IAX Intl Absorbents

FERNDALE, Wash., Oct. 16 /PRNewswire-FirstCall/ -- International Absorbents Inc. (AMEX:IAX), a leading developer and producer of environmentally-friendly pet care and industrial products, today announced that on October 10, 2006 the Company was notified that the American Arbitration Association (the "Arbitrator") had issued a decision in the arbitration between R. Wilder Sales, R&D Midwest Pet Supply (the "Claimants") and the Company. As previously disclosed in the Company's filings with the Securities and Exchange Commission, the arbitration demand was filed against the Company's wholly owned subsidiary, Absorption Corp. ("Absorption"), on February 23, 2004. At that time, the Claimants were seeking damages in the amount of approximately $1,000,000. This arbitration demand related to a lawsuit that was filed on June 22, 1995 in the Boone Circuit Court of the Commonwealth of Kentucky against Absorption. The lawsuit was captioned Wilder et.al. v. Absorption Corp., Civil Action No. 95-CI-547, and alleged breach of contract, fraud, violation of the Kentucky Unfair Trade Practices Act and other related claims. The Arbitrator ruled in favor of the Claimants and ordered the Company to pay to the Claimants an aggregate amount totaling $1,186,435 for damages and recovery of attorney fees and expenses as well as the administrative fees, compensation and expenses of the Arbitrator. The Company is currently evaluating whether to appeal the award. If the Company elects not to appeal or if the appeal is unsuccessful, then the award and fees must be paid on or before November 9, 2006. The statements in this report regarding future aspects relating to the award, any appeal and other statements which are not historical facts are forward-looking statements that involve risks and uncertainties, including, but not limited to, arbitration and judicial rules and proceedings, the Company's cash position, and other financial conditions, that may cause actual future experience and results to differ materially from the statements made. 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/. Contact: Charles (Chuck) Tait International Absorbents Inc. Toll-free: 1-866-514-6559 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, the Company's ability to control expenses, 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-K for the fiscal year ended January 31, 2006 and its quarterly filings on Form 10-Q. 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 Web site: http://www.absorbent.com/

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