Lapolla Reports Record First Quarter 2012 Results
Delivers 8.6% Sales Growth in Foam Segment
HOUSTON, May 16, 2012 /PRNewswire via COMTEX/ -- Lapolla Industries, Inc. ("Lapolla") , a Houston based manufacturer and supplier of spray foam insulation, cool roof coatings and equipment designed to reduce energy consumption in the residential and commercial markets, for both new construction and retrofit applications, today announced results for the first quarter of 2012.
Douglas J. Kramer, CEO and President of Lapolla, commented, "High and increasingly volatile energy prices continue to heighten the public's interest for green building materials and sustainable energy solutions. Lapolla's first quarter 2012 results reflect sustained aggressive sales growth in our foam segment, while sales volumes declined due to seasonal conditions in our coatings segment. After two years of strategic planning, Lapolla is only now beginning to realize international growth as demand for our products increases and our international plans materialize," concluded Mr. Kramer.
Results of Business Segments
Foam sales increased $1,278,673, or 8.6%, in the first quarter of 2012 compared to the first quarter of 2011, due to energy conscious building owners and consumers continuing to seek relief from costly energy prices, as spray polyurethane foam (SPF) gains market share from replacing traditional insulation systems such as fiberglass. Foam equipment sales increased $177,289, or 19.4%, quarter over quarter. Foam cost of sales increased $1,409,713, or 12.2%, in the first quarter of 2012 compared to the first quarter of 2011, due to increases of $1,278,673, or 8.6%, in sales, $201,572, or 25.4%, in freight, and approximately 7.4% in material costs, partially offset by purchasing power with key vendor alliances and manufacturing efficiencies. Foam gross profit decreased $131,040, or 4.0%, and gross margin percentage decreased 2.6%, primarily from higher freight and material costs, offset by increased sales volumes and product prices, from the first quarter of 2012 compared to the first quarter of 2011. Foam segment profit decreased $201,134, or 31.6%, for the first quarter of 2012 compared to the first quarter of 2011, primarily due to higher freight and material costs, offset by an approximate 6.5% increase in sales prices and 93.5% increase in sales volumes.
Coatings sales decreased $601,276, or 19.1%, in the first quarter of 2012 compared to the first quarter of 2011, due to seasonal factors in the roofing markets. Coatings equipment sales increased $9,331, or 24.0%, quarter over quarter. Coatings cost of sales decreased $485,376, or 18.9%, in the first quarter of 2012 compared to the first quarter of 2011, due to decreases of $601,276, or 19.1%, in sales, and $16,323, or 9.3%, in freight, offset by an increase of approximately 5.8% in material costs. Coatings gross profit decreased $115,900, or 20.2%, due to lower sales volumes, and a gross margin percentage decline of 1.4%, primarily from higher material costs, from the first quarter of 2012 compared to the first quarter of 2011. Coatings segment profit increased $601,276, or 19.1%, for the first quarter of 2012 compared to the first quarter of 2011, primarily due to a decrease in segment operating costs and expenses and an approximate 7.1% increase in sales prices and 107.1% increase in sales volumes.
Total segment sales increased $677,397, or 3.8%, cost of sales increased $924,337, or 6.5%, and gross profit decreased $246,940, or 6.5%, in the first quarter of 2012 compared to the first quarter of 2011. Total segment profits decreased $186,661, or 28.5%, due primarily to increases of $185,249, or 19.1%, in freight, 5.9% in material costs, offset by increases of approximately 18.6% in sales prices and 81.4% in sales volumes, in the first quarter of 2012 compared to the first quarter of 2011.
Overall Results of Operations
Sales increased $677,397, or 3.8%, for the first quarter of 2012 compared to the first quarter of 2011. Cost of sales increased $924,337, or 6.5%, for the three months ended March 31, 2012 compared to the three months ended March 31, 2011. Gross profit decreased $246,940, or 6.5%, for the first quarter of 2012 compared to the first quarter of 2011, due to the 19.1% increase in freight costs, 5.9% increase in material costs, and decrease of 19.1% in our coatings sales, partially offset by our 8.6% increase in our foam sales, of which $131,040, or 4.0%, resulted from our foam segment and $115,900, or 20.2%, resulted from our coatings segment. Gross margin percentage decreased 2.1%, quarter over quarter, due to higher freight and material costs, offset by approximately 46.4% price increases, manufacturing efficiencies from increased foam sales volume, and purchasing power with key vendor alliances. Total operating expenses are comprised of selling, general and administrative expenses, or SG&A, professional fees, depreciation, amortization of other intangible assets, and consulting fees. These total operating expenses increased $197,533, or 4.8%, in the first quarter of 2012 compared to the first quarter of 2011, due to increases of $72,505 for SG&A, $17,941 for amortization of other intangible assets, and $125,603 for consulting fees, offset by decreases of $11,779 for professional fees, and $6,737 for depreciation. Total other (income) expense is comprised of interest expense, gain or loss on derivative liability, and other, net. Total other (income) expense decreased $22,883, or 17.9% from the first quarter of 2012 compared to the first quarter of 2011, due to gains of $33,939 in our derivative liability and $9,947 in our other, net, offset by an increase of $21,220 in interest expense. Net loss increased $421,590, or 94.0%, in the first quarter of 2012 compared to the first quarter of 2011, due to increases of $72,505, or 1.9%, in SG&A, $17,941, or 17.1%, in amortization of other intangible assets, $125,603, or 262.5% in consulting fees, and $21,219, or 16.6%, in interest expense, offset by decreases of $11,779, or 10.1%, in professional fees, $6,737, or 9.9%, in depreciation, and gains of $33,939 in our derivative liability and $9,947 in our other, net. Net loss per share was $0.01 for the quarter ended March 31, 2012 and 2011, respectively.
http://www.marketwatch.com/story/lapolla-reports-record-first-quarter-2012-results-2012-05-16
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