Slide 1: Q4 2003 Earnings Call
(A aware a ee Cy) 2005 Oeirter Earrings Cail
Slide 2: Forward-looking statements
es Certain of the matters | will discuss today, and certain information in the slides that follow, will consist of forward-looking statements, including without limitation expectations concerning funding and total cost of the Ecolochem transaction, the contribution to be made by Ecolochem to lonics'
Slide 3: Q4 2003 income statement summary
@4 2003 Revenues $89.0 Cost of Sales $66.4 Selling, General & Administrative (including R&D) $34.4 Restructuring and Impairment of Long Lived Assets $2.1 Equity Loss 4 Eamings (loss) before Interest & Taxes ($18.3) Interest Income $0.7 Loss from continuing operations ' ($17.6) * before gain on sale,
Slide 4: Restructuring and other charges: consolidation related inventory charges
Rstr& Equity COGS SG&A _ImpLLA Income Total Mfg consolidation related inventory charges $0.5 $0.5 Total $0.5 ae
Slide 5: Restructuring and other charges build
Rstr& Equity COGS SG&A _ImpLLA Income Total Mfg consolidation related inventory charges $0.5 $0.5 US Home Water consol & other 1.3 $1.3 Total 905 313 =a CInnmrs
Slide 6: Restructuring and other charges: process re-engineering
Rstr& Equity COGS SG&A _ImpLLA Income Total Mfg consolidation related inventory charges $0.5 $0.5 US Home Water consol & other 1.3 $1.3 Process re-engineering $1.4 $1.4 Total 905 927 =a CInnmrs
Slide 7: Restructuring and other charges: pension plan curtailment
Rstr& Equity COGS SG&A _ImpLLA Income Total Mfg consolidation related inventory charges $0.5 $0.5 US Home Water consol & other 1.3 $1.3 Process re-engineering $1.4 $1.4 Pension plan curtailment $5.4 $5.4 Total 905 $8.1 Pp: CInnmrs
Slide 8: Restructuring and other charges: bad debt expense
Rstr& Equity COGS SG&A _ImpLLA Income Total Mfg consolidation related inventory charges $0.5 $0.5 US Home Water consol & other 1.3 $1.3 Process re-engineering $1.4 $1.4 Pension plan curtailment $5.4 $5.4 Bad debt expense 1.8 $1.8 Total 905 99.9 <a CInnmrs
Slide 9: Restructuring and other charges: asset impairment
Rstr& Equity COGS SG&A _ImpLLA Income Total Mfg consolidation related inventory charges $0.5 $0.5 US Home Water consol & other 1.3 $1.3 Process re-engineering $1.4 $1.4 Pension plan curtailment $5.4 $5.4 Bad debt expense 1.8 $1.8 Asset Impairment -lonics $1.8 $1.8 Total 905 99.9 318 <a CInnmrs
Slide 10: Charges by income statement line
Mfg consolidation related inventory charges $0.5 US Home Water consol & other Process re-engineering Pension plan curtailment Bad debt expense Asset Impairment -lonics Restructuring Rstr& Equity COGS SG&A _ImpLLA Income Total $0.5 1.3 $1.3 $1.4 $1.4 $5.4 $5.4 1.8 $1.8 $1.8 $1.8 $0.3 $0.3 99.9 $24 To
Slide 11: Restructuring and other charges: TMA affiliate impairment
Rstr& Equity COGS SG&A _ImpLLA Income Total Mfg consolidation related inventory charges $0.5 $0.5 US Home Water consol & other 1.3 $1.3 Process re-engineering $1.4 $1.4 Pension plan curtailment $5.4 $5.4 Bad debt expense 1.8 $1.8 Asset Impairment -lonics $1.8 $1.8 Restructuring $0.3 $0.3 Asset impai
Slide 12: Restructuring and other charges: income from affiliates
Rstr& Equity COGS SG&A _ImpLLA Income Total Mfg consolidation related inventory charges $0.5 $0.5 US Home Water consol & other 1.3 $1.3 Process re-engineering $1.4 $1.4 Pension plan curtailment $5.4 $5.4 Bad debt expense 1.8 $1.8 Asset Impairment -lonics $1.8 $1.8 Restructuring $0.3 $0.3 Asset impai
Slide 13: SG&A for Q4 2002 and Q4 2003
° SG&A for Q4 2002 was $28.7 million ° SG&A for Q4 2003 was $32.5 million — Includes multiple restructuring charges « Reduction achieved despite increased costs — Insurance — Auditing fees — Benefits / retirement plan costs <a CInnmrs
Slide 14: Revenue and gross margin by third party and affiliates
@4 2002 @4 2003 Revenue GM % Revenue GM% Third Party $80.9 30.0% $75.2 28.5% Affiliates $3.1 15.1% $13.8 8.3% $84.0 29.5% $89.0 25.3% e.. CInnmrs
Slide 15: Revenue by business
es 100 wo 0 [BAtiiated companies Dirstument Business EConcumer Water mUtkapure water IBEquipment Business o4 a 3 $8 Eg 942 $35 42002 ov2000 Omnmns
Slide 16: Q4 softness impacted by reorganization
° Q4 softness impacted by — Reorganization activities * Sales force restructured — Management focus on Ecolochem acquisition -- ounnmn
Slide 17: $ Million
O$ Million a CInnmrs
Slide 18: Assets at 12/31/03 and 12/31/02
12/31/03 Cash $134 Current Assets1 182 Affiliates - long-term 35 PP&E, net 172 Other 69 Total Assets $592 + Excluding cash —— 12/31/02 $140 201 30 168 65 $604
Slide 19: Liabilities and shareholders equity
oe 12/31/03 Current Liabilities1 $112 Total Debt 15 Other Liabilities 49 Shareholders Equity 416 Total Liabilities and $592 Shareholders Equity } Excluding notes payable and current portion of long-term debt. 12/31/02 $110 14 42 438 $604
Slide 20: Additional cost reductions planned for Q1 and Q2
« Additional cost reductions planned for Q1 and Q2 * Realize benefit from cost reductions implemented in Q4/Q1 — Defined benefit plan savings $1-2 million / year « Significant recovery in electronics sector « Ecolochem results consolidated as of 14 February « Substantial synergy potential between lo