International Absorbents Announces Financial Results For Fiscal Year 2010

FERNDALE, Wash., April 29 /PRNewswire-FirstCall/ -- International Absorbents Inc. (NYSE 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, 2010.

Net income for fiscal year 2010 was $1,450,000, or $0.23 per basic share, versus $2,239,000, or $0.35 per basic share, for fiscal year 2009.

Sales were $34,575,000 compared to $35,752,000 for fiscal year 2009.

Gross profit for fiscal year 2010 was $12,020,000 compared to $11,482,000 for fiscal year 2009.

Gordon L. Ellis, Chairman of International Absorbents Inc. commented on the Company's financial results, "2009 was a challenging year for many companies, including International Absorbents. Although year-over-year sales decreased at one point by almost six percent, by the start of our fourth fiscal quarter our sales had begun to recover such that they were only down three percent as compared to prior year by fiscal year-end. While sales were down, our gross profit for the year was up 4.7 percent due to improved efficiencies and cost cutting.  Net profit was down largely due to expenses related to the potential sale of the Company. Without the transaction-related costs, net profit would have been slightly better than the previous year.

The Company took advantage of the slower sales period to improve productivity, develop a number of new products and establish stronger relationships in both new geographic areas and new markets. As a result, we believe we have started this year as a better company in many respects, including a much improved employee safety record, better quality control, a broader range of products and a wider customer base."

As more fully described in our definitive proxy statement filed with the Securities and Exchange Commission (the "SEC") on April 16, 2010 (the "Proxy Statement"), on December 14, 2009, we entered into an Arrangement Agreement (the "Arrangement Agreement") with IAX Acquisition Corporation, a Delaware corporation ("Parent"), and IAX Canada Acquisition Company Inc., a corporation incorporated under the laws of the Province of British Columbia ("Canada Sub") and a wholly-owned subsidiary of Parent. The Arrangement Agreement provides that, upon the terms and subject to the conditions set forth in the Arrangement Agreement, Parent, through its wholly-owned subsidiary, will acquire all of the outstanding common shares of International Absorbents for $4.75 per common share in cash, with International Absorbents continuing as the surviving corporation (the "Arrangement"). As a result of the Arrangement, International Absorbents will become a wholly-owned subsidiary of Parent. The consummation of the Arrangement is subject to various closing conditions, including obtaining the approval of the Arrangement by our shareholders and the Supreme Court of British Columbia.  

Additional Information and Where to Find It

This press release may be deemed to be solicitation material in respect of the proposed Arrangement.  The Proxy Statement contains important information about the Arrangement and related matters.  INVESTORS AND SHAREHOLDERS ARE URGED TO READ THE PROXY STATEMENT CAREFULLY.  Investors and shareholders are able to obtain free copies of the Proxy Statement and other documents filed with the SEC by us through the web site maintained by the SEC at www.sec.gov.  In addition, investors and shareholders may obtain free copies of the Proxy Statement and other documents filed with the SEC from us by contacting David Thompson, Corporate Secretary, by telephone at (604)681-6181, or by mail at International Absorbents Inc., Investor Relations, 1569 Dempsey Road, North Vancouver, British Columbia V7K 1S8 Canada.

We and our directors and executive officers may be deemed to be participants in the solicitation of proxies from our shareholders in connection with the Arrangement.  Information regarding the interests of these directors and executive officers in the Arrangement is included in the Proxy Statement described above.  Additional information regarding these directors and executive officers is also included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2010, which was filed with the SEC on April 29, 2010.  This document is available free of charge at the SEC's web site at www.sec.gov, and from us by contacting David Thompson, Corporate Secretary, by telephone at (604) 681-6181, or by mail at International Absorbents Inc., Investor Relations, 1569 Dempsey Road, North Vancouver, British Columbia V7K 1S8 Canada, or by going to our SEC Filings page on our corporate web site at www.internationalabsorbents.com.

About International Absorbents

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 www.internationalabsorbents.com.

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 impact on the Company of the current economic uncertainties; the Company's ability to reduce costs, increase efficiencies, improve safety and quality control, enter into new markets, establish stronger relationships, introduce new products, expand its customer base, gain market share, improve profitability and execute on its future growth strategies; potential financial results; the capacity of the Company's manufacturing facilities; forecasted benefits from infrastructure improvements; the Company's competitiveness and profitability as a result of new sales and marketing programs; and the Company's ability to consummate the proposed Arrangement, 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, the effect on the Company of the ongoing global economic downturn, any potential decrease or change in consumer spending, the potential impact on the Company of any increases in energy and transportation costs; the performance of the Company's manufacturing facilities, competitor reactions and their ability to market and price their products, the availability of sources of raw materials to meet demand rates necessary to sustain growth, and the risk that the Arrangement does not close or that the closing is delayed.  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, 2010 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.

SOURCE International Absorbents Inc.