Lapolla Reports Record Third Quarter 2010 Results

HOUSTON, Nov. 12, 2010 /PRNewswire-FirstCall/ -- Lapolla Industries, Inc. ("Lapolla") (OTC Bulletin Board: LPAD), a leading national manufacturer and supplier of insulation foam, coatings, and equipment, focused on commercial, industrial and residential applications in the insulation and construction industries, today announced results for the third quarter and nine months ended September 30, 2010.

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Third Quarter Ended September 30, 2010 Overall Results

The Company reported sales of $19,445,034 for the third quarter ended September 30, 2010, compared to $14,022,690 in the prior third quarter in 2009, an increase of $5,422,344, or 38.7% quarter-over-quarter. Gross profit was $4,613,377 in the third quarter of 2010, compared to $3,726,712 in the same quarter in 2009, an increase of $886,665, or 23.8%, of which 90.3% resulted from the Foam segment and 9.7% resulted from the Coatings segment. Total operating expenses were $3,681,940 for the third quarter of 2010, compared to $3,367,397 for the third quarter in 2009, an increase of $359,314, or 9.3%, due primarily to higher SG&A costs related to higher sales volumes, offset primarily by lower interest costs due to refinancing our matured credit facility with Bank of America. Net income was $931,437 for the quarter ended September 30, 2010, compared to $359,315 in the quarter ended September 30, 2009, an increase of $572,122, or 159.2%.

Douglas J. Kramer, CEO and President of Lapolla, commented, "Lapolla's third quarter results continue to reflect record sales, record growth, and record profitability.  We believe that Lapolla's sustained progress throughout the global economic downturn over the last two years is an indication that we will continue to gain market share against conventional insulation products as the US housing market begins to show more meaningful recovery in 2011 and beyond."

Results of Business Segments

Foam segment sales were $17,082,266 for the third quarter ended September 30, 2010, compared to $11,895,900 for the third quarter of 2009, an increase of $5,186,366, or 43.6%.  Foam segment equipment sales for the third quarter of 2010 were $864,753, compared to $594,792 for the third quarter of 2009, an increase of $269,961, or 45.4%.  Foam segment profit was $1,640,270 in the third quarter of 2010, compared to $1,158,597 in the third quarter of 2009, an increase of $481,673, or 41.6%.

Coatings segment sales were $2,362,768 for the third quarter ended September 30, 2010, compared to $2,126,790 in the third quarter ended September 30, 2009, an increase of $235,978, or 11.1%.  Coating segment profit was $120,933 in the third quarter of 2010, compared to $109,961 in the third quarter of 2009, an increase of $10,972, or 10.0%.

Total Foam and Coatings segments sales for the third quarter ended September 30, 2010 were $19,445,034, compared to $14,022,690 for the third quarter of 2009, an increase of $5,422,344, or 38.7%.  Total Foam and Coatings segments profits were $1,761,203 in the third quarter of 2010, compared to $1,268,558 in the third quarter of 2009, an increase of $492,645, or 38.8%, due primarily to increases of $5,186,366 in Foam segment sales and $235,978 in Coatings segment sales.

Mr. Kramer continued, "As the fourth quarter unfolds, increased demand and order flow continues aggressively as expected. Additionally, we are pursuing deeper growth strategies in new market areas currently untapped by Lapolla, including making significant progress in our plans to begin sales and marketing throughout Europe in 2011.  The global recognition of the value proposition of spray foam insulation technology is undeniable. Moreover, the commercial roofing insulation and coating markets are showing indications of recovery, further indicating growing consumer confidence for our energy saving products."

Nine Months Ended September 30, 2010 Overall Results

The Company reported sales of $49,495,943 for the nine months ended September 30, 2010, compared to $34,702,271 for the prior comparable nine months in 2009, an increase of $14,793,672, or 42.6% period-over-period. Gross profit was $12,232,452 for the nine months of 2010, compared to $9,104,732 for the same comparable period in 2009, an increase of $3,127,720, or 34.4%, of which 95.6% resulted from the Foam segment and 4.4% resulted from the Coatings segment. Total operating expenses were $10,593,710 for the nine months ended September 30, 2010, compared to $11,258,529 for the comparable nine months in 2009, a decrease of $664,820, or 5.9%, due primarily to tighter cost controls and reduced bad debt expense. Net income was $1,638,742 for the nine months ended September 30, 2010, compared to a net loss of $2,153,797 for the nine months ended September 30, 2009, due primarily to a sales increase of $14,793,672, or 42.6%.

Results of Business Segments

Foam segment sales were $43,401,550 for the nine months ended September 30, 2010, compared to $29,253,763 for the comparable nine months of 2009, an increase of $14,147,787, or 48.4%.  Foam segment equipment sales for the nine months of 2010 were $2,973,145, compared to $1,305,026 for the comparable nine months of 2009, an increase of $1,668,119, or 127.8%.  Foam segment profit was $3,849,071 for the nine months of 2010, compared to $993,696 for the comparable nine months of 2009, an increase of $2,855,375, or 287.3%.

Coatings segment sales were $6,094,393 for the nine months ended September 30, 2010, compared to $5,448,508 for the nine months ended September 30, 2009, an increase of $645,885, or 11.9%.  Coating segment profit was $433,924 for the nine months of 2010, compared to a loss of $35,128 for the comparable nine months of 2009.

Total Foam and Coatings segments sales for the nine months ended September 30, 2010 were $49,495,943, compared to $34,702,271 for the comparable nine months of 2009, an increase of $14,793,672, or 42.6%.  Total Foam and Coatings segments profits were $4,282,995 for the nine months of 2010, compared to $958,567 for the comparable nine months of 2009, an increase of $3,324,427, or 346.8%, due primarily to increases of $14,147,787 in Foam segment sales and $645,885 in Coatings segment sales.

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 and www.Lapolla.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.

SOURCE Lapolla Industries, Inc.