International DisplayWorks Announces Record Fiscal 2006 Third Quarter Financial Results

International DisplayWorks, Inc. (IDW) (NASDAQ:IDWK), a
manufacturer and distributor of liquid crystal displays (LCDs),
modules and assemblies, today announced financial results for the
Company's third quarter of fiscal 2006 which ended on July 31, 2006.
The earnings conference call previously scheduled for Thursday,
September 7, 2006 at 4:30 p.m. (EASTERN) has been cancelled.

   Third Quarter Highlights:

   --  Total revenues were a record $32.3 million, representing a
        37.0 percent increase over the comparable quarter of fiscal
        year 2005.

   --  Operating income was $2.0 million, representing a 53.8 percent
        increase over the comparable quarter of fiscal 2005.

   --  Net income increased 129.2 percent to $2.3 million versus last
        year, representing the 12th consecutive quarter of
        profitability.

   --  During the quarter shipments began for the Company's Tier One
        cell phone customer.

   Recent Contract Wins and other Events:

   --  IDW was awarded up to $7 million in TFT orders from CK Telecom
        Ltd, a leading Chinese handset manufacturer, with initial
        shipments beginning in the fourth quarter of 2006.

   --  On July 11, 2006, IDW announced a new contract win from a
        leading printer manufacturer with anticipated revenues of $6
        million over the next 12 months.

   --  IDW secured new contracts for two separate satellite radio
        products with anticipated revenues of $7 million for both the
        automotive and mobile MP3 markets.

   Financial Results:

   The Company reported revenues of $32.3 million for the third
quarter, which was an increase of 37.0 percent as compared to the same
period last year. The increase in net sales is primarily attributable
to the addition of new customers and increased revenues from existing
customers. Gross profit increased 34.6 percent to $5.6 million during
the third quarter with respective gross margins of 17.2 percent as
compared to 17.5 percent last year. SG&A expense during the third
quarter totaled $3.6 million and as a percentage of revenue declined
to 11.1 percent as compared to 12.1 percent during the third quarter
of fiscal 2005. Operating income experienced a 53.8 percent increase
to $2.0 million as compared to $1.3 million last year. As a result of
strong revenue growth and a conscious decision to control expenses
operating income showed an improvement to 6.1 percent from 5.4 percent
for the year ago period. Net income for the period increased 129.2
percent to $2.3 million up from $1.0 million during the third quarter
of 2005 despite the inclusion of income tax expense and the
aforementioned stock option expense during the quarter. Earnings per
share for the third quarter were $0.05 which increased from $0.03 in
the prior year period. Fully diluted shares utilized to calculate
earnings per share during the third quarter totaled 45.0 million or a
37.5 percent increase versus last year primarily as a result of the
Company's February 2006 stock offering.
   Commenting on the Company's financial results Joe Bedewi, the
Company's Chief Financial Officer, stated, "During the third quarter
we further executed on our strategy to win new contracts, expand our
pace of business and capture the inherent operating synergies
associated with a higher overall base of revenue. We will look to
continue to control our costs and improve our overall level of
profitability."
   For the nine-month period, revenues were $83.1 million, which
increased 29.2 percent as compared to the prior year period. Gross
profit increased 18.0 percent to $14.0 million primarily driven by
strong growth in overall revenue. Operating income for the period
totaled $3.7 million or a 6.0 percent decrease as compared to last
year. Net income for the nine-month period increased 40.5 percent to
$4.9 million with the increase a result of higher overall revenues,
other income and a fiscal 2006 first quarter tax benefit offsetting
lower overall comparable gross and operating margins.
   The Company completed the third quarter with $8.1 million in cash
and cash equivalents, down slightly from the $8.9 million at the end
of fiscal 2005. Including trading securities the Company's total
assets were $132.5 million. Shareholder's equity at the end of the
third quarter was $108.3 million, a 206.5 percent increase as compared
to $35.4 million at the end of fiscal 2005.

   About International DisplayWorks

   International DisplayWorks, Inc. is a manufacturer and designer of
high quality liquid crystal displays, modules and assemblies for a
variety of customer needs including OEM applications. IDW operates
466,000 square feet of manufacturing facilities in the People's
Republic of China (PRC). Sales offices are located in US, Europe, Hong
Kong, Singapore, and China. Copies of IDW's 10-K and other documents
as filed with the SEC are available through a link on our web site:
www.idwk.com.

   NOTE: The foregoing is news relating to International
DisplayWorks, Inc. ("IDW") and contains forward-looking statements,
which are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. The forward-looking
statements involve risks and uncertainties that could cause actual
results to differ materially from the forward-looking statements. When
used in this release, the words "anticipate," "believe," "estimate,"
"expect" and similar expressions as they relate to IDW or its
management, including without limitation, IDW and its subsidiaries,
are intended to identify such forward-looking statements. IDW's actual
results, performance or achievements could differ materially from the
results expressed in, or implied by these forward-looking statements.
For more detailed information the reader is referred to IDW's 10-K and
other related documents filed with the Securities and Exchange
Commission. This does not constitute an offer to buy or sell
securities by the Company and is meant purely for informational
purposes.
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           INTERNATIONAL DISPLAYWORKS, INC. AND SUBSIDIARIES
                      CONSOLIDATED BALANCE SHEETS
                            (in thousands)


                      ASSETS                      July 31, October 31,
                      ------                       2006       2005
                                                 Unaudited  Audited   
                                                 --------- -----------
Current assets:
  Cash and cash equivalents
    Cash and cash equivalents                    $  8,081  $    8,875
    Cash in banks - restricted deposits                 -         383
                                                 --------- -----------
      Total cash and cash equivalents               8,081       9,258
  Trading Securities, at market                    46,645           -
  Accounts receivable,
     net of allowance for doubtful accounts of
      $125 and $36                                 30,893      21,776
  Inventories, net of allowance of $293 and $229   14,409       8,516
  Prepaid expense and other current assets          3,140       1,939
                                                 --------- -----------
    Total current assets                          103,168      41,489
                                                 --------- -----------
Other assets
  Deferred tax asset                                1,218         262

Property, plant and equipment at cost, net         28,087      27,031
                                                 --------- -----------
    Total assets                                 $132,473  $   68,782
                                                 ========= ===========
     LIABILITIES AND SHAREHOLDERS' EQUITY
     ------------------------------------
Current liabilities:
  Accounts payable                               $ 15,389  $   13,928
  Accrued liabilities                               4,175       3,835
  Income taxes payable                                555         163
  Line of credit                                        -      12,953
  Current portion of long term debt                 2,506       2,545
                                                 --------- -----------
    Total current liabilities                      22,625      33,424

Long-term debt, net of current portion              1,501           5
                                                 --------- -----------
    Total liabilities                              24,126      33,429
                                                 --------- -----------

Commitments and contingencies

Shareholders' equity
  Preferred stock, par $0.001, 10,000,000 shares
   authorized, none issued                              -           -
  Common stock, par $0.001, 100,000,000 shares
   authorized 44,719,829 and 31,971,629 shares
   issued and outstanding at July 31, 2006 and
   October 31, 2005 respectively                       45          32
  Additional paid in capital                      135,164      67,424
  Accumulated deficit                             (27,934)    (32,812)
  Cumulative translation adjustment                 1,072         709
                                                 --------- -----------
    Total shareholders' equity                    108,347      35,353
                                                 --------- -----------
    Total liabilities and shareholders' equity   $132,473  $   68,782
                                                 ========= ===========

              The accompanying notes are an integral part
                     of these financial statements



           INTERNATIONAL DISPLAYWORKS, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF OPERATIONS
            (in thousands, except Share and per share data)

                        For Nine Months       For Three Months Ended
                  ----------------------------------------------------
                     July 31,     July 31,     July 31,     July 31,
                      2006         2005          2006         2005
                    Unaudited    Unaudited    Unaudited    Unaudited
                  ----------------------------------------------------

  Net sales       $     83,103  $    64,323  $    32,340  $    23,600
Cost of goods
 sold                   69,063  $    52,423       26,771  $    19,463
                  ----------------------------------------------------
  Gross profit          14,040       11,900        5,569        4,137
                  ----------------------------------------------------

Operating
 expenses:
  General and
   administrative        7,408        5,532        2,592        1,837
  Selling,
   marketing and
   customer
   service               2,112        1,918          757          745
  Engineering,
   advanced
   design and
   product
   management              827          525          248          273
                  ----------------------------------------------------
     Total
      operating
      expenses          10,347        7,975        3,597        2,855
                  ----------------------------------------------------

     Operating
      income             3,693        3,925        1,972        1,282
                  ----------------------------------------------------

Other income
 (expense):
  Interest
   expense                (309)        (426)         (54)        (248)
  Investment
   income, net           1,017            -          618            -
  Other income              39          (27)          18          (50)
                  ----------------------------------------------------
     Total other
      income
      (expense)            747         (453)         582         (298)
                  ----------------------------------------------------


     Income before
      taxes              4,440        3,472        2,554          984
                  ----------------------------------------------------

     Provision for
      income
      taxes               (438)           -          299            -
                  ----------------------------------------------------

     Net income   $      4,878  $     3,472  $     2,255  $       984
                  ====================================================


Basic and diluted
 income per
 common share
  Basic           $       0.13  $      0.11  $      0.05  $      0.03
                  ====================================================

  Diluted         $       0.13  $      0.11  $      0.05  $      0.03
                  ====================================================

Weighted average              
 common shares
 outstanding
  Basic             37,873,056   31,282,781   44,699,621   31,701,456
                  ====================================================

  Diluted           38,206,490   32,326,370   45,033,055   32,745,045
                  ====================================================

              The accompanying notes are an integral part
                     of these financial statements
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