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Lapolla Industries Reports Financial Results for the Third Quarter

Lapolla Industries Reports Financial Results for the Third Quarter
Ended September 30, 2016

Climate-Friendly FOAM-LOK® 4G Spray Foam Insulation
Taking Hold of Market Share

Houston, TX, October 31, 2016 – Lapolla Industries, Inc. (“Lapolla” or the “Company”)(LPAD), a Houston-based publicly traded manufacturer and global supplier of high performance, energy efficient building products, today announced its financial results for the third quarter ended September 30, 2016.

Third Quarter 2016 Highlights:

  • Sales for the nine months ended September 30, 2016 increased by 8% to $61.7 million compared to the same period in 2015
  • Net Income from the nine months ended September 30, 2016 was $4.0 million, an increase of $5.3 Million compared to the same period in 2015
  • Adjusted EBITDA for the nine months ended September 30, 2016 was $7.1 million, an increase of $4.8 million compared to the same period in 2015
  • Paid off $5.8 million debt with Enhanced Capital and $2.7 million revolver loan with Bank of America with new line of credit
  • New $15 million line of credit with Bank of America reduced average cost of capital from 9.7% to 3.0% resulting in annual interest savings of $583,000
  • Reduced debt by $5.7 million for the nine months ended September 30, 2016 resulting in annual interest savings of $382,000
  • Overall interest savings of $965,000 on an annual basis

“Lapolla’s continued positive financial performance correlates directly to enhanced sales both domestically and internationally of our high performance building envelope and roofing product lines,” stated Douglas J. Kramer, Chief Executive Officer and President of Lapolla. “Additionally, we believe our market share growth is tied to the environmental stewardship we have driven through our energy efficient spray polyurethane foam roofing and insulation offerings, as well as our company being recognized as the first spray foam manufacturer to bring to market a spray foam system that reduces Global Warming Potential (GWP) and eliminates Ozone Depletion Potential (ODP), in line with, and as a partner to, the White House in its Climate Action Plan,” concluded Mr. Kramer.

The company’s Chief Financial Officer, Jomarc Marukot added, “In the third quarter, Lapolla achieved strong revenue and profitability. We remain focused on delivering value to our shareholders. The reductions in our debt and cost of capital will contribute significantly to our bottom line, improve our cash flow, and further strengthen our balance sheet.”

For further information regarding Lapolla’s financial results as of September 30, 2016, including Adjusted EBITDA, and a reconciliation of Adjusted EBITDA to net income or loss for the three and nine months ended September 30, 2016 and 2015, respectively (see below), refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” 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, available at www.lapolla.com.

 

About Lapolla Industries, Inc.
Lapolla Industries, Inc. (LPAD) is a global supplier and manufacturer of spray polyurethane foam for insulation and roofing applications, reflective roof coatings and equipment. Based in Houston, Texas, the company’s building envelope and roofing product solutions are designed to reduce energy consumption in the building environment, across the residential, commercial and industrial sectors, in both new construction and retrofits. Visit Lapolla Industries at www.lapolla.com.
FORWARD LOOKING STATEMENTS
Certain statements in this press release that are forward-looking and not statements of historical fact are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally identifiable by the use of words like “may,” “will,” “should,” “could,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of these words or other variations on these words or comparable terminology. The reader is cautioned not to put undue reliance on these forward-looking statements, as these statements are subject to numerous factors and uncertainties outside of our control that can make such statements untrue, including, but not limited to, adverse economic conditions and their effect on demand for foams and coating; adverse effects of fluctuations in sales; intense competition from competitors that are better established and have significantly greater resources than us; our dependence on a few large suppliers for a large portion of materials required for production and sales of our products; loss or departure of key personnel; market acceptance of our existing and new products; unanticipated increases in raw material prices or disruptions in supply; restrictive loan covenants and/or our ability to repay or refinance debt under our credit facilities; operating margin risk due to competitive pricing and operating efficiencies, supply chain risk, material, labor or overhead cost increases, interest rate risk and commodity risk; the fact that our chairman controls a majority of our combined voting power, and may have, or may develop in the future, interests that may diverge from those of other stockholders; future sales of large blocks of our common stock, which may adversely impact our stock price; and the liquidity and trading volume of our common stock. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company’s filings with the Securities and Exchange Commission (SEC), including the Company’s Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. Investors and security holders are urged to read these documents free of charge on the SEC’s web site at http://www.sec.gov. The Company assumes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise.

Investor Relations:
Michael T. Adams, EVP
Phone: 281-219-4700
Email: IR@lapolla.com

Results of Operations

Summary
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. The table is presented in thousands. All financial information for September 30, 2016 and September 30, 2015, is derived from the Company’s unaudited financial statements, as disclosed in the Company’s Quarterly Report on Form 10-Q, for the three and nine months ended September 30, 2016, filed with the SEC.

lapolla-reports-third-quarter-ended-9-30-16-results-final-2

Non-GAAP Financial Measures
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.

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;
  • EBITDA and Adjusted EBITDA do not include depreciation and amortization of other intangible assets expense. Because we use capital assets, depreciation and amortization of other intangible assets expense is a necessary element of our costs and ability to generate profits. Therefore, any measure that excludes depreciation and amortization of other intangible assets expense may have material limitations;
  • EBITDA and Adjusted EBITDA do not include tax expenses. Because the payment of taxes is a necessary element of our costs, any measure that excludes tax expense may have material limitations;
  • EBITDA and Adjusted EBITDA do not reflect capital expenditures or future requirements for capital expenditures or contractual commitments;
  • EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, working capital needs; and
  • Adjusted EBITDA does not include share-based compensation expense.

Lapolla Industries Reports Financial Results for the Second Quarter

Lapolla Industries Reports Financial Results for the Second Quarter
Results Focus on Driving Shareholder Value

Houston, TX, July 27, 2016 – Lapolla Industries, Inc. (“Lapolla” or the “Company”) (OTCQX: LPAD), a Houston-based global supplier and manufacturer of spray polyurethane foam insulation, reflective roof coatings, and equipment, today announced its financial results for the second quarter ended June 30, 2016.

Second Quarter 2016 Highlights:
–  Sales in the six months ended June 30, 2016 increased by 10% to $40.7 million compared to the same period in 2015
–  Net Income from the six months ended June 30, 2016 was $2.5 million, an increase of $4.0 Million compared to the same period in 2015
–  Adjusted EBITDA for the six months ended June 30, 2016 was $4.5 million, an increase of $3.6 million compared to the same period in 2015
“The first half results of 2016 further demonstrate the resolve our Company has to providing value to our shareholders,” stated Douglas J. Kramer, Chief Executive Officer and President of Lapolla. “All of our strategies and efforts revolve around delivering a quality product that is designed to reduce energy consumption in a cost efficient manner to select target markets around the globe. We see our business as a moral imperative towards combatting climate change. Having been in this business for over 25 years I have never been more excited about our industry and our company. We are more determined than ever on growing the bottom line and building shareholder value.”
Kramer continued, “We have built a great team of professionals in all aspects of our company from Sales, to having by the far the most qualified experienced Technical Service team in the industry, to our Finance and Operations team; as a result of their hard work and dedication, Lapolla has achieved a record Net Income and Adjusted EBITDA for the first six months of 2016. It is tremendously rewarding to be a part of a company that has come so far in such a short period of time.”

The company’s Chief Financial Officer, Jomarc Marukot added, “Our goal is to continue to grow profitably and provide a return to our shareholders. Our Fixed Charge Coverage Ratio (excluding non-scheduled principal payments) was 5.57:1 at June 30, 2016 vs 3.73:1 at December 31, 2015 and our leverage ratio was 2.2 at June 30, 2016 vs 3.5 at December 31, 2015. Adjusted EBITDA for the trailing twelve months ended June 30, 2016 was $7.6 million vs $4.1 million for the period ended December 31, 2015. These are demonstrations of the significant financial performance the company has achieved in 2016.”

As a further commitment to our shareholders, Lapolla has moved to the OTCQX, “Moving up to the OTCQX is an important strategic step in our investor outreach commitment. Being traded on the OTCQX will allow for greater exposure, accessibility, and liquidity from the investment community,” commented Michael T. Adams, the company’s Chief Governance Officer.

“Lapolla continues to seek top industry performers, in terms of personnel and independent installers and distributors, to facilitate growth and promote our value proposition,” concluded Mr. Kramer.

For further information regarding Lapolla’s financial results as of June 30, 2016, including Adjusted EBITDA, and a reconciliation of Adjusted EBITDA to net income or loss for the three and six months ended June 30, 2016 and 2015, respectively (see below), refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” 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, available at www.lapolla.com.

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
Certain statements in this press release that are forward-looking and not statements of historical fact are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally identifiable by the use of words like “may,” “will,” “should,” “could,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of these words or other variations on these words or comparable terminology. The reader is cautioned not to put undue reliance on these forward-looking statements, as these statements are subject to numerous factors and uncertainties outside of our control that can make such statements untrue, including, but not limited to, adverse economic conditions and their effect on demand for foams and coating; adverse effects of fluctuations in sales; intense competition from competitors that are better established and have significantly greater resources than us; our dependence on a few large suppliers for a large portion of materials required for production and sales of our products; loss or departure of key personnel; market acceptance of our existing and new products; unanticipated increases in raw material prices or disruptions in supply; restrictive loan covenants and/or our ability to repay or refinance debt under our credit facilities; operating margin risk due to competitive pricing and operating efficiencies, supply chain risk, material, labor or overhead cost increases, interest rate risk and commodity risk; the fact that our chairman controls a majority of our combined voting power, and may have, or may develop in the future, interests that may diverge from those of other stockholders; future sales of large blocks of our common stock, which may adversely impact our stock price; and the liquidity and trading volume of our common stock. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company’s filings with the Securities and Exchange Commission (SEC), including the Company’s Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. Investors and security holders are urged to read these documents free of charge on the SEC’s web site at http://www.sec.gov. The Company assumes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise.

Investor Relations:
Michael T. Adams, EVP
Phone: 281-219-4700
Email: info@lapolla.com

Results of Operations

Summary
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. The table is presented in thousands. All financial information for June 30, 2016 and June 30, 2015, is derived from the Company’s unaudited financial statements, as disclosed in the Company’s Quarterly Report on Form 10-Q, for the three and six months ended June 30, 2016, filed with the Securities and Exchange Commission.

Lapolla Reports Second Quarter Ended 6-30-16 Results-Final-7-27-16-2 - Chart

Non-GAAP Financial Measures
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.

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;
• EBITDA and Adjusted EBITDA do not include depreciation and amortization of other intangible assets expense. Because we use capital assets, depreciation and amortization of other intangible assets expense is a necessary element of our costs and ability to generate profits. Therefore, any measure that excludes depreciation
and amortization of other intangible assets expense may have material limitations;
• EBITDA and Adjusted EBITDA do not include tax expenses. Because the payment of taxes is a necessary element of our costs, any measure that excludes tax expense may have material limitations;
• EBITDA and Adjusted EBITDA do not reflect capital expenditures or future requirements for capital expenditures or contractual commitments;
• EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, working capital needs; and
• Adjusted EBITDA does not include share-based compensation expense.

Ty Pennington & Lapolla Employees Hangin Out

Check out how Lapolla employees kicked back on a visit from Ty Pennington to our Houston, TX, office. What better way to end a week of video production than a meet & greet morning packed with food and fun. Can you spot someone you know?

Don’t miss our behind-the-scenes footage at Silver Rock Studios and The Woodlands, plus across all Lapolla’s social media channels!

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

Lapolla Reports VP of Sales

Brings a 23 Year Proven Track Record

HOUSTON–(BUSINESS WIRE)–Lapolla Industries, Inc. (“Lapolla”) (LPAD), a Houston based 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, announces Michael J. Kontranowski as VP of Sales.

“We are very pleased to announce this appointment,” reported Douglas J. Kramer, CEO and President of Lapolla. “Michael brings leadership and drive to Lapolla and will be responsible for profitable revenue growth of Lapolla’s broad product portfolio. He brings a 23 year proven track record of exceeding revenue goals and adoption rates within the building and construction industry with experience in all aspects of sales, marketing, and product development,” concluded Mr. Kramer.

Prior to arriving at Lapolla, Mr. Kontranowski held roles in purchasing, sales, and marketing at The Dow Chemical Company with the last six years as Strategic Marketing Director responsible for developing the 3-5 year sales and marketing execution strategy focused on high margin sales. Mr. Kontranowski has a bachelor’s degree in Marketing and International Business as well as an MBA from DeVos Graduate School, Northwood University.

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 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.

Contact:
Lapolla
Douglas J. Kramer, CEO
Harvey L. Schnitzer, COO
Michael T. Adams, CGO
Charles A. Zajaczkowski, CFO
(281) 219-4700