Lapolla Industries Reports Full Year 2013 Results

-- Annual Gross Profit Increased 15.8 Percent since 2012 --
-- Adjusted EBITDA Increased 349.46 Percent since 2012--

HOUSTON--()--Lapolla Industries, Inc. (“Lapolla”) (OTCQB: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, today announced its full year 2013 financial results.

Full Year 2013 Operational and Financial Highlights

  • Adjusted EBITDA increased 349.46 percent to $2.1 million
  • Gross profit increased 15.8 percent to $15 million
  • Sales revenue increased 1.1 percent to $71.2 million
  • Engaged in exclusive relationships with two large international suppliers
  • Achieved significant profit increases for both business segments: foams and coatings

For the full year 2013, Lapolla’s sales revenue increased 1.1 percent to $71.2 million, as compared to $70.4 million during 2012. During the full year 2013, Lapolla’s gross profit increased 15.8 percent to $15 million, as compared to $12.9 million for 2012. Adjusted EBITDA for 2013 increased to $2.1 million, or 349.46 percent, from a loss of $861,709 in 2013.

For the full year 2013, reported foam segment sales were $61.1 million, an increase of 3.8 percent, as compared to $58.9 million in 2012. Foam segment profit was $2.3 million during 2013, an increase of 261 percent, as compared with $634,872 for 2012. During the full year 2013, coatings segment sales were $10.1 million, a decrease of 12.3 percent from $11.5 million in 2012. Coatings segment profit increased 642 percent to $1.5 million, as compared to $194,144 for 2012.

“Our ability to successfully execute our business strategy in 2013 led to increased sales revenue, while also increasing our overall gross profit,” stated Douglas J. Kramer, CEO and President at Lapolla Industries. “This marked growth in profitability is a direct result of our continued efforts to increase the operational efficiency within our business and our goal of driving long-term shareholder value.”

Mr. Kramer continued, “During 2013, we engaged in exclusive partnerships with two large international suppliers. With these relationships, we believe that we are well positioned in these regions to expand our global footprint as spray foam insulation continues to gain traction in new markets worldwide. Additionally, in 2013, we appointed talented executives who will help us continue to grow our business.”

“During the past twenty years, spray foam has evolved from a cottage industry to capturing more than 15 percent of the overall market. Lapolla is one of the largest pure play spray foam companies, and as such, we are confident in our ability to capitalize on the fundamental shift occurring in the insulation markets today,” concluded Mr. Kramer.

Notes:

Lapolla Industries utilizes Adjusted EBITDA to assist it in reviewing financial results and for management incentives. Adjusted EBITDA is defined as EBITDA increased by total share based compensation included in net income or loss. Lapolla’s management utilizes Adjusted EBITDA in an effort to provide information that reflects the Company’s economic performance. Lapolla’s management team reviews their monthly financial results on an Adjusted EBITDA basis. Adjusted EBITDA has no impact on reported volumes or sales.

Adjusted EBITDA is used as a supplemental financial measure by management to describe Lapolla’s operations and economic performance to financial institutions:

• The economic results of Lapolla Industries’ operations
• Repeatable operating performance that is not distorted by non-recurring items, certain other non-cash items, or market volatility.

Adjusted EBITDA is not prepared in accordance with GAAP. Adjusted EBITDA should not be considered as an alternative to net income or loss, income or loss from operations, cash flows from operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP.

 

Reconciliation of EBITDA and Adjusted EBITDA to Net Income for years ended December 31, 2013
and December 31, 2012:

 

 

Year Ended December 31,
2013     2012
 
Net Income (Loss): $ (1,971,045 ) $ (4,430,672 )
Additions / (Deductions):
Interest Expense 1,093,184 831,074
Interest Expense – Related Party 749,291 390,922
Interest Expense – Amortization of Discount 10,697
Tax Expense (Benefit) 69,522 92,060
Depreciation 453,827 539,487
Amortization of Other Intangible Assets 424,426   501,315  
EBITDA $ 829,902 $ (2,075,814 )
Additions / (Deductions):
Share Based Compensation 1,319,730 1,214,105
Adjusted EBITDA $ 2,149,632 $ (861,709 )
 

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, 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

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.

     

LAPOLLA INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS

 
December 31,
  2013         2012  
Assets    
Current Assets:

 

Cash

$

$

Trade Receivables, Net 7,694,589 7,302,149
Inventories 5,421,935 4,832,348
Prepaid Expenses and Other Current Assets   1,250,314         726,737  
Total Current Assets   14,366,838         12,861,234  
 
Property, Plant and Equipment 1,600,679 1,969,998
 
Other Assets:
Goodwill 4,234,828 4,234,828
Other Intangible Assets, Net 1,165,157 1,462,639
Deposits and Other Non-Current Assets, Net   686,658         455,553  
Total Other Assets   6,086,643         6,153,020  
 
Total Assets

$

22,054,160

     

$

20,984,252

 
 

Liabilities and Stockholders' Equity

Current Liabilities:
Accounts Payable

$

6,694,633

$

7,637,141

Accrued Expenses and Other Current Liabilities 1,456,895 1,345,014
Current Portion of Note Payable – Prior Enhanced Note 1,219,998
Current Portion of Derivate Liability 65,656
Current Portion of Long-Term Debt   4,599         21,077  
Total Current Liabilities   8,156,127         10,288,886  
 
Other Liabilities:
Non-Current Portion of Revolver Loan 4,539,163 5,032,450
Non-Current Portion of Note Payable – New Enhanced Note 6,683,561
Non-Current Portion of Note Payable – Prior Enhanced Note 3,117,336
Non-Current Portion of Note Payable – Related Party 1,300,000 1,300,000
Accrued Interest – Note Payable – Related Party 117,633 47,038
Non-Current Portion of Long-Term Debt           4,430  
Total Other Liabilities   12,640,357         9,501,254  
 
Total Liabilities   20,796,484         19,790,140  
 
Commitments and Contingencies
 
Stockholders' Equity:

Common Stock, $.01 Par Value; 140,000,000 Shares Authorized; 114,148,378 and 109,372,266
Issued and Outstanding for 2013 and 2012, respectively.

1,141,484

1,093,723

Additional Paid-In Capital 86,734,757 84,745,704
Accumulated (Deficit) (86,495,654 ) (84,524,609 )
Accumulated Other Comprehensive (Loss)   (122,911 )       (120,706 )
Total Stockholders' Equity   1,257,676         1,194,112  
 
Total Liabilities and Stockholders' Equity

$

22,054,160

     

$

20,984,252

 
 
         

LAPOLLA INDUSTRIES, INC.
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

 
Years Ended December 31,
  2013         2012  
 
       
Sales

$

71,176,971

     

$

70,383,827

 
 
Cost of Sales   56,152,602         57,413,413  
 
Gross Profit   15,024,369         12,970,414  
 
Operating Expenses:
Selling, General and Administrative 13,489,457 14,608,934
Professional Fees 1,076,153 438,674
Depreciation 174,256 224,551
Amortization of Other Intangible Assets 424,426 501,315
Consulting Fees   476,247         514,244  
Total Operating Expenses   15,640,539         16,287,718  
 
Operating (Loss) (616,170 ) (3,317,304 )
 
Other (Income) Expense:
Interest Expense 1,093,184 831,074
Interest Expense – Related Party 749,291 390,922
Interest Expense – Amortization of Discount 10,697
(Gain) on Derivative Liability (65,656 ) (88,862 )
(Gain) on Extinguishment of Debt (398,886 )
Other, Net   (33,755 )       (19,766 )
Total Other (Income) Expense   1,354,875         1,113,368  

 

Net (Loss)

$

(1,971,045

)

   

$

(4,430,672

)

 
Net (Loss) Per Share – Basic and Diluted

$

(0.02

)

   

$

(0.04

)

Weighted Average Shares Outstanding 111,449,320

107,312,421

 
Other Comprehensive (Loss):
Foreign Currency Translation Adjustment (Loss)   (2,205 )       (3,031 )
Total Other Comprehensive (Loss)

$

(2,205

)

   

$

(3,031

)

 
Comprehensive (Loss)

$

(1,973,250

)

   

$

(4,433,703

)

 

Contacts

Investors:
KCSA Strategic Communications
Todd Fromer / Phil Carlson
212-896-1215 / 212-896-1233
tfromer@kcsa.com / pcarlson@kcsa.com
or
Media:
KCSA Strategic Communications
Samantha Wolf / Jon Goldberg
212-896-1220 / 212-896-1282
swolf@kcsa.com / jgoldberg@kcsa.com

Release Summary

Lapolla Industries Reports Full Year 2013 Results

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Contacts

Investors:
KCSA Strategic Communications
Todd Fromer / Phil Carlson
212-896-1215 / 212-896-1233
tfromer@kcsa.com / pcarlson@kcsa.com
or
Media:
KCSA Strategic Communications
Samantha Wolf / Jon Goldberg
212-896-1220 / 212-896-1282
swolf@kcsa.com / jgoldberg@kcsa.com