Liquidation World Inc. (LQW – TSE; LIQWF – Nasdaq) announces the results of operations for the 53 weeks ended October 7, 2001. Sales increased 13% to $185,459,000 from $164,814,000 during the 52 weeks ended October 1, 2000. Net earnings increased 11% to $6,981,000 ($0.83 per share) during fiscal 2001 from $6,298,000 ($0.76 per share) during the 2000 fiscal year.

During the final quarter, the fourteen weeks ended October 7, 2001, sales increased to $49,226,000 up 18% over $41,884,000 during the thirteen weeks ended October 1, 2000. Net earnings in the fourth quarter of 2001 decreased 17% to $1,990,000 ($0.24 per share) compared to $2,409,000 ($0.29 per share) in the fourth quarter of 2000.

"The decline in net earnings in the fourth quarter is attributable to lower gross margins as a result of aggressive inventory management," said Company President, C.E.O. and founder Dale Gillespie. "It became apparent to us earlier this year that the retail environment was softening, and that as the year wore on, retailers would be under significant pressure to discount inventories in an effort to maintain revenues. These deflationary conditions are very evident now, and our focus on cash flow has put us in an enviable position to take advantage of the abundant surplus opportunities that we foresee in calendar 2002."

For the year, free cash flow increased 229% to $4.9 million from $1.5 million in the previous year. Accounts payable were reduced by 45% or $3.9 million. The improvements in cash flow permitted the Company to eliminate its already low outstanding bank indebtedness.

Mr. Gillespie added "the Company continues to strive for its goal of being the most complete solution provider in North America for companies with problem inventories. Last year we added reverse logistics and reprocessing capabilities to our menu of services through our investment in Product Management Canada Inc. This year we continued to complement our service menu with the provision of store closure services to our retail clients, through our wholly owned subsidiary Liquidation World Enterprises Inc."

Liquidation World is a liquidator of consumer merchandise through 93 outlets across North America. The Company conducts Auctions of a diverse range of merchandise and equipment in the Calgary and Edmonton, Alberta markets and through on-site auctions across North America. Liquidation World solves inventory problems, in a professional manner, for banks, receivers, insurance companies, manufacturers and other organizations, and is committed to providing its customers with outstanding value over a broad range of merchandise. Liquidation World opened its first outlet in 1986 and is now the largest liquidator in Canada, with more than 1,600 employees in outlets across Canada and the U.S.