Significant improvement from year ago period reflect an important milestone in continuing turnaround.

Liquidation World Inc. (LQW – TSX) today announces the results of operations for the thirteen weeks ended October 2, 2005. Revenue increased by 3.6% to $46,813,000 from $45,199,000 while earnings increased 188% in Q4 2004 to $418,000 ($0.05 per share) during the fourth quarter of the year from a loss of $476,000 ($0.06 per share)

"We’re pleased with the progress we have made in our business during the fourth quarter of the year. Our results reflect the appropriateness of our strategy and a deliberate effort to increase the pace of improvements at Liquidation World", said Jonathan Hill, President & CEO. "While we continue to implement our agenda, we are beginning to see the results of a more focused merchandising group. We have delivered new and exciting merchandise for our customers with a great value proposition and stronger margins than we have experienced for some time. In addition, we continue to be more disciplined in addressing aged and other non-performing inventory in order to meet and exceed our customer’s expectations while carefully managing our largest asset. We have also made progress in more effectively managing the costs of our business. This was also within the context of a high level of activity in the field during the quarter associated with the implementation of our merchandise management system and new point of sale terminals in each of our stores".

For the year, revenue of $184,151,000 during the 52 weeks ended October 2, 2005 is consistent with $184,418,000 in fiscal 2004. Net earnings decreased by 381% to a loss of $6,454,000 ($0.77 per share) from $2,293,000 ($0.27 per share) in 2004.

"The year was a difficult one financially, marking our first ever annual loss", said Andrew Searby, CFO. "However, we closed the year with a marked improvement in the fourth quarter, with much work completed on installing a merchandise management system that will better support the business and a very strong balance sheet from which we can build."

Additional details are provided in the financial statements below.

Jonathan Hill said; "Obviously this has been a year of great challenge and transition. While I take responsibility for our financial results, we believe we have taken steps to implement an effective strategy that will support our business in the long term. Some changes are painful but we believe they are necessary. During 2005 we accomplished the following:

1. We improved our leadership structure, personnel line up and strengthened the independence of our Board of Directors.
   During the course of the year we elected our first independent non-executive Chairman. In mid February our shared leadership structure was dissolved in favour of a traditional sole CEO that clarifies vision and strategy and promotes greater accountability. In addition to other personnel changes, Darren Gillespie was appointed to the position of President, Liquidation World U.S.A. and relocated to this market to dedicate his attention to this important part of our business.
2. We substantially completed the implementation of a new merchandise management system (MMS) ahead of schedule and under budget.
   While much work remains to complete the implementation and change further processes most of the infrastructure has been put in place. This system will allow us to better manage our largest asset. A greater understanding of local market performance will improve inventory allocations and identify under-performing inventory more quickly. Our buyers will be more effective in understanding past performance and negotiating future deals. Our ability to scan at store level in the future will allow for better inventory control, and a greater emphasis on customer service and store maintenance among other things.
3. We began the process of more clearly organizing our buying team to achieve more focus and leverage the information that will be available to us from the MMS. This new structure reflects our commitment to developing excellence within product categories and better understanding competitive environments and new opportunities within each one. As well, a dedicated business development team is responsible for the increasing opportunities available to us from non-traditional merchandise sources such as bankruptcies and insurance claims. This is now supported by our Deal Hunter Tip Line which offers rewards for leads resulting in a successful transaction.
4. We adopted a more disciplined policy with respect to aged and non-performing inventory. While this resulted in a write down of more than $3.2 million dollars during the year this is an important change for the current size of our business. This policy encourages discipline in our purchasing and inventory management and most importantly better answers our customers’ most frequent question: "What’s new?".
5. We completed the renovation or improvement of 6 of our existing stores and opened 6 new locations that reflect our commitment to improving the shopping experience of our customers. These improvements provide a brighter environment with a greater merchandise assortment through more efficient fixtures. Additional signage reinforces a positive brand message.
6. We implemented our employee "Win-Win" program to more effectively manage the costs in our business and share the results of these efforts.
   In the last quarter of the year more than two thirds of employees with leadership positions in our company voluntarily reduced their base salaries in return for stock option grants. This sends a clear message about their own confidence in the future of the company and results in cost savings. As well, we will return 10% of all costs savings achieved in 2006 to every employee outside of this group who is employed with us at year end providing an incentive and benefit for these efforts.

Our financial results for the year do not reflect the effort, enthusiasm and commitment of the nearly 1,800 members of the Liquidation World team who know our plans for the future are exciting and effective."

Liquidation World has scheduled a conference call to begin promptly at 11:00 a.m. Calgary time.

Monday, December 12, 2005 at 11:00 a.m. MST (1:00 p.m. EST)
Conference call dial in number is 1-877-888-3855, or 416-695-6622

A replay of the conference call will be accessible on Liquidation World’s website within twenty-four hours at www.liquidationworld.com by selecting "Company/Investor Info", "News Archives", and "Annual Conference Call".

About Liquidation World

Liquidation World liquidates consumer merchandise through 106 outlets across North America, and also provides store-closure sales management. The company solves asset recovery problems in a professional manner for the financial services industry, insurance companies, manufacturers and other organizations. Liquidation World opened its first retail outlet in 1986 and is now the largest liquidator in Canada, with more than 1,800 employees in outlets and offices across Canada and the United States.

For more information, please contact:

Jonathan Hill, President and CEO
416-587-0688 phone
866-237-3778 fax
jonathanh@liquidationworld.com

Andrew Searby, CA, Executive VP, and CFO
403-250-1222 phone
403-291-1306 fax
investorinfo@liquidationworld.com