IAX Intl Absorbents

FERNDALE, Wash., Sept. 12 /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 second fiscal quarter ended July 31, 2007. Sales for the second quarter of fiscal year 2008 were $7,401,000, an increase of 1% as compared to $7,300,000 for the second quarter in the prior fiscal year. Sales for the first six months of fiscal year 2008 increased by 13% to $15,766,000 as compared to $13,921,000 for the same period in fiscal year 2007. Net income for the second quarter of fiscal year 2008 was $126,000, a decrease of 52% as compared to $262,000 for the same quarter in the prior fiscal year. Net income for the first six months of fiscal year 2008 increased by 85% to $749,000, as compared to $404,000 for the same period in the prior year. Gross profit for the second quarter of fiscal year 2008 was $2,036,000 as compared to $2,158,000 for the second quarter in fiscal year 2007, representing a decrease of 6%. Gross profit for the first six months of fiscal year 2008 increased by 14% to $4,803,000, as compared to $4,213,000 for the first six months of fiscal year 2007. "It has been a challenging quarter during which we successfully closed down our original manufacturing facility in Bellingham, Washington and completed the commissioning of our new plant in Ferndale, Washington" commented Gordon L. Ellis, Chairman of International Absorbents Inc. "In anticipation of this manufacturing shutdown and potential shortage of product, we decreased our promotional activity for our animal care products during the period and stockpiled product. Despite these factors, we managed modest sales growth as compared to the same quarter last year. Costs associated with the shut down and commissioning, including additional shipping and logistics, had an adverse impact on our margins for the period but these were short-term concerns, and our margins are currently back to acceptable levels. This last stage of our infrastructure build out is now behind us and we believe we are in an excellent position for growth over the coming years." 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 Jul. 31, 6 Months Ended Jul. 31, 2007 2006 2007 2006 Sales $7,401,000 $7,300,000 $15,766,000 $13,921,000 Gross profit 2,036,000 2,158,000 4,803,000 4,213,000 Net income before taxes 237,000 446,000 1,271,000 719,000 Net income 126,000 262,000 749,000 404,000 Basic earnings per share 0.02 0.04 0.12 0.06 Weighted average shares (basic) 6,410,000 6,410,000 6,410,000 6,397,000 As at Jul. 31, As at Jan. 31, 2007 2007 Total assets $28,209,000 $27,691,000 Stockholders' equity 16,251,000 15,390,000 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 and sales results, ability to improve production capabilities and efficiencies, 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, risks related to commissioning a new manufacturing plant, newly installed equipment performance, consumer acceptance of the Company's products, competitor reactions, the Company's ability to market and price its products, general economic conditions outside of the control of the Company, fuel prices, 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, 2007 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. Contact: Charles (Chuck) Tait International Absorbents Inc. Toll Free: 866-514-6559 or 604-681-6181 DATASOURCE: International Absorbents Inc. CONTACT: Charles (Chuck) Tait of International Absorbents Inc., 1-866-514-6559, or +1-604-681-6181, Web site: http://www.internationalabsorbents.com/

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