IAX Intl Absorbents

FERNDALE, Wash., Dec. 8 /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 third quarter and nine months ended October 31, 2006. Sales for the third quarter of fiscal year 2007 increased by 28% to a Company record for a single quarter of $8,615,000, versus $6,751,000 for the same period in fiscal year 2006. Sales for the nine months ended October 31, 2006 increased by 20% to $22,536,000, compared to $18,717,000 for same period in the prior fiscal year. Gross profit for the three months ended October 31, 2006 increased by 61% to $3,069,000, versus $1,909,000 for the comparable period in the prior fiscal year. Gross profit for the nine months ended October 31, 2006 rose by 30% to $7,282,000 compared to $5,595,000 for the comparable nine month period in the prior fiscal year. Net income for the third quarter of fiscal year 2007 decreased to $69,000. Net income for the first nine months of fiscal year 2007 increased to $473,000. "Operationally, we had a good third quarter, with gross profit exceeding $3 million," stated Gordon L. Ellis, Chairman of International Absorbents Inc. "Our after-tax profit was hit hard by the extraordinary expense related to our recent loss of a long standing legal suit (see previous news release "Arbitrator Issues Decision in International Absorbents vs. R. Wilder Sales" October 16, 2006). Our Jesup production facility continues to improve its efficiency and productivity thereby contributing significantly to the return of our gross margins to higher levels. All of our facilities continue to work towards overcoming the additional burdens of increased raw material costs and utility rates and increased fuel surcharges on freight. Our sales increase for the quarter was led by strong growth from our CareFRESH(R) Ultra(TM) and CareFRESH(R) Colors products. Other contributing factors to the growth in sales were a price increase implemented in the second quarter, and strong seasonal promotional activity ahead of the holidays. These promotional activities and accelerated sales are not expected to continue as we head into what is historically our slowest quarter." 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 3 Months Ended Oct. 31, 9 Months Ended Oct. 31, 2006 2005 2006 2005 Sales, net $8,615,000 $6,751,000 $22,536,000 $18,717,000 Net income before taxes 85,000 268,000 804,000 597,000 Net income 69,000 188,000 473,000 402,000 Basic earnings per share 0.01 0.03 0.07 0.06 Weighted average shares (basic) 6,410,000 6,261,000 6,402,000 6,258,000 As at Oct. 31, As at Jan. 31, 2006 2006 Total assets $28,082,000 $24,513,000 Stockholders' equity 15,085,000 14,154,000 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, the Company's ability to control expenses and improve operating efficiencies, 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 +1-604-681-6181, or Web site: http://www.internationalabsorbents.com/

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