Portland, Oregon – Schmitt Industries completed the fiscal quarter ended August 31, 2004 with net income of $280,055 or $.10 per fully diluted share compared to a net loss of $66,997 or $.03 per share for the fiscal quarter ended August 31, 2003. Sales increased to $2,428,729 for the quarter ended August 31, 2004 compared to $1,648,201 in same period last year, a 47% increase. Gross profits, as a percentage of sales, for this first fiscal quarter were 56% compared to 54% in the same quarter in the prior fiscal year. Operating expenses for the quarter ended August 31, 2004 were $1,080,459 compared to $972,264 for the same quarter in the prior fiscal year.

Wayne Case, President and CEO of Schmitt Industries said: “We are pleased to see the growth in our sales volume in the most recent fiscal quarter when compared to the same quarter in the prior fiscal year. We experienced sales increases in both the Balancer and Measurement segments. The higher Balancer segment sales are attributed to increasing sales in the North American market, historically our largest and oldest market. That growth is attributed to the continued strong demand in that geographic marketplace resulting from economic conditions that continue to improve.

Measurement sales increased for both our surface measurement and dimensional sizing product lines in the three months ended August 31, 2004 when compared to the same period in the prior fiscal year. The increases in sales of surface measurement products is attributed to greater unit sales resulting from improving economic conditions in the target markets for these products while growth in dimensional sizing product sales results from a customer base that continues to expand due to the continued efforts of our sales force.

The economic conditions in our target markets have been improving over the past six months and we believe these improved conditions can continue in the coming months as we are seeing sustained demand for our products. However, there can be no assurance those conditions will continue into the future and if so for how long.”

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.