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Lapolla Industries, Inc.: Lapolla Reports 2008 Year Results
HOUSTON, TX--(Marketwire - April 15, 2009) - Lapolla Industries, Inc. ("Lapolla") (
Overall Results of Operations
Sales increased $15.7 Million, or 49%, from $31.8 Million in 2007 to $47.6 Million in 2008. Gross profit increased $4.2 Million, or 86%, from $4.9 Million in 2007 to $9.1 Million in 2008, due to our substantial sales growth. Gross margin percentage increased 3.7% from 15.3% in 2007 to 19% in 2008, due to a full year of foam resin plant utilization manufacturing in-house foam resins, versus a partial year of 2007 when the foam resin plant was initially constructed. Operating expenses increased $2.7 Million, or 27%, from $9.9 Million in 2007 to $12.6 Million in 2008, 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. Lapolla's operating loss decreased $1.5 Million, or 30%, from $5 Million in 2007 to $3.5 Million in 2008. Net loss per share decreased $.037 per share, or 33.6%, from $.110 in 2007 to $.073 in 2008.
Douglas J. Kramer, CEO and President of Lapolla, stated, "Lapolla had unprecedented sales growth, a full year of manufacturing its own in-house foam resins, attained essential industry approvals, credentials and certifications for its own products, and integrated AirTight's equipment, distribution and training programs during 2008. Although we are seeing a clear increase in our margin as a result of our vertical integration, we were not able to fully optimize this value in 2008 as a result of an extraordinary spike in petroleum related raw material costs. Lapolla is now positioned to bring the full value to our bottom line in 2009 and beyond."
Results of Business Segments
Foam sales increased $16.6 Million, or 80%, from $20.8 Million in 2007 to $37.3 Million in 2008, as energy conscious building owners and consumers continued to seek relief from volatile energy prices and polyurethane spray foam (SPF) continues to gain market share from traditional insulation systems such as fiberglass. Lapolla's 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 loss decreased $1.8 M, or 94%, from a loss of $2 Million in 2007 to a loss of only $127 Thousand in 2008 as targeted volumes were achieved in the marketplace.
Coatings sales decreased $814 Thousand, or 7%, from $11 Million in 2007 to $10.3 Million in 2008 because of the 2007 divestiture of Lapolla's retail coatings business. The divestiture has enabled Lapolla to focus more of its resources on its core foam and coating businesses and reduce operating costs in its Coatings segment. As a result, Coating segment profit increased $550 Thousand, or 410%, from $134 Thousand in 2007 to $683 Thousand in 2008 due to the increased margin percentage associated with Lapolla's more strategic product line.
Mr. Kramer concluded, "After combining the results of our foam and coatings segments, we made a profit in our core businesses. The growth experienced during 2008 despite one of the worst economic conditions since the Great Depression is an incredible feat and a testament to the ripe timing of our foam and coating business in today's environment."
Outlook for 2009
Lapolla's outlook is very aggressive, as sales are expected to continue to grow to record levels in 2009. This outlook is based on market share increases in the construction insulation markets which are driven by growing consumer awareness about energy efficient foams and coatings. Margin increases as a result of vertical integration, sales growth, potential acquisitions, in conjunction with tighter controls on spending are expected to enable Lapolla to achieve profitability in 2009. The markets for Lapolla's products are highly competitive; however, Lapolla's competitive advantages are rooted in owning its own foam resin plant, proprietary product formulations, product credentials, approvals and performance, price structures, and technical customer service. In addition, Lapolla offers the flexibility, quality of products and responsiveness that a smaller company can offer.
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 ].
