SOURCE: LaPolla Industries, Inc.

Lapolla Industries, Inc.

March 15, 2010 11:39 ET

Lapolla's CEO Issues 2010 Annual Letter to Shareholders

Green Building Materials at Forefront of Global Stage

HOUSTON, TX--(Marketwire - March 15, 2010) - Lapolla Industries, Inc. (OTCBB: LPAD) (Lapolla), a Houston based manufacturer and supplier of spray foam insulation, coatings, and equipment designed to reduce energy consumption in the residential and commercial markets for both new construction and retrofit applications, today announced the release of its annual shareholder letter from CEO and President of Lapolla, Douglas J. Kramer.

Dear Fellow Shareholders:

Thank you for being a part of Lapolla. In spite of a very tough and challenging commercial and residential development market, Lapolla has made significant headway in growing its business, further promoting our high quality spray polyurethane foam insulation and expanding our corporate footprint as the leading manufacturer and supplier of spray foam insulation in the United States in 2009. We wanted to take this time to outline our achievements this past year and what we expect in 2010.

As I am sure you are all aware, we have experienced what has become known as one of the worst financial crises in United States history, with the housing market getting particularly battered, especially the residential and commercial development sectors. This has caused depressed revenues and minimal growth across the sector. Lapolla, fortunately, has several advantages against its basic materials competitors that allow us to prosper in spite of the nation's current economic troubles. Our spray foam insulation products provide a cleaner, more cost effective solution to rising energy costs and increasing greenhouse gas emissions, helping to not only insulate and seal the "shell" of a structure but also aid in preventing air infiltration and reducing our energy consumption overall. Our spray foam insulation product lines can save homeowners up to 40% or more on their energy bills. Due to volatile energy costs, we have seen compounded revenue growth of 82% over the previous 5 years. With the implementation of the U.S. Economic Stimulus Package, the government increased the past tax credit for home improvement from 10% to 30% of the cost and increased the maximum amount of the credit from $500 to $1500, greatly benefitting Lapolla and other green building material solutions. We provide homeowners and business owners with energy savings for the lifetime of their building and saving them tax dollars at the end. Our market for providing clean, energy saving, high quality insulation at an affordable price has further solidified Lapolla's leading position as a brand people trust. This is a truly compelling value proposition to our customers as the return on investment begins upon installation.

During 2009, we further expanded our growing brand recognition and grew our market share. In fact, during the year, we went international, opening a headquarters in Toronto, Canada. In April 2009, we received Canadian Product Approval and CCMC Approval which allows us market access with our Foam-LOK™ spray polyurethane insulation systems throughout Canada. Thanks to our solid relationships with distributors, we are seeing great interest amongst the Canadian construction and roofing industries. In late April 2009, we also received ICC-ES Approval for our half pound spray foam insulation for use in wall cavities, floor and ceiling assemblies, as well as attic and crawl space applications, further building our product pipeline and expanding our market share.

In June 2009, we were pleased to accept an offer to contribute our spray foam insulation for the Emmy Award Winning ABC television show Extreme Makeover: Home Edition for Season 7 and remain truly honored to be their preferred spray foam insulation supplier and a part of this great, combined effort to improve deserving peoples' living situations. We contributed to 5 home makeovers since entering into the relationship and look forward to continued participation with the show. The ABC Extreme Makeover: Home Edition and Lapolla partnership is indicative of the growing awareness and need for a healthy living environment, better air quality, reduced air infiltration, and combating rising energy costs, thus further solidifying our position in the green building materials market.

To further increase mainstream awareness of our green building envelope technology, we have committed ourselves to increasing our marketing, advertising and overall communication efforts through a variety of mediums. As recently announced, we have arranged for Lapolla™ and Airtight™ commercials to air on over 55 networks across the country, totaling over 22,000 airtime minutes, by far the largest consumer marketing endeavor that we have initiated to date, in an effort to create sales pull through and increase our independent contractor/installer network. The Airtight™ program provides a turn-key approach to helping ensure the start-up success of independent spray foam insulation installers. Both commercials have been well received by our targeted audiences and we are already experiencing a greater market impact in our foam insulation for construction and retrofitting markets as a result of this effort.

In addition to promotional product marketing, we have made a significant pledge to expand and broaden our investor communication efforts and have engaged American Capital Ventures to lead the campaign on behalf of Lapolla and its shareholders. They are a premier investor relations firm with extensive ties to Wall Street and specific expertise in the micro and small cap arena. We intend on being very active this year in communicating company related news, engaging in multi-city non-deal road-shows, investor conferences and one-on-one meetings with current and potential investors.

Looking ahead, we anticipate that 2010 will be an unprecedented year for Lapolla and its shareholders. Even in the face of a tough economic environment, our strategic partnerships and ripe energy saving product lines aided us in producing sound financial growth in 2009. In the third quarter, we achieved a small yet meaningful increase in revenue as compared to 2008, which for most companies in this current economic environment is outstanding growth. More importantly, we saw our foam insulation segment increase to 85% in 2009 from 79% in 2008, continuing an upward trend in the growth of our spray foam insulation based on increased market demand.

Lapolla is at the forefront of a rapidly emerging green building materials insulation market and the timing could not be better. With our energy saving product lines, compelling value proposition, attractive pricing model, and immediate cost-saving benefits to consumers and businesses alike, Lapolla has a solid foundation in the spray foam insulation and roof coatings markets. The past year has produced many great strides and sound organic growth. In the year ahead, we will continue to grow our business, communicate the value-added benefits of spray foam insulation, cool roof coatings, and place a strong emphasis on expanding our investor platform, increasing our shareholder base and growing our market share. We appreciate your trust in Lapolla and look forward to a successful and prosperous 2010 year.

-- Douglas J. Kramer, CEO and President, Lapolla.

About Lapolla Industries, Inc.

Lapolla Industries, Inc. is a leading manufacturer and supplier of spray polyurethane foam for insulation and roof coatings targeting residential and commercial applications in the building envelope construction industries. For more information, please visit www.Lapolla.com and www.AirTightInsulation.com.

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. 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. 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.

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