Liquidation World: Liquidation World Earnings Increase 48% in the Second Quarter

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Liquidation World Earnings Increase 48% in the Second Quarter
May 9, 2001 – Calgary, Alberta

Liquidation World Inc. (LQW - TSE; LIQWF - Nasdaq) is pleased to announce the results of operations for the thirteen weeks ended April 1, 2001. Sales increased 16% to $44,993,000 from $38,770,000 during the corresponding period in 2000. Net earnings increased 48% to $1,534,000 ($0.18 per share) during the second quarter of fiscal 2001 from $1,035,000 ($0.13 per share) during the corresponding period in fiscal 2000.

The quarter marks the highest ever sales and profit for the second quarter and the 58^th consecutive quarter of profitability (all quarters since inception).

On a cumulative basis, sales increased 13% to $93,898,000 during the twenty-six weeks ended April 1, 2001 from $83,316,000 during the period ended April 2, 2000. Net earnings increased 33% to $3,818,000 ($0.45 per share) during the first half of fiscal 2001 from $2,869,000 ($0.35 per share) during the first half of fiscal 2000. Additional details are provided in the financial statements below.

"In turbulent times, we see more opportunities to acquire inventories," said Dale Gillespie, President, CEO & Founder of Liquidation World. "We expect to see more opportunities in all facets of our business as the economic slow-down continues."

Liquidation World is a retail liquidator of consumer merchandise through 86 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 1600 employees in outlets across Canada and the U.S.

Liquidation World Inc.
Consolidated Balance Sheets
As at April 1, 2001 and October 1, 2000
(In thousands of dollars)
				2001		2000
				(unaudited)
ASSETS
Current assets
	Cash and equivalents		$	256	$	177
	Accounts receivable			2,542		896
	Inventory			52,384		49,858
	Prepaid expenses			836		1,993
				56,018		52,924
Capital assets				4,237		4,378
Investment in affiliate				459		411
			$	60,714	$	57,713

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
	Bank indebtedness		$	-	$	3,435
	Accounts payable and accrued liabilities			9,911		8,630
	Income taxes payable			1,646		836
				11,557		12,901
Shareholders' equity
	Share capital			15,430		14,903
	Retained earnings			33,727		29,909
				49,157		44,812
			$	60,714	$	57,713

Consolidated Statements of Earnings and Retained Earnings
For the 26 weeks ended April 1, 2001 and April 2, 2000 (unaudited)
(In thousands of dollars, except per share amounts)
				2001		2000
Sales			$	93,898	$	83,316
Cost of sales				57,269		51,514
				36,629		31,802
Expenses
	Selling and store operations			26,260		23,427
	General and administrative			2,837		2,464
	Depreciation and amortization			687		597
	Interest			42		157
				29,826		26,645
Earnings before income taxes				6,803		5,157
Income taxes				2,985		2,288
Net earnings				3,818		2,869
Retained earnings, beginning of period				29,909		23,611
Retained earnings, end of period			$	33,727	$	26,480
Earnings per share - Basic			$	0.45	$	0.35
	Fully diluted		$	0.43	$	0.33


Consolidated Statements of Cash Flows
For the 26 weeks ended April 1, 2001 and April 2, 2000 (unaudited)
(In thousands of dollars)
				2001		2000
Cash provided by (used in):
Operations
	Net earnings		$	3,818	$	2,869
	Add (deduct) non-cash items:
		Depreciation and amortization		687		597
		Equity in loss (income) of affiliate		(48)		5
				4,457		3,471
	Changes in non-cash operating working capital
		Accounts receivable		(1,646)		(112)
		Inventory		(2,526)		(2,824)
		Prepaid expenses		1,157		521
		Accounts payable and accrued liabilities		1,281		2,466
		Income taxes		810		145
				3,533		3,667
Investments
	Purchase of capital assets			(546)		(681)
	Investment in affiliate			-		(455)
				(546)		(1,136)
Financing
	Increase (decrease) in bank indebtedness			(3,435)		(2,599)
	Proceeds on issuance of common shares			527		87
				(2,908)		(2,512)
Increase (decrease) in cash				79		19
Cash and equivalents, beginning of period				177		152
Cash and equivalents, end of period			$	256	$	171

– 30 –

For more information, please contact:
Mr. Dale Gillespie, President & C.E.O.
Mr. Andrew Searby, CA, Chief Financial Officer
E-mail: investorinfo@liquidationworld.com
Website: www.liquidationworld.com
Telephone: (403) 250-1222
Fax: (403) 291-1306

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