Houston, Texas -- Lapolla Industries Inc. a Houston based manufacturer and supplier of spray foam insulation, cool roof coatings and equipment, announced record results for the year 2011 on 18 April.
"Lapolla's 2011 year results reflect aggressive sales growth across our business segments despite extraordinarily high raw material and freight costs. We are seeing modest gross margin growth so far in 2012," said Douglas Kramer, ceo and president of Lapolla, in the company's announcement.
"As we progress through the first half of 2012, we continue to experience sustained growing demand for our products both domestically and internationally. We hired a chief operating officer, Harvey Schnitzer, last week, to broaden the depth of our management team and prepare for handling much larger sales volumes in 2012 and beyond," Kramer added.
In its foam business, Lapolla said sales increased by $10 million or 16.2 percent, from 2010 to 2011 due to energy conscious building owners and consumers continuing to seek relief from costly energy prices.
Lapolla said this has meant that spray polyurethane foam (SPF) has raised market share in the shift away from traditional insulation systems such as fiberglass. Lapolla's AirTight SPF product furthered market penetration through start-up training and rig building operations, the company added.
In foam, cost of sales increased by $11.9 million, or 25.4 percent, from 2010 to 2011, due primarily to increased sales volumes, higher freight and raw material costs, partially offset by manufacturing efficiencies.
But Lapolla noted that gross profit in foam decreased by nearly $2 million, or 13.0 percent, from 2010 to 2011, "due to extraordinary increases in raw material costs from global allocation and unusual geopolitical circumstances, offset by sales growth."
The company added that foam gross margin percentage decreased 13.0 percent from 2010 to 2011, due primarily to increased raw material and freight costs and the inability to pass on these increased costs to our customers due to market softness during 2011.
Foam segment profit decreased $3,290,157, or 65.9 percent, from 2010 to 2011, primarily due to an increase of $9,995,501, or 16.2 percent from aggressive sales growth, offset by an increase of $12 million or 25.4 percent, in cost of sales from higher freight and raw material costs and $1.4 million, or 14.2 percent in segment operating costs.
Coatings sales increased by nearly $6 million or 64.4 percent, from 2010 to 2011, due to increased demand from general economic improvements and loosening of credit markets, Lapolla said.