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10-K: Lapolla Industries Inc

(EDGAR Online via COMTEX) — Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Management’s Discussion and Analysis

of Financial Condition and Results of Operations for the Two-Year Period Ended December 31, 2014

Overview

This financial review presents our operating results for each of the two years in the period ended December 31, 2014, and our financial condition at December 31, 2014. To supplement our financial statements presented on a GAAP basis, we disclose non-GAAP measures as EBITDA and Adjusted EBITDA because management uses these supplemental non-GAAP financial measures to evaluate performance period over period, to analyze the underlying trends in its business, and to establish operational goals and forecasts that are used in allocating resources. In addition, we believe many investors use these non-GAAP measures to monitor the Company’s performance. Our presentation includes these non-GAAP financial measures, and a reconciliation of EBITDA and Adjusted EBITDA to the GAAP measures most directly comparable thereto. The GAAP measure most directly comparable to EBITDA and Adjusted EBITDA is net income or loss. The non-GAAP financial measures of EBITDA and Adjusted EBITDA should not be considered as an alternative to net income or loss or any other measure of financial performance or liquidity presented in accordance with GAAP. EBITDA and Adjusted EBITDA are not presentations made in accordance with GAAP and have important limitations as analytical tools. You should not consider EBITDA or Adjusted EBITDA in isolation or as substitutes for analysis of our results as reported under GAAP. Because EBITDA and Adjusted EBITDA exclude some, but not all, items that affect net income and is defined differently by different companies, our definitions of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures of other companies. Except for the historical information contained herein, the following discussion contains forward-looking statements which are subject to known and unknown risks, uncertainties and other factors that may cause our actual results to differ materially from those expressed or implied by such forward-looking statements. We discuss such risks, uncertainties and other factors throughout this report and specifically under Item 1A of Part I of this report, “Risk Factors.” In addition, the following review should be read in conjunction with information presented in Part I, Item 1 – Business relating to non-GAAP financial measures EBITDA and Adjusted EBITDA, as well as the information presented in our financial statements and the related notes to our financial statements.

Refer to Note 18 – Business Segments and Geographical Area information in our financial statements listed under Item 15 of Part IV of this report for further information regarding our business segment structure.

Non-GAAP Financial Measures

EBITDA

We define EBITDA as net income or loss before interest, income taxes, depreciation and amortization of other intangible assets.

Adjusted EBITDA

Adjusted EBITDA is defined as EBITDA increased by total share based compensation included in net income or loss.

The Company believes that presenting EBITDA and Adjusted EBITDA, in addition to the corresponding GAAP financial measures, provides investors greater transparency to the information used by management for financial and operational decision-making and allows investors to see the Company’s results “through the eyes” of management. We further believe that providing this information assists investors in understanding the Company’s operating performance and the methodology used by management to evaluate and measure such performance.

We recognize that the usefulness of EBITDA and Adjusted EBITDA as an evaluative tool may have certain limitations, including:

EBITDA and Adjusted EBITDA do not include interest expense. Because we have borrowed money in order to finance our operations, interest expense is a necessary element of our costs and impacts our ability to generate profits and cash flows. Therefore, any measure that excludes interest expense may have material limitations;

See also to Part I, Item 1 – Businessfor more information on our Non-GAAP financial measures.

Overall Results of Operations

The following table presents selected financial and operating data derived from the audited financial statements of the Company as of the dates and for the periods indicated. In addition, the table presents our unaudited non-GAAP financial measures, EBITDA and Adjusted EBITDA, and includes our reconciliation to net income or loss, its most directly comparable financial measure calculated and presented in accordance with GAAP.

Year Ended December 31, 2014 2013 Summary of Overall Results of Operations Sales $ 72,065,015 $ 71,176,971 Operating Income (Loss) (1,515,296) (616,170) Other (Income) Expense 2,145,653 1,354,875 Net Loss (3,660,949) (1,971,045) EBITDA (Unaudited) $ (586,234) $ 921,13 Adjusted EBITDA (Unaudited) $ 504,961 $ 2,240,865 Reconciliation of EBITDA and Adjusted EBITDA to Net Loss: Net Loss: $ (3,660,949) $ (1,971,045) Additions / (Deductions): Interest Expense 1,193,298 1,093,184 Interest Expense – Related Party 805,608 749,291 Interest Expense – Amortization of Discount 182,444 10,697 Tax Expense (Benefit) 220,230 160,755 Depreciation 394,309 453,827 Amortization of Other Intangible Assets 278,826 424,426 EBITDA $ (586,234) $ 921,135 Additions / (Deductions): Share Based Compensation (1) 1,091,195 1,319,730 Adjusted EBITDA $ 504,961 $ 2,240,865

(1) Represents non-cash share-based compensation expense for the periods then ended.

Sales The following is a summary of sales for the years ending December 31: 2014 2013 % Change Foam $ 62,477,449 $ 61,080,736 2.3% Coatings 9,587,566 10,096,235 -5.0% Total Sales $ 72,065,015 $ 71,176,971 1.2%

For the year ended December 31, 2014, our total sales increased by $888,044, from $71,176,971 to $72,065,015, or an increase of 1.2% from the same period in 2013. Foam sales increased $1,396,713 primarily due to higher demand for our foams attributed to cost conscious residential and commercial building owners transitioning from traditional fiberglass insulation to energy efficient spray polyurethane foam, offset by a $508,669 decrease in coatings sales due to lower demand attributed to general market conditions.

Gross Profit The following is a summary of gross profit for the years ending December 31: 2014 2013 % Change Cost of Sales $ 58,460,940 $ 56,152,602 4.1% Gross Profit $ 13,604,075 $ 15,024,369 -9.5% Gross Margin Percentage: Foam 17.8% 19.6% -1.8% Coatings 25.6% 30.3% -4.7% Total 18.9% 21.1% -2.2%

For the year ended December 31, 2014, our gross profit decreased by $1,420,294, from $15,024,369 to $13,604,075, or a decrease of 9.5% from the same period in 2013. The decrease in gross profit was due to lower gross profit in coatings as a result of lower coatings sales and an increase in raw material costs resulting in a decline of $460,995, additional freight expense of $334,306 related to an increase in domestic sales versus international sales in 2014 compared to 2013, higher freight rates resulting in additional expense of $613,538, and a net increase in manufacturing absorption of $297,556, partially offset by an increase in gross profit from foam of $286,101 as a result of increased sales.

Selling, general and administrative expenses decreased $229,537 or 1.7%, to $13,259,920 in 2014, compared to $13,489,457 in 2013, primarily due to a $261,402 decrease in share-based compensation related to fully vested shares in connection with an advisory and consultant agreement, augmented by decreases in payroll and related employee benefits, distribution, and rents.

Professional fees decreased $160,784 or 14.9%, to $915,369 in 2014, compared to $1,076,153 in 2013, primarily due to the recovery of legal fees from our insurance companies and various settlements relating to litigation.

Depreciation expense decreased $7,963 or 4.6%, to $166,293 in 2014, compared to $174,256 in 2013, due to reductions in depreciable assets.

Amortization of other intangible assets expense decreased $145,600 or 34.3%, to $278,826 in 2014, compared to $424,426 in 2013, due to a decrease in amortizable assets including customer lists and trade names.

Consulting fees increased $22,716 or 4.8%, to $498,963 in 2014, compared to $476,247 in 2013, primarily due to an increase in the need for business consulting services for The AirTight Division.

Interest expense increased $100,114 or 9.2%, to $1,193,298 in 2014, compared to $1,093,184 in 2013, primarily due to a higher amount outstanding on the New Enhanced Note.

Interest expense – related party increased $56,317 or 7.5%, to $805,608 in 2014, compared to $749,291 in 2013, due to an increase in share based compensation classified as interest expense relating to restricted shares of common stock being issued to the Chairman of the Board in connection with his personal guarantees required on the New Enhanced Note

Interest expense – amortization of discount increased $171,747 or 1,605.6%, to $182,444 in 2014, compared to $10,697 in 2013, due to a full year amortization of the New Enhanced Note discount.

Other income, net increased $1,942 or 5.8%, to $35,697 in 2014, compared to $33,755 in 2013, due primarily to a favorable settlement relating to litigation, and gain on disposals of vehicles for more than book value.

Outlook for 2015

The Company’s outlook remains aggressive and positive, as we expect sales to grow globally to record levels in 2015 and beyond. Our optimism is based on growing global consumer awareness about energy efficient foams and coatings and reductions in energy costs. The markets for our products are highly competitive; however, we believe that our competitive advantages are rooted in our management, product formulations, credentials, approvals, performance, pricing, and technical customer service. In addition, we offer the flexibility, quality of products and responsiveness that a smaller more dynamic company can offer. This outlook is based on a number of assumptions relating to our business and operations which are subject to change, some of which are outside our control. Any variation in our assumptions may result in a change in this outlook.

Liquidity and Capital Resources

We do not maintain any cash on hand by design. Instead, we maintain a $13 Million asset based revolver loan as part of our Loan Agreement with Bank of America (“Revolver Loan”) that includes an automatic cash sweep feature that identifies any cash available in our bank accounts at the end of a banking business day and then applies that cash to reduce our outstanding Revolver Loan balance for that day to fund our continuing operations. The reduction serves to decrease our daily interest expense to the extent cash is available and swept over to reduce the Revolver Loan. Disbursements are paid daily from cash being made available under our Revolver Loan based on a borrowing base calculation prepared daily for funding.

Net cash used in operating activities was $997,146 in 2014 and $2,132,440 in 2013. The cash used in operations for 2014 as compared to 2013 was attributable to the net loss of $3,660,949 for the year, including the effect of adjustments to reconcile net loss to cash used in or provided by operating activities and adjusting for non-cash items, decreases of $59,518 in depreciation due to a decrease in depreciable assets, $145,600 in amortization of other intangible assets due to a decrease in amortizable assets including customer lists and non-competes from previous acquisitions, and $261,403 in share-based compensation expense due to completion of vesting of shares originally granted by the Company pursuant to an advisory and consultant agreement, offset by increases of $91,697 in provision for losses due to an increase in customer insolvencies, $56,317 in interest expense due to the issuance of New Guaranty Shares being classified as interest expense, and $171,747 in interest expense due to the purchase discount being amortized over the life of the New Enhanced Note, which matures in December 2016. The foregoing was augmented by decreases of $153,910 in inventories, $101,035 in prepaid expenses and other current assets, and $287,575 in deposits and other non-current assets, and increases of $1,839,626 in trade receivables, $297,121 in other intangible assets, $18,411 in costs and estimated earnings in excess of billings, and $293,935 in accounts payable, and $301,765 in accrued expenses and other current liabilities.

Net cash used in investing activities was $144,096 in 2014 and $69,825 in 2013. We invested $207,191 in property, plant and equipment in 2014, of which $118,047 was for vehicles, $43,473 was for upgrades to our IT systems, $39,214 was for machinery and equipment related to our manufacturing facilities, and $6,457 was for computers and software. We disposed of certain assets for net proceeds of $63,095, all of which were vehicles. We invested $118,611 in property, plant and equipment in 2013, of which $64,633 was for vehicles, $3,090 was for office equipment, $30,050 was for computers and software upgrades, $16,022 was for machinery and equipment for our plant, and $4,816 was for leasehold improvements. We disposed of certain assets for net proceeds of $48,786, all of which were vehicles.

Net cash provided by financing activities was $1,141,242 in 2014 and $2,204,470 in 2013. In 2014, we borrowed a cumulative aggregate of $74,459,796 and made principal repayments for a cumulative aggregate of $74,563,955 under our Revolver Loan, $250,000 from our Chairman of the Board, and $4,599 on our long term debt primarily related to financed vehicles. In 2013, we borrowed a cumulative aggregate of $81,608,230 under our Revolver Loan, and an aggregate of $7,200,000 under our New Enhanced Note, of which $3,214,003 was refinanced from the Note Purchase Agreement with Enhanced Jobs for Texas Fund, LLC and Enhanced Capital Texas Fund LP dated June 29, 2012 (“Prior Enhanced Note”), and made principal repayments for a cumulative aggregate of $82,101,515 under our Revolver Loan, an aggregate of $4,337,334 under our Prior Enhanced Note, and $20,911 on our long term debt primarily related to financed vehicles. We had a net working capital of $6,572,046 in 2014 and $6,210,711 in 2013. Our current assets were approximately 1.8 times our current liabilities in 2014 and 2013. Cash available under our Revolver Loan based on the borrowing base calculation at December 31, 2014 and 2013 was $2,754,601 and $1,761,427, respectively.

Management believes that any cash generated from operations and the Revolver Loan availability, subject to borrowing base limitations which may adversely impact our ability to raise capital, based on budgeted sales and expenses and implemented minimum sales margin and cost controls, are sufficient to fund operations, including capital expenditures, for the next 12 months. Notwithstanding the foregoing, we evaluate capital raising opportunities for private placements of debt or common or preferred stock from accredited sophisticated investors from time to time to not only gauge market conditions but also to ensure additional capital is readily available to fund aggressive growth developments. If we raise additional capital from the sale of capital stock (except for permitted issuances) or debt (other than permitted indebtedness), we are required under the New Enhanced Note to prepay, including any prepayment penalty, the amount raised up to the amount outstanding under the New Enhanced Note as of the date of the closing of the transaction out of the net proceeds of the capital raised.

Credit Agreements and Other Debt

On September 1, 2010, we entered into our Loan Agreement with Bank of America, N.A., which, as amended from time to time, provides for our $13,000,000 Revolver Loan. At December 31, 2014 and 2013, the balance outstanding on the Revolver Loan was $5,435,005 and $4,539,163 respectively. The Company has four material debt covenants to comply with relating to its Loan Agreement: (i) Capital expenditures are limited to $625,000 on an annual basis, (ii) The amount outstanding under the Revolver Loan may not exceed the borrowing base (calculation defined as an amount determined by a detailed calculation and includes an amount equal to 85% of eligible accounts receivable, plus 55% of eligible inventory); (iii) Maintain an FCCR, tested monthly as of the last day of each calendar month for the twelve month period then ended, of at least 1.0 to 1.0, and (iv) Maintain minimum liquidity of $500,000. The Company is required to submit its borrowing base calculation to Bank of America daily. If, at any time, the Company’s borrowing base calculation is less than the amount outstanding under the Revolver Loan, and that amount remains unpaid or future borrowing base calculations do not increase to an amount equal to the balance outstanding under the Revolver Loan, Bank of America, in its sole discretion, may accelerate any and all amounts outstanding under the Revolver Loan. At December 31, 2014, we were in compliance with our Loan Agreement and debt covenants.

On December 10, 2013, we entered into our New Enhanced Note with Enhanced Jobs for Texas Fund, LLC and Enhanced Credit Supported Loan Fund, LP, which, as amended from time to time, provided us with an aggregate of $7.2 Million in cash to refinance the remaining $3,346,762 balance outstanding on December 10, 2013 on our prior Note Purchase Agreement dated as of June 29, 2012 entered into with Enhanced Jobs For Texas Fund, LLC and Enhanced Capital Texas Fund LP (“Prior Enhanced Note”)(under the Prior Enhanced Note, we borrowed an aggregate of $4.4 Million under subordinated secured variable rate notes due June 29, 2014, of which $2.2 Million was with Enhanced Jobs For Texas Fund, LLC and $2.2 Million was from Enhanced Capital Texas Fund LP Enhanced Texas), and increase our working capital for the remaining difference. Repayment of the $7.2 Million is required on the maturity date of December 10, 2016. Interest is payable monthly and broken down into current pay interest at the rate of 7.25% per annum, and PIK Interest at the rate of 4.25% (increased from 3.75% to 4.25% by amendment on November 14, 2014)(which is added to the principal balance of the outstanding notes) to create the aggregate interest rate of 11.5%. The Company has the right to prepay the New Enhanced Note, subject to a prepayment premium equal to 3% for the first year or 2% for the second year. The Company also entered into a security agreement with the New Enhanced Note providing for a second lien on all assets of the Company after Bank of America, which has a first lien on all asset of the Company. The Company has four material debt covenants to comply with relating to its New Enhanced Note: (i) Capital expenditures are limited to $625,000 on an annual basis, (ii) A minimum Adjusted EBITDA which cannot, for the three (3) months ending on the last day of each month set forth in a schedule, be less than the corresponding amount set forth in the schedule for such period, (iii) Maintain an FCCR, tested monthly as of the last day of each calendar month, in each case for the most recently completed twelve calendar months, equal to at least 1.0 to 1.0, and (iv) Maintain minimum liquidity equal of $500,000. At December 31, 2014, we were in compliance with our New Enhanced Note and debt covenants.

We also borrowed an aggregate of $500,000 from our chairman of the board and majority stockholder, of which $250,000 was received on November 12, 2014 and $250,000 was received on January 21, 2015.

Future Minimum Principal Payments on Long-Term Debt At December 31, 2014, future minimum principal payments of long-term debt are as follows: Payments Due By Period Less Than 1 to 3 4 to 5 More Than 1 Year Years Years 5 Years Total Revolver Loan $ – $ 5,435,005 $ – $ – $ 5,435,005 New Enhanced Note – 7,157,852 – – 7,157,852 Note Payable – Related Party – 250,000 – – 250,000 Long Term Debt Obligations – – – – – Total $ – $ 12,842,857 $ – $ – $ 12,842,857

Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with GAAP requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of our financial statements and the reported amounts of revenues and expenses during the reporting period. The accounting policies that we believe require more significant estimates and assumptions include: the valuation of goodwill, other intangible assets, and allowances for doubtful accounts. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ significantly from these estimates under different assumptions or conditions. There have been no material changes to these estimates for the periods presented in this Annual Report.

We believe that of our significant accounting policies, which are described below in this Item 7, and in Note 1 to our audited financial statements, of this Annual Report, the following accounting policies involve a greater degree of judgment and complexity. Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our financial condition and results of operations.

Goodwill

Goodwill represents the excess of the aggregate purchase price over the fair value of net tangible and identifiable intangible asset of an acquired business. The Company operates two reporting units, Foam and Coatings. The Company evaluates goodwill for impairment on an annual basis, or more frequently if Management believes indicators of impairment exist, by comparing the carrying value of each of reportable unit to their estimated fair values. The impairment test requires the Company to compare the fair value of each reporting unit to its carrying value, including assigned goodwill. In the fourth quarter of 2014 and 2013, the Company conducted the required annual test of goodwill for impairment. Management uses the income approach to estimate the fair market value of the business segments based on expected future economic benefits. This approach serves to estimate the value of the specific income stream with consideration given to the risk inherent in that income stream. The income approach is most relevant when valuing an equity interest that is based on the premise that Lapolla is considered a going concern or a viable business for the foreseeable future. Lapolla used the discounted cash flow method under the income approach in its analysis. In applying the discounted cash flow method, Lapolla identified the level of cash flow estimated for five years. The annual estimated cash flows and terminal value were then discounted to present value, at an appropriate discount rate, to arrive to the indication of fair market value for each reporting unit. The discount rate utilized reflected the estimate of investor-required rates of return for investments that are seen as similar to an investment in similarly situated companies like Lapolla. The assumptions were consistent with those utilized in the Company’s operating plan and long term financial planning process and considered historical experience and current and future expected market and industry conditions. Management judgment is required in the determination of each assumption used in the valuation model, and actual results could differ from the estimates. There were no goodwill impairment charges recorded during the years ended December 31, 2014 or 2013.

Other Intangible Assets

The Company had other intangible assets consisting of product formulations, and trade names that were acquired as part of business combinations, and trademarks and approvals and certifications obtained as part of entering into new markets. Other intangible assets are tested for impairment as part of the long-lived asset grouping impairment tests. Impairment testing of the asset group occurs whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Impairment testing of the assets occurs whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Such circumstances would include a significant decrease in the market value of an asset, a significant adverse change in the manner in which the asset is being used or in its physical condition, a history of operating or cash flow losses associated with the use of the asset, or changes in the expected useful life of the asset. If such circumstances are determined to exist, an estimate of undiscounted future cash.

Mar 31, 2015

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Spray Foam Expo 2015 KASA Interview – Ty Pennington & Lapolla’s Spray Foam Insulation

ALBUQUERQUE (KASA) – The Sprayfoam 2015 Convention and Expo wraps up in Albuquerque today, and we’re talking with keynote speaker and star of Trading Spaces and Extreme Makeover: Home Edition Ty Pennington about the revolutionary insulation solution that could save your family money on energy costs year-round.

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ProudGreenHome.com – 2015 IBS Interview with Ty Pennington

IBS Interview: Ty Pennington talks spray foam insulation

ProudGreenHome.com talked with Ty at the Lapolla Industries booth at the International Builders’ Show, where the conversation ranged over many building science topics, along with Doug Kramer, president and CEO of Lapolla.

Pennington talked about the benefits of spray foam insulation, which can maximize a homeowners investment by sealing the building envelope to stop conditioned indoor air from escaping and prevent unconditioned air from entering a home. Air exchange in and out of a home is a leading cause of escalated energy bills. The mechanical systems that heat and cool buildings are continuously operating; reducing extreme temperature variations saves on the overuse of mechanical systems and leads to lower energy bills.

Read the full article at proudgreenhome.com

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Lapolla Chairman, Richard Kurtz, Cutting Energy Costs At His and Others’ Buildings

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Kevin R. Wexler/Photographer

As a landlord, Richard Kurtz of the Kamson Corp. in Englewood Cliffs faced a few expenses that just seemed to keep growing: insurance. Taxes. And heating costs.

He couldn’t do much about the first two, but he decided to tackle energy costs at the roughly 14,000 apartments Kamson owns in the Northeast. That led him to become a majority shareholder about a decade ago in a Houston-based company, Lapolla Industries Inc., which makes spray foam insulation and other energy-saving products.

Kurtz, who also is the chairman of Lapolla’s board, said that through Lapolla’s AirTight division, he has cut energy costs in half at his apartment complexes in Lodi and Garfield by adding spray foam insulation, wireless thermostats and more efficient boilers and water heaters.

Now, Kurtz plans to do the same at his other complexes, and he’s also reaching out to other landlords. Lapolla’s AirTight division recently signed a $1 million-plus contract to improve the energy efficiency at Jacob Ford Village, a 270-unit Morristown complex owned by Rochester, N.Y.-based Home Properties.

“This is serious savings for a landlord,” Kurtz said. “I feel saving on energy offers the greatest upside and success for property owners.” It’s also better for the environment, he added.

The AirTight program costs $3,000 to $4,000 per apartment, Kurtz said, but the savings on utility bills will allow property owners to recover those costs in five to eight years. Most of Kamson’s portfolio consists of two-and three-story garden apartment complexes, and the company pays heating costs in 90 percent of them.

Brent Kohere, regional vice president for Home Properties, said he was drawn to AirTight’s program because AirTight offers a turnkey package, including helping his company get state rebates for the improvements.

“We’re looking at some substantial energy savings,” Kohere said. Between the rebates and the energy savings, he said, “it essentially pays for itself over a few years.”

Kurtz gives much of the credit for AirTight to Bill Murphy, a longtime Kamson employee who developed the program.

“Landlords seem to be more interested now in getting more efficient heating systems than in the past,” said Murphy.

Read the full article on NewJersey.com

Ty Pennington with Spray Hose

Ty Pennington Signs on as Spokesperson for Lapolla Industries, Leading Spray Foam Insulation Brand

Star of “Extreme Makeover: Home Edition” to Raise Awareness about the Advantages of Choosing Spray Foam Insulation during Home Construction and Renovations
Houston, TX, May 19, 2014Lapolla Industries, Inc. (“Lapolla”) (OTCQB: LPAD), a Houston-based global supplier and manufacturer of spray polyurethane foam insulation, reflective roof coatings, and equipment, has announced that home improvement superstar, Ty Pennington, will act as the Company’s official spokesperson. Ty will promote Lapolla’s products in upcoming national and local campaigns, as well as make appearances at international trade shows and participate in consumer events, media relations and social media activities.

“Ty Pennington is one of the most trusted names and faces in home improvement and renovation. We view our partnership with Ty as an opportunity to reach a broader audience to educate them on the importance and value of spray foam insulation,” said Doug Kramer, President and Chief Executive Officer of Lapolla Industries. “Like Lapolla’s foam insulation, Ty is recognized and respected by contractors, builders, and home owners for his innovative and intelligent techniques for improving homes.”

Mr. Pennington is best known for hosting and leading the design team on “Extreme Makeover: Home Edition.” Prior to that role, he was the lead carpenter on TLC’s “Trading Spaces.” He is also the author of two books on home improvement.

“For years, I’ve been bringing attention to the importance of purposeful and creative home renovation,” said Ty Pennington. “By teaming up with Lapolla, we have an opportunity to build awareness about the importance of proper insulation to create significant energy savings to the entire residential market. The best home construction in the world needs the best, most efficient insulation to be truly effective for home owners.”

Ty’s role with the Company is aligned with the beginning of the home construction and renovation season, a time when Lapolla’s environmentally friendly products are top of mind. The Company’s products are known for their ability to reduce energy consumption in the residential, industrial and commercial markets for both new construction and retrofit applications, preventing heat or air conditioning from escaping. Lapolla’s spray foam can cut a buildings’ energy use by up to 40 percent for the life of the structure.

Lapolla also recently announced that its AirTight®Division is implementing a Multi-Family Energy Savings Program to contribute to additional savings – amounting to more than 55 percent – for landlords and property owners. This four-component program is a turn-key service that provides energy assessments and analysis with the assistance of independent consultants, project design, and regulatory due diligence to secure rebates from state and utility authorities.

Lapolla’s foam products include spray foam insulation for residential and commercial perimeter walls, crawl spaces and attic space applications. The Company also supplies spray foam and elastomeric coatings for low slope residential and commercial roofing. Lapolla supplies polyurethane as an adhesive for board stock insulation to roofing substrates for commercial and industrial applications as well as sundry items.

About Lapolla Industries, Inc.
Lapolla Industries, Inc. is a global supplier, and manufacturer of spray polyurethane foam insulation, reflective roof coatings, and equipment, designed to reduce energy consumption in the residential, industrial and commercial markets, for both new construction and retrofit applications. More information is available at www.lapolla.com.

Forward Looking Statements
Statements made in this press release that are not historical facts constitute “forward-looking statements” pursuant to Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and Private Securities Litigation Reform Act of 1995. Any such forward-looking statements should be considered in context with various disclosures made by Company about its business. All information herein is as of date hereof. Company undertakes no duty to update any forward-looking statement.

Investor Contacts:
Todd Fromer / Phil Carlson
KCSA Strategic Communications
Phone: 212-896-1215 / 212-896-1233
Email: tfromer@kcsa.com / pcarlson@kcsa.com

Media Contacts:
Samantha Wolf / Jon Goldberg
KCSA Strategic Communications
Phone: 212-896-1220 /212-896-1282
Email: swolf@kcsa.com  / jgoldberg@kcsa.com

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Visit Lapolla Industries at SPFA 2014

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Visit Lapolla Industries, Inc.
Booth #101
Visit SPFA.org for more information

lapolla spray foam cold weather insulation tips

Lapolla Tech Tip – Cold Weather

Cold weather brings additional challenges for the spray foam contractor. These challenges are easily addressed, but not easily remembered until the contractor begins to experience the issues which are always present during cold weather application The first issue is being aware that the temperature is about to change, and ordering the appropriate reactivity product to address the upcoming change. Below is a chart showing the lower end of the application range for each product.

When spray applied polyurethane foam is applied in colder conditions than intended for the formulated reactivity, the results can include a smooth glossy surface, friability, poor yield, and poor adhesion. There is some ability, although limited, to adjust for fluctuations in temperature. Often referred to as “dialing in” a foam during the application, the applicator can adjust the preheats and hose temperatures as well as the pressure of the proportioning unit.

The proper storage of both components is critical for a successful application during cold weather conditions. Both components must be at a minimum of 70°F to insure that the supply pumps can move the material to the spray machine at an appropriate rate. Both materials will thicken as they cool. The resin or “B” side will get very thick and hard to pump very quickly as the temperature drops below 70°F. In addition, depending on the machine being used, some machines may not have the capability to heat the material to the required application temperature.

Each machine is only capable of producing a specific amount of heat. If the temperature difference between the beginning temperature of the material and the required temperature for application is greater than the machine can supply the result will be poor foam quality. This may also cause off ratio foam, down time and may damage your equipment.

cold weather home commercial spray foamAs always, please do not hesitate to contact your Lapolla salesman or technical staff with questions of field application issues. Once you are on the job, should problems occur, you risk down time. As we all know, if the applicator is not spraying foam, nobody is making money.

Here are some additional tips for successful cold weather spray foam application.

Warm up the substrate as much as possible before spraying. Torpedo heater can be used prior to spraying, however, all open flame heaters must be turned off while you are spraying. Please remember that the use of propane and gas fired heaters will result in high humidity levels. This humidity may condense on cold substrates creating moisture issues such as poor adhesion or shrinkage. Applicators should avoid the use of gas fired heaters if possible to reduce this risk. Blocking soffits and exterior penetrations will help retain some of the heat.

Keep the hose off the snow, ice, and concrete. These will draw heat off the hose as fast as the proportioner can heat it.

Use the sun to your advantage. The sun is the largest heater you have. Start spraying on the sunny side and follow the sun around through the day.

Whenever possible, maintain heat in the area for 24 to 48 hours after spraying to help with the curing process.

Order you materials far enough in advance to give them time to warm up (about 10 degrees per 24 hours). Do not store drums in direct contact with concrete. Keep them on the pallets while in storage. When the materials are in the truck, place something under the drums to raise them an inch or two off the floor to allow warm air to circulate underneath them.

Do not allow the dynamic pressure to drop below 1000 psi. Pressures less than 1000 psi can result in a poor mix in the gun.

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American Chemistry Council (ACC) launches new SPF Safety Website

The American Chemistry Council’s (ACC) Center for the Polyurethanes Industry (CPI), in cooperation with the Spray Polyurethane Foam Alliance (SPFA), is pleased to announce the launch of a new Spray Polyurethane Foam (SPF) Health and Safety website, www.spraypolyurethane.org . The website provides a wealth of information on SPF, arranged by topics of interest to construction and weatherization professionals, homeowners and Do-It-Yourselfers.

SPF insulation and insulating foam sealants continue to gain popularity due to their ability to reduce home heating and cooling costs.  This website is intended for anyone interested in SPF insulation or insulating foam sealants, from SPF contractors/builders and weatherization professionals to Do-It-Yourselfers (DIYers) and homeowners.