Catalina Lighting Repays $2.5 Million of Convertible Notes

MIAMI, March 16 /PRNewswire/ -- Catalina Lighting, Inc. (NYSE: LTG), a leading international designer, manufacturer and distributor of lighting products for residential and office environments, today confirmed the payment of a scheduled $2.5 million principal reduction of its 8% convertible subordinated notes. The Company anticipates that the payment will have a positive impact on diluted earnings per share for future periods. The Company's 8% subordinated notes are convertible at the option of the holder into common shares of the Company's stock at a conversion price of $6.63 per share at any time prior to maturity. Generally accepted accounting principles require consideration of the shares contingently issuable upon conversion of the notes in the Company's diluted earnings per share calculations. The $2.5 million repayment prospectively eliminates approximately 382,000 shares from the diluted earnings per share calculations in future fiscal reporting periods.

The remaining $5,066,000 balance of the notes is payable in installments of $2,534,000 and $2,532,000 on March 15, 2001 and 2002, respectively. However, effective July 1, 2000, the Company has the right to prepay the outstanding balance of the notes without premium or penalty. Any prepayment is subject to 40 days advance notice by the Company to the note holder (during which time the note holder has the option to convert the note to stock).

To date, the Company has also repurchased 526,900 shares of its common stock pursuant to a previously-announced stock repurchase program. The repurchased shares have also enhanced the Company's earnings per share and net book value per share by reducing the number of common shares outstanding.

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 "believes," "anticipates," "estimates," "should," "expects" 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. SOURCE Catalina Lighting, Inc.

CONTACT:
David Sasnett, Chief Financial Officer, or Dean Rappaport, Chief Operating Officer, both of Catalina Lighting, 305-558-4777; or R. Jerry Falkner, CFA, Investor Relations Counsel, 800-377-9893, or www.rjfalkner.com, for Catalina Lighting.