Schmitt Industries Forecasts Weak Markets For Measurement Products

Business Wire, March 6, 1998

PORTLAND, Ore.--(BUSINESS WIRE)--March 6, 1998--Schmitt Industries, Inc., (NASDAQ: SMIT) today reviewed its expectations for th third and fourth quarters of fiscal year 1998 and business outlook for 1999.

Wayne A. Case, Chairman and CEO of Schmitt, stated, "Schmitt's Measurement growth outlook is tied to the semiconductor and data storage industries which comprise our core Measurement customer base. Our major data storage customers have pre-announced revenue and earnings shortfalls due to over-capacity, product mix issues and falling hard drive prices, due in part to uncertainty over the Asian markets and other factors. We believe that underlying PC unit demand and growth remain positive with a long-term upward trend." Our exclusive distributor into these measurement markets, Veeco Instruments (NASDAQ: VECO), has rescheduled product delivery to later periods in 1998.

Case continued, "Based upon this weakness at the customer level, we are experiencing the rescheduling of delivery of equipment from the third quarter to the fourth quarter and into the next fiscal year. The effect of these recent events will cause shipments to be below our previous expectations for the third and fourth quarters of fiscal year 1998, ending 5/31/98. We currently expect our earnings to be below the analysts' consensus estimates. Based upon this weakness in the Measurement markets, we have to project that our 1998 earnings growth will be slower than previously anticipated. With new successful products such as the DTM-2000, we expect 1999 to be a year of normal growth for Schmitt Industries in both the Balancer and Measurement markets."

The Company also announces that it has applied for a non-reporting status under the Securities Act of British Columbia so that it will no longer be obligated to make statutory filings under that Act.

The information contained in this release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act of 1934, and is subject to the safe harbor created by those sections. The Company cautions investors that any forward-looking statements made by the Company are not guarantees of future performance; actual results may differ materially from those projected in the forward-looking statements as a result of various factors including, but not limited to, those set forth in the Company's Form 8-K filed with the Securities and Exchange Commission on June 6, 1996.

CONTACT: Schmitt Industries, Inc.

Linda M. Case, Investor Relations

503/227-7908