IAX Intl Absorbents

FERNDALE, Wash., April 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 fiscal year ended January 31, 2006. Sales increased 15% to $25,436,000 for fiscal year 2006 versus $22,163,000 for fiscal year 2005. Net income for fiscal year 2006 was $655,000 compared to $1,790,000 for fiscal year 2005, representing a decrease of 63%. Gross profit for the fiscal year was $7,648,000 compared to $8,447,000 for the previous fiscal year, a 9% decrease. "Fiscal 2006 was a year of both successes and challenges for the Company," stated Gordon L. Ellis, Chairman of International Absorbents Inc. "We managed to increase our top-line sales at the high end of projected growth while struggling with the bottom-line net income due to a range of factors. While we successfully launched new products and brought our new Georgia facility on- line, we were also challenged by rising raw materials costs, extended commissioning expenses at our new facility in Georgia and significant increases in fuel and energy costs. Going forward, the Company will remain focused on continuing to implement changes and counter measures to help improve profit margins. For example, we are currently installing a new state-of-the-art cost control and financial management software system (ERP) which we believe will assist in controlling costs. In addition, we are directly addressing the cost increases with steps such as an alternative energy system at our Jesup, Georgia facility that is now coming on-line. This system will allow us to side step detrimental rises in gas prices and is expected to soon produce significant energy cost reductions at the Jesup facility. Similar changes are planned for our other facilities. Overall we believe we have made good progress over the year in sales of new products and in new market channels, we have expanded our infrastructure to support growth over the coming years and we have reacted to changes in the manufacturing environment by making changes in our systems that will make us more cost effective and competitive. We look forward to the future." 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.internationalabsorbents.com/. FINANCIAL HIGHLIGHTS Year Ended Jan. 31, 2006 2006 2005 Sales, net $25,436,000 $22,163,000 Gross profit 7,648,000 8,447,000 Net income before taxes 940,000 2,658,000 Net income 655,000 1,790,000 Basic earnings per share 0.10 0.30 Weighted average shares (basic) 6,263,000 5,973,000 Total assets $24,513,000 $23,477,000 Stockholders' equity 14,154,000 13,346,000 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. Contact: Charles (Chuck) Tait of International Absorbents Inc., toll free, 866-514-6559, or +1-604-681-6181, or . DATASOURCE: International Absorbents Inc. CONTACT: Charles (Chuck) Tait of International Absorbents Inc., toll free, 866-514-6559, or +1-604-681-6181, or Web site: http://www.absorbent.com/ Web site: http://www.internationalabsorbents.com/

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