SOURCE: LaPolla Industries, Inc.

May 19, 2008 16:06 ET

LaPolla Reports First Quarter 2008 Results

Delivers 34% Sales Growth in Foam Business

HOUSTON, TX--(Marketwire - May 19, 2008) - LaPolla Industries, Inc. (OTCBB: LPAD), a leading manufacturer of foam and coating products targeting commercial, industrial and residential building envelope applications, today announced results for the first quarter ended March 31, 2008.

For the first quarter of 2008 sales increased 12.4% to $8.2 million compared to $7.2 million in the first quarter of 2007. Gross profit increased 27% to $1.5 million from $1.2 million in the first quarter of 2007. Operating expenses were $2.6 million in the first quarter of 2008 compared to $2.2 million in the same period last year, reflecting increased sales and distribution expenses. Included in the first quarter 2008 operating expenses was $203,457 in interest expense consisting of amortization of the discount on the company's convertible term note and revolving credit note, and cash interest payments. Interest expense in the prior year period was $80,171. Operating loss for the first quarter was $1.2 million compared to $1.0 million for the same period last year. Included in the operating loss was non-cash stock-based compensation expense of $232,272 and $265,370 in the first quarters of 2008 and 2007, respectively. Net loss available for common stockholders for the three months ended March 31, 2008 was $1.3 million, or $0.02 per share, compared to $1.2 million, or $0.02 per share, for the three months ended March 31, 2007.

"We had a great start to the year with insulation foam sales rising 34% in the first quarter over last year's first quarter and 11% over the fourth quarter of 2007," said Douglas J. Kramer, president and chief executive officer. "Our strong results are a testament to the growing awareness of the energy cost savings that our spray foam insulation products deliver to home owners and businesses alike; to the markets we opened during the quarter through our successful efforts to expand key industry credentials; and to our broadened sales coverage both within the U.S. and abroad."

"In putting forth significant resources to satisfy and, in most cases, exceed industry standards for product performance, we are now positioned to more aggressively penetrate certain larger, concentrated domestic markets. Our laboratory continues to pursue additional credentials, which will create an even wider set of market opportunities for LaPolla," continued Kramer. "Since our foam plant began production in 2007, our customers and prospects have been able to evaluate our technology. As a result, we have gained strong market recognition and credibility in a relatively short time. Additionally, we are attracting more national distributors, independent sales representatives, and in-house sales representatives, and we are making forays in the Middle East and China."

"The value proposition for LaPolla's spray foam insulation products is clearly resonating as consumers and builders recognize the 'green' benefits of our products in reducing a building's carbon footprint and in providing potentially significant energy cost savings. Demand and awareness is escalating, and we have the credentials, the technology, established national footprint, proven product reliability and vertically integrated manufacturing to lead the conversion from fiberglass to foam insulation. Our long-term business strategy is working and we're now hitting our stride on the path to profitability," concluded Kramer.

Results of Core Business Segments

Foam sales increased 34% to $6.1 million in the first quarter of 2008 from $4.5 million in the same period last year, reflecting increased market penetration in the traditional insulation markets and expanded distribution both nationally and internationally. Segment loss for the first quarter of 2008 decreased to $313,733 from $563,844 in the prior year period primarily due to higher sales volumes and margin improvements associated with the production of our in-house foam resins.

Coatings sales were $2.1 million in the first quarter of 2008 compared to $2.7 million in the same period last year reflecting the sale of the company's retail distribution channel in 2007. Segment income was $38,257 in the first quarter of 2008 compared to a segment loss of $26,564 in same period last year, primarily due to cost reductions associated with the sale of the retail distribution channel and improved manufacturing efficiencies.

About LaPolla Industries, Inc.

LaPolla Industries, Inc. is a national manufacturer of 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

  • 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