HOUSTON, TX--(Marketwire - March 31, 2010) - Lapolla Industries, Inc. ("Lapolla") (
Overall Results of Operations
Sales increased $1.9 million, or 3.9%, from $48.1 million in 2008 to $50 million in 2009. Gross profit increased $3.3 million, or 36.8%, from $9.1 million in 2008 to $12.4 million in 2009, due to our substantial sales growth and favorable raw material costs. Gross margin percentage increased 5.8% from 19% in 2008, due to favorable raw material costs and increased manufacturing efficiencies particularly in our Foam segment. Operating expenses increased $2.1 million, or 16.4%, from $13.1 million in 2008 to $15.2 million in 2009, due to increases in SG&A to support revenue growth, including increases in non-cash share based compensation and interest expenses related to funding growth in trade receivables and inventory. The Company's non-cash share based compensation of $1.4 million in 2008, decreased roughly 70% to $539k in 2009. Lapolla's net operating loss decreased $1.2 million, or 29.7%, from $4.0 million in 2008 to $2.8 million in 2009. Net loss per share decreased $0.02 per share, or 34%, from 2008 to 2009.
Results of Business Segments
Foam sales increased $5.3 million, or 14.1%, from $37.8 million in 2008 to $43.1 million in 2009, as energy conscious building owners and consumers continued to seek relief from volatile energy prices and spray polyurethane foam (Spray Foam) continues to gain market share from traditional insulation systems such as fiberglass. Our AirTight asset purchase furthered market penetration into the Foam segment through AirTight's training, startup and rig building operations. By providing new market entrants as well as existing insulation companies with the equipment and training to successfully market foam, revenue growth from equipment has escalated and the ongoing sales of Lapolla foam has followed. Foam segment realized a profit of $1.2 million in 2009, as compared to a loss of $127k in 2008 as targeted market share gains were achieved.
Coatings sales decreased $3.5 million, or 33%, from $10.4 million in 2008 to $6.9 million in 2009 due to general slowdown in the roofing construction industry from current tightened credit markets and the recession. The Company expects sales to pick up significantly in 2010 as a result of pent up demand in 2009. Coating segment profit decreased $827k, or 121%, as compared to 2008 due to lower sales volumes.
Douglas J. Kramer, CEO and President of Lapolla, stated, "We are pleased with our continued revenue growth in 2009 despite the tight credit conditions and challenging economic environment experienced during the first half of 2009. Even with the recession, we were successful in growing our foam segment market share as a direct result of increasing global awareness of the energy saving benefits of Spray Foam among cost conscious consumers, residential home builders, and commercial building owners. Furthermore, our AirTight SprayFoam™ small business startup program has experienced solid growth as the demand for independent licensed applicators to install Spray Foam nationally continues to increase due to the paradigm shift away from traditional insulation to energy conserving Spray Foam and its job creation aspects."
Mr. Kramer concluded, "Going forward, we anticipate seeing unprecedented growth in 2010 as credit markets have continued to improve and the value proposition of Spray Foam, including the immediate cost savings upon installation, is increasingly recognized in the marketplace. We expect greater penetration in Canada, overseas, and throughout the United States and a marked increase in revenues in 2010 in all of our targeted markets. Further, we expect an increase in our Spray Foam market share due to government rebates and growing consumer awareness of energy cost savings. Finally, our bottom line should continue to improve as a result of vertical integration and sales growth combined with our continued cost and expense control."
About Lapolla Industries, Inc.
Lapolla Industries, Inc. is a national manufacturer of insulation foam and coating products targeting commercial, industrial and residential applications in the roofing and insulation construction industries. Additional information about Lapolla is available on the World Wide Web at www.lapollaindustries.com.
Forward-Looking Statements
Statements made in this press release that are not historical facts constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21 of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. These forward-looking statements are necessarily estimates reflecting the best judgment of senior management and express the Company's opinions about trends and factors which may impact future operating results. You can identify these and other forward-looking statements by the use of words such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "intends," "potential," "continue," or the negative of such terms, or other comparable terminology. Such statements rely on a number of assumptions concerning future events, many of which are outside of the Company's control, and involve risks and uncertainties that could cause actual results to differ materially from opinions and expectations. Any such forward-looking statements should be considered in context with the various disclosures made by the Company about its businesses including, without limitation, the risk factors described below. Although the Company believes its expectations are based on reasonable assumptions, judgments, and estimates, forward-looking statements involve known and unknown risks, uncertainties, contingencies, and other factors that could cause the Company or the Company's industries' actual results, level of activity, performance or achievement to differ materially from those discussed in or implied by any forward-looking statements made by or on the Company and could cause the financial condition, results of operations, or cash flows to be materially adversely affected. In evaluating these statements, some of the factors that you should consider include the following: financial position and results of operations, cash position and cash requirements, accounting estimates, doubtful accounts, inventories, and warranties; operations, supply chain, quality control, and manufacturing supply, capacity, and new and existing facilities; products, price of products, product lines, and product and sales channel mix; relationship with customers, suppliers and strategic partners; credit facilities; industry trends and responses to these trends; sources of competition; and outcome and effect of current and potential future litigation. All information in this release is as of the date hereof. The Company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations.
For further information regarding risks, uncertainties, and other factors associated with Lapolla's business, please refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" sections of Lapolla's SEC filings, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q. Copies of Lapolla's press releases and additional information about Lapolla is available on the World Wide Web at www.lapollaindustries.com.
Contact Information:
Lapolla Contacts:
Douglas J. Kramer, CEO
Michael T. Adams, CGO
(281) 219-4700
IR Contact:
Howard Gostfrand
(305) 918-7000
info@amcapventures.com
www.amcapventures.com