IAX Intl Absorbents

International Absorbents Announces Financial Three Month Results FERNDALE, Wash., Jun. 10 /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 first quarter of fiscal year 2006 ended April 30, 2005. Sales for the first quarter of fiscal year 2006 were $5,892,000, a 7% increase compared to $5,501,000 for the same period in the prior fiscal year. Net income for the first quarter of fiscal year 2006 decreased by 71% to $166,000, versus $602,000 for the same period in the prior fiscal year. Gross profit was $1,959,000, compared to $2,345,000 for the comparable three months last year, a decrease of 16%. Gordon L. Ellis, Chairman of International Absorbents Inc. commented on the first quarter, "Our financial results for the quarter were at the lower end of what was anticipated based on two significant factors. First, we experienced an extended period of start up challenges at our new Jesup facility. Second, we incurred promotional and marketing expense in excess of our budget. Jesup is now operating closer to expectations and we do not expect the increased promotional expenses to continue in the future. Increased utility rates, depreciation, fuel surcharges and costs related to heightened regulatory requirements have also been additional factors contributing to the lower-than-prior results. "As production increases at our Jesup facility, we expect to see increasing benefit from the design efficiencies of this new plant and from reduced shipping costs due to the new plant's proximity to primary markets. "During the quarter we continued to execute on components of our business plan including investments in capital infrastructure, sales and marketing programs, and cost management controls. We believe that implementation of the key components of our business plan will provide us with the infrastructure necessary to support our ongoing growth. Preparations are being completed for the launch of new product lines, which we anticipate will help extend and accelerate that growth." 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 3 Months Ended Apr. 30 2005 2004 Sales, net $5,892,000 $5,501,000 Net income before taxes 226,000 947,000 Net income 166,000 602,000 Basic earnings per share 0.03 0.10 Weighted average shares (basic) 6,254,000 5,802,000 As at Apr. 30 As at Jan. 31 2005 2005 Total assets $23,764,000 $23,477,000 Stockholders' equity 13,527,000 13,346,000 Contact: Charles (Chuck) Tait International Absorbents Inc. Toll Free: 866-514-6559 or 604-681-6181 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 delays related to commissioning a new manufacturing plant, contractor performance, newly installed equipment performance, 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, 2005 and its quarterly filings on Form 10-Q and 10-QSB. This press release speaks only as of its date, and the Company disclaims any duty to update the information herein. 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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