For more information contact:
Amir Rosenthal
(203) 598-0397
Vice President, Chief Financial Officer,
General Counsel & Secretary

KATY INDUSTRIES, INC. DISCUSSING POSSIBLE TRANSACTION

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ENGLEWOOD, CO - March 2, 2001 - Katy Industries, Inc. (NYSE:KT) today announced
that it was engaged in discussions with a potential purchaser of a substantial
equity position in the company.

Under the transaction as presently under consideration, the purchaser would buy
a minority of the Company’s outstanding common shares at a premium to the
current market price, and would also invest directly in the Company through the
purchase of nonvoting convertible preferred stock. The transaction would be
subject to shareholder approval and restructuring of the Company's existing
bank debt. Katy said that there could be no assurance that an agreement for
the transaction would be reached or, if reached, would be completed. Katy said
that it did not intend to comment further unless agreement is reached or
discussions terminate.

On November 6, 2000, Katy announced that it was exploring strategic
alternatives, including the possible sale of the Company, and that it was
engaged in discussions with one potential purchaser relating to the possible
sale of the Company. Those discussions have been superseded by discussions
with the same potential purchaser relating to the transaction referred to above.

Some of the statements made in this press release constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
These statements include all statements regarding the Company’s intentions and
strategies for exploring alternatives, including a sale of the Company. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors, as detailed from time to time in the Company's filings with the
Securities and Exchange Commission, that may cause the actual results,
performance or achievements of the Company to be materially different from any
future results, performance or achievements expressed or implied by the forward-
looking statements.

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

Company contact:
Stephen Nicholson, Vice President of Finance, in Englewood at (303) 290-9300,
or at www.katyindustries.com


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