WSI Industries Reports Second Quarter Results

Michael J. Pudil, president and chief executive officer, commented: "The economic recession took a toll on our fiscal 2009 second quarter revenues as we experienced sales declines in all sectors of our business. December and January were especially hard hit with deliveries being deferred from our two main industries, recreational vehicles and energy. With the shortfall in revenue, we experienced our first quarterly loss in almost 5 years." Pudil went on to say: "While it is uncertain when the overall recovery will occur in the country, our current customer schedules for the second half of fiscal 2009 project a rebound in sales. During this period, we will be working to streamline and reduce costs in an effort to return WSI to profitability without impacting revenue or the ability to capture new business." Pudil concluded: "Even during this troubling time, WSI has been able to secure additional long term agreements, new multiyear purchase orders, and new parts for existing programs. We therefore remain confident about WSI's long-term future. We have a strong balance sheet, state of the art equipment and facilities, and have good relationships with customers who are leaders in their industries. We are continually working and quoting on new business opportunities and believe that we will be in a stronger position when the economy starts to improve."

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 and aerospace, energy, recreational vehicles, small engines, marine, bioscience and the defense markets.

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
                                                              Second quarter ended                First six months ended
                                                              March 1,           February 24,     March 1,        February 24,
                                                              2009               2008             2009            2008
Net Sales                                                     $       4,001      $    6,422       $   10,037      $    12,396
Cost of products sold                                                 3,809           5,057           9,019            9,912
Gross margin                                                          192             1,365           1,018            2,484
Selling and administrative expense                                    558             650             1,140            1,227
Interest and other income                                             (4      )       (28   )         (10    )         (148   )
Interest and other expense                                            117             77              210              144
Profit (loss) from operations before income taxes
                                                                      (479    )       666             (322   )         1,261
Income taxes                                                          (172    )       233             (116   )         442
Net earnings (loss)                                                   ($307   )  $    433             ($206  )    $    819
Basic earnings (loss) per share                                       ($0.11  )  $    0.16            ($0.07 )    $    0.30
Diluted earnings (loss) per share                                     ($0.11  )  $    0.15            ($0.07 )    $    0.29
Weighted average number of common shares
                                                                      2,789           2,734           2,787            2,729
Weighted average number of dilutive common shares outstanding
                                                                      2,789           2,795           2,793            2,787
CONDENSED BALANCE SHEETS (Unaudited)
In thousands
                                                                                                  March 1,        February 24,
                                                                                                  2009            2008
Assets:
Total Current Assets                                                                              $   7,974       $    8,159
Property, Plant, and Equipment, net                                                                   8,044            5,402
Intangible Assets                                                                                     3,005            2,894
                Total Assets                                                                      $   19,023      $    16,455
Liabilities and Shareholders' Equity:
Total current liabilities                                                                         $   3,884       $    3,735
Long-term debt                                                                                        6,264            4,105
Shareholders' equity                                                                                  8,875            8,615
                Total Liabilities and Shareholders' Equity                                        $   19,023      $    16,455

SOURCE: WSI Industries, Inc.

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