News Release

For Immediate Release December 10, 2002

Liquidation World Announces Annual Results

Liquidation World Inc. (LQW – TSX; LIQWF – Nasdaq) announces the results of operations for the 52 weeks ended October 6, 2002. Revenue decreased 5% to $174,520,000 from $183,400,000 during the 53 weeks ended October 7, 2001.  Revenues have been reduced from previously announced results to reflect only the net commission earned on consignment sales.  This adjustment has no effect on net earnings.  Net earnings decreased 68% to $2,205,000 ($0.26 per share) during fiscal 2002 from $6,981,000 ($0.83 per share) during the 2001 fiscal year.

During the final quarter, the thirteen weeks ended October 6, 2002, revenue decreased 12% to $42,595,000 from $48,594,000 during the fourteen weeks ended October 7, 2001. Net earnings in the fourth quarter of 2002 decreased 81% to $385,000 ($0.05 per share) compared to $1,990,000 ($0.24 per share) in the fourth quarter of 2001.

For the year, cash flow from operations increased 52% to $7.4 million from $4.9 million in the previous year including opening and stocking of 10 outlets during the year.

“Several factors conspired to weaken our financial results,” said Mr. Gillespie, Company Founder & C.E.O.  “Most lenders hoped that improvements in the economy would assist their clients with weak performance and accordingly, deferred on some tough decisions.  Also there has been a drought on natural disasters, which typically yield salvage inventory that we acquire for our outlets.  These factors resulted in reduced sales and significantly reduced earnings.  During the year, we were able to add 10 outlets and put over $5 million in the bank that will help us to leverage our performance when the direction of the economy becomes more clear.”

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. Two years ago we added reverse logistics and reprocessing capabilities to our menu of services through our investment in Product Management Canada Inc. Last year we continued to complement our service menu with the provision of store closure services to our retail clients, and this year we added turnaround consulting services that provides solutions beyond inventory issues with the acquisition of start up Clear Thinking Group, Inc.”

About Liquidation World

Liquidation World offers a uniquely diversified menu of solutions for organizations with asset recovery issues. Services include auctions, reverse logistics and processing, store closure sales management, turnaround consulting, and retail liquidations of consumer merchandise through 98 outlets across North America. Liquidation World 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 1,600 employees in outlets and offices across Canada and the United States.

For more information, please contact:

Mr. Dale Gillespie, Chief Executive Officer

Mr. Andrew Searby, C.A., Chief Financial Officer

E-mail:  investorinfo@liquidationworld.com

Website: www.liquidationworld.com

Telephone:  (403) 250 – 1222

Fax:  (403) 291 – 1306

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LIQUIDATION WORLD INC.
Consolidated Statements of Earnings and Retained Earnings
(unaudited) (In thousands of Canadian dollars, except per share amounts)
				13 Weeks Ended		14 Weeks Ended		52 Weeks Ended		53 Weeks Ended
				October 6 2002		October 7 2001		October 6 2002		October 7 2001
Revenue			$	42,545	$	48,594	$	174,520	$	183,400
Cost of sales				25,717		30,558		106,592		112,670
				16,828		18,036		67,928		70,730
Expenses
	Selling and store operations			13,112		12,819		54,224		51,372
	General and administrative			2,681		1,587		8,279		5,804
	Depreciation and amortization			381		396		1,460		1,427
	Interest			-		55		7		125
				16,174		14,857		63,970		58,728
Earnings before income taxes				654		3,179		3,958		12,002
Income taxes				269		1,190		1,753		5,021
Net earnings				385		1,989		2,205		6,981
Retained earnings, beginning of period				38,663		34,901		36,890		29,909
Excess of repurchase amount over stated				(117)		-		(164)		-
	capital of repurchased shares
Retained earnings, end of period			$	38,931	$	36,890	$	38,931	$	36,890
Earnings per share
	Basic		$	0.05	$	0.24	$	0.26	$	0.83
	Diluted		$	0.04	$	0.24	$	0.25	$	0.81
Shares outstanding at period end								8,538,756		8,485,896
Options outstanding at period end								604,830		567,590
Segmented Information
(unaudited) (In thousands of Canadian dollars, except per share amounts)
				2002		2001		2002		2001
Revenue
	Canada		$	34,493	$	37,563	$	138,644	$	140,464
	United States			8,052		11,031		35,876		42,936
	Total		$	42,545	$	48,594	$	174,520	$	183,400
Capital assets
	Canada						$	5,169	$	4,063
	United States							580		561
	Total						$	5,749	$	4,624
LIQUIDATION WORLD INC.
Consolidated Statements of Cash Flows
(unaudited) (In thousands of Canadian dollars)
				13 Weeks Ended		14 Weeks Ended		52 Weeks Ended		53 Weeks Ended
				October 6 2002		October 7 2001		October 6 2002		October 7 2001
Cash provided by (used in):
Operations
	Net earnings		$	385	$	1,989	$	2,205	$	6,981
	Add (deduct) non-cash items:
		Depreciation and amortization		381		396		1,460		1,427
		Equity in income of affiliate		3		5		(105)		(71)
				769		2,390		3,560		8,337
	Changes in non-cash operating working capital
		Accounts receivable		1,114		144		174		(329)
		Inventory		3,001		5,310		5,101		80
		Prepaid expenses		317		415		(556)		619
		Accounts payable and accrued liabilities		(1,014)		(2,785)		3,054		(3,909)
		Income taxes		(603)		(407)		(3,907)		73
				3,584		5,067		7,426		4,871
Investments
	Purchase of capital assets			(1,415)		(484)		(2,545)		(1,673)
	Business Acquisition			-		-		(104)		-
				(1,415)		(484)		(2,649)		(1,673)
Financing
	Decrease in bank indebtedness			-		(4,255)		-		(3,435)
	Proceeds on issuance of common shares			-		-		405		562
	Repurchase of common shares			(171)		-		(237)		-
				(171)		(4,255)		168		(2,873)
Increase in cash				1,998		328		4,945		325
Cash and equivalents, beginning of period				3,449		174		502		177
Cash and equivalents, end of period			$	5,447	$	502	$	5,447	$	502
Supplemental disclosure of cash paid for:
	Income taxes		$	863	$	1,175	$	5,631	$	4,609
	Interest			-		64		8		148
			$	863	$	1,239	$	5,639	$	4,757
LIQUIDATION WORLD INC.
Consolidated Balance Sheets
(In thousands of Canadian dollars)
								October 6		October 7
								2002		2001
								(unaudited)
Assets
Current assets
	Cash and equivalents						$	5,447	$	502
	Accounts receivable							1,051		1,225
	Income taxes receivable							2,998		-
	Inventory							44,677		49,778
	Prepaid expenses							1,930		1,374
								56,103		52,879
Capital assets								5,749		4,624
Investment in affiliate								587		482
Goodwill								278		-
							$	62,717	$	57,985
Liabilities and Shareholders' Equity
Current liabilities
	Accounts payable and accrued liabilities						$	7,815	$	4,721
	Income taxes payable							-		909
								7,815		5,630
Shareholders' equity
	Share capital							15,971		15,465
	Retained earnings							38,931		36,890
								54,902		52,355
							$	62,717	$	57,985

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