HOUSTON, Aug. 19, 2011/PRNewswire/ -- Lapolla Industries, Inc. ("Lapolla") (OTC BB: LPAD), 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 second quarter of 2011.
Douglas J. Kramer, CEO and President of Lapolla, commented, "Lapolla's second quarter 2011 results reflect an increase of 30.1% in sales compared to the prior year's second quarter. We continued to experience commodity cost challenges during the quarter from volatile oil prices and global allocation of certain coating materials, resulting in higher freight and materials costs across both of our segments, and a reduction in our gross profit for the period. From all indications, it appears the short term spike in materials pricing is stabilizing and in some cases reversing, while market softness persists. We continued to invest in our business infrastructure to support our aggressive growth both domestically and internationally. As we enter the third quarter, we continue to experience sustained growing demand for our products," concluded Mr. Kramer.
Sales increased $5,006,398, or 30.1%, from the second quarter of 2011 compared to the second quarter of 2010. Foam sales increased $2,894,564, or 20.0%, and coatings sales increased $2,111,834, or 96.1%, quarter over quarter, due to continued market penetration and higher consumer demand attributed to cosconscious residential and commercial building owners transitioning from traditional fiberglass insulation and roofing systems to energy efficient SPF and acrylic coatings. High and increasingly volatile energy prices continue to heighten the public's interest for green building materials and sustainable energy solutions. Cost of sales increased $5,232,219, or 42.3%, for the three months ended June 30, 2011 compared to the three months ended June 30, 2010. Cost of sales increased $3,246,374, or 30.2%, for our foams, and $1,985,845, or 122.6%, for our coatings, quarter over quarter, due primarily to increases of $2,894,564, or 20.0%, and $2,111,834, or 96.1%, in our foam and coatings sales, respectively. We had a 47.1% increase in freight costs, along with an approximate 6.9% increase in material costs, in the second quarter of 2011 compared to the second quarter of 2010. Freight and material costs increased in 2011 due primarily to surging oil prices which justified higher trip rates and fuel surcharges, as well as from global allocation of certain coating raw materials requiring us to deploy spot market buying at higher prices to meet demand.