Catalina Lighting Reports 113% Increase In First Quarter Earnings (Excluding Non-Recurring Item

MIAMI, Feb. 7 /PRNewswire/ -- Catalina Lighting, Inc. (NYSE: LTG) a leading international designer, manufacturer and distributor of lighting products for residential and office environments, today announced continued improvement in its operating performance with the release of its results for the first quarter of its 2000 fiscal year.

The Company earned $1,073,000 or $0.14 per diluted share for the quarter ended December 31, 1999, excluding a non-recurring cost from the reorganization of the Company's executive management structure. Net income reported for the quarter, after this non-recurring cost, was $537,000, or $0.07 per diluted share. Catalina reported net income of $503,000 or $0.07 per diluted share for the three months ended December 31, 1998. Sales for the quarter were $43.2 million versus $42.8 million for the prior year period.

"This is the fifth consecutive quarter in which Catalina's net income exceeded prior year levels," said Chairman and C.E.O. Robert Hersh. "Sales increased, our overall gross profit percentage rose to 20.6% from 19.0% last year and we reduced S,G&A expenses (after the non-recurring item) and lowered interest expense -- providing evidence of a solid foundation that allows us to aggressively pursue new markets and customers." "We expect our fiscal 2000 strategic initiatives -- which include possible acquisitions, e-commerce, international expansion, further penetration of the commercial homebuilders market and new product introductions -- will continue to drive revenues and earnings growth," concluded Mr. Hersh.

The Company also reported that during the quarter approximately $5.2 million in cash was provided by operations, outstanding debt levels were lowered by approximately $2,000,000, and repurchases of the Company's common stock continued. As of December 31, 1999, a total of 502,300 Catalina shares had been repurchased by the Company at an average price of $3.66 per share. Catalina's net book value at December 31, 1999 was approximately $7 per share.

Catalina Lighting, Inc. a leading international designer, manufacturer and distributor of lighting products for residential and office environments, employs approximately 3,200 people throughout the United States, Canada and Southeast Asia. The Company is headquartered in Miami, Florida and its common stock trades on the New York Stock Exchange under the ticker symbol "LTG".

This press release includes statements that may constitute "forward-looking" statements, usually containing the words "believe", "anticipate", "estimate", "should", "expect" or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, general domestic and international economic conditions, consumer spending trends, reliance on key customers, continued acceptance of the Company's products in the marketplace, competitive factors, new products and technological changes, product prices and raw material costs, dependence upon third-party vendors, dependence on imports from China, competitive developments, changes in manufacturing and transportation costs, the availability of capital, foreign exchange rates, changes in the Company's effective tax rate, and other risks detailed in the Company's periodic report filings with the Securities and Exchange Commission. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release.

For further information, please contact David Sasnett, Chief Financial Officer or Dean Rappaport, Chief Operating Officer at (305) 558-4777 or R. Jerry Falkner, CFA, Investor Relations Counsel at (800) 377-9893 or www.rjfalkner.com. Copies of Catalina press releases may be obtained by fax at any time by calling (800) 758-5804 and inputting access number 146925.

        19991998
Net sales                      $43,208,000  $42,803,000
Gross profit                   $8,895,000   $8,129,000
Selling, general and
 administrative expenses       $7,569,000*  $6,811,000
Operating income               $1,326,000*  $1,318,000
Income before income taxes     $789,000     $701,000
Net income                     $537,000     $503,000
Basic earnings per share       $0.08        $0.07
Diluted earnings per share     $0.07        $0.07
Diluted earnings per share
 excluding non-recurring item  $0.14        $0.07
Weighted avg. basic shares
 outstanding                   6,986,000    7,171,000
Weighted avg. diluted shares
 outstanding                   7,745,000    7,282,000

* Includes non-recurring charge of $788,000 related to reorganization of the Company's executive management structure. SOURCE Catalina Lighting, Inc.

CONTACT: David Sasnett, Chief Financial Officer or Dean Rappaport, Chief Operating Officer, 305-558-4777, or R. Jerry Falkner, CFA, Investor Relations Counsel, 800-377-9893.