LaPolla Reports Third Quarter Profit

HOUSTON, TX--(Marketwire - November 20, 2008) - LaPolla Industries, Inc. (OTCBB: LPAD) ("LaPolla"), a leading manufacturer and supplier of spray foam insulation and coatings designed to reduce energy consumption in the commercial and residential new construction and retrofit markets, today announced results for the third quarter and nine months ended September 30, 2008.

"LaPolla continues to grow sales dramatically despite the current economic crisis. Mainstream acceptance in conventional construction as well as increased consumer demand for superior insulation, are at the forefront of our charge. LaPolla has met steep declines in the housing market with strong market share gains. Consumers at all levels are realizing that insulation has an incredible impact on the conservation of energy and reduction in costs," stated Douglas J. Kramer, CEO and President, of LaPolla Industries, Inc.

Third Quarter Results

For the third quarter of 2008 total sales increased 66% to $13.9 million compared to $8.4 million in the third quarter of 2007. Foam sales increased 96% to record levels due to market share gains, primarily from displacement of conventional insulation products like fiberglass with spray foam insulation, despite steep declines in the new housing market. LaPolla's acquisition of certain of AirTight SprayFoam's assets, effective July 1, 2008, demonstrates our commitment to converting traditional insulators to spray foam insulation, as Airtight SprayFoam is a turn-key, equipment and business startup leader in the industry. Energy cost savings, especially solutions utilizing green building materials, have become a global priority. Coatings sales increased 5% as foam roofing products continue to provide a pull through advantage for our energy efficient coatings. Gross profit increased 50% to $2.6 million from $1.7 million in the third quarter of 2007 primarily due the aggressive sales growth of our foam products as well as a smaller increase in coatings volumes, partially offset by rising raw material and freight costs. Operating expenses were $2.6 million in the third quarter of 2008 compared to $2.5 million in the same period last year, reflecting anticipated increases associated with our aggressive growth in sales. Operations in the second quarter produced net income of $25 thousand, or less than $.001 per share, compared to a net loss of $777 thousand, or $.01 per share, for the same period in 2007.

Mr. Kramer further commented, "Our third quarter results are further evidence of LaPolla's solid business plan and management's execution ability. The acquisition of AirTight SprayFoam's assets during the quarter is allowing us to more aggressively pursue conventional insulators interested in converting to spray foam insulation to meet escalating demand and growing market opportunities," concluded Mr. Kramer.

Nine Months Results

For the nine months ended September 30, 2008 total sales increased 36% to $34.1 million compared to $25.2 million in the nine months ended September 30, 2008. Foam sales escalated 66% due to market share gains as trends established earlier in the year have strengthened and our product lines continue to gain acceptance in conventional construction. Coatings sales declined 16% due to the 2007 divestiture of our retail coatings segment. Gross profit increased 45% to $6.8 million from $4.7 million in the nine months ended September 30, 2008 due to aggressive sales growth of our foam products partially offset by the divestiture of our retail coatings products. Gross margin percentage increased 1.3% compared to same period in 2007 as efficiencies recognized from our new foam resin plant were partially offset by higher raw material, chemical prices associated with oil. Operating expenses were $7.8 million in the nine month period of 2008 compared to $7.1 million in the same period last year, reflecting anticipated increases in volume related expenses such as payroll and commissions, as we grow our sales personnel and revenues, as well as increases realized in legal fees and interest expense. Operating loss for the nine months ended September 30, 2008 was $1.0 million, or $.017 per share, compared to $2.4 million, all of which was incurred in the first quarter, or $.03 per share, for the same period last year.

Results of Core Business Segments

Third Quarter Results

Foam sales increased $5,383,386, or 96%, compared to the same period in 2007, as residential and commercial landlords continue to recognize the significant advantage spray foam insulation provides versus traditional fiberglass insulation. Construction industry professionals such as contractors, builders, and architects have generally accepted spray polyurethane foam as a mainstream product line, further solidifying LaPolla's market penetration. Additionally, critical third party approvals and credentials for our foam formulations continue to differentiate our product lines from competition, allowing us to penetrate markets previously unavailable. Gross profit increased $1,184,560, or 130.3%, compared to the same period in 2007, due to higher sales volumes, partially offset by increasing raw material and freight costs. Segment profit was $624,745 compared to a segment loss of $306,513 for the same period for 2007, primarily due to sales and margin increases in a product line offering sought after energy cost savings.

Coatings sales increased $127,332, or 4.6%, compared to the same period in 2007 as our coatings product line offers an economic alternative for roof maintenance as opposed to replacement in difficult economic times. Continued momentum is expected as new legislation and energy company incentives promote additional uses and awareness of our products. Gross profit decreased $326,595, or 40.1%, compared to the same period in 2007, due primarily to increasing raw material costs. Segment profit decreased $68,368, or 39.5%, compared to the same period in 2007, due to higher material and freight costs.

Nine Months Results

Foam sales increased $10,432,998, or 66.4%, compared to the same period in 2007, as energy conscious residential and commercial building owners' transition from fiberglass insulation to spray polyurethane foam insulation. Trends established earlier in the year have strengthened and our product lines continue to gain acceptance in conventional construction. Gross profit increased $2,577,514, or 111.3%, compared to the same period in 2007, as higher sales volumes more than offset higher raw material and freight costs. Segment profit was $470,075 compared to segment loss of $1,073,888 in the same period in 2007, primarily from increased volumes and margins associated with the aggressive growth realized in our energy saving product line. Builders and owners alike are opting for sustainable, energy efficient, and green building materials, such as LaPolla's spray polyurethane foam, driving substantial volume increases despite sluggish economic conditions.

Coatings sales decreased $1,504,744, or 15.9%, with a corresponding decrease in our cost of sales of $1,047,037, or 14.8%. Gross profit decreased $457,707, or 19.2%, compared to the same period in 2007, due to the divestiture of our retail distribution channel in 2007, as well as increased raw material cost. Segment profit increased $421,049, or 194.3%, compared to the same period in 2007, as the 2007 divestiture of our retail coatings business allowed us to focus on higher margin coatings used in conjunction with our insulating roofing foam.

About LaPolla Industries, Inc.

LaPolla Industries, Inc. is a leading manufacturer and supplier of spray polyurethane foam for insulation and coatings targeting commercial and residential applications in the building envelope construction industries.

Forward Looking Statements

Statements made in this press release that are not historical facts constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21 of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. These forward-looking statements are necessarily estimates reflecting the best judgment of senior management and express the Company's opinions about trends and factors which may impact future operating results. You can identify these and other forward-looking statements by the use of words such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "intends," "potential," "continue," or the negative of such terms, or other comparable terminology. Such statements rely on a number of assumptions concerning future events, many of which are outside of the Company's control, and involve risks and uncertainties that could cause actual results to differ materially from opinions and expectations. Any such forward-looking statements should be considered in context with the various disclosures made by the Company about its businesses including, without limitation, the risk factors described below. Although the Company believes its expectations are based on reasonable assumptions, judgments, and estimates, forward-looking statements involve known and unknown risks, uncertainties, contingencies, and other factors that could cause the Company or the Company's industries' actual results, level of activity, performance or achievement to differ materially from those discussed in or implied by any forward-looking statements made by or on the Company and could cause the financial condition, results of operations, or cash flows to be materially adversely affected. In evaluating these statements, some of the factors that you should consider include the following: financial position and results of operations, cash position and cash requirements, accounting estimates, doubtful accounts, inventories, and warranties; operations, supply chain, quality control, and manufacturing supply, capacity, and new and existing facilities; products, price of products, product lines, and product and sales channel mix; relationship with customers, suppliers and strategic partners; credit facilities; industry trends and responses to these trends; sources of competition; and outcome and effect of current and potential future litigation. All information in this release is as of the date hereof. The Company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations. For further information regarding risks, uncertainties, and other factors associated with LaPolla's business, please refer to LaPolla's SEC filings, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q, which are available at www.lapollaindustries.com.

Contact Information: LaPolla Industries, Inc. Contacts: Douglas J. Kramer CEO Michael T. Adams CGO (281) 219-4700 Public Relations Contacts: Kristin Sommers 5W Public Relations (212) 999-5585 ksommers@5wpr.com