months ended September 30, 2008 due to aggressive sales growth of our foam
products partially offset by the divestiture of our retail coatings
products. Gross margin percentage increased 1.3% compared to same period in
2007 as efficiencies recognized from our new foam resin plant were
partially offset by higher raw material, chemical prices associated with
oil. Operating expenses were $7.8 million in the nine month period of 2008
compared to $7.1 million in the same period last year, reflecting
anticipated increases in volume related expenses such as payroll and
commissions, as we grow our sales personnel and revenues, as well as
increases realized in legal fees and interest expense. Operating loss for
the nine months ended September 30, 2008 was $1.0 million, or $.017 per
share, compared to $2.4 million, all of which was incurred in the first
quarter, or $.03 per share, for the same period last year.
Results of Core Business Segments
Third Quarter Results
Foam sales increased $5,383,386, or 96%, compared to the same period in
2007, as residential and commercial landlords continue to recognize the
significant advantage spray foam insulation provides versus traditional
fiberglass insulation. Construction industry professionals such as
contractors, builders, and architects have generally accepted spray
polyurethane foam as a mainstream product line, further solidifying
LaPolla's market penetration. Additionally, critical third party approvals
and credentials for our foam formulations continue to differentiate our
product lines from competition, allowing us to penetrate markets previously
unavailable. Gross profit increased $1,184,560, or 130.3%, compared to the
same period in 2007, due to higher sales volumes, partially offset by
increasing raw material and freight costs. Segment profit was $624,745
compared to a segment loss of $306,513 for the same period for 2007,
primarily due to sales and margin increases in a product line offering
sought after energy cost savings.
Coatings sales increased $127,332, or 4.6%, compared to the same period in
2007 as our coatings product line offers an economic alternative for roof
maintenance as opposed to replacement in difficult economic times.
Continued momentum is expected as new legislation and energy company
incentives promote additional uses and awareness of our products. Gross
profit decreased $326,595, or 40.1%, compared to the same period in 2007,
due primarily to increasing raw material costs. Segment profit decreased
$68,368, or 39.5%, compared to the same period in 2007, due to higher
material and freight costs.
Nine Months Results
Foam sales increased $10,432,998, or 66.4%, compared to the same period in
2007, as energy conscious residential and commercial building owners'
transition from fiberglass insulation to spray polyurethane foam
insulation. Trends established earlier in the year have strengthened and
our product lines continue to gain acceptance in conventional construction.
Gross profit increased $2,577,514, or 111.3%, compared to the same period
in 2007, as higher sales volumes more than offset higher raw material and
freight costs. Segment profit was $470,075 compared to segment loss of
$1,073,888 in the same period in 2007, primarily from increased volumes and
margins associated with the aggressive growth realized in our energy saving
product line. Builders and owners alike are opting for sustainable, energy
efficient, and green building materials, such as LaPolla's spray
polyurethane foam, driving substantial volume increases despite sluggish
economic conditions.
Coatings sales decreased $1,504,744, or 15.9%, with a corresponding
decrease in our cost of sales of $1,047,037, or 14.8%. Gross profit
decreased $457,707, or 19.2%, compared to the same period in 2007, due to
the divestiture of our retail distribution channel in 2007, as well as
increased raw material cost. Segment profit increased $421,049, or 194.3%,
compared to the same period in 2007, as the 2007 divestiture of our retail
coatings business allowed us to focus on higher margin coatings used in
conjunction with our insulating roofing foam.
About LaPolla Industries, Inc.
LaPolla Industries, Inc. is a leading manufacturer and supplier of spray
polyurethane foam for insulation and coatings targeting commercial and
residential applications in the building envelope construction industries.
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of the Securities Act of 1933, Section 21 of the Securities Exchange Act of
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