IAX Intl Absorbents

International Absorbents Announces Record Results for Fiscal Year 2005; Net Income Increased 25%, Sales Improved 13% FERNDALE, Wash., April 6 /PRNewswire-FirstCall/ -- International Absorbents Inc. (AMEX:IAX), a leading developer and producer of environmentally-friendly pet care and industrial products, today reported financial results for the fiscal year 2005 ended January 31, 2005. Net income for fiscal year 2005 increased 25% to a record $1,790,000, versus $1,435,000 for fiscal year 2004. Gross profit for the fiscal year ended January 31, 2005 was $8,447,000, a 13% improvement over $7,456,000 for the prior fiscal year. Basic earnings per share increased to $0.30, compared to $0.25 per share for the previous fiscal year, an increase of 20%. Sales for fiscal year 2005 grew to $22,163,000, a new record and a 13% improvement over $19,618,000 for fiscal year 2005. Gordon L. Ellis, Chairman of International Absorbents Inc. commented on the year, "Our focus this year has been to complete our new CareFRESH(R) manufacturing facility in Georgia and thereby take some of the pressure off of our Washington State plant which has been running 24-7 for too long now. Ongoing sales growth has been recently hampered by our overextended production capacity so completion of our Jesup, Georgia plant has been greeted with relief. Jesup is now producing all of our CareFRESH(R) Ultra(TM) and is gearing up to produce increasing volumes of regular CareFRESH(R). Even with the added load of bringing on a new production facility our excellent team has managed to keep costs down, raise cash flow significantly and increase sales and profits. With our new plant up and running we look forward to a resurgence of unrestricted growth over the coming years. Our marketing and sales groups are doing a terrific job of identifying and launching complementary product lines, demand for our products remains strong and our long term growth strategy appears to working in our favor." For the convenience of the reader, the Company's Consolidated Balance Sheet, Statement of Earnings, and Statement of Cash Flows, all without notes, have been attached. Please refer to the Company's fiscal year 2005 report on Form 10-KSB for statement details. International Absorbents Inc. develops, manufactures and markets patented and proprietary, cost effective consumer and commercial products derived from recycled, renewable materials. These environmentally safe products outperform conventional products used in a broad range of consumer and industrial applications, including retail/commercial pet bedding and litter, oil and hazardous liquid spill cleanup and control, oil/water filtration, and packaging. Further information is available at http://www.absorbent.com/. FINANCIAL HIGHLIGHTS Fiscal 2005 Fiscal 2004 Sales, net $22,163,000 $19,618,000 Net cash flow from operating activities 3,693,000 1,769,000 Net Income before taxes 2,658,000 2,220,000 Net income 1,790,000 1,435,000 Basic earnings per share 0.30 0.25 Total assets 23,477,000 15,943,000 Stockholders' equity 13,346,000 10,503,000 Weighted average shares (basic) 5,973,000 5,710,000 CONTACT: Charles (Chuck) Tait of International Absorbents Inc., 866-514-6559 or +1-604-681-6181, or . A number of the matters and subject areas discussed in this press release that are not historical or current facts deal with potential future circumstances and developments, including without limitation, statements referring to the Company's future growth strategies, prospects for the future, potential financial results, market and product line growth, abilities to enter new markets, ability to introduce new products, benefits from infrastructure improvements and the Company's competitiveness and profitability as a result of new sales and marketing programs, are forward-looking statements. The words "believe," "expect," "intend," "estimate," "assume" and "anticipate," variations of such words and similar expressions identify forward-looking statements, but their absence does not mean that a statement is not forward-looking. The discussion of such matters and subject areas is qualified by the inherent risks and uncertainties surrounding future expectations generally, and it is important to note that the Company's actual results could differ materially from those projected, due to various risk factors. Those risks include, but are not limited to contractor performance, newly installed equipment performance, weather related construction issues, consumer acceptance of the Company's products at a new location, competitor reactions and their ability to market and price their products, general economic conditions outside of the control of the Company, and the economic availability of sources of raw materials to meet demand rates necessary to sustain growth. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the Company's reports filed with the SEC, including, but not limited to, the Company's annual report on Form 10-KSB for the fiscal year ended January 31, 2004 and its quarterly filings on Form 10-QSB. This press release speaks only as of its date, and the Company disclaims any duty to update the information herein. International Absorbents Inc. and Subsidiary Consolidated Balance Sheets As at January 31, 2005 and 2004 (in thousands of U.S. dollars, except per share amounts) 2005 2004 Assets Current assets: Cash and cash equivalents $3,520 $1,453 Restricted cash 437 432 Short term investments 218 211 Accounts receivable, net 1,523 1,525 Inventories, net 1,408 1,335 Prepaid expenses 161 148 Income taxes receivable 28 271 Deferred income tax asset 40 31 Total current assets 7,335 5,406 Property, plant and equipment, net 15,846 10,348 Intangible assets, net 8 39 Other assets, net 288 150 Total assets $23,477 $15,943 Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued liabilities $1,861 $1,976 Related party payable 5 4 Current portion of long-term debt 329 142 Total current liabilities 2,195 2,122 Deferred income tax liability 673 384 Long-term debt 7,263 2,934 Total liabilities 10,131 5,440 Stockholders' equity: Common stock, no par value - 100,000,000 shares authorized, 6,251,838 and 5,773,970 issued and outstanding at 8,154 7,256 January 31, 2005 and 2004, respectively Additional paid in capital 644 489 Retained earnings 4,548 2,758 Total stockholders' equity 13,346 10,503 Total liabilities and stockholders' equity $23,477 $15,943 International Absorbents, Inc. and Subsidiary Consolidated Statements of Earnings For the years ended January 31, 2005 and 2004 (in thousands of U.S. dollars, except earnings per share amounts) 2005 2004 Sales, net $22,163 $19,618 Cost of goods sold 13,716 12,162 Gross Profit 8,447 7,456 Selling, general and administrative expenses 5,691 5,187 Income from operations 2,756 2,269 Interest expense (173) (92) Interest income 75 43 Income before provision for income taxes 2,658 2,220 Income tax provision (868) (785) Net income $1,790 $1,435 Basic earnings per share $.30 $.25 Fully diluted earnings per share $.29 $.24 Weighted average number of shares outstanding (in thousands) Basic 5,973 5,710 Diluted 6,255 5,983 International Absorbents Inc. and Subsidiary Consolidated Statement of Cash Flows For the years ended January 31, 2005 and 2004 (in thousands of U.S. dollars, except per share amounts) 2005 2004 Cash flows from operating activities Net income $1,790 $1,435 Adjustments to reconcile net income to net cash used for operating activities Depreciation and amortization 792 430 Stock-based compensation 38 10 Tax benefit from exercise of stock options 117 35 Deferred taxes 280 464 Changes in operating assets and liabilities Accounts receivable 2 (36) Inventory (73) (293) Prepaid expenses (13) 3 Accounts payable and accrued liabilities 516 20 Income taxes receivable/payable 243 (299) Due to related party 1 (1) Interest receivable from related party -- 1 Net cash flows from operating activities 3,693 1,769 Cash flows from investing activities Purchase of short-term investments (433) (420) Proceeds from short-term investments 426 416 Purchase of property, plant and equipment (7,139) (6,110) Proceeds from sale of property, plant and equipment 267 -- Purchase of other assets (156) (126) Proceeds from related party -- 25 Investment in restricted cash (4,900) (2,910) Proceeds from restricted cash 4,895 2,478 Net cash flows from investing activities (7,040) (6,647) Cash flows from financing activities Proceeds from long-term debt 6,728 3,171 Repayment of long-term debt (2,212) (95) Proceeds from exercise of stock options 848 154 Proceeds from exercise of common stock warrants 50 50 Net cash flows from financing activities 5,414 3,280 Net change in cash 2,067 (1,598) Cash and cash equivalents, beginning of period 1,453 3,051 Cash and cash equivalents, end of period $3,520 $1,453 Cash paid for interest $215 $138 Cash paid for income taxes $150 $592 Non-cash investing activities Increase in property, plant and equipment and accounts payable for purchase of plant and equipment $30 $661 DATASOURCE: International Absorbents Inc. CONTACT: Charles (Chuck) Tait of International Absorbents Inc., +1-866-514-6559 or +1-604-681-6181, or Web site: http://www.absorbent.com/

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