2014 Annual Meeting of Shareholders

FORWARD-LOOKING STATEMENTS This presentation contains statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. “Forward-looking statements” describe future expectations, plans, results or strategies and are generally preceded by words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “sees,” “estimates,” and variations of such words and similar expressions. You are cautioned that such statements are based upon current expectations, estimates and projections about the Company's business that are based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors as detailed in the Company's SEC filings. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. Such forward-looking statements speak only as of the date on which they were made and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of the presentation.

Q1 2015 and FY 2014

Balance Sheet Data

(in 000's) 8/31/14 5/31/14

Cash & cash equivalents 1,731$ 1,511$

Current assets 8,994 8,689

Total assets 11,063 10,824

Current liabilities 1,416 1,211

Shareholders' equity 9,647 9,613

Working capital 7,578 7,478

Current ratio 6.4 7.2

Q1 2015 and Q1 2014

Statement of Operations Data

(in 000's, except for per share data) 8/31/14 8/31/13

Sales 3,049$ 2,899$

Gross profit 1,464 1,331

48.0% 45.9%c

Operating expenses 1,410 1,478 c

Operating income (loss) 53 (147)

Net income (loss) 52 (147)

Diluted earnings (loss) per

share 0.02 (0.05)

FY 2014 and FY 2013

Statement of Operations Data

(in 000's, except for per share data) 5/31/14 5/31/13

Sales 12,135$ 12,452$

Gross profit 6,508 6,095

53.6% 48.9%

Operating expenses 6,139 6,657

Operating loss (512) (562)

Net loss (540) (540)

Diluted loss per share (0.18) (0.18)

Revenues

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2014

Xact

Lasercheck

Surface Measurement

Acuity

SBS

What We Do:

We design, manufacture and market high precision test and measurement products through five product lines:

SBS: Vibration and process control products for the global manufacturing (grinding) industry.

SMS: Laser-based surface analysis and microroughness measurement products.

Acuity: Distance and dimensional measurement lasers and sensors.

Lasercheck: Laser-based surface roughness gauge.

Xact: Remote tank monitoring using ultrasonic sensors and satellite communication.

SCHMITT CORPORATE OVERVIEW

SBS Balance Systems

We design, manufacture and market vibration and process control products for the global grinding industry.

Global grinding industry valued at over $1.0 billion; addressable market for SBS estimated at approximately $75 million. Global market share of 10-12%.

SBS represents over 60% of total consolidated revenue. International sales represent over 50% of total SBS revenue.

SBS BALANCERS AND PROCESS CONTROL

SBS Growth Strategy: (1) Develop Unique Process Control Products to Compliment Balancing Products, (2) Penetrate German/Swiss OEM Market.

Dittel GmbH acquisition by Marposs Srl presents unique opportunity for SBS.

Developed right sales and product development team in Germany (working with Portland engineers) to effectively execute this strategy.

Working to complete product development.

We are reaching out to the right companies at the right levels.

esOur German process control software engineers have completed the IVIS visualization software for integration into machine tool CNC operating

Our German process control software engineers have completed the IVIS visualization software for integration into machine tool CNC operating systems.

They are also on schedule to complete the initial version of our ExactControl process control software

SBS UPDATE

Blohm SMS Elb Junker

Reisshauer Mercedes Benz Modler Habrama

Bahmüller Anca Kapp/Niles Reform

Schaeffler Tecify Schaudt/Mikrosa SMS

GST Schutte Waldrich Siegen/Herkules Hoeffler

Studer Ziersch Maegerle Klingenberg Schweiz

Dr. Kaiser Liebherr Profin EMAG

Walter Supfina Rollomatic Kellenberger

Mahle Vollmer Linear Abrasive Geibel & Hotz

Gleason Pfauter Schweiz Schneeberger Index Bosch

GMN Ewag

CURRENT PRODUCTS

SB-5500; full featured digital controller.

SB-1000; low cost balancer.

SB-2000, SB-2000-P; dual plane

manual balancing.

AE-1000; Dedicated acoustic monitoring

system for gap/crash.

SBS BALANCERS AND PROCESS CONTROL

PROCESS CONTROL PRODUCTS

ExactDress™ process control card for precision dress of the grinding wheel.

Additional process control products to be introduced.

SBS BALANCERS AND PROCESS CONTROL

IVIS™ software to fully integrate and display SB-5500 balancing and process control data within any CNC operating system.

SBS UPDATE

SBS UPDATE

ExactControl™ ̶ Process Control

Technology

Quality Control and Optimization

Improve Process Efficiency and Safety

Reduce Operating Costs

Save Energy

SBS UPDATE

ExactControl™ ̶ Process Control Technology

ExactDisplay

Process visualization for analyzing the grinding

process.

Sensor signal data shown within CNC operating

system.

Sensor data automatically stored on SD card for later

evaluation and quality control.

Sensor data enables realtime process optimization.

SBS UPDATE

ExactControl™ ̶ Process Control Technology

ExactDress

Automatically Control the Dressing Process of

Regular and Profiled Grinding Wheels.

A good dress process is determined as a series of

signal segments (vertical grey bars).

New dress process is overlaid and each segment of

the new process is evaluated.

First release of ExactControl™ this month, with subsequent

releases by end of year. Immediate customer

demonstrations planned.

Developing German/Swiss OEM market takes time, but

progress is being made.

Anticipate Germany sales to increase in second half of this

fiscal year.

Success in this strategy will have dramatic implications for

sales in key markets throughout the world.

Our European sales strategy is a key driver for the future

growth of SBS.

SBS UPDATE

Global Presence; Worldwide Support

Acuity Measurement Systems

Laser Based Dimensional Sensors

We design, manufacture, private label and distribute laser and other sensors for distance and dimensional measurement.

Experienced high level of inquiries and quotes but lower bookings and lumpy quarter-to-quarter sales.

North American market focus; Extensive sales network, robust web presence.

ACUITY LASER SENSORS

Acuity Sensors

AR4000 Distance Sensor

AR700 Distance Sensor

AR200 Distance Sensor

ACUITY LASER SENSORS

AR500

Distance Sensor

AR1000 Distance Sensor

AR3000

Distance Sensor

Touch Panel Display

Additional Acuity Sensors

ACUITY LASER SENSORS

AR2000 Range

Finder

AR2500 Range

Finder

2D Laser Line Scanners

ACUITY LASER SENSORS

Confocal Chromatic Sensors

Optical pen type : OP020 (20 µm depth of field)

1 2µm

-0.3

-0.2

-0.1

0

0.1

0.2

0.3

0.4

0.5

0.6

0 20 40 60 80 100 120 140 160 180 200 220 µm

3

1 2

Maximum height 0.656 µm 0.767 µm

Mean height 0.645 µm 0.753 µm

Altitude Measurement

ACUITY LASER SENSORS

Backplane Profiling

Second largest contributor to revenue.

Continue with private label model of distribution.

Focus on OEM sales.

Return to revenue to $3.0M - $5.0 range.

ACUITY LASER SENSORS

SMS Measurement Products

We design, manufacture and market laser-based surface measurement products: advanced surface analysis scatterometers (CASI) and wafer/hard disk drive surface measurement tools (TMS).

Measurements to sub-Angstrom (0.03Å) level. Width of human hair: 80-100 microns. One micron = 10,000Å.

SMS sales lumpy but expect improvement in FY2015.

SCHMITT MEASUREMENT SYSTEMS UPDATE

The SMS CASI® Scatterometer uses laser light from UV to IR as a nondestructive probe to measure surface quality, optical performance, smoothness, appearance, defects, and contamination on a wide variety of materials.

Laboratory grade research instrument.

Customers: E.g. US Government labs, Boeing, Ball Aerospace, Northrup Grumman, GE Aviation, Lockheed, Penn State, Stanford, UNC Charlotte, European Space Agency.

SCHMITT MEASUREMENT SYSTEMS UPDATE

Unique proprietary product with high price point ($180K - $500K) and healthy margin (65%-80%).

Niche market with existing sophisticated customer base and lumpy sales.

Potential for product refreshment and upselling existing customer base with updated capability.

Pursuing additional orders; focus on growing this business.

SCHMITT MEASUREMENT SYSTEMS UPDATE

TMS Update

SMS/CASI UPDATE

The TMS (Texture Measurement System) provides non-contact sub-Angstrom measurement of silicon wafers and hard disc drives.

TMS-2000W-RC for wafers up to 200mm; TMS-3000W-RC for wafers up to 300mm.

SCHMITT MEASUREMENT SYSTEMS UPDATE

Scan of Ultra Smooth Surfaces

Circumferential

Radial

SCHMITT MEASUREMENT SYSTEMS UPDATE

Scan of Silicon Wafer

SCHMITT MEASUREMENT SYSTEMS

Unique and propriety product, with higher price point ($145K - $200K) and healthy margins.

Lab tool configuration only.

Evaluating long term sales potential of TMS for device-quality silicon wafer market.

1. Technically solid lab tool.

2. Microroughness measurement an important capability.

3. Short list of potential sales identified.

4. New distribution developed.

5. Continuing business development outreach in US and Asia.

SMS/TMS UPDATE

Xact UPDATE

We design, manufacture and market ultrasonic tank measurement systems for propane and now diesel tanks.

Tank data is sent via the Globalstar satellite network to a secure website for review. We sell the hardware and provide fee-based monthly monitoring.

FY2014 was successful for Xact, as was Q1/FY15, with sales exceeding our forecast.

Xact business model, with an increasing percentage of recurring monthly monitoring revenue, is a growth driver for the Company.

Xact UPDATE

Xact Product Line

• Large tank unit

(6,000 to 120,000 gallons).

• Small tank “Event Monitor”

(500 to 2,000 gallons).

• Gauge reader

(125 to 2,000 gallons).

Xact UPDATE

Magnets and

strap hold all

components in

place,

NO DRILLING

OR MESSY

ADHESIVES

Patented

Ultrasonic Sensor

Controller Unit/Satellite

Radio

Communication and

Battery Box

Xact® Tank Monitoring System

Xact UPDATE

Satellite

Customer Network

External Mounted

Satellite Radio &

Controller

Ultrasonic Sensor - patented

Xact® Data Center

Globalstar® Earth Station

Internet

@

www

System Overview

SATELLITE

RADIO

Xact SONIC SENSOR

COMMUNICATION

& BATTERY BOX

Xact Signal

…sent

ECHO of

fill level

Fill level

Received

Fill level Data

Transmitted How it works!

Xact UPDATE

Tank Data Website

Xact UPDATE

Detailed Tank History

Xact UPDATE

Tank details and Alarms Available on Website

Xact UPDATE

New Mobile Friendly Website

Launched in September

Xact UPDATE

• Currently working with the top propane retailers in the US and

Canada (AmeriGas, CHS, Ferrellgas, Parkland, Suburban,

Superior) and in discussions with others.

• Currently have small scale and large scale programs in place

with regional retailers across the US and Canada.

• Customer subscriber base continues to grow.

• Eight new customers added in just the last 4 months alone.

• Competitive marketplace in NA: Wesroc-Independent

Technologies (US); Petro-Viron, Inc./Centeron (Canada, US),

ISA (Portugal); Enertrac (US); Silicon Controls (Australia);

WACnGO (Israel); Tank Link (US); NasCorp (US).

Xact in North America

Xact UPDATE

• Continued research reaching out to railroad and oil companies.

• With satellite based communications, Xact has the ability to

work even in the most remote and mountainous areas.

Xact UPDATE

• Latin America market (Mexico, Central America, South America)

represents the largest market opportunity for Xact with

potential unit sale quantities in the 1000’s with multiple major

users.

• Largest market in terms of per capita consumption of propane;

lack of robust cellular networks; keen interest in the accuracy

of ultrasonic technology for purposes of inventory control and

theft prevention.

• Relationship building is critical, as is language fluency.

Xact in Latin America

Xact UPDATE

• Applications include bulk storage tanks, small tanks,

autogas tanks and trucks.

• Trucks (mobile application) represents a significant

opportunity.

• No dominant competitor, relatively undeveloped market.

• Xact strategy to become the dominant tank monitoring

provider in Latin America by end of fiscal year.

• Established dedicated primary distributor in Monterrey,

Mexico.

• Sub-distributors established in: Guatemala, Peru, Chile,

Brazil, Bolivia. Additional distributors being identified.

Xact UPDATE

We distribute and service customers in Latin America through our exclusive distributor, XactLat.

Key Operational Goals for FY2015

Appropriately manage cash and inventory.

Complete ExactControl development for SBS.

Further develop key OEM customer relationships and SBS sales in Germany/Switzerland.

Complete Xact mobile unit, continue growing customer base.

Expand Acuity sales.

Expand CASI/TMS orders.

SALES, SALES, SALES

SCHMITT CORPORATE UPDATE

The Best is Yet to Come