WSI Industries Reports Improved Quarter on Quarter Results

MINNEAPOLIS--(Business Wire)--
WSI Industries, Inc. (Nasdaq: WSCI) today reported net sales of $4,736,000 for
the third quarter of fiscal 2009 ended May 31, 2009, a decrease of 29% as
compared to the year-earlier quarter of $6,703,000. The Company posted net
income of $12,000 which equated to break-even on a per share basis for the
current quarter, compared to $357,000 or $.13 per share in the third quarter of
fiscal 2008. Year-to-date sales in fiscal 2009 were down 23% vs. the prior year
as sales decreased to $14,773,000 from $19,099,000 a year ago. Year-to-date
diluted earnings per share were a loss of $.07 down from the prior year`s income
of $.42.

As compared to the prior fiscal 2009 second quarter, the Company`s sales were up
18%. The Company`s bottom line also improved from a loss of $307,000 in the
fiscal 2009 second quarter to its net income of $12,000 in this quarter.

Michael J. Pudil, president and chief executive officer, commented: "Our goal in
our fiscal 2009 third quarter was to streamline our cost base and return the
Company to profitability without affecting our ability to obtain new business.
While our net income was slightly above the break-even point, we made a dramatic
improvement from our fiscal 2009 second quarter loss of $307,000. In addition,
we have continued to expand our search efforts in order to obtain new customers
and projects." Pudil went on to say: "We anticipate that our fiscal 2009 fourth
quarter will be similar to our third quarter that just ended. We will continue
working to preserve our balance sheet and conserve our cash as we weather the
ongoing recession. We believe that the Company is in an excellent position to
capitalize on new opportunities when the country`s economy starts to rebound."

WSI Industries, Inc. is a leading contract manufacturer that specializes in the
machining of complex, high-precision parts for a wide range of industries,
including avionics, aerospace and defense, energy, recreational vehicles,
computers, small engines, marine, bioscience and instrumentation.

The statements included herein which are not historical or current facts are
forward-looking statements made pursuant to the safe harbor provisions of the
Private Securities Reform Act of 1995. There are certain important factors which
could cause actual results to differ materially from those anticipated by some
of the statements made herein, including the Company`s ability to retain current
programs and obtain additional manufacturing programs, and other factors
detailed in the Company`s filings with the Securities and Exchange Commission.

WSI INDUSTRIES, INC.

CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
In thousands, except per share amounts

Third quarter ended Three quarters ended
May 31, May 25, May 31, May 25,
2009 2008 2009 2008
Net Sales $ 4,736 $ 6,703 $ 14,773 $ 19,099
Cost of products sold 4,083 5,498 13,101 15,410
Gross margin 653 1,205 1,672 3,689
Selling and administrative expense 533 597 1,673 1,824
Interest and other income (5 ) (16 ) (14 ) (164 )
Interest and other expense 106 75 316 219
Profit (loss) from operations
before income taxes 19 549 (303 ) 1810
Income taxes (benefit) 7 192 (109 ) 633
Net earnings (loss) $ 12 $ 357 ($194 ) $ 1,177

Basic income (loss) per share $ 0.00 $ 0.13 ($0.07 ) $ 0.43

Diluted income (loss) per share $ 0.00 $ 0.13 ($0.07 ) $ 0.42

Weighted average number of common shares 2,793 2,764 2,789 2,741

Weighted average number of diluted shares 2,793 2,860 2,789 2,811

CONDENSED BALANCE SHEETS (Unaudited)
In thousands

May 31, May 25,
2009 2008
Assets:
Total Current Assets $ 7,713 $ 7,962
Property, Plant, and Equipment, net 7,791 5,731
Intangible Assets 3,035 3,051
Total Assets $ 18,539 $ 16,744

Liabilities and Shareholders' Equity:
Total current liabilities $ 3,266 $ 3,806
Long-term debt 6,327 4,077
Shareholders' equity 8,946 8,861
Total Liabilities and Shareholders' Equity $ 18,539 $ 16,744

WSI Industries, Inc.
Michael J. Pudil (CEO), 763-295-9202
or
Paul D. Sheely (CFO), 763-295-9202

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