<PAGE>
                              TO OUR FELLOW SHAREHOLDERS
                                           

We are pleased to report another successful year at Hach with all time record
results for net sales, net income, cash flow and economic value added.  Beyond
the financial results, a number of other significant events took place.  First,
our increased investments in research and development over the past two years
have provided a number of new products that were introduced late in fiscal year
1997 and should contribute to sales growth in 1998 and beyond.  Second, our
ongoing efforts to enhance competitiveness and quality continue to show
progress.  Third, our Board of Directors approved a proposal to amend the
Company's Certificate of Incorporation to create a new, non-voting class of
stock.  Fourth, subsequent to our fiscal year end, we purchased all Hach Company
stock which was owned by Lawter International.  And finally, 1997 marks our
fiftieth year in business.

FINANCIAL RESULTS

Net sales reached a record $121,480,000, 6% ahead of 1996 sales of 
$114,285,000. Once again international sales led the way, increasing 7% 
despite a strong United States dollar. Although sales measured in Belgium 
Francs increased, the strong dollar had the effect of reducing 1997 European 
sales by $1,300,000 when compared to 1996.  International sales outside of 
Europe increased 16% due to volume increases in all of the Company's major 
product lines.  Net income rose 11% to $12,495,000 and earnings per share 
increased to $1.10.  Operating cash flow increased $896,000 to a record 
$20,396,000.  Economic Profit increased to $4,367,000 from $2,871,000 in 
1996, thus yielding Economic Value Added of $1,496,000 for 1997.  Economic 
Profit is defined as net operating profit after taxes, in excess of a 
computed capital charge for average capital employed. Economic Value Added 
represents the growth in Economic Profit from year to year. We believe that 
Economic Value Added is the single best measure of assessing our overall 
performance.  Major factors contributing to both the operating cash flow and 
economic profit increases were the improvement in operating income and 
improvements in operating asset management.  During 1997 better asset 
utilization resulted in a 8% decrease in inventory and a $308,000 reduction 
in net property, plant and equipment.  At year end our cash and investments 
had grown to $41,081,000 thus providing a great deal of flexibility to 
finance our future growth.  During the year dividends paid amounted to 24 
cents per share. This marks the 16th consecutive year dividends have 
increased.

NEW PRODUCTS

Results from our research and development efforts pay off in many ways.  Fiscal
year 1997 marks the completion of the replacement and upgrade of the entire
colorimeter and spectrophotometer product line to incorporate the latest in
chemical procedures and electronics.  Additionally, the introduction of the
Pocket Turbidimeter and 1720D Process Turbidimeter completes the upgrade to the
clean water turbidimeters.  This gives Hach Company the newest and most complete
line of turbidimeters in the world.  Finally, the recent introduction of the
APA6000 Process Analyzer promises to bring solid sales growth from the process
control market by bringing a Hach developed modification of sequential injection
analysis to routine instrumentation.

In fiscal year 1997 our research and development investment reached seven
percent of net sales.  This investment is helping to bring more new products to
market while at the same time shortening the product development cycle.

ENHANCED COMPETITIVENESS

During fiscal year 1997 we continued to make progress toward our goals of making
the Company more efficient and improving quality.  Net income grew at nearly
twice the rate of sales growth, reaching 10.3% of net sales for 1997 compared to
9.8% of sales in 1996.  Sales per employee increased by 6% to $140,500 compared
to $132,200 for the previous year, and the quality of our products and services
continued to improve.

                                                                            1

<PAGE>


During fiscal year 1998 we will be making significant capital investments
designed to assure these improvements continue.  Total capital spending in
fiscal 1998 will approximate $10,000,000, and includes construction of a new
building at our main plant in Loveland, Colorado.  This building will be a
66,000 square foot state of the art manufacturing facility and once completed
should supply adequate space to meet our needs for the next several years.  We
will also be investing significant resources into modernizing our information
systems.  When complete, this investment will provide an integrated information
system to support customer service, manufacturing, finance and other areas of
the Company.  Brian Bowden has been promoted to Vice President of Information
Systems and is heading up this important project.  Brian has been with Hach for
nine years and during that time has held a number of management positions.  

PROPOSED NEW  CLASS OF STOCK

In May our Board of Directors approved a proposal to amend the Company's
Certificate of Incorporation.  The amendment, which is subject to approval by
the holders of a majority of the outstanding shares of existing common stock,
would create a new class of stock designated as Class A Common Stock.  The Class
A stock would be non-voting except under certain limited circumstances.  Upon
approval and filing of the amendment under Delaware law, the Board plans to
authorize distribution of a stock dividend of one share of Class A common stock
on each share of the Company's outstanding common stock.  The benefits and other
consequences of this dual class structure are described in the proxy statement
accompanying this annual report.

REPURCHASE OF HACH COMMON STOCK

On July 8, 1997, the Company repurchased the entire block of Hach Company common
stock which was owned by Lawter International.  This stock represented
approximately 28% ownership in Hach Company.  The purchase of the 3,157,223
shares at $19.00 per share was financed with $30 million of cash on hand and $30
million in bank financing.  By reducing the number of outstanding shares, the
remaining stockholders will experience an immediate increase in earnings per
share.  Other anticipated benefits of this transaction include a more freely
traded marketplace for our stock and the flexibility to utilize Hach Company
stock for future growth initiatives.

FIFTY YEARS OF SERVICE

This year marks our fifty year anniversary of providing quality systems for
analysis to our chosen markets.  Our financial condition has never been
stronger.  During fiscal year 1997 cash and investment balances grew by more
than $10,000,000.  With the repurchase of the shares previously owned by Lawter
International, we have used a significant portion of our cash balances and
provided a more appropriate capital structure for our company.  We believe this
structure, along with the operational plans already in place, will lend to
enhanced shareholder value over the coming years.

Over the past fifty years we have grown from a small two person proprietorship
to a complex organization of more than 875 individuals.  During this time we
have remained focused on providing quality products and services to our many
customers.  We are grateful to the employees of Hach Company for their dedicated
service.  Without their support and cooperation our success over the past fifty
years would not have been possible.

                                                                            2


<PAGE>


As we enter our second fifty years we are confident in the continued efforts of
our employees to pursue superior rewards for our customers and shareholders.

Sincerely,



/s/  Kathryn C. Hach-Darrow
Chairman of the Board 
and Chief Executive Officer



/s/  Bruce J. Hach
President 
and Chief Operating Officer

                                                                            3
<PAGE>

HACH COMPANY & SUBSIDIARIES
COMPARATIVE FINANCIAL DATA - 10 YEAR SUMMARY
(THOUSANDS OF DOLLARS EXCEPT RATIO AND SHARE DATA)

<TABLE>
<CAPTION>

<S>                                      <C>            <C>          <C>         <C>           <C>      
SUMMARY OF OPERATIONS   Years ended April 30,     1997           1996         1995        1994          1993 
--------------------------------------------------------------------------------------------------------------
Net Sales:
  United States                              $  77,688      $  73,472    $  69,867   $  69,100     $  62,497 
  International                                 43,792         40,813       35,402      31,269        31,504 
--------------------------------------------------------------------------------------------------------------

  Worldwide                                    121,480        114,285      105,269     100,369        94,001 

Cost of sales                                   62,342         57,839       51,994      49,534        46,623 
Selling, general and administrative expense     33,385         33,000       32,240      30,802        28,685 
Research and development expense                 8,459          7,464        6,875       6,586         5,752 
Electrochem line phaseout                            -              -          775           -              -
Interest income                                  1,799          1,324          661         467           427 
Interest expense                                    13              6            1          12            48 
Income taxes                                     6,585          6,046        4,775       4,842         4,700 
Net income                                      12,495         11,254       9,270*      9,508+         8,620 
Per share data:++
  Net income                                      1.10           0.99        .081*       .084+          0.76 
  Cash dividends                                  0.24           0.22         0.17       0.136         0.128 

OTHER DATA
Current ratio                                     4.71           4.59         4.55        4.14          3.49 
Working capital                                 53,332         41,886       38,596      30,699        25,124 
Property, plant and equipment, net              28,804         29,112       29,128      28,903        29,270 
Total assets                                   105,580         93,655       84,258      74,358        66,971 
Long-term liabilities                            1,726          1,347        2,070       2,081         2,246 
Stockholders' equity                            87,289         78,820       71,328      62,497        54,651 
Equity per share at year end++                    7.68           6.93         6.27        5.49          4.81 
Sales per employee                                 140            132          120         112           105 
Weighted average shares outstanding++       11,365,108     11,368,126   11,385,355  11,385,793    11,361,958 

</TABLE>
                                                                            4

<PAGE>


HACH COMPANY & SUBSIDIARIES
COMPARATIVE FINANCIAL DATA - 10 YEAR SUMMARY
(THOUSANDS OF DOLLARS EXCEPT RATIO AND SHARE DATA)

<TABLE>
<CAPTION>

<S>                                      <C>            <C>           <C>         <C>          <C> 
SUMMARY OF OPERATIONS   Years ended April 30,     1992           1991         1990        1989          1988 
---------------------------------------------------------------------------------------------------------------
Net Sales:
  United States                              $  57,148      $  50,476    $  45,645   $  40,598     $  36,056 
  International                                 27,591         21,844       17,456      15,253        11,579 
---------------------------------------------------------------------------------------------------------------
  Worldwide                                     84,739         72,320       63,101      55,851        47,635 

Cost of sales                                   41,938         36,094       32,193      27,392        23,698 
Selling, general and administrative expense     25,936         22,360       18,912      17,619        15,564 
Research and development expense                 4,951          4,372        3,991       3,519         2,984 
Electrochem line phaseout                            -              -            -           -              -
Interest income                                    312            296          311         332           313 
Interest expense                                   119            177          244         283           322 
Income taxes                                     4,357          3,648        3,007       2,815         2,250 
Net income                                       7,750          5,965        5,065       4,555         3,130 
Per share data:++
  Net income                                      0.68           0.53         0.45        0.40          0.28 
  Cash dividends                                 0.106           0.09        0.077       0.065         0.052 

OTHER DATA
Current ratio                                     2.72           2.79         2.89        2.76          3.57 
Working capital                                 20,977         17,631       16,546      14,555        15,293 
Property, plant and equipment, net              28,094         25,024       21,678      18,221        14,493 
Total assets                                    61,619         52,849       47,217      42,530        37,201 
Long-term liabilities                            2,104          2,593        3,131       3,629         4,259 
Stockholders' equity                            47,301         40,401       35,328      30,610        27,001 
Equity per share at year end++                    4.17           3.56         3.12        2.71          2.40 
Sales per employee                                  98             90           85          82            78 
Weighted average shares outstanding++       11,348,444     11,319,723   11,311,315  11,304,776    11,259,349 

</TABLE>

                                                                            5

<PAGE>


*Net income for 1995 includes a one-time pretax charge of $775,000 or $.05 per
share after tax for the provision to reduce carrying value of electrochemical
assets.

+ Net income for 1994 includes a benefit of $448,000 or $.04 per share for the
cumulative effect of a change in accounting for income taxes.

++ All shares and per share amounts have been restated to give effect to the
five-for-four stock split in April 1994 and the three-for-two stock split in
June of 1992 and the five-for-four stock splits in fiscal 1991, 1990 and 1989.





MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

RESULTS OF OPERATIONS
1997 COMPARED TO 1996
Net sales were a record $121,480,000, an increase of 6.3% over 1996 net sales of
$114,285,000.  The Company's domestic and international net sales increased 5.7%
and 7.3% respectively, due primarily to unit volume increases in most of the
Company's major product lines.  Although sales measured in Belgium francs
increased, a strong U.S. dollar had the effect of reducing European sales by
approximately $1,300,000 when compared to the prior year.  International sales
outside of Europe increased 16%.

Cost of sales increased 7.8% to $62,342,000 from $57,839,000.  This cost item,
composed of material, labor and product overhead, increased because of unit
volume increases.  The gross margin was 48.7% and 49.4% of net sales for 1997
and 1996 respectively.  The gross margin decrease was due primarily to the
geographic mix of products sold.  In general, international sales have lower
gross margins than domestic sales due to the higher discounting granted to the
Company's international distributors.

Selling, general and administrative expense increased 1.2% to $33,385,000 from
$33,000,000.  The increase was due primarily to normal wage and salary increases
and costs associated with the increased sales volume, offset partially by
efficiency improvements throughout the administrative area.

Research and development expense increased 13.3% to $8,459,000 from $7,464,000. 
The increase was primarily due to normal wage and salary increases and increased
emphasis on research and development efforts.

Interest income increased to $1,799,000 from $1,324,000.  The increase was the
result of higher average investments in the current period.

The effective income tax rate was 34.5%, compared to 35.0% in 1996.  The
decrease in the effective income tax rate was due primarily to foreign tax
credits.

Net dollar sales for the Company's European subsidiary decreased 4.6%  to
$16,531,000 from $17,290,000, due primarily to a stronger U.S. dollar.  The
actual unit sales volume increased by 3.3% from that of the prior year.  The
operating income decreased 35% to $2,380,000 from $3,689,000.  The decrease was
due primarily to increased costs for U.S. goods, brought about by a stronger
U.S. dollar on a weighted average basis in fiscal year 1997 as compared to
fiscal year 1996.  In addition, during 1997 the Company increased the transfer
price for U.S. goods sold to its European subsidiary.

                                                                            6

<PAGE>

1996 COMPARED TO 1995
Net sales were a record $114,285,000, an increase of 8.6% over 1995 net sales of
$105,269,000.  The Company's domestic and international net sales increased 5.2%
and 15.3% respectively.  The domestic increase was due primarily to unit volume
increases in most of the Company's major product lines.  The international sales
increase was due to unit volume increases and, to a lesser degree, a weak U.S.
dollar.

Cost of sales increased 11.2% to $57,839,000 from $51,994,000.  This cost item,
composed of material, labor and product overhead, increased because of unit
volume increases.  The gross margin was 49.4% and 50.6% of net sales for 1996
and 1995 respectively.  The deterioration in gross margin was due to the mix of
products sold.

Selling, general and administrative expense increased 2.4% to $33,000,000 from
$32,240,000.  The increase was due primarily to normal wage and salary increases
and costs associated with the increased sales volume.

Research and development expense increased 8.6% to $7,464,000 from $6,875,000. 
The increase was primarily due to normal wage and salary increases and increased
emphasis on research and development efforts.

Interest income increased to $1,324,000 from $661,000.  The increase was the
result of higher average investments in the current period.

The effective income tax rate was 35.0%, compared to 34.0% in 1995.  The
increase in the effective income tax rate was due primarily to an expiration of
the research and experimentation tax credit.

Net dollar sales for the Company's European subsidiary increased 15.4%  to
$17,290,000 from $14,989,000, due primarily to a weaker U.S. dollar.  The actual
unit sales volume increased by 5.5% from that of the prior year.  The operating
income increased 128% to $3,689,000 from $1,619,000.  The increase was due
primarily to lower cost for U.S. goods, brought about by a weaker U.S. dollar on
a weighted average basis in fiscal year 1996 as compared to fiscal year 1995,
and lower operating costs resulting from efficiency improvements.

CAPITAL RESOURCES AND LIQUIDITY
The Company's liquidity showed continued improvement as reflected by an increase
of $11,446,000 or 27.3% in working capital.  Capital resources were strengthened
further as reflected by an increase of $8,469,000 or 10.7% in stockholders'
equity.  The Company expects to continue to pay cash dividends in the future. 
Company cash dividends paid in 1997, 1996 and 1995 were $2,728,000, $2,502,000
and $1,935,000, respectively.  The Company intends to continue to increase cash
dividend payments, provided long-term growth is not jeopardized.

The Company monitors cash flow and capital expenditures in great detail as part
of its total budgeting process.  During fiscal year 1997, the Company spent
approximately $6,163,000 on capital equipment.  During fiscal year 1998, the
Company expects to spend approximately $10,000,000 on capital items.  These
expenditures include the construction of a 66,000 square foot building at the
Loveland, Colorado site, production equipment and computer hardware and software
to support production, research and development and administration.  Total costs
to construct the building are estimated at $5,500,000 and will be incurred in
fiscal years 1998 and 1999. The addition will provide more manufacturing,
research and development and office space.  Construction is tentatively
scheduled to begin in late summer or early fall of 1997.

Throughout most of the world, the Company transacts business in U.S. dollars. 
In Europe, the Company's foreign subsidiary, Hach Europe, transacts business
primarily in Belgium Francs.  The change in the cumulative currency translation
adjustment in fiscal year 1997 was due primarily to a stronger U.S. dollar at
April 30, 1997, compared to April 30, 1996.

                                                                            7

<PAGE>

On June 26, 1997, the Company and Lawter International, entered into a
definitive agreement for the repurchase of Lawter International's entire
holdings of Hach Company Common Stock.  The 3,157,223 shares, representing
approximately 28% of Hach Company outstanding Common Stock, were purchased for
$19.00 per share.  The transaction was completed on July 8, 1997.  The purchase
was made using approximately $30 million of cash on hand, supplemented by bank
borrowings.

During the fiscal year 1995, the Company's Board of Directors authorized the
Company to repurchase up to $2,000,000 in value of the Company's common stock. 
As of April 30, 1997, the Company has repurchased approximately 98,060 shares at
an average cost of $15.35 per share.  The Company intends to finance its capital
projects, working capital needs and stock buy-back through existing cash and
cash equivalents, short-term investments and projected cash flow from
operations.


EFFECTS OF INFLATION ON THE COMPANY
The Company is affected by inflation to about the same degree as other U.S.
companies.  The Company sells a great variety of products and has a relatively
small order size and short production runs.  This causes a higher ratio of
support or overhead personnel in the factory, research and selling functions. 
Thus, the impact of wage increases is somewhat greater than would be typical. 
As the rate of inflation has declined in recent years, the impact of inflation
on the Company has lessened.  However, inflation continues to increase costs to
the Company, including the costs of material, labor and overhead.

ACCOUNTING PRONOUNCEMENT
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 128, "Earnings Per Share," in February 1997.  This
statement, which is required to be adopted in the third quarter of fiscal year
1998, establishes standards for computing and presenting earnings per share. 
The company has not yet adopted this statement but believes that this statement
will have no material effect on the Company's financial statements.

DESCRIPTION OF BUSINESS

GENERAL NATURE AND SCOPE OF BUSINESS
Hach Company is engaged predominantly in a single industry segment encompassing
laboratory instruments, process analyzers and test kits which are used to
analyze the chemical content and other properties of water and other aqueous
solutions.  This segment encompasses the analytical reagents and chemicals
manufactured and sold by the Company.  The Company manufactures and sells a
small amount of chemicals for uses not associated with the Company's analytical
systems for water analysis.

SALES BY PRINCIPAL PRODUCT GROUP
(PERCENT OF NET SALES)                    1997         1996           1995
-------------------------------------------------------------------------------
Analytical Reagents and Chemicals       31.7%          30.9%          31.3%
Laboratory and Portable Instruments     29.5%          29.7%          29.1%
Continuous Reading Process Analyzers    17.4%          16.8%          16.6%
Portable Test Kits and Replacements     12.2%          13.2%          13.7%
Other                                    9.2%           9.4%           9.3%
-------------------------------------------------------------------------------
Total                                    100%           100%           100%
===============================================================================

                                                                            8


<PAGE>

Analytical reagents and chemicals are manufactured and sold to support Hach
testing systems of laboratory and portable instruments, process analyzers and
portable test kits.  More stringent water quality standard and a worldwide
direction toward better control of processes - exhibited by ISO (International
Organization for Standardization) 9000 registration of many industrial companies
- drive the demand for the Company's products and their continued use.

Laboratory and portable instruments consist of Hach-manufactured analytical
instruments in the following categories:  spectrophotometers and colorimeters,
turbidimeters, Ion Selective Electrodes, COD (chemical oxygen demand) apparatus,
digestion apparatus and precision reagent-dispensing devices.  These products
are sold to municipal water and wastewater utilities, chemical manufacturers,
industrial water conditioning firms and organizations, power utilities,
commercial analytical laboratories and government agencies for the testing and
monitoring of controlled impurities in water systems.

Continuous-reading process analyzers consist of Hach-manufactured products in 
the following categories:  colorimetric analyzers, process turbidimeters, pH 
controllers and analyzer accessories.  These products are sold to 
municipalities for monitoring and controlling drinking water quality and to 
ensure that wastewater treatment procedures comply with government 
regulations.  Steam-generating plants, including operations at electrical 
utilities, petrochemical processors, heavy industry installations and pulp 
and paper factories, use the Company's continuous-reading process analyzers 
for on-line monitoring of cooling-tower and boiler-feedwater quality.  The 
microelectronics industry uses the Company's trace silica analyzers to 
monitor ultrapure water systems used in processing electronic components.

Hach offers more than 200 different test kits for 12 different application areas
ranging from agriculture to water quality.  These portable test kits are
recognized worldwide for ease of use, innovative chemistry, field-oriented
design and rugged construction.  Test kits are sold to municipalities for use in
monitoring drinking water distribution systems; to conservation groups to
monitor for influences impacting the environment; to educators for use in
teaching environmental awareness; to customers monitoring industrial processes;
to the water-conditioning industry to use in testing water quality and to
environmental regulatory authorities for use in checking compliance
requirements.

No material part of the business of the Company is dependent upon a single
product or any customer or a small group of customers.

DISTRIBUTION
Hach Company sells it analytical systems throughout the United States by direct
marketing.  The Company has Regional Sales Managers located across the country
and responsive telemarketing Customer Service Representatives in the Loveland
facility selling its products.  The Company directly distributes products to
customers in the United States through a modern distribution facility in Ames,
Iowa.

Independent distributors and sales representatives, who frequently handle
complementary and/or competitive product lines, are used to sell and distribute
the Company's products to international customers.  Customers in Canada are
supported directly by a sales and service office in Winnipeg, Manitoba.

Hach Company operates a facility in Namur, Belgium, for the marketing and
distribution of its products to the European market.  The Namur facility
primarily services the Company's European independent distributors and, to a
lesser extent, distributors and sales agents in Mediterranean Africa and the
Middle East.

                                                                            9

<PAGE>


AVAILABILITY OF MATERIALS
The Company has developed close working relationships with many of its key
vendors to assure an adequate and continuous supply of materials for the
Company's products.  There are some unique components that would cause temporary
stoppage of specific products if these components were not available.  However,
since the Company could obtain alternate sources of supply after a reasonable
period of time, the temporary stoppage would not have a material adverse effect
on the Company.

COMPETITION
The Company competes domestically with a fairly large number of companies. 
These companies range in size from a few which are larger than Hach and sell,
primarily, laboratory and portable instruments, to numerous smaller companies
which sell products competitive with only a few of Hach's products.  The Company
is not aware of any company which competes with it across the full range of
products sold by it or which competes with it in all major product lines.

Different competitive factors are of greater or lesser importance with respect
to each of the Company's product lines although, overall, technical
sophistication, reliability, quality, relative ease of operation and price
probably are most important.  The Company believes that it has no competitive
disadvantages with respect to any of these factors.  In many instances the
Company has a competitive advantage due to the relative ease with which
individuals without technical backgrounds can use the Company's products to
perform analyses.  Hach Company's competition in international markets is
comparable to its competition in domestic markets.  However, the international
competition, particularly from Europe, appears to be growing more aggressive and
competes across a broader range of products.

RESEARCH
During fiscal 1997, 1996 and 1995, the Company spent $8,459,000, $7,464,000 and
$6,875,000, respectively, on Company-sponsored research and development
activities.

PATENTS
The Company owns a number of patents.  While the company regards its patents as
valuable, it does not consider any of its business materially dependent upon any
single patent.

BACKLOG
The dollar amounts of backlogged orders at May 23, 1997 and May 24, 1996 were
$5,797,000 and $4,227,000, respectively.  During the current fiscal year the
Company expects to fill all of the orders which were backlogged at May 23, 1997.

EMPLOYEES
At April 30, 1997, the Company employed approximately 875 people.  The Company
is not a party to any collective bargaining agreements.

                                                                            10


<PAGE>

COMMON STOCK PRICE RANGE AND DIVIDENDS                 
                                                       CASH
FISCAL                                SALE           DIVIDENDS
YEAR    QUARTER                  HIGH       LOW      PER SHARE


1997    Fourth................   19 3/4    14 1/2        .06
        Third.................   19        16 1/4        .06
        Second................   20        14 7/8        .06
        First.................   17 1/2    14 1/2        .06

1996    Fourth................   17 3/4    16 1/4        .06
        Third.................   17 1/2    15            .06
        Second................   20 3/8    12 3/4        .05
        First.................   16        12 3/4        .05


The Company's Common Stock trades on the Nasdaq Stock Market under the symbol
HACH.  The preceding table sets forth the daily high and low last sales prices
for the Company's Common Stock for the periods indicated, as reported in the
Wall Street Journal, together with the amounts of dividends paid for the fiscal
years ended April 30, 1997 and 1996.  These prices represent quotations between
dealers in securities, do not include retail markdowns or commissions and do not
necessarily represent "actual transactions."  The current quoted price of the
stock is listed daily in the WALL STREET JOURNAL in the Nasdaq National Market
System section.  On April 30, 1997, there were 805 holders of record of the
Company's Common Stock.


MANAGEMENT'S REPORT AND REPORT OF INDEPENDENT ACCOUNTANTS

Stockholders of Hach Company:

The information presented in this Annual Report was prepared by your company's
management.  The financial statements were prepared in accordance with generally
accepted accounting principles applied on a consistent basis.  These principles
require choices among alternatives and numerous estimates of financial matters.
We believe that the accounting principles chosen are appropriate in the
circumstances and the estimates and judgments involved in Hach's financial
reporting are reasonable.  All other financial and operating data included in
this Annual Report are presented to provide information we believe useful to
investors.

Management recognizes its responsibility for the integrity and objectivity of
the information presented.  To meet this responsibility, management maintains a
system of internal accounting controls designed to provide reasonable assurance
that the financial reports are fairly presented and that our employees comply
with our stated policies and procedures, including policies on the ethical
conduct of business.

The Audit Committee recommended and the Board of Directors approved the
appointment of Coopers & Lybrand L.L.P. as independent auditor for the Company.
The Coopers & Lybrand L.L.P. report on the financial statements is presented in
this Annual Report.

Audit and related activities of Coopers and Lybrand L.L.P. are conducted
throughout the year for the purposes of the annual audit and limited reviews of
interim financial statements.  The audit of the financial statements is
conducted in accordance with generally accepted auditing standards and includes
tests of internal controls and accounting records as deemed necessary.

                                                                            11

<PAGE>


The Audit Committee of the Board of Directors, which is composed solely of
outside directors, performs an oversight role relating Hach's public financial
reporting.  The Audit Committee meets at least two times a year with management
and Coopers & Lybrand L.L.P., both privately and collectively, to discuss
internal accounting control and financial reporting matters.  Coopers & Lybrand
L.L.P. has access to the Audit Committee to discuss any matter.


KATHRYN HACH-DARROW
Chairman of the Board


GARY R. DREHER
Vice President and
Chief Financial Officer



To the Stockholders and Board of Directors of Hach Company:

We have audited the accompanying consolidated balance sheets of Hach Company and
Subsidiaries as of April 30, 1997 and 1996, and the related consolidated
statements of income, stockholders' equity and cash flows for each of the three
years in the period ended April 30, 1997.  These financial statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. 
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Hach
Company and Subsidiaries as of April 30, 1997 and 1996, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended April 30, 1997, in conformity with generally accepted
accounting principles.


COOPERS & LYBRAND L.L.P.
Denver, Colorado
June 26, 1997

                                                                            12

<PAGE>

HACH COMPANY & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED APRIL 30, 1997, 1996 AND 1995
(THOUSANDS OF DOLLARS EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
<S>                                                         <C>                <C>              <C> 
                                                                    1997                 1996         1995
--------------------------------------------------------------------------------------------------------------
Net sales                                                        $  121,480          $  114,285    $  105,269 
Cost of sales                                                        62,342              57,839        51,994 
--------------------------------------------------------------------------------------------------------------
  Gross Profit                                                       59,138              56,446        53,275 
Selling, general and administrative expense                          33,385              33,000        32,240 
Research and development expense                                      8,459               7,464         6,875 
Provision to reduce carrying value of electrochemical assets            ---                 ---           775 
--------------------------------------------------------------------------------------------------------------
  Income from operations                                             17,294              15,982        13,385 
Investment income                                                     1,799               1,324           661 
Interest expense                                                        (13)                 (6)           (1)
---------------------------------------------------------------------------------------------------------------
  Income before income taxes                                         19,080              17,300        14,045 
Income tax expense                                                    6,585               6,046         4,775 
--------------------------------------------------------------------------------------------------------------
  Net income                                                     $   12,495          $   11,254    $    9,270 
--------------------------------------------------------------------------------------------------------------
  Net income per common share                                    $     1.10          $     0.99    $     0.81 
==============================================================================================================
Weighted average shares outstanding                              11,365,108          11,368,126    11,385,355 
==============================================================================================================

</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

                                                                            13


<PAGE>


HACH COMPANY & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
YEAR ENDED APRIL 30, 1997 AND 1996
(THOUSANDS OF DOLLARS EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
<S>                                                                    <C>              <C>
                                                                                 1997          1996 
----------------------------------------------------------------------------------------------------
ASSETS
Current assets:
  Cash and cash equivalents                                                 $  14,575      $  8,487 
  Marketable securities, held to maturity                                      19,100        12,821 
  Accounts receivable, less reserves of $249 and $248, respectively            17,829        15,846 
  Inventories, net                                                             11,798        12,769 
  Deferred tax assets and other current assets                                  4,416         3,637 
----------------------------------------------------------------------------------------------------
    Total current assets                                                       67,718        53,560 
----------------------------------------------------------------------------------------------------
Property, plant and equipment, at cost
  Buildings and improvements                                                   23,404        23,557 
  Machinery and equipment                                                      46,555        43,129 
----------------------------------------------------------------------------------------------------
                                                                               69,959        66,686 
  Less: allowance for depreciation and amortization                            42,141        38,571 
----------------------------------------------------------------------------------------------------
                                                                               27,818        28,115 
  Land                                                                            986           997 
----------------------------------------------------------------------------------------------------
Net property, plant and equipment                                              28,804        29,112 
----------------------------------------------------------------------------------------------------
  Marketable securities, held to maturity                                       7,406         9,299 
  Other assets                                                                  1,652         1,684 
----------------------------------------------------------------------------------------------------
Total assets                                                               $  105,580     $  93,655 
====================================================================================================

</TABLE>

                                                                            14

<PAGE>

<TABLE>
<CAPTION>

<S>                                                                    <C>             <C>
LIABILITIES
Current liabilities:
  Accounts payable                                                           $  4,044      $  2,826 
  Accrued liabilities:
    Compensation                                                                1,082           731 
    Compensated absences                                                        3,655         3,500 
    Profit sharing                                                              3,473         3,069 
    Income taxes payable                                                          753           360 
    Other                                                                       1,379         1,188 
----------------------------------------------------------------------------------------------------
    Total current liabilities                                                  14,386        11,674 
----------------------------------------------------------------------------------------------------
Long term liabilities                                                           1,726         1,347 
Deferred income taxes                                                           2,179         1,814 
----------------------------------------------------------------------------------------------------
Total liabilities                                                              18,291        14,835 
----------------------------------------------------------------------------------------------------

STOCKHOLDERS' EQUITY 
Common stock, $1 par value; authorized 25,000,000 shares in 1997
  and 40,000,000 shares in 1996; issued 11,622,953 shares                      11,623        11,623 
Capital contributed in excess of par value of common stock                        453           316 
Retained earnings                                                              76,944        67,177 
Cumulative currency translation adjustment                                        338         1,636 
----------------------------------------------------------------------------------------------------
                                                                               89,358        80,752
Less: shares held in treasury, at cost: (254,356 in 1997 and 258,881 in 1996)  (2,069)       (1,932)
----------------------------------------------------------------------------------------------------
Total stockholders' equity                                                     87,289        78,820 
----------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity                                 $  105,580     $  93,655 
====================================================================================================

</TABLE>


The accompanying notes are an integral part of the consolidated financial 
statements.

                                                                            15


<PAGE>

HACH COMPANY & SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED APRIL 30, 1997, 1996 AND 1995
(THOUSANDS OF DOLLARS EXCEPT SHARE DATA)

<TABLE>
<CAPTION>

<S>                                 <C>         <C>               <C>            <C>             <C>            <C> 
                                         COMMON        CAPITAL          RETAINED      CUMULATIVE     SHARES HELD     TOTAL
                                         STOCK, $1  CONTRIBUTED IN       EARNINGS       CURRENCY     IN TREASURY, STOCKHOLDERS'
                                         PAR VALUE  EXCESS OF PAR                     TRANSLATION      AT COST      EQUITY
                                                         VALUE OF                     ADJUSTMENT
                                                     COMMON STOCK
--------------------------------------------------------------------------------------------------------------------------
Balance April 30, 1994                   $  11,623          $  31      $  51,090         $  497     $  (744)    $  62,497 
Net income                                     ---            ---          9,270            ---         ---         9,270 
Cash dividends, $.17 per share                 ---            ---         (1,935)           ---         ---        (1,935)
Purchase of treasury stock                     ---            ---            ---            ---         ---           --- 
  (30,922 shares)                              ---            ---            ---            ---        (445)         (445)
Stock options exercised, net
  (12,130 shares)                              ---            117            ---            ---         (84)           33 
Foreign currency                               ---            ---            ---            ---         ---           --- 
  translation adjustment                       ---            ---            ---          1,908         ---         1,908 
--------------------------------------------------------------------------------------------------------------------------
Balance April 30, 1995                   $  11,623         $  148      $  58,425       $  2,405   $  (1,273)    $  71,328 
Net income                                     ---            ---         11,254            ---         ---        11,254 
Cash dividends, $.22 per share                 ---            ---         (2,502)           ---         ---        (2,502)
Purchase of treasury                           ---            ---            ---            ---         ---           --- 
  stock (47,638 shares)                        ---            ---            ---            ---        (736)         (736)
Stock options exercised, net
  (21,722 shares)                              ---            168            ---            ---          77           245 
Foreign currency                               ---            ---            ---            ---         ---           --- 
  translation adjustment                       ---            ---            ---           (769)        ---          (769)
--------------------------------------------------------------------------------------------------------------------------
Balance April 30, 1996                   $  11,623         $  316      $  67,177       $  1,636   $  (1,932)    $  78,820 
Net income                                     ---            ---         12,495            ---         ---        12,495 
Cash dividends, $.24 per share                 ---            ---         (2,728)           ---         ---        (2,728)
Purchase of treasury                           ---            ---            ---            ---         ---          --- 
  stock (19,500 shares)                        ---            ---            ---            ---        (326)         (326)
Shares purchased under 
  employee stock purchase plan                 ---            137            ---            ---         189           326 
Foreign currency                               ---            ---            ---            ---         ---           --- 
  translation adjustment                       ---            ---            ---         (1,298)        ---        (1,298)
---------------------------------------------------------------------------------------------------------------------------
Balance April 30, 1997                   $  11,623         $  453      $  76,944         $  338   $  (2,069)    $  87,289 
===========================================================================================================================

</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

                                                                            16
<PAGE>

HACH COMPANY & SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED APRIL 30, 1997, 1996 AND 1995
(THOUSANDS OF DOLLARS)

<TABLE>
<CAPTION>
<S>                                                              <C>              <C>           <C>
                                                                            1997           1996       1995 
-------------------------------------------------------------------------------------------------------------
Cash from operating activities:
Net income                                                             $  12,495      $  11,254   $  9,270 
Adjustments to reconcile net income to 
  net cash provided by operating activities:
     Depreciation and amortization                                         6,196          6,049      5,769 
     (Benefit) provision for deferred income taxes                           (38)          (277)      (559)
     Loss on disposal of equipment                                            40             63        177 
     Provision to reduce carrying value of electrochemical assets            ---            ---        775
     (Increase) decrease in accounts receivable                           (1,983)           490       (393)
     (Increase) decrease in inventories                                      971         (1,038)      (362)
     (Increase) decrease in deferred tax assets and 
       other current assets                                                 (376)           798     (1,509)
     Increase (decrease) in accounts payable                               1,218             (9)       385 
     Increase in accrued liabilities                                       1,873          2,170        695 
-----------------------------------------------------------------------------------------------------------
Net cash provided by operating activities                                 20,396         19,500     14,248 
-----------------------------------------------------------------------------------------------------------
Cash flow from investing activities:
     Proceeds from sale of equipment                                          11            271         62 
     Capital expenditures                                                 (6,163)        (6,488)    (6,445)
     Purchases of investments held-to-maturity                           (21,727)       (23,397)    (4,723)
     Proceeds from maturities of short-term investments                   17,341          9,587      2,241 
     (Increase) decrease in other assets                                      32           (395)      (573)
------------------------------------------------------------------------------------------------------------
Net cash used by investing activities                                    (10,506)       (20,422)    (9,438)
------------------------------------------------------------------------------------------------------------
Cash flow from financing activities:
     Payments on capital lease obligations                                   ---             (6)        (6)
     Dividends paid                                                       (2,728)        (2,502)    (1,935)
     Purchases of treasury stock                                            (326)          (736)      (445)
     Shares purchased under employee stock purchase plan                     326            245         33 
------------------------------------------------------------------------------------------------------------
Net cash used by financing activities                                     (2,728)        (2,999)    (2,353)
------------------------------------------------------------------------------------------------------------
Effect of exchange rate changes                                           (1,074)          (642)     1,556 
------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents                       6,088         (4,563)     4,013 
------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at the beginning of the year                     8,487         13,050      9,037 
------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at the end of the year                       $  14,575       $  8,487  $  13,050 
============================================================================================================


Supplemental disclosures of cash flow information:
Cash paid during the year for income taxes                              $  6,231       $  5,028   $  6,422 

</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

                                                                            17

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiaries.  All significant intercompany transactions and
account balances have been eliminated in consolidation.

Certain amounts in the financial statements for prior years have been
reclassified to conform with the current year's presentation.

CASH EQUIVALENTS AND CONCENTRATIONS OF CREDIT RISK
Cash and cash equivalents include currency on hand, demand deposits with banks
or other financial institutions and other highly liquid securities purchased
with a maturity of three months or less.  Financial instruments which
potentially subject the Company to concentrations of credit risk consist
principally of cash and cash equivalents.  The Company places its cash and cash
equivalents with high-credit quality financial institutions.  At times, these
deposits may exceed federally insured limits.  The Company has not experienced
any losses in such accounts.

The Company's concentration of credit risk with respect to accounts receivable
is limited due to a large customer base and its geographic dispersion.

INVESTMENTS
The Company accounts for investments in accordance with SFAS No. 
115, "Accounting for Certain Investments in Debt and Equity Securities."  
This accounting standard requires companies to classify securities as 
held-to-maturity, trading or available-for-sale.  A substantial majority of 
the Company's marketable investments are classified as held-to-maturity.  The 
Company uses the amortized cost method of accounting for investments in 
held-to-maturity debt securities for which it has the positive intent and 
ability to hold to maturity.  The cost of securities sold is based on the 
specific identification method. Of these securities, $19,100,000 have 
contracted maturities within one year and $7,406,000 within one to five 
years.  The carrying amount of these securities approximated the fair value 
at April 30, 1997.

INVENTORIES
Inventories are valued at the lower of cost or market.  The cost of United
States inventories is based on the last-in, first-out (LIFO) method;  all other
inventories are based on the average cost method.

PROPERTY, PLANT AND EQUIPMENT
The property, plant and equipment are stated at cost.  Depreciation and
amortization are computed by using the straight-line method based on estimated
useful lives of the related assets or the lease term.  Estimated useful lives
range from three to 30 years.

Maintenance and repairs are charged to expense as incurred while major renewals
and improvements are capitalized.

The cost and related allowances for depreciation of assets sold or otherwise
disposed of are deducted from the related accounts and resulting gains or losses
are reflected in operations.

INCOME TAXES
The Company accounts for taxes in accordance with SFAS No. 109, "Accounting for
Income Taxes," using an asset and liability approach.  The asset and liability
approach requires the recognition of deferred tax liabilities and assets for the
expected future tax consequences of temporary differences between the carrying
amounts and the tax bases of those assets and liabilities.
                                                                            18


<PAGE>

FOREIGN CURRENCY TRANSLATION
Foreign asset and liability accounts are converted into U.S. dollars using the
exchange rate in effect at the end of the year and revenue and expense accounts
are converted at the average exchange rate in effect during the year.

The Company's European subsidiary occasionally enters into foreign exchange
forward contracts in an attempt to mitigate risk of currency fluctuations on a
portion of the anticipated inventory purchases to be made from Hach Company. 
Gains and losses on these contracts are included in the determination of net
income.  As of April 30, 1997 and 1996, the Company had no forward contracts to
sell Belgium francs.

REVENUE RECOGNITION
The Company sells a large number of different tangible products and the average
size of a customer order is relatively small.  Revenue is recognized upon
shipment of products to customers.  Customers purchasing products from the
Company may return the products within a 30-day period if they are not
satisfied.  Estimated returns are charged against earnings in the period the
original sale occurred.

The Company does not warrant products for an extended period of time.  Warranty
claims historically have been minor.  Known warranty claims are accrued in the
period they become known.

ADVERTISING
Costs associated with advertising are expensed in the year incurred except 
for direct-response advertising costs. Direct-response advertising costs are 
recorded as prepaid and amortized over the life of the associated program 
which is generally one year. Advertising expense was $3,741,000, $4,352,000 
and $4,046,000 in 1997, 1996 and 1995, respectively.


EARNINGS PER SHARE
Earnings per share are computed using the weighted average number of shares
outstanding during each year.  Stock options outstanding do not have a material
dilutive effect on earnings per share.  Shares used in computing per share
amounts give a retroactive effect in all periods to the stock splits.

The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 128, "Earnings Per Share," in February 1997.  This
statement, which is required to be adopted in the third quarter of fiscal year
1998, establishes standards for computing and presenting earnings per share. 
The company has not yet adopted this statement but believes that this statement
will have no material effect on the Company's financial statements.

USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect amounts reported therein.  Due to the inherent uncertainty involved in
making estimates, actual results reported in future periods may be based upon
amounts which differ from those estimates.


2.  INVENTORIES

 Components of inventory at April 30 were:
                                       (THOUSANDS OF  DOLLARS)
                                           1997        1996
-------------------------------------------------------------
Raw materials and purchased parts    $    2,811     $  2,623
Work in process                           1,534        2,030
Finished Goods                            7,031        7,762
Resale                                      422          354
-------------------------------------------------------------
Total                                 $  11,798     $ 12,769
-------------------------------------------------------------

Inventory Valuation Allowances at April 30, 1997, 1996 and 1995 were $555,000,
$188,000 and $505,000 respectively.

                                                                            19


<PAGE>

Management believes the LIFO method, which results in better matching of current
costs with current revenues, minimizes inflation-induced inventory profits and
thus more clearly reflects results of operations.  The cost of United States
inventories stated under LIFO method for 1997, and 1996 was approximately 80% of
the value of total inventories.

For purposes of comparison to companies not utilizing the LIFO method, the
following information is presented.  If all inventories had been determined
using the current replacement cost at April 30, 1997, and 1996, reported
inventories would have been $3,184,000 and $2,819,000 higher, respectively. 
Reported net income would have been $226,000 ($.02 per common share) higher for
fiscal year 1997,  $94,000 ($.01  per common share) higher for fiscal year 1996,
and $208,000 ($.02 per common share) for fiscal year 1995.  The impact on
reported net income utilizing LIFO as opposed to the current replacement cost
method has been computed by taking the change from year to year in the
difference between inventory valuation under LIFO and the inventory valuation
under current replacement costs and tax affecting such difference by 38% for
1997 and 1996, and 36% for 1995, the approximate incremental tax rate for each
year.


3. INCOME TAXES

Income before income tax expense consisted of the following:

                                     (THOUSANDS OF DOLLARS)
                                    1997      1996      1995
Income before income tax:
  Domestic                       $16,559   $13,386   $12,352
  Foreign                          2,522     3,914     1,693
-------------------------------------------------------------
                                 $19,081   $17,300   $14,045
==============================================================

Income tax expense:
  Current
      Federal                    $ 4,852   $ 4,122   $ 4,045
      State                          775       631       606
      Foreign                        997     1,570       683
-------------------------------------------------------------
                                   6,624     6,323     5,334
  Deferred
      Federal                        (63)     (227)     (496)
      State                           30       (46)      (69)
      Foreign                         (6)       (4)        6
-------------------------------------------------------------
                                     (39)     (277)     (559)
-------------------------------------------------------------
                                 $ 6,585   $ 6,046   $ 4,775
==============================================================

Components of the net deferred tax assets resulting from differences in book
and tax accounting methods are as follows:

                                                                            20

<PAGE>



NET DEFERRED TAX ASSET

                                              (THOUSANDS OF DOLLARS)
                                              1997      1996      1995
-----------------------------------------------------------------------
Deferred tax assets:
      Vacation pay                        $  1,104  $  1,087  $  1,055
      Inventory capitalization / valuation     654       527       545
      Write-off of electrochemical assets      ---       ---       233
      Deferred compensation                    652       376       208
      Intercompany profits                     271       120       117
      Marketable securities                    114       108        75
      Employee benefit plans                   ---        83        53
      Other                                    113       122       114
-----------------------------------------------------------------------
Total deferred tax assets                    2,908     2,423     2,400

Deferred tax liabilities:
      Accelerated depreciation            $  2,103  $  1,749  $  1,998
      Foreign deferrals                         86        91        95
      Employee benefit plans                    97       ---       ---
-----------------------------------------------------------------------
Total deferred tax liabilities               2,286     1,840     2,093
-----------------------------------------------------------------------
Net deferred tax asset                    $    622  $    583  $    307
=======================================================================
Current deferred tax asset                   2,801     2,397     2,377
Noncurrent deferred tax liability            2,179     1,814     2,070
-----------------------------------------------------------------------
Net deferred tax asset                    $    622  $    583  $    307
=======================================================================

The company believes, based upon past earnings, that all of the deferred tax
assets will be realized.  Accordingly, no valuation allowance has been 
provided.

Effective tax rates on income before income taxes for the years ended April 30,
1997, 1996 and 1995 were 35%, 35% and 34%, respectively.  Differences from
applying the statutory Federal corporate income tax rate to income before 
income taxes are due to the following:

                                               (THOUSANDS OF DOLLARS)
                                              1997      1996      1995
-----------------------------------------------------------------------
Computed statutory expense                $  6,487  $  5,882  $  4,775
State income tax, net                          512       443       386
Prior years' tax accrual adjustment            ---       ---       284
Difference between U.S. statutory rates
  and foreign effective rates                  135       235       114
Foreign sales corporation                     (212)     (136)      (95)
Tax credits, net                              (352)     (306)     (185)
Prior year's amended tax credits, net          ---       ---      (418)
Other, net                                      15       (72)      (86)
-----------------------------------------------------------------------
                                          $  6,585  $  6,046  $  4,775
========================================================================

Undistributed earnings intended to be reinvested indefinitely by the foreign
subsidiaries totaled $8,492,000 at April 30, 1997.  The earnings would become
taxable upon the sale or liquidation of the foreign subsidiaries or upon the
remittance of dividends.  The determination of the deferred tax liability
related to these undistributed earnings is not practicable and, accordingly, 
no U.S. deferred tax has been recorded.
      
                                                                            21


<PAGE>


4.  EMPLOYEE BENEFITS

EMPLOYEE PROFIT SHARING AND SAVINGS PLANS

The Company has an employee profit-sharing plan covering substantially all
regular employees of the Company with the maximum contribution limited to the
amount allowable for federal tax purposes.  Each year the Company's Board of
Directors approves an amount the Company will contribute to the plan.  The
Company has a savings plan which qualifies under Section 401(k) of the Internal
Revenue Code.  Eligible employees may contribute from 1% to 10% of their income
on a pretax basis to this savings plan.  The Company matches 50% of the first 4%
of the employee's contribution.  The Company's annual contributions under these
Plans were $2,638,000 in 1997, $2,385,000 in 1996 and $1,967,000 in 1995.

EMPLOYEE STOCK OWNERSHIP PLAN

The Company has an Employee Stock Ownership Plan (ESOP) which is a
noncontributory plan established to acquire shares of the Company's common stock
for the benefit of all eligible employees.  The Company accounts for the ESOP
under Employers' Accounting for Employee Stock Ownership Plans (SOP 93-6).  Each
year the Company's Board of Directors approves an amount the Company will
contribute to the plan.  The Company contributions to the Plan were $917,000 in
1997, $829,000 in 1996 and $650,000 in 1995.  ESOP stock purchases are made from
the open market.  As of April 30, 1997, all shares in the ESOP plan were
allocated to participants.

STOCK OPTION PLANS

The Company has two active stock option plans.  Under the 1993 Stock Option Plan
the Company periodically grants certain officers and key employees incentive
stock options to purchase common stock.  A total of 625,000 shares of the
Company's common stock have been reserved for option at a price not less than
the market price on the date of grant.  Options granted under the plan may not
be exercised until one year after the date of grant.  Options are exercisable in
installments on a cumulative basis beginning  in the second year after grant and
expiring not later than ten years from the date of grant.  Under the 1995 
Non-Employee Director Stock Plan, 150,000 shares of the Company's common stock 
have been reserved for option.  The option price per share is equal to the fair
market value of a company share on the date of grant.  The term of each option
may not exceed ten years, and an option first becomes exercisable six months
after the option grant date.

A summary of the status of the Company's stock option plans follows:
                                        Options     Weighted Average
                                       OUTSTANDING  EXERCISE PRICE

Balance at April 30, 1994                  303,303    $16.88
Exercised                                  (25,101)     8.96
-------------------------------------------------------------
Balance at April 30, 1995                  278,202     17.60
Granted                                    245,000     16.15
Exercised                                  (33,827)     8.96
Expired                                    (20,000)    19.00
-------------------------------------------------------------
Balance at April 30, 1996                  469,375     17.41
Granted                                     88,648     16.79
-------------------------------------------------------------
Balance at April 30, 1997                  558,023    $17.31

Options exercisable at:

April 30, 1996                             183,999    $19.34


                                                                            22


<PAGE>


April 30, 1997                             332,016    $18.01


EMPLOYEE STOCK PURCHASE PLAN

The Company has an employee stock purchase plan for all eligible employees. 
Under the plan, shares of the Company's common stock may be purchased at 
six-month intervals at 85% of the lower of the fair market value on the first 
or the last day of each six-month period.  Employees may purchase shares, 
through payroll deductions not exceeding 10% of their gross compensation 
during an offering period.  During 1997, employees purchased 11,485 shares on 
June 30, 1996 and 12,540 shares on December 31, 1996, at a price of $13.60 
per share. During 1996, employees purchased 13,510 shares at a price of 
$11.47 per share, for the plan's first offering period.  At April 30, 1997, 
462,465 shares were reserved for future issuance.

PRO FORMA INFORMATION

Statement of Financial Accounting Standard No. 123, "Accounting for Stock-Based
Compensation," requires companies to measure employee stock compensation plans
based on the fair value method of accounting.  However, the Statement allows the
alternative of continued use of Accounting Principles Board (APB) Opinion No.
25, "Accounting for Stock Issued to Employees," with pro forma disclosure of net
income and earnings per share determined as if the fair value based method had
been applied in measuring compensation cost.  The Company adopted the new
standard in 1997, using the disclosure method, and elected the continued use of
APB Opinion No. 25 for financial statement purposes.  

Pro forma information regarding net income and earnings per share is required by
SFAS No. 123.  This information is required to be determined as if the Company
had accounted for its employee stock options (including shares issued under the
Employee Stock Purchase Plan, collectively called "options") granted subsequent
to April 30, 1995, under the fair value method of that statement.  The fair
value of options granted in 1996 and 1997 reported below has been estimated at
the date of grant using a Black-Scholes option pricing model with the following
weighted average assumptions:

                                                             Employee Stock
                                         Stock Options    Purchase Plan Shares
                                         1997    1996        1997      1996
-------------------------------------------------------------------------------
Expected life (in years)                  4.0    4.0         .5          .5
Risk-free interest rate                   6.2%   5.7%       5.4%        5.5%
Volatility                               .233   .233       .233        .233
Dividend yield                            1.5%   1.5%       1.5%        1.5%

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options that have no vesting restrictions and are fully
transferable.  In addition, option valuation models require the input of highly
subjective assumptions, including the expected stock price volatility.  Because
the Company's options have characteristics significantly different from those of
traded options, and because changes in the subjective input assumptions can
materially affect the fair value estimate, in the opinion of management, the
existing models do not necessarily provide a reliable single measure of the fair
value of its options.  The weighted average estimated fair value of employee
stock options granted during 1997 and 1996 was $4.18 and $3.87 per share,
respectively.  The weighted average estimated fair value of shares granted under
the Employee Stock Purchase Plan during 1997 and 1996 was $3.88 and $3.40,
respectively.

The majority of the Company's stock options are classified as Incentive Stock
Options and therefore, provide no tax benefit to the Company.

For purposes of pro forma disclosures, the estimated fair value of the options
is amortized to expense over the options' vesting period.  The Company's pro
forma information follows:

                                                                            23


<PAGE>

                                                 1997         1996 
--------------------------------------------------------------------
Pro forma net income (thousands of dollars)     $12,067    $11,029
Pro forma earnings per share                    $  1.06    $   .97

Because SFAS No. 123 is applicable only to options granted subsequent to April
30, 1995, the resulting pro forma effect may not be representative of that to be
expected in future years.

At April 30, 1997, options with a weighted average remaining life of 3.1 years
covering 558,023 shares were outstanding at $16.125 to $21.80 per share.  Shares
available for future grants amounted to 320,102 and 408,750 in 1997 and 1996,
respectively.

DEFERRED COMPENSATION PLAN

The Company has a Deferred Compensation Plan which permits eligible employees to
defer a portion of their compensation  The deferred compensation, together with
a Company contribution and accumulated earnings is accrued but unfunded.  At
April 30, 1997 and 1996, the liability for the deferred compensation is
$1,507,000 and $1,087,000 respectively, and is included with long-term
liabilities.

5. CAPITAL STOCK

On May 19, 1997, the Board of Directors of the Company approved revisions to a
proposal to implement a dual class stock structure previously approved by the
Board in March 1997.  The revised proposal would amend the Company's Certificate
of Incorporation to allow a new class of stock, which would be non-voting.  The
amendment is subject to approval by the holders of a majority of the outstanding
shares of existing common stock.  Upon such approval and the filing of the
amendment under Delaware law, the Board plans to establish a record date and
authorize distribution of a stock dividend of one share of non-voting stock on
each share of the Company's outstanding common stock.

6. SUBSEQUENT EVENT

On June 26, 1997, the Company and Lawter International, entered into a
definitive agreement for the repurchase of Lawter International's entire
holdings of Hach Company Common Stock.  The 3,157,223 shares, representing
approximately 28% of Hach Company outstanding Common Stock, were purchased for
$19.00 per share.  The transaction was completed on July 8, 1997.  The purchase
was made using approximately $30 million of cash on hand, supplemented by bank
borrowings.


7.  SEGMENT INFORMATION

The Company operates primarily in a single industry segment encompassing
laboratory instruments, process analyzers and test kits which analyze the
chemical content and other properties of water and other aqueous solutions.
This segment also encompasses the chemicals manufactured and sold by the
Company, most of which are used with the instruments and test kits manufactured
by the Company.

Sales for the Company's European subsidiary are made to European dealers and to
customers in the Middle East and Mediterranean Africa in Belgium francs and U.S.
dollars, respectively.  Payments from the European subsidiary to the U.S. parent
are made in U.S. dollars and are subject to the exchange rate in effect at the
time of payment.  Export transactions made to all other parts of the world by
the international staff based in Loveland, Colorado, are conducted primarily in
U.S. dollars.

                                                                            24


<PAGE>


The amount of sales made into the international marketplace is influenced to
some degree by the strength of the U.S. dollar against other currencies.  Other
conditions which to some extent affect the sales of the Company's products in
international markets include restrictive tariff and trade policies imposed by
foreign countries and domestic and foreign tax and economic policies.



The table below summarizes certain financial information by geographic segments:
                                         (THOUSANDS OF DOLLARS)
GEOGRAPHIC SEGMENT INFORMATION           1997       1996      1995 
--------------------------------------------------------------------
Net Sales to Unaffiliated Customers:
  United States:
    Domestic                        $  77,688   $  73,472  $   69,867 
---------------------------------------------------------------------
    Export:
      Canada                            5,018       4,840       3,951
      Asia                             10,875       9,388       7,414
      Australia/Oceania                 1,360       1,496       1,212
      Mexico/Central America/Caribbean  3,619       2,738       2,924
      South America                     4,121       3,313       3,023
      Other                             2,268       1,748       1,889
---------------------------------------------------------------------
                                       27,261      23,523      20,413
---------------------------------------------------------------------
                                      104,949      96,995      90,280
Europe                                 16,531      17,290      14,989
---------------------------------------------------------------------
                                      121,480     114,285     105,269
---------------------------------------------------------------------
Net Sales to European Subsidiaries:
  United States                        11,402      10,140       8,310
  Eliminations                        (11,402)    (10,140)     (8,310)
----------------------------------------------------------------------
                                   $  121,480   $ 114,285  $  105,269
======================================================================
Income from Operations:
  United States                    $   14,914   $  12,293  $   11,766
  Europe                                2,380       3,689       1,619
----------------------------------------------------------------------
                                   $   17,294   $  15,982  $   13,385
======================================================================
Identifiable Assets:
  United States                       $51,244   $  49,384  $   48,795
  Europe                                7,186       8,342       8,401
---------------------------------------------------------------------
                                       58,430      57,726      57,196
Corporate Assets                       47,150      35,929      27,062
---------------------------------------------------------------------
                                     $105,580   $  93,655  $   84,258
======================================================================

                                                                            25

<PAGE>


8. UNAUDITED SUMMARY OF QUARTERLY FINANCIAL INFORMATION
    (THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS)


                                        First    Second     Third    Fourth
                                      Quarter   Quarter   Quarter   Quarter
----------------------------------------------------------------------------
Fiscal Year 1997:
Net Sales                           $  28,910 $  30,284 $  29,481  $ 32,805
Gross Profit                           14,163    14,960    14,157    15,858
Net income                              2,960     3,215     3,025     3,295
  Net income per common share            0.26      0.28      0.27      0.29

Fiscal Year 1996:
Net Sales                           $  27,188 $  28,717 $  27,999  $ 30,381
Gross Profit                           13,750    14,370    13,737    14,589
Net income                              2,610     2,940     2,750     2,954
  Net income per common share            0.23      0.26      0.24      0.26


                                                                           26

<PAGE>

HACH COMPANY AND SUBSIDIARIES           
CORPORATE DATA      
<TABLE>
<CAPTION>
<S>                            <C>                                <C>  
WORLD HEADQUARTERS                 BOARD OF DIRECTORS                 CORPORATE OFFICERS
5600 Lindbergh Drive               KATHRYN HACH-DARROW                KATHRYN HACH-DARROW
Loveland, Colorado, U.S.A.           Chairman of the Board              Chairman of the Board
                                     and Chief Executive Officer        and Chief Executive Officer
U.S.A. SALES                       BRUCE J. HACH                      BRUCE J. HACH
Davis, California                    President and Chief                President and Chief
Corona, California                   Operating Officer                  Operating Officer
Loveland, Colorado                 GARY R. DREHER                     ROBERT O. CASE
Daytona Beach, Florida               Vice President and                 Secretary and General Counsel
Snellville, Georgia                  Chief Financial Officer          LOEL J. SIROVY
Roselle, Illinois                  LINDA O. DOTY                        Senior Vice President
Fort Wayne, Indiana                  Partner                            Operations and Outbound Marketing
Huxley, Iowa                         Doty & Associates                JERRY M. CHURCHILL
Louisville, Kentucky                 Denver, Colorado                   Vice President
Westminster, Maryland              JOHN N. MCCONNELL                    US Sales and Service
Preston, Mississippi                 Chairman and President           GARY R. DREHER
Auburn, New Hampshire                Labconco                           Vice President and 
Whitehouse Station, New Jersey       Kansas City, Missouri              Chief Financial Officer
Mt. Laurel, New Jersey             JOSEPH V. SCHWAN                   RANDALL A. PETERSEN
Ponce City, Oklahoma                 Chief Operating Officer            Vice President
Columbus, Ohio                       and Executive Vice President       Human Resources
Sullivan's Island, South Carolina    Standard Register                JOHN C. PRIVETTE
Georgetown, Texas                    Dayton, Ohio                       Vice President
Conroe, Texas                      FRED W. WENNINGER                    International Operations
Mill Creek, Washington               Independent Businessman          KENNETH OGAN
                                     Spoakane, Washington               Vice President
                                                                        Research & Development
</TABLE>


                                                                            27


<PAGE>


<TABLE>
<CAPTION>


<S>                           <C>                                 <C> 
INTERNATIONAL SALES                TRANSFER AGENT                     BRIAN BOWDEN
Headquarters:  Loveland,           AND STOCK REGISTRAR                  Vice President
  Colorado, U.S.A.                 HARRIS TRUST & SAVINGS BANK          Information Systems Technology
European Sales:  Namur, Belgium    311 West Monroe Street             LARRY D. THOMPSON
  sales agents in principal cities Chicago, IL  60690                   Vice President
  throughout the world                                                  Ames Chemical Operations
Hach Sales & Service Canada Ltd.                                      
  Winnipeg, Manitoba, Canada                                          
WHOLLY OWNED SUBSIDIARIES          AUDITORS                           FOR MORE INFORMATION
HACH EUROPE, S.A./N.V.             COOPERS & LYBRAND L.L.P.           To learn more about Hach Company
  Namur, Belgium                   370 17th Street                    visit our site on the World Wide Web
HACH (BARBADOS) FSC, INC.          Denver, CO  80202                  at www.hach.com.
  Loveland, Colorado                                                  
HACH SALES & SERVICE CANADA LTD.                                      
  Winnipeg, Manitoba, Canada                                          

</TABLE>
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