FOR IMMEDIATE RELEASE

Kurita Water Industries Reports First Quarter Earnings For the Three Months
Ended June 30, 2006
Tokyo, Japan July 28, 2006—Kurita Water Industries Ltd. (TSE Security Code 6370) announced net salesof 33,362 million yen for the first three months (April 1 – June 30, 2006) of the fiscal year ending March
31, 2007 and net income of 1,733 million yen, or 13.47 yen per share.

Results of Operations
Total consolidated orders for the Kurita Group increased 19.2% from the same period a year earlier to50,881 million yen, while net sales grew 19.5% year-on-year to 33,362 million yen. Operating income
surged 243.3% to 2,925 million yen and ordinary income also jumped 172.3% to 3,137 million yen,resulting in net income of 1,733 million yen, an increase of 177.7% year-on-year. By segment, water
treatment chemicals sales grew 9.4% year-on-year to 13,093 million yen, while water treatment facilities
sales rose 27.0% to 20,268 million yen.
During the period, capital expenditures in the electronics industry continued to be solid in Japan, Taiwanand South Korea on the back of buoyant demand for liquid crystal display (LCD) TVs and plasma display
panel (PDP) TVs, etc. In the water treatment industry, both factory operating rates and capital
expenditures remained robust mainly in basic materials sectors such as steel, oil refining andpetrochemical.

Segment Information
Water Treatment Chemicals
Total Group orders for the segment increased 7.6% year-on-year to 14,470 million yen, while sales grew
9.4% to 13,093 million yen.
During the period, the Group focused on securing stable order flow by concentrating its efforts onstrategic markets and pursuing closer relationships with its clients through “solution business.”
In the domestic market, orders for mainstay boiler water treatment chemicals and wastewater treatment
chemicals slightly declined compared with the previous year, while orders for cooling water treatment
chemicals were largely flat. On the other hand, orders increased for process treatment chemicals used in
the paper/pulp industry and in the oil refining and petrochemical industries, as well as for contract based
services .
Water Treatment Facilities
Total Group orders for the segment increased 24.6% year-on-year to 36,410 million yen, while sales grew
27.0% to 20,268 million yen.
During the period, the Group further accelerated its drive to expand its proprietary businesses, including
the ultrapure water supply business, and aggressively expanded business in the Asian markets, primarilyin Taiwan, South Korea and China, in a bid to secure stable order flow.
In the private sector, orders for the Group’s mainline ultra-pure water production systems (including theultrapure water supply business) targeted primarily for the electronics industry surged both in Japan andabroad. Orders for related maintenance services also showed growth and those for tool cleaning services
for semiconductor and LCD production equipment increased significantly. Orders for water treatment
facilities fell sharply, whereas orders for related maintenance services showed growth. Orders for watertreatment facilities for electric power plants increased sharply, and orders for soil remediation also
surged.

1

Regarding the water treatment facilities business for the public sector, the Group withdrew from businessactivities involving construction projects for human waste treatment facilities.

Financial Condition (consolidated)
As of the end of the period, total assets decreased by 4,510 million yen from the end of the previous fiscal
year to 208,264 million yen. Accounts receivable decreased by 12,715 million yen as a result of theprogress in the collection of receivables related to sales that were concentrated at the end of the previous
fiscal year, which offset a 7,339 million yen increase in inventories largely due to the progress inconstruction works in the water treatment facilities segment. Total liabilities decreased 4,287 million yen
to 61,824 million yen, mainly reflecting a 4,571 million yen decrease in accounts payable. As a result, theshareholders’ equity ratio rose from 68.3% at the end of the previous fiscal year to 69.7%.

Outlook for the Full Year
The Group’s first-quarter earnings were largely in line with the initial forecast and the Group believes that
it is on track to achieving its first-half and full-year earnings forecasts for the fiscal year ending March 31,
2007, which were included in its consolidated full-year earnings report for the previous fiscal year
released on April 28, 2006.

Business Risks
Major risk factors that could affect the Group’s future performance include, but are not limited to, capital
expenditure trends on water treatment facilities and factory operating rates at clients, price movements in
oil and other materials, and competition with peers.
Reflecting the seasonal nature of its water treatment facilities business, the Group’s first quarter and thirdquarter sales tend to be lower than other quarters, with the water treatment facilities sale skewed toward
the end of the first half and the end of the fiscal year.

About the Kurita GroupThe Kurita Group provides a wide range of products, technologies, and maintenance services related towater treatment. The two core lines of the Group’s business consist of: 1) water treatment chemicals used
for boiler water, cooling water, waste water and in manufacturing processes, and 2) water treatment
facilities such as ultra-pure water production systems, wastewater treatment facilities, and sewage water
treatment facilities. The business scope of both lines includes production, sales, and maintenanceservices. For additional information about the Kurita Group, please visit the Company’s website atwww.kurita.co.jp/english

Forward-Looking Statements
This news release contains various forward-looking statements, which are based on current expectations
and assumptions of future events. Except for the historical information contained herein, all figures andstatements with respect to future performance, projections and business plans of the Kurita Group
constitute forward-looking statements. Although Kurita believes that its expectations and assumptions arereasonable, actual results and trends of the Group’s performance could differ materially from thoseexpressed or implied by such figures or statements because of risks and uncertainties, including but notlimited to factory operating rates at major clients in the steel, petroleum and paper/pulp industries; andcapital expenditure trends in the electronics, food processing, pharmaceuticals, basic material andautomobile industries.

2

Condensed Financial Statements - Consolidated
Condensed Balance Sheets - Consolidated(Millions of Yen)

(Reference)
As of
As of
As ofJune 30, 2006 June 30, 2005
March 31, 2006
(A)
(B)
(C)
[Assets]
Current assets
Cash and deposits
Notes receivable - trade
Accounts receivable - tradeMarketable securities
Inventories
Other
Allowance for doubtful accounts
Fixed assets
Tangible fixed assets
Intangible fixed assets
Investments and other assets
Total assets[Liabilities]
Current liabilities
Notes payable - trade
Accounts payable - trade
Accounts payable - other/Accrued
expenses
Income taxes payable
Advances received
Other
Fixed liabilities
Accrued employees’ retirement
benefits
Other
Total liabilities(A) – (B)(A) – (C)120,109
30,003
9,343
54,242
7,352
15,4093,877-119
88,15556,6852,881
28,589208,264

107,332
30,781
11,34445,221
2,277
14,154
3,698-144
79,47144,7593,073
31,638186,803125,231
30,107
10,11566,957
6,162
8,070
3,944
-125
87,542
53,991
2,863
30,687
212,774

12,777-778-2,001
9,021
5,075
1,255
179
25
8,684
11,926-192-3,04921,461-5,122-104-772-12,715
1,190
7,339
-67
6
613
2,694
18
-2,098-4,51050,4552,780
24,202

39,731
1,729
21,72554,877
1,638
28,773

10,7241,051
2,477-4,422
1,142-4,571

10,9948,40113,493

2,593-2,499

1,737
6,746
3,994
11,368

933
3,365
3,576
10,104

4,376
2,055
4,540
11,233

804
3,381
418
1,264

-2,6394,691-546
135

8,388

8,655

8,261

-267

127

2,980
61,824

1,448
49,835

2,972
66,111

1,532
11,9898-4,2873

Condensed Balance Sheets – Consolidated(Continued)(Reference)
As of
As of
As of
June 30, 2006 June 30, 2005 March 31,(A)(B)
2006 (C)[Minority interests]
Minority interests[Shareholders’ equity]
Common stock
Additional paid-in capital
Retained earnings
Net unrealized gains onavailable-for-sale securities
Foreign currency translation
adjustments
Treasury stock
Total shareholders’ equity
Total liabilities, minority interests andshareholders’ equity[Net assets]
Shareholders’ capital
Common stock
Additional paid-in capital
Retained earnings
Treasury stock
Valuation and translation adjustments
Minority interests
Total net assets
Total liabilities and net assets(A) – (B)(A) – (C)

-

1,230

1,295

-

-

-

13,45011,409114,628

13,45011,426
122,350

-

-

-

1,766

3,132

-

-

-

-685

-200

-

--

-4,832135,737-4,793
145,366---

186,803

212,774--

142,738
13,45011,426
122,656-4,7952,329
1,372
146,440
208,264----4

Condensed Statements of Operations - Consolidated(Millions of Yen)

Three months ended
June 30, 2006 (A)Three months ended
June 30, 2005 (B)(A) – (B)

AmountAmount%Amount%(Reference)Year ended
March 31, 2006
Amount%Net sales
Cost of sales
Gross profit
Selling, general andadministrative expenses

33,362
21,923
11,438

100.0
65.7
34.3

27,922
18,579
9,343

100.0
66.5
33.5

5,4403,344
2,095

173,683
122,630
51,052

100.0
70.6
29.4

8,512

25.5

8,490

30.4

22

33,741

19.4

Operating income
Non-operating income
Non-operating expense
Ordinary income
Extraordinary gains
Extraordinary losses
Net income before income
taxes
Income taxes, inhabitants
tax and enterprise taxes
Minority interests inearnings of consolidated
subsidiaries

2,925
268
56
3,137-

8.8
0.8
0.2
9.4
-

852
369
70
1,152-

3.1
1.3
0.3
4.1
-

2,073
-101
-14
1,985-

17,3111,334
220
18,425
1,205
1,430

10.0
0.7
0.110.6
0.7
0.8

3,137

9.4

1,152

4.1

1,985

18,200

10.5

1,289

3.9

457

1.6

832

7,496

4.3

115

0.3

700.3

45

184

0.1

1,733

5.2

624

2.2

1,109

10,5196.1

Net income

5Order Intake

Business Segment
Water Treatment Chemicals
Water Treatment Facilities
Total

Three months ended
June 30, 2006 (A)Three months ended
June 30, 2005 (B)(A) – (B)

Amount14,47036,41050,881

Amount13,44629,222
42,668Amount1,024
7,188
8,213%
28.4
71.6
100.0%
31.5
68.5
100.0

(Millions of Yen)
(Reference)Year ended
March 31, 2006
Amount%53,90329.3
130,00770.7
183,910100.0

Net Sales

Business Segment
Water Treatment Chemicals
Water Treatment Facilities
Total

Three months ended
June 30, 2006 (A)Three months ended
June 30, 2005 (B)(A) – (B)

Amount13,093
20,26833,362

Amount11,963
15,95927,922

Amount
1,130
4,309
5,440

%
39.2
60.8
100.0

%
42.8
57.2
100.0

(Millions of Yen)
(Reference)Year ended
March 31, 2006
Amount%54,54931.4
119,133
68.6
173,683
100.06