Exhibit 99.1

KATY NEWS
FOR IMMEDIATE RELEASE

KATY INDUSTRIES, INC.
REPORTS 2007 SECOND QUARTER RESULTS

ARLINGTON, VA — August 20, 2007 — Katy Industries, Inc. (OTC BB: KATY) today reported a net loss in the second quarter of 2007 of ($0.4) million [($0.05) per share], versus a net loss of ($1.0) million [($0.13) per share], in the second quarter of 2006, as adjusted to exclude restructuring and other non-recurring or unusual items, which are discussed below. Including these items, Katy reported net income in the second quarter of 2007 of $1.8 million [$0.23 per share], versus a net loss of ($1.9) million [($0.24) per share], in the same period of 2006. Operating income, as adjusted to exclude all restructuring and other non-recurring or unusual items, was $0.3 million [0.4% of net sales] in the second quarter of 2007, compared to an operating income, as adjusted, of $0.1 million [0.1% of net sales] in the same period in 2006. Net income (loss), as adjusted, and operating income (loss), as adjusted, are non-GAAP financial measures and are further discussed below.

Katy also reported a net loss for the six months ended June 30, 2007 of ($3.6) million [($0.45) per share], versus a net loss of ($3.3) million [($0.42) per share], for the six months ended June 30, 2006, as adjusted to exclude restructuring and other non-recurring or unusual items, which are discussed below. Including these items, Katy reported a net loss for the six months ended June 30, 2007 of ($2.0) million [($0.25) per share], versus a net loss of ($7.7) million [($0.96) per share], in the same period of 2006. The operating loss, as adjusted to exclude all restructuring and other non-recurring or unusual items, was ($2.9) million [(1.7%) of net sales] for the six months ended June 30, 2007, compared to an operating loss, as adjusted, of ($2.3) million [(1.5%) of net sales] in the same period in 2006. Net income (loss), as adjusted, and operating income (loss), as adjusted, are non-GAAP financial measures and are further discussed below.

During the second quarter of 2007, Katy reported restructuring and other non-recurring or unusual items of $2.8 million pre-tax [$0.36 per share], including a gain on the sale and operating activities of the discontinued businesses of $6.9 million offset by severance, restructuring and related costs of ($2.4) million and loss on sale of assets of ($1.7) million. During the second quarter of 2006, Katy reported no significant restructuring and other non-recurring or unusual items. Details regarding these items are provided in the “Reconciliations of GAAP Results to Results Excluding Certain Unusual Items” accompanying this press release.

For the six months ended June 30, 2007, Katy reported restructuring and other non-recurring or unusual items of $4.6 million pre-tax [$0.57 per share], including a gain on the sale and operating activities of discontinued businesses of $8.8 million offset by severance, restructuring and related costs of ($2.6) million and loss on sale of assets of ($1.6) million. For the six months ended June 30, 2006, Katy reported restructuring and other non-recurring or unusual items of ($1.8) million pre-tax [($0.23) per share], including severance, restructuring and related costs of ($0.9) million, loss from discontinued operations of ($0.7) million and costs of ($0.8) million related to the cumulative effect of a change in accounting principle for the implementation of SFAS No. 123R, Accounting for Stock-Based Compensation offset by gain on SESCO joint venture transaction of $0.6 million. Details regarding these items are provided in the “Reconciliations of GAAP Results to Results Excluding Certain Unusual Items” accompanying this press release.

Financial highlights for the second quarter of 2007, as compared to the same period in the prior year, included:

• Net sales in the second quarter of 2007 were $81.5 million, a decrease of $3.2 million compared to the same period in 2006 primarily due to lower volume activity in the Electrical Products Group. Overall, the decrease in net sales of 4% resulted from lower volumes of 13% offset by higher pricing of 9%. Lower net sales in the Electrical Products Group resulted from lower demand from its major customers along with its timing as the second quarter volume level slightly offsets the volume improvement reflected in the first quarter of 2007. In addition, the Electrical Products Group has increased prices driven by the significant change in copper prices over the past year.

• Gross margins were 12.2% in the second quarter of 2007, versus 13.1% in the second quarter of 2006. In 2007, our margins were adversely impacted by higher copper costs within our Electrical Products Group, a significant portion of which were not passed through as price increases.

• Selling, general and administrative expenses were $1.4 million lower than the second quarter of 2006. These costs represented 11.8% of net sales in the second quarter of 2007, a decrease from 13.0% of net sales for the same period of 2006. The reduction in percentage reflects favorable trends within our self-insurance programs as well as cost improvements implemented during the past year.

• On June 6, 2007, Katy sold Contico Manufacturing, Ltd. (“CML”) for approximately $10.4 million which resulted in a $7.2 million gain on sale of discontinued business. The Company has reflected all activity associated with operations of this division and the sale as a discontinued operation for all periods presented.

• Debt at June 30, 2007 was $48.9 million [57% of total capitalization], versus $62.2 million [56% of total capitalization] at June 30, 2006. The increase in the ratio of debt to total capitalization was principally due to the lower stockholders’ equity which resulted from the net loss reflected over the past twelve months. In addition, stockholders’ equity has been impacted from the adoption of SFAS No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans and FIN 48, Accounting for Uncertainty in Income Taxes. Debt has been reduced as a result of proceeds received from the various business units sold in the past twelve months. Cash on hand at June 30, 2007 was $2.5 million versus $4.6 million at June 30, 2006.

• Katy used free cash flow of $11.1 million during the six month period ended June 30, 2007 versus using $5.9 million of free cash flow during the six month period ended June 30, 2006. The increased use of cash was primarily attributable to the higher operating loss in 2007 as compared to 2006. Free cash flow, a non-GAAP financial measure, is discussed further below.

“Our overall results continue to be adversely impacted by the Electrical Products Group’s inability to recover from customers all of the copper cost increases that the Group is experiencing,” said Anthony T. Castor III, Katy’s President and Chief Executive Officer. “While we have implemented more price increases during the second quarter of 2007, they were not enough to recover volatile changes in our material costs,” added Mr. Castor.

Non-GAAP Financial Measures

To provide transparency about measures of Katy’s financial performance which management considers most relevant, we supplement the reporting of Katy’s consolidated financial information under GAAP with certain non-GAAP financial measures, including Net Income (Loss), as adjusted, Net Income (Loss), as adjusted per share, Operating Income (Loss) and Operating Income (Loss) as adjusted, as a percentage of sales, and Free Cash Flow. Details regarding these measures and reconciliations of these non-GAAP measures to comparable GAAP measures are provided in the “Reconciliations of GAAP Results to Results Excluding Certain Unusual Items” and “Statements of Cash Flows” accompanying this press release. These non-GAAP financial measures should be considered in addition to, and not as a substitute or superior to, the other measures of financial performance prepared in accordance with GAAP. Using only the non-GAAP financial measures to analyze our performance would have material limitations because their calculation is based on the subjective determinations of management regarding the nature and classification of events and circumstances that investors may find material. Management compensates for these limitations by utilizing both the GAAP and non-GAAP measure reflected below to understand and analyze the results of its business. Katy believes the presentation of these measures is nonetheless useful to investors for the following reasons:

Net Income (Loss), as adjusted, Net Income (Loss), as adjusted per share, Operating Income (Loss) and Operating Income (Loss) as adjusted, as a percentage of sales: All of these non-GAAP operating measurements adjust the corresponding GAAP measurement to exclude restructuring and other non-recurring and unusual items, as appropriate. Following the recapitalization of the company in 2001, a comprehensive restructuring program became essential to the future viability of Katy. All other non-recurring and unusual items are typically indicative of non-cash impacts to Katy’s results of operations. These non-GAAP measures are used by management as Katy believes that these measures are more indicative of the company’s underlying business performance and that eliminating restructuring and other non-recurring and unusual charges provides more meaningful year-to-year comparison of the company’s operations.

Free Cash Flow: Free cash flow is defined by Katy as cash flow from operations less capital expenditures and cash dividends paid. Katy believes that free cash flow is useful to management and investors in measuring cash generated that is available for repayment of debt obligations, investment in growth through acquisitions, new business development and stock repurchases.

This press release may contain various forward-looking statements. The forward-looking statements are based on the beliefs of Katy’s management, as well as assumptions made by, and information currently available to, the company’s management. Additionally, the forward-looking statements are based on Katy’s current expectations and projections about future events and trends affecting the financial condition of its business. The forward-looking statements are subject to risks and uncertainties, detailed from time to time in Katy’s filings with the SEC that may lead to results that differ materially from those expressed in any forward-looking statement made by the company or on its behalf. Katy undertakes no obligation to revise or update such statements to reflect current events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Katy Industries, Inc. is a diversified corporation with interests primarily in Maintenance Products and Electrical Products.

Company contact:
Katy Industries, Inc.
Amir Rosenthal
(703) 236-4300

KATY INDUSTRIES, INC. SUMMARY OF OPERATIONS — UNAUDITED
(In thousands, except per share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2007			2006			2007			2006
				As restated						As restated
Net sales	$	81,534		$	84,678		$	171,581		$	156,494
Cost of goods sold		71,597			73,573			154,355			136,220
Gross profit		9,937			11,105			17,226			20,274
Selling, general and administrative expenses		9,613			11,047			20,104			22,544
Severance, restructuring and related charges		2,402			71			2,646			853
Loss (gain) on sale of assets		1,691			(48	)		1,571			54
Operating (loss) income		(3,769	)		35			(7,095	)		(3,177	)
Gain on SESCO joint venture transaction		—			563			—			563
Interest expense		(1,186	)		(1,775	)		(3,135	)		(3,546	)
Other, net		200			78			268			415
Loss from continuing operations before provision for income taxes		(4,755	)		(1,099	)		(9,962	)		(5,745	)
Provision for income taxes from continuing operations		(386	)		(300	)		(779	)		(464	)
Loss from continuing operations		(5,141	)		(1,399	)		(10,741	)		(6,209	)
Loss from operations of discontinued businesses (net of tax)		(202	)		(505	)		(47	)		(684	)
Gain (loss) on sale of discontinued businesses (net of tax)		7,151			(30	)		8,817			(30	)
Income (loss) before cumulative effect of a change in accounting principle		1,808			(1,934	)		(1,971	)		(6,923	)
Cumulative effect of a change in accounting principle (net of tax)		—			—			—			(756	)
Net income (loss)	$	1,808		$	(1,934	)	$	(1,971	)	$	(7,679	)
Income (loss) per share of common stock — basic and diluted:
Loss from continuing operations	$	(0.64	)	$	(0.17	)	$	(1.35	)	$	(0.78	)
Discontinued operations		0.87			(0.07	)		1.10			(0.09	)
Cumulative effect of a change in accounting principle		—			—			—			(0.09	)
Net income (loss)	$	0.23		$	(0.24	)	$	(0.25	)	$	(0.96	)
Weighted average common shares outstanding — basic and diluted		7,951			7,979			7,951			7,975

			As restated
	June 30,		June 30,
Other Information:	2007		2006
Working capital	$	6,496	$	(3,171	)
Working capital, exclusive of deferred tax assets and liabilities and debt classified as current	$	44,686	$	47,881
Long-term debt, including current maturities	$	48,889	$	62,161
Stockholders’ equity	$	37,045	$	48,355
Capital expenditures	$	2,244	$	1,688

KATY INDUSTRIES, INC. RECONCILIATIONS OF GAAP RESULTS
TO RESULTS EXCLUDING CERTAIN UNUSUAL ITEMS — UNAUDITED
(In thousands, except percentages and per share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2007			2006			2007			2006
				As restated						As restated
Reconciliation of net income (loss) to net loss, as adjusted:
Net income (loss)	$	1,808		$	(1,934	)	$	(1,971	)	$	(7,679	)
Unusual items:
Severance, restructuring and related charges		2,402			71			2,646			853
Loss (gain) on sale of assets		1,691			(48	)		1,571			54
Gain on SESCO joint venture transaction		—			(563	)		—			(563	)
Discontinued operations		(6,949	)		535			(8,770	)		714
Cumulative effect of a change in accounting principle		—			—			—			756
Adjustment to reflect a more normalized effective tax rate excluding unusual items		638			923			2,962			2,516
Net loss, as adjusted	$	(410	)	$	(1,016	)	$	(3,562	)	$	(3,349	)
Net loss, as adjusted per share:
Net income (loss) per share	$	0.23		$	(0.24	)	$	(0.25	)	$	(0.96	)
Unusual items per share		(0.36	)		—			(0.57	)		0.23
Adjustment to reflect a more normalized effective tax rate excluding unusual items per share		0.08			0.11			0.37			0.31
Net loss, as adjusted per share	$	(0.05	)	$	(0.13	)	$	(0.45	)	$	(0.42	)
Weighted average common shares outstanding:
Basic and diluted		7,951			7,979			7,951			7,975
Operating income (loss), as adjusted:
Operating (loss) income	$	(3,769	)	$	35		$	(7,095	)	$	(3,177	)
Severance, restructuring and related charges		2,402			71			2,646			853
Loss (gain) on sale of assets		1,691			(48	)		1,571			54
Operating income (loss), as adjusted:	$	324		$	58		$	(2,878	)	$	(2,270	)
Operating income (loss), as adjusted, as a % of sales		0.4	%		0.1	%		-1.7	%		-1.5	%

KATY INDUSTRIES, INC. SEGMENT INFORMATION — UNAUDITED
(In thousands)

	Three Months Ended June 30,						Six Months Ended June 30,
	2007			2006			2007			2006
				As restated						As restated
Net sales:
Maintenance Products Group	$	49,972		$	50,932		$	95,524		$	96,903
Electrical Products Group		31,562			33,746			76,057			59,591
	$	81,534		$	84,678		$	171,581		$	156,494
Operating income (loss), as adjusted:
Maintenance Products Group	$	1,505		$	286		$	2,193		$	782
Electrical Products Group		481			1,922			(743	)		1,981
Unallocated corporate expense		(1,662	)		(2,150	)		(4,328	)		(5,033	)
	$	324		$	58		$	(2,878	)	$	(2,270	)

KATY INDUSTRIES, INC. BALANCE SHEETS — UNAUDITED
(In thousands)

							As restated
Assets	June 30,			December 31,			June 30,
Current assets:	2007			2006			2006
Cash and cash equivalents	$	2,483		$	7,392		$	4,565
Accounts receivable, net		40,272			55,014			54,102
Inventories, net		63,976			54,980			56,927
Other current assets		3,004			2,991			3,653
Asset held for sale		—			4,483			—
Total current assets		109,735			124,860			119,247
Other assets:
Goodwill		665			665			665
Intangibles, net		5,237			6,435			6,563
Other		8,067			8,990			9,706
Total other assets		13,969			16,090			16,934
Property and equipment		126,055			129,708			153,277
Less: accumulated depreciation		(88,610	)		(87,964	)		(99,673	)
Property and equipment, net		37,445			41,744			53,604
Total assets	$	161,149		$	182,694		$	189,785
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	28,206		$	33,684		$	28,714
Accrued expenses		35,936			41,705			41,791
Current maturities of long-term debt		1,500			1,125			2,857
Revolving credit agreement		37,597			43,879			49,056
Total current liabilities		103,239			120,393			122,418
Long-term debt, less current maturities		9,792			11,867			10,248
Other liabilities		11,073			8,402			8,764
Total liabilities		124,104			140,662			141,430
Stockholders’ equity:
Convertible preferred stock		108,256			108,256			108,256
Common stock		9,822			9,822			9,822
Additional paid-in capital		27,274			27,120			27,020
Accumulated other comprehensive income		38			2,242			4,045
Accumulated deficit		(86,385	)		(83,434	)		(78,734	)
Treasury stock		(21,960	)		(21,974	)		(22,054	)
Total stockholders’ equity		37,045			42,032			48,355
Total liabilities and stockholders’ equity	$	161,149		$	182,694		$	189,785

KATY INDUSTRIES, INC. STATEMENTS OF CASH FLOWS — UNAUDITED
(In thousands)

	Six Months Ended June 30,
	2007			2006
				As restated
Cash flows from operating activities:
Net loss	$	(1,971	)	$	(7,679	)
(Income) loss from operations of discontinued businesses		(8,770	)		714
Loss from continuing operations		(10,741	)		(6,965	)
Cumulative effect of a change in accounting principle		—			756
Depreciation and amortization		4,135			4,327
Write-off and amortization of debt issuance costs		906			582
Write-off of assets due to lease termination		751			—
Stock option expense		171			371
Loss on sale of assets		1,571			54
Deferred income taxes		(94	)		—
		(3,301	)		(875	)
Changes in operating assets and liabilities:
Accounts receivable		11,979			9,678
Inventories		(11,045	)		3,199
Other assets		(25	)		697
Accounts payable		(2,014	)		(12,789	)
Accrued expenses		(5,659	)		56
Other, net		1,390			(4,374	)
		(5,374	)		(3,533	)
Net cash used in continuing operations		(8,675	)		(4,408	)
Net cash (used in) provided by discontinued operations		(222	)		216
Net cash used in operating activities		(8,897	)		(4,192	)
Cash flows from investing activities:
Capital expenditures of continuing operations		(2,244	)		(1,688	)
Proceeds from sale of assets		197			338
Net cash used in continuing operations		(2,047	)		(1,350	)
Net cash provided by discontinued operations		16,954			2,273
Net cash provided by investing activities		14,907			923
Cash flows from financing activities:
Net (repayments) borrowings on revolving loans		(6,677	)		6,835
Decrease in book overdraft		(2,116	)		(4,315	)
Repayments of term loans		(1,700	)		(2,609	)
Direct costs associated with debt facilities		(127	)		(166	)
Repurchases of common stock		(3	)		(75	)
Proceeds from the exercise of stock options		—			147
Net cash used in financing activities		(10,623	)		(183	)
Effect of exchange rate changes on cash and cash equivalents		(296	)		(404	)
Net decrease in cash and cash equivalents		(4,909	)		(3,856	)
Cash and cash equivalents, beginning of period		7,392			8,421
Cash and cash equivalents, end of period	$	2,483		$	4,565
Supplemental disclosure of non-cash investing activities:
Note receivable from sale of discontinued operations	$	—		$	1,200
Reconciliation of free cash flow to GAAP Results:
Net cash used in operating activities	$	(8,897	)	$	(4,192	)
Capital expenditures		(2,244	)		(1,688	)
Free cash flow	$	(11,141	)	$	(5,880	)