Slide 1: November 19, 2003 Webcast
(A aware a ee November 19, 2003 Webcast
Slide 2: Forward-looking statements
rae: 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 lonic
Slide 3: Proxy statement and additional information
ans lonics will file a proxy statement and other related documents with the SEC regarding the issuance of lonics common stock in connection with the proposed acquisition of the Ecolochem companies, which will be a topic of this presentation, and other matters. Investors are encouraged to read the pr
Slide 4: Participants in the solicitation
ae lonics and its directors, executive officers, and certain of its employees may be deemed to be participants in the solicitation of proxies of lonics stockholders. These individuals may have an interest in the Ecolochem acquisition, the related issuance of common stock, or both, including as a res
Slide 5: Ionics Today
lonics Today Leading integrated manufacturer of membranes and systems Leading operator of water desalination facilities Portfolio of build-own-operate facilities Key provider of ultrapure water systems for microelectronics industry Large and growing presence in water reuse markets mane
Slide 6: Ionics Today: Acquisition of Ecolochem
lonics Today Acquisition of Ecolochem Leading provider of emergency and mobile water treatment services Adds recurring service-based revenue stream Adds complementary portfolio of build-own-operate facilities =
Slide 7: Mobile and emergency water treatment
Mobile and emergency water treatment Emergency service = Rapid response = Short-term Supplemental service = Planned usage - Medium-term Build-own-operate (B-0-0) = Long-term Privately-held company in operation for over 30 years Approximately $109mm Revenue a - Approximately $40mm adjusted EBITDA App
Slide 8: Ionics to acquire 100% of Ecolochem stock
lonics to acquire 100% of Ecolochem stock $338mm (based on 30-day average closing stock price ended 11/17) — 4.91mm shares of lonics stock = $200mm cash + 8.4x adjusted EBITDA") 12.0x adjusted EBIT “) | Financing | * Commitment in place for new credit facilities‘? Financials for Ecolachern FY ended
Slide 9: Ecolochem shareholders ownership and management positions
oaks ° Ecolochem shareholders will initially own up to approximately 21.7% of lonics post transaction + Lyman B. Dickerson, President of Ecolochem, to become Vice President of lonics’ Water Systems Division + Up to 2 additional directors, one of whom will be Lyman B. Dickerson =
Slide 10: Reinforces strategic focus on water services
« Reinforces strategic focus on water services with predictable recurring revenue * Sales and operating synergies — End markets — Geographies — Technology « Expected to be accretive to shareholders ——
Slide 11: Ecolochem and Ionics customers
Ecolochem lonics TVA (XN; MoTroROLA png @orona Extra 7 Resorts and ExxonMobil Municipalities ES man
Slide 12: Ionics, Ecolochem and Bath customers
[ tonics Ecolochem §% Bath ——
Slide 13: es
es
Slide 14: Enhanced fiscal planning
« Enhanced fiscal planning — Option to pursue 338(h)(10) election — Estimated cost: $15 million — Estimated present value of tax savings: $50 million oie
Slide 15: Opportunity for general and administrative savings
« Opportunity for general and administrative savings — Benefits — Insurance es
Slide 16: Ecolochem and Ionics revenue mix
Ecolochem 24% Ecolochem 62% lonics 38% lonics 76% Note: Ecalochem fiscal year ended 9/30/02. Ionics fiscal year ended 12/31/02 ee
Slide 17: Sources and Uses
Sources Cash on Hand 95 Revolving Credit Facility” 0 Term Loan B 175 lonics Stock 138 Total Sources $368 Uses Refinance Portion of Existing Debt $2 Acquire Ecolochem 338 Estimated 338(h)(10) 15 Estimated Fees and Expenses 13 Total Uses $368 © None anticipated to be crawn at closing. $75 million faci
Slide 18: Combined Companies pro forma balance sheet
Combined Companies Selected 9/30/03 Pro Forma Balance Sheet Items ($mm) Cash $75 Existing Debt 2 New Debt Ve Total Debt $187 Net Debt $112 ——
Slide 19: Ionics 2004 Forecast
lonics 2004 Forecast Revenue $350 Gross profit 105 EBIT 16 EPS — before restructuring $0.60 charge oe
Slide 20: Anticipated results following acquisition
Anticipated lonics 2004 Following Forecast Acquisition Revenue $350 $460 Gross profit 105 147 EBIT 16 36? EPS — before restructuring $0.60 $0.74” charge © Assumes company is combined for all of 2004. ® Includes $6 million in intangible asset amortization a
Slide 21: Anticipated EPS before transaction amortization
Anticipated lonics 2004 Following Forecast Acquisition EPS — before restructuring $0.60 $0.91 charge and transaction amortization © Assumes company is combined for all of 2004. ® Includes $6 million in intangible asset amortization een
Slide 22: Anticipated reported EPS
Anticipated lonics 2004 Following Forecast Acquisition EPS - reported $0.40 $0.59 © Assumes company is combined for all of 2004. ® Includes $6 million in intangible asset amortization ——
Slide 23: Transaction timeline
es Financing commitments Completed File preliminary proxy statement with SEC November / December Complete HSR / other regulatory processes December / January lonics stockholders’ meeting to vote on transaction February Close transaction February ew
Slide 24: Ecolochem Overview
Ecolochem Overview es
Slide 25: Ecolochem's Water Treatment Services
Slide 26: Water treatment technologies
es «lon exchange using central regeneration facilities « Reverse osmosis + ion exchange « Reverse osmosis + electrodeionization (EDI) * Gas transfer membranes
Slide 27: Ecolochem history
tage 7984 1992 Emergency reverse Opened UK introduced 2000 1990 (Opened Baytown, Tk First long replacing Houston, Ti "876 fistlons, pacing pened St. Lous, Mo| ria 1998 1986 Opened Mai, FL Opened Fontana, CA 7980 7998 pened Norfolk, VA and Opened S. Peters, Houston, T 1381 MO replacing 8 Opened Fast
Slide 28: Ecolochem history
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Slide 29: Ecolochem history
oe ‘370 184 ‘e82 Eosacens Sneraenoy reve pened UK predecessor coos smoce cove pacer Trosieed dararaoe er 2000 ane ‘Opened Baytown, TH 7898 cing cebin esta, pane Lai, 0 tem 860 1988 1998 peed Mar FL peed Foran, 7998 peed Pt. ie ‘MO replacing St. pened Eas ment beter
Slide 30: Ecolochem history
7970 Eoolochem predecessor senioes US Navy uth emineraized water "876 pened St.Louis, Mo| 7992 Opened UK 7990 First long term B00 2000 (Opened Baytown, Tk replacing Houston, Ti es 7980 pened Nerf, VA and Heuston, Tk 1986 Opened Fortana, Cal 1998 Opened Mami, FL 1981 Opened Fast Harford CT 7998 Opene
Slide 31: Ecolochem history
en ‘370 184 ‘e82 Eosacens Sneraenoy reve pened UK predecessor coos smoce cove pacer Trosieed dararaoe er 2000 ane ‘Opened Baytown, TH 7898 cing cebin esta, pane Lai, 0 tem 860 1988 peed Mar FL “280 peed Nok, a an ‘998 eur peed Pt. ie ‘MO replacing St. pened Eas ment beter
Slide 32: Ecolochem history
en ‘370 184 ‘e82 Eosacens Sneraenoy reve pened UK predecessor coos smoce cove pacer Trosieed dararaoe er 2000 ane ‘Opened Baytown, TH 7898 cing cebin esta, pane Lai, 0 tem 860 1988 peed Mar FL “280 peed Nok, a an ‘998 eur peed Pt. ie ‘MO replacing St. pened Eas ment beter
Slide 33: Ecolochem history
7970 Eoolochem predecessor senioes US Navy uth emineraized water "876 pened St.Louis, Mo| 7992 Opened UK 7984 Emergency reverse introduced 7990 First long term B00 instalation 2000 (Opened Baytown, Tk replacing Houston, Ti es 7980 pened Nerf, VA and Heuston, Tk 1986 Opened Fortana, Cal 1998 Opened M
Slide 34: Ecolochem history
—— ‘370 184 Eosacens Sneraenoy reve predecessor coos smoce cove pacer Trosieed dararaoe er 2000 ane ‘Opened Baytown, TH 7898 cing cebin esta, pane Lai, 0 tem 860 1988 1998 peed Mar FL peed Foran, “280 peed Nok, a an ‘998 eur peed Pt. ie ‘MO replacing St. pened Eas ment beter
Slide 35: Ecolochem history
—— 7970 7984 7992 Eoolochem Emergency reverse Opened UK predecessor senioes fosmaze sere US Navy uth introduced emineraized water 2000 oe (Opened Baytown, Tk "876 First long replacing Houston, Ti term B00 acing pened St.Louis, Mo| Saat 1986 Opened Fortana, Cal 7980 pened Nerf, VA and 1998 Heuston, T
Slide 36: Ecolochem history
a ‘370 184 ‘e82 Eosacens Sneraenoy reve pened UK predecessor coos smoce cove pacer Trosieed dararaoe er 2000 ane ‘Opened Baytown, TH 7898 cing cebin esta, pane Lai, 0 tem 860 1988 1998 peed Mar FL peed Foran, “280 peed Nok, a an eur a pened Eas beter
Slide 37: Ecolochem history
man ‘370 184 ‘e82 Eosacens Sneraenoy reve pened UK predecessor coos smoce cove pacer Trosieed dararaoe er “990 7898 Eratong pane Lai, 0 tem 860 1988 1998 peed Mar FL peed Foran, “280 peed Nok, a an ‘998 eur peed Pt. ie ‘MO replacing St. pened Eas ment beter
Slide 38: Ecolochem senior management
Name Title Yrs.with Company Yrs. in Industry Lyman B. (Skip") Dickerson President 32 32 J. Roger Taylor VP. and COO 16 26 Mary Landon CFO 20 20 Kenneth Schmidt Managing Director, Director Ecolochem intl 14 14 Douglas Schmitt VP, Director of Sales & Marketing 14 18 ‘wiliarn Miler VP. Senior Advisor a
Slide 39: Ecolochem service offerings
: ee
Slide 40: Short-term / temporary need
« Short-term / temporary need — Periods of high demand for treated water — Problems with existing water treatment equipment — Deterioration of raw water supply -"'24 -7" dispatch center « Rapid response: — two hours for water treatment unit departure — ISO 9000 =
Slide 41: Medium-term / planned usage
* Medium-term / planned usage — New power plant commissioning — Scheduled water plant outages, inspections or repairs — Planned periods of peak production — Boiler maintenance « Some customers outsource 100% of their water treatment needs — Merchant power producers — Peaking power plants ma
Slide 42: Long-term contracts
= Long-term contracts Provides customers’ base-load water treatment needs Water facility can be mobile or permanently installed
Slide 43: Reputation for timely, high-quality water treatment
= « Reputation for providing timely, high-quality water treatment services for 30 years « Ecolochem advantages: — 24 hour service and support — Broad geographic coverage — Broad array of mobile technologies — One of world’s largest mobile fleets « Experienced technical organization — Over 150 Field
Slide 44: Revenue
Revenue $105 $107 $109 Fy2001 Fy2002 FY2003 Ecolachem fiscal years ending Sept 30 a
Slide 45: EBIT and EBITDA
EBIT EBITDA $40 28 38 wes : s al Fy2001 Fy2002 Fy2003 Fy2001 Fy2002 FY2003 Note: 2001 and 2002 excluding approximately-§0.8 mm and $2.2mm tatal non-recuning items, respectively. 2003 results exclude approximately §2.3 million non-recurring charges and approximately $13 million of non-recurring other
Slide 46: rage
$110 $100 390 $80 570 960 350 40 $80 20 510 0 rage 6
Slide 47: Acquisition Supports Ionics Strategy
(A aware a ee Acquisition Supports lonics Strategy
Slide 48: Ionics total revenues by segment
es lor ‘Total Revenues $350 Million Equipment Sales $175 Plant Operations $110 Consumer Water $30 Instruments $35 50% 31% 9% 10%
Slide 49: Total revenues before and after acquisition
oe ‘Total Revenues $350 Million Equipment Sales $175 Plant Operations $110 Consumer Water $30 Instruments $35 50% 31% 9% 10% Total Revenues $460 Million Equipment Sales 00, $175 — Plant Operations| 4g $220 Consumer Water 70% $30 Instruments 9 $35 a
Slide 50: Recurring versus non-recurring revenue pro forma
100%. - a 0%. a Ionics Eeolochem Pro Forma Company BE Estimated Recurring Revenue Estimated Non-Recurring Revenue a
Slide 51: Reinforces strategic focus on water services
« Reinforces strategic focus on water services with recurring revenue * Sales and operating synergies — End markets — Geographies — Technology « Expected to be accretive to shareholders a