Portland, Oregon – Schmitt Industries completed the fiscal quarter ended February 29, 2004 with net income of $1,054 or $.00 per share compared to a net loss of ($1,714,551) or ($0.69) per share for the fiscal quarter ended February 28, 2003. This reduces the loss for the nine-months ended February 29, 2004 to ($19,365) or ($.01) per share compared to a net loss of ($1,626,787) or ($.66) per share for the nine months ended February 28, 2003. The results for the prior year fiscal periods include adjustments in the amount of $1,598,057 (as described in the Company’s press release dated April 10, 2003) that were made to reflect the impact of economic conditions at that time on the financial condition of the Company. When those adjustments are excluded from the above results, the net loss for the quarter ended February 28, 2003 would have been ($92,494) or $(.04) per share and for the nine months ended February 28, 2003 the net loss would have been ($4,730) or $(.00) per share.

Sales increased to $1,772,556 for the quarter ended February 29, 2004 compared to $1,621,763 in same period last year. Gross profits, as a percentage of sales, for the three months ended February 29, 2004 were 55%, equal to the same quarter in the prior fiscal year (when inventory adjustments included in the total adjustments reported in the April 10, 2003 press release are excluded). Operating expenses for the quarter ended February 29, 2004 were $1,009,870 compared to $1,066,825 for the same quarter in the prior fiscal year.

For the nine-months ended February 29, 2004, sales were $5,156,491 compared to $5,417,406 in same period last year. Gross profits, as a percentage of sales, for the nine-months ended February 29, 2004 were 54% compared to 58% in the same period in the prior fiscal year (when inventory adjustments included in the total adjustments reported in the April 10, 2003 press release are excluded). Operating expenses for the nine-months ended February 29, 2004 were $2,935,738 compared to $3,293,960 for the same period in the prior fiscal year.

Wayne Case, President and CEO of Schmitt Industries said: “We continue to see increasing sales of our Balancer segment products to the growing market in China with strong orders expected to continue over the next several months. While sales of Balancer segment products in North America declined from the second fiscal quarter of the current year, they were virtually equal to those of the first fiscal quarter in the current year. Despite that decline from the current year second fiscal quarter, we continue to see increased quoting activity to our customer base in that geographic market. Demand for Balancer products in Europe remains soft, reflecting continued soft economies in that geographic market.

In the Measurement Segment, the development of our sales network for the Acuity product line over the past few months is producing increasing customer inquiries, sales quote activity and increasing sales. We continue to quote sales of our surface measurement products to our customer base with shipments of four systems scheduled in the fourth fiscal quarter of the current year. Operating expenses are within projections and continue to be below year ago levels despite higher sales. We believe the Company will close fiscal 2004 with stronger sales and a stronger profit level.”

The information contained in this release contains certain forward-looking statements that anticipate future trends or events. These statements are based on certain assumptions that may prove to be erroneous and are subject to certain risks including but not limited to the uncertainties of the Company’s new product introductions, the risks of increased competition and technological change in the Company’s industry and other factors detailed in the Company’s SEC filings. Accordingly, actual results may differ, possibly materially, from the predictions contained herein.