ITT to split stock and raise annual dividend

Filtration Industry Analyst

January 2006

Filtration Company Index 3M Co Ahlstrom Altair Technology

4

Axium Process

6

BWT Aktiengesellschaft

9

Bekaert

8

Blackburn and Associates

6

CECO Environmental

5

CH2M HILL

7

Ceetak Ltd

6

Clarcor Inc

7

Conwed

7

Cummins Donaldson

3 2,12

Dresser-Rand

4

EPA

2

Ecosphere Technologies

3

Entegris Esco Technologies

NEWS

5 1,12

4 10

Fibermark

1

GL&V

8

GE Energy

4

GlobeTec

4

Hollingsworth & Vose

16

ITT

2,9

Inge AG

5

Johnson Controls

9

KHS Maschinen- und Anlagenbau AG

5

Koch Membrane Systems

5

Kvaerner

4

Lantor

1

Larox MFRI Inc

5 13

Mann + Hummel

6,16

Mast Carbon

8,16

Met-Pro

5

Millipore

3,8,9

Moen

6

PCC

4

PICA

16

Parker Hannifin Pall Pentair Pierce SPX Sartorius Siemens AG

6,7,8,9 3,4,5,13 8,9 3 14 7 11

Stormwater Management

9

Tamfelt Corp

8

UK Filtration Society

9

Walter Industries Inc Watts Water Technologies

7 8,9

Westfalia Separator

7

Whitehouse Scientific

5

Zenon

2

2,14

ITT TO SPLIT STOCK AND RAISE ANNUAL DIVIDEND According to ITT, holders of the company’s stock at the close of business on 7 February will receive one extra share on 21 February. The annual dividend, based on a presplit share count, will be US$.88 a share, beginning in April. Excluding items, ITT forecast 2005 profit at US$5.17 to US$5.22 a share, surrounding the US$5.21 average predicted by analysts in a survey by Thomson First Call. ITT estimates that its revenue will grow 6% to 8% in 2006 to about US$7.85 billion to US$7.98 billion. Net income will be US$5.78 to US$5.92 a share, also bracketing the US$5.90 a share average predicted by analysts. Revenue growth should be driven in large part from ITT’s water and wastewater businesses, as well as continued strength in the defence business. Prudential analysts have forecast that ITT would turn its attention to acquiring companies in its diversified industrial or water businesses, particularly in Asia.

ISO 9001:2000 FOR DONALDSON MEMBRANE PLANT Donaldson’s membrane plant in Ivyland, Pennsylvania, USA has received ISO9001:2000 certification. The International Organisation of Standardisation (ISO) is the source of the ISO 9000 and ISO 14000 families of quality and environmental management standards. According to Donaldson, included among the ISO 9001:2000 standards are product defect tracking, supplier management and corporate objectives and activities.

Ongoing activities include employee and management training, the establishment of interrelated processes and systems to ensure that customer requirements are understood and met; ongoing quality goals and a detailed process for addressing and correcting problems. The 60,000 ft2 plant produces Donaldson’s expanded PTFE membranes and related composite materials which are marketed under the Tetratex® brand. These products include thermobonded composites used in industrial filtration applications, including coated filter bags and cartridge media, and other advanced PTFE membrane materials used in technical applications, including liquid microfiltration, venting, and medical applications. (For Donaldson’s quarterly report, see page 12.)

ZENON WARNS OF FOURTH QUARTER, FULL-YEAR LOSS Zenon Environmental Inc has predicted a fourth-quarter and full-year operating loss. This is due, the company says, to higher than expected project costs, production delays, a manufacturing reorganisation of its water-treatment products, some weaker Homespring sales and the deferral of some revenue to the first quarter. However, the company has reportedly made process in shipping out all delayed orders of its ZeeWeed 1000 version 3. Zenon said it expects a before-tax operating loss of between C$10 million (US$8.55 million) and C$12 million for the fourth quarter ending 31 December and full fiscal 2005 operating loss of C$12 million to C$14 million. Under a recently initiated restructuring, the Ontario, Canada-based company has consolidated manufacturing

and cut its product lines, eliminated jobs, and used different procedures to better manage subcontracted project costs. In order to improve future profitability Zenon plans to consolidate manufacturing in Hungary and Canada, reduce overhead resulting from headcount reductions and reduction of selling costs, improve bid project margins due to the adoption of recent technology improvements and adopt new risk management procedures to better control subcontracted project costs. (For the full quarterly report, see page 14.)

EFP ENTERS INTO NINE DISTRIBUTION AGREEMENTS Emergency Filtration Products (EFP) has entered into distribution agreements with nine international distributors operating in the following countries: Australia, Canada, Denmark, New Zealand, Pakistan, South Africa, South Korea, Sweden and Thailand. The company is also at an advanced stage of negotiations to sign additional distributors in a number of other countries. These distributors have agreed to order a minimum of 550,000 NanoMasks and 7,250,000 NanoMask filters over the next two years. The current delivery schedule, which is based on the company’s production capacity, involves approximately 225,000 NanoMasks and 3,000,000 NanoMask filters to be delivered in equal allotments over the course of 2006. In 2007, deliveries to these distributors are currently scheduled to reach 325,000 NanoMasks and 4,250,000 NanoMask filters. Following the delivery plan for 2006, deliveries are currently scheduled to be made in equal numbers over the course of the year. These schedules could be either accelerated and/or increased should EFP’s