Wednesday November 1, 2006
LaPolla Reports Record Third-Quarter Sales
HOUSTON, TX--(MARKET WIRE)--Nov 1, 2006 -- LaPolla Industries, Inc. ("LaPolla" or the "Company") (AMEX:LPA - News), today announced record sales of $9,116,759 for the quarter and $22,735,762 for the nine months ended September 30, 2006 and conversion of $6,900,000 in debt owed to the Chairman of the Board into equity.
LaPolla's sales of $9,116,759 for the third quarter of 2006 marked a 64% increase over sales of $5,559,460 for the same period in the prior year. Net loss for the third quarter was $1,385,767, or $0.025 per basic and diluted share, compared to a net loss of $269,909, or $0.006 per basic and diluted share for the corresponding period in 2005. The net loss for the third quarter of 2006 was primarily attributable to an increase in bad debt expense, which includes a non-recurring charge for a long standing customer filing for Chapter 11 Bankruptcy protection, increase in SG&A as an investment towards continued rapid growth of LaPolla's sales force, and decrease in deferred tax asset.
For the nine months ended September 30, 2006, the Company had record sales $22,735,762, a 71% increase over sales of $13,223,290 for the same period in the prior year. Net loss for the nine months ended September 30, 2006 was $1,151,497, or $0.021 per basic and diluted share, compared to a net loss of $2,690,143, or $0.054 per basic and diluted share for the corresponding period in 2005. The net loss for the nine months ended September 30, 2006 was primarily attributable to an increase in bad debt expense (as described above), increase in SG&A to support growth of LaPolla's sales force, non-cash items relating to share-based compensations expenses, and decrease in deferred tax asset.
The Company issued 6,900 shares of Series D Preferred Stock, pursuant to a Securities Purchase Agreement, to the Chairman of the Board and principal stockholder of the Company, in exchange for cancellation of $6,900,000 in loans due and owing to him by the Company.
"We have continued our rapid sales growth trend for the third quarter and believe our sales will further increase moving forward," said Doug Kramer, President and Chief Executive Officer. "It is unfortunate that one of our longstanding customers filed bankruptcy unexpectedly during the third quarter, which partially caused the increase in our bad debt expense, decrease in our deferred tax asset, and resulting loss for the reported periods." Mr. Kramer stated, "We are taking steps to increase our margins through greater sales focus on higher margin business segments, such as the investment of substantial resources in our retail division, which is expected to materially benefit our near term results." To conclude, Mr. Kramer stated, "Our chairman also has further expressed his confidence in the success of LaPolla, and to this end, converted $6.9 Million in loans in exchange for our newly designated Series D Preferred Stock."
Business Segments
The following is a summary of sales by segment for the quarter ended:
September 30, September 30,
Segments 2006 2005
--------------- ---------------
Coatings $ 2,591,773 $ 1,966,521
Foam 5,864,422 3,052,386
Paints 249,769 217,347
Sealants 210,268 265,417
Adhesives 882 --
Equipment 118,253 26,761
All Other $ 81,392 $ 31,028
Coatings sales grew to $2,591,771 from $1,966,521, up 33%, due to the expansion of the Company's sales force, including marketing and promotion programs, which resulted in greater market penetration. Foam sales increased to $5,864,422 from $3,052,386, up 92%, due to the same reasons described in our coatings segment above, including the addition of independent distributors. Paints sales rose to $249,769 from $217,347, up 13%, as a result of an increase in our sales force and limited regional advertising, marketing and promotional programs. Sealants sales decreased to $210,268 from $265,417, down 21%, due to a slight decline in market demand. Adhesives sales were $882 compared to $-0-, as a result of an increase in demand. Equipment sales grew to $118,253 from $26,761, up 342%, as a result of an increase in our sales force. All Other sales increased to $81,392 from $31,028, up 162%, due to an increase in walk-in customers in our Florida and Arizona locations needing sundry items.
The following is a summary of sales by segment for the nine months ended:
September 30, September 30,
Segments 2006 2005
--------------- ---------------
Coatings $ 7,392,130 $ 4,780,715
Foam 13,016,074 7,043,568
Paints 870,867 600,791
Sealants 729,562 611,344
Adhesives 31,147 4,602
Equipment 491,274 57,178
All Other $ 204,709 $ 125,091
Coatings sales grew to $7,392,130 from $4,780,715, up 55%, due to the expansion of the Company's sales force, including marketing and promotion programs, which resulted in greater market penetration. Foam sales increased to $13,016,074 from $7,043,568, up 85%, due to the same reasons described in our coatings segment above, including the addition of independent distributors. Paints sales rose to $870,867 from $600,791, up 45%, as a result of an increase in our sales force and limited regional advertising, marketing and promotional programs. Sealants sales increased to $729,562 from $611,344, up 19%, due to the same reasons described in our paints segment above, partially offset by a slight decline in market demand. Adhesives sales grew to $31,147 from $4,602, up 576%, due to increased demand. Equipment sales rose to $491,274 from $57,178, up 759%, due to the same reasons described in our coatings and foam segments. All Other sales increased to $204,709 from $125,091, up 64%, due to an increase in walk-in customers in our Florida and Arizona locations needing sundry items.
For additional information, please refer to the LaPolla Industries, Inc. Quarterly Report on Form 10-Q for the period ended September 30, 2006, filed with the Securities and Exchange Commission.
About LaPolla Industries, Inc.
LaPolla Industries, Inc. is a national manufacturer and distributor focused on several basic segments: Coatings, Foam, Paints, Sealants, Adhesives, Equipment, and All Other. Within these business segments, LaPolla has invested resources in a variety of products targeting commercial and industrial and residential applications in the roofing, construction and paint industries. For additional information on LaPolla, please visit 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 in the Company's periodic reports filed with the SEC. 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. All information in this release is as of September 30, 2006. 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 http://www.lapollaindustries.com.
Contact:
Company Contacts:
Douglas J. Kramer
CEO
John A. Campbell
CFO
Michael T. Adams
CGO
(281) 219-4700 (t)
(281) 219-4701 (f)
