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FOR IMMEDIATE RELEASE                                     CONTACT: JAMES C. SHAY
BHA - 0402                                                 SENIOR VICE PRESIDENT
January 21, 2004                                         CHIEF FINANCIAL OFFICER
8:30 A.M. ET                                       (816) 356-8400, Extension 336


                       BHA GROUP HOLDINGS, INC. ANNOUNCES
                      FIRST QUARTER 2004 OPERATING RESULTS

For the quarter ended December 31, 2003 ("fiscal 2004"), BHA Group Holdings,
Inc.'s (NASDAQ - BHAG) consolidated net income was $3.1 million or $0.47 per
diluted share. Consolidated net income was $2.9 million or $.45 per diluted
share for the same period in the prior year. Consolidated revenues were $42.7
million for the quarter, a 15% decline as compared to the same period in the
prior year.

Commenting on the results, James E. Lund, President and Chief Executive Officer,
said, "The results for the first quarter are reflective of the strength the
Company has in the diversity of its businesses. Year over year earnings have
increased despite a decline in sales due to exceptional gross margin
performance. Gross margins increased across all segments due to improved sales
mix, increased production volumes in the ePTFE membrane business and lower
manufacturing costs. In particular, the strong results in our ePTFE membrane
business had a positive impact on consolidated earnings. We are cautiously
optimistic that U.S. manufacturing, as it impacts our fabric filter business,
will show gradual improvement over the coming quarters. The results in the
domestic ESP area of our business were in-line with internal expectations. We
saw an increase in international orders during the last 90 days which has had a
favorable impact on the Company's overall backlog as we move into the second
quarter."

The following table provides a breakdown of consolidated revenues and pretax
income by segment (dollars in millions):

                                                             QUARTER ENDED
                                                              DECEMBER 31,
                                                         2003             2002
                                                         ----             ----
REVENUES
Domestic Air Pollution Control (APC) Segment
   U.S. Fabric Filter                                    17.6             17.0
   U.S. Electrostatic Precipitator (ESP)                  9.3             20.5
   U.S. Exports to Latin America and Asia                 3.5              3.3
                                                       --------         --------
      Total Domestic APC Segment                         30.4             40.8
Europe APC Segment                                        7.0              5.4
BHA Technologies Segment                                  5.3              3.9
                                                       --------         --------
   TOTAL REVENUES                                        42.7             50.1
                                                       ========         ========

PRETAX EARNINGS
Domestic APC Segment                                      2.9              4.0
Europe APC Segment                                        0.3             (0.2)
BHA Technologies Segment                                  1.5              0.5
                                                       --------         --------
   TOTAL PRETAX EARNINGS                                  4.7              4.3
                                                       ========         ========


REVENUES

Consolidated revenues for the quarter decreased $7.4 million or 15% as compared
to the same period in the prior year. Revenues for the Domestic Air Pollution
Control (APC) Segment decreased 25%. Going into the quarter, the Company had
provided guidance that we expected a year-over-year decline in sales for this
business segment due to the unusually strong revenues of the ESP portion of this
segment in the prior year. The timing of execution of major project work tends
to cause fluctuations in quarterly sales results. The $11.2 million decrease in
sales for the ESP portion of the Domestic APC segment was offset in part by a
modest increase in fabric filter replacement parts sales in the U.S. and export
markets which corresponds to improving business conditions. On a U.S. dollar
basis, sales for the Europe APC Segment increased 29% over the prior year. On a


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local currency basis, sales in Europe increased 9%. BHA Technologies' sales to
third parties increased by 36% due in large part to continued success in selling
membrane products for use in non-consumer apparel applications.

PRETAX EARNINGS

Pretax earnings for the quarter increased $0.4 million or 9% as compared to the
prior year. The Company's pretax earnings increased despite lower sales due to
improved gross margins. Gross margin as a percentage of sales was 36.3% and
30.4% for the first quarter of fiscal 2004 and 2003, respectively. The improved
gross margins were attributable to a combination of sales mix and cost
reductions. Operating margins as a percentage of sales were 11.2% and 8.8% for
the first quarter of fiscal 2004 and 2003, respectively.

CASH FLOWS

During the first quarter of fiscal 2004, the Company's cash flows from
operations resulted in a net use of cash of $4.1 million. The use of cash to
fund operations, despite the increase in net earnings, is largely attributable
to increases in inventories and accounts receivable related to the timing of
project work and annual funding of incentive bonus plans and retirement
contributions during the first quarter. Cash was also used during the quarter to
invest $0.8 million in fixed assets, to fund $3.1 million in dividends and to
repurchase $0.4 million of the Company's common stock. Additionally, the Company
spent $0.5 million relating to a product line acquisition that will expand the
Company's offering in the area of acoustic cleaning systems.

BACKLOG

BHA's backlog was $68.0 million at December 31, 2003. This compares with order
backlogs of $60.4 million at September 30, 2003 and $47.5 million at December
31, 2002. Approximately $57.9 million (85%) of the backlog at December 31, 2003
is scheduled to ship within the next 12 months. At September 30, 2003,
approximately $44.0 million (73%) of the backlog was scheduled for shipment
during fiscal 2004. Substantially all of the December 31, 2002 backlog was
scheduled to ship in the subsequent 12 months.

OUTLOOK
One of the Company's primary business goals is to increase compounded earnings
per share at a 12% to 15% rate over time. Between fiscal 2000 and 2003, the
Company's consolidated earnings per diluted share increased at a 19% compounded
rate. The overall financial condition of the Company has improved as bank
borrowings, net of cash, were reduced by $30.0 million during the three-year
period. The Company's earnings growth during that period was the result of an
increase in ESP parts and service work for electric utility customers in the
U.S. and the success of BHA Technologies. These areas of the Company's business
provided strength to offset the overall weakness the Company experienced in its
worldwide fabric filter replacement parts and service business. Although its
financial results have varied by segment, the Company believes it has improved
its market position and competitive advantage in each of its major business
areas. The following are various factors for consideration as the Company moves
into its second quarter:

    o   Publicly available information provides an indication that the U.S.
        economy is improving. Based on historical trending, the Company
        continues to believe that improvement in its market for the sale of
        fabric filter replacement parts and services will likely trail an
        improvement in overall manufacturing conditions by as much as six
        months. Although the Company saw some improvement in new orders during
        the first quarter, it expects that competition will remain intense for
        at least the next several quarters. The Company believes that it is well
        positioned with its products, people and approach to servicing this
        market. These factors, combined with a lower cost structure, are
        expected to benefit the Company as business conditions improve.

    o   The Company believes that over the past three years it has established
        itself as the premier supplier for ESP replacement parts, services and
        rebuilds in the U.S. The Company has also been successful in expanding
        this business in certain international markets. The Company's overall
        ESP replacement parts and service results achieved record levels during
        fiscal 2003. The Company's system for tracking project work to be
        executed over the next few years provides an indication that this market
        will continue to provide good opportunity for BHA. This same tracking
        information led the Company to

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        predict the decline in ESP rebuild work executed by customers during the
        fall 2003 outage season. The Company believes that work to be executed
        in the spring 2004 outage season will also be lower than the same period
        in the prior year. Preliminary information available to the Company
        provides an indication that business should again start to increase
        during the fall 2004 and spring 2005 outage seasons. This factor,
        combined with the Company's existing backlog of business scheduled for
        the next fiscal year, are early positive indicators of potential results
        for fiscal 2005.

    o   The Company is pleased with its sales and earnings growth in the BHA
        Technologies segment. The Company believes this segment is well
        positioned for additional growth during fiscal 2004. Incremental third
        party revenues within this segment are likely to be structured under
        multi-year supply arrangements with new customers. The extent to which
        this segment will increase its sales and earnings beyond fiscal 2004
        will be dependent upon the timing of final product commercialization and
        order execution in its target markets.

Due to the factors discussed above, visibility with respect to future results
beyond 90 days remains a challenge. For more information, you should refer to
the sections entitled, "Outlook" and "Factors Affecting Earnings and Share
Price" included in the Company's Annual Report on Form 10-K filed with the
Securities and Exchange Commission on November 11, 2003. The following is
specific guidance being provided for the second quarter of fiscal 2004:

    o   For the second quarter of fiscal 2004, the Company anticipates that
        consolidated net sales will be higher than the same period in the prior
        year by as much as 10%.

    o   Gross margins and operating margins as a percentage of sales are
        expected to be lower in the second quarter than in the just completed
        period. The backlog includes a mix of larger orders of lower margin
        products and services.

    o   Earnings for the second quarter of fiscal 2004 are expected to be in the
        range of $.48 to $.58 per diluted share as compared to $.52 reported for
        the same period in the prior year.

OTHER ACTIONS

The Company also reports that it has accumulated 2.6 million shares of the 4.0
million shares of BHA common stock authorized by its Board of Directors for
repurchase.

BHA Group Holdings, Inc. is a world leader in innovative filtration technology.
Its two principal operating subsidiaries are BHA Group, Inc., the world's
largest supplier of replacement parts and services for industrial air pollution
control systems, and BHA Technologies, Inc., which manufactures and markets
expanded polytetrafluoroethylene (ePTFE) membrane products for use in a variety
of industrial and consumer products.

This press release contains forward-looking statements that reflect the
Company's current views with respect to future events and financial performance.
These statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from historical results or those
anticipated. The words "should," "believe," "anticipate," "expect," and other
expressions that indicate future events and trends identify forward-looking
statements. Actual future results and trends may differ materially from
historical results or those anticipated depending on a variety of factors,
including, but not limited to, the performance of newly established domestic and
international operations, demand and price for the Company's products and
services, and other factors. You should also consult the sections entitled
"Factors Affecting Earnings and Stock Price" and "Management's Discussion and
Analysis" included in the Company's report on Form 10-K which was filed with the
Securities & Exchange Commission on November 11, 2003.


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                            BHA GROUP HOLDINGS, INC.
                   CONDENSED CONSOLIDATED STATEMENT OF INCOME
                                & BALANCE SHEETS
                     (IN MILLIONS EXCEPT PER SHARE AMOUNTS)

                                                             QUARTER ENDED
                                                             DECEMBER 31,
                                                        2003              2002
                                                        ----              ----

Net sales                                               $ 42.7           $ 50.1
                                                        ------           ------
Gross margin                                              15.5             15.2
Operating expense                                         10.7             10.8
Interest expense, net                                       .1               .1
                                                        ------           ------
Earnings before income taxes                               4.7              4.3
Income tax expense                                         1.6              1.4
                                                        ------           ------
Net income                                              $  3.1           $  2.9
                                                        ======           ======
Diluted shares outstanding                                 6.6              6.4
                                                        ======           ======
Diluted earnings per share                              $ 0.47           $ 0.45
                                                        =======          ======

Depreciation and amortization                           $  1.4           $  1.5
                                                        ======           ======


The earnings per share figures in this press release are computed on a "diluted"
basis as defined under Statement of Financial Accounting Standards No. 128,
"Earnings per Share."

                                                  DECEMBER 31,     SEPTEMBER 30,
                                                      2003              2003
                                                      ----              ----

Cash and equivalents                               $    9.8          $   18.8
Accounts receivable                                    30.9              28.8
Inventories                                            27.1              23.5
Other current assets                                    5.9               5.2
                                                   --------          --------
     Total current assets                              73.7              76.3
PP&E and other assets                                  39.9              40.4
                                                   --------          --------
Total assets                                       $  113.6          $  116.7
                                                   ========          ========

Current debt and lease payments                    $    2.3          $    2.5
Accounts payable and accruals                          19.3              23.5
                                                   --------          --------
     Total current liabilities                         21.6              26.0
Long-term debt and capital leases                      13.3              12.2
Other liabilities                                       3.1               3.1
                                                   --------          --------
Total liabilities                                      38.0              41.3
Equity                                                 75.6              75.4
                                                   --------          --------
Total liabilities and equity                       $  113.6          $  116.7
                                                   ========          ========



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