Catalina Lighting, Inc. Reports Third Quarter Operating Results

MIAMI, Aug. 4 /PRNewswire/ -- Catalina Lighting, Inc. (NYSE: LTG) a leading international designer, manufacturer and distributor of lighting products for residential and office environments, today announced operating results for the third quarter and first nine months of its fiscal year ending September 30, 2000. The Company earned $1,080,000, or $0.14 per diluted share, for the three months ended June 30, 2000. Net income reported for the comparable quarter of last year was approximately $3.9 million, or $0.45 per share, due to a non- recurring item that significantly increased net income. Excluding this non- recurring item, net income for the prior year quarter was $1.7 million, or $0.21 per share. Net sales for the three months ended June 30, 2000 were $46.7 million as compared to $46.3 million for last year.

The comparability of current and prior year nine month results is affected by non-recurring items reported in both periods. Excluding non-recurring items, the Company earned $2.9 million, or $0.36 per diluted share, for the nine months ended June 30, 2000, as compared to $3.5 million, or $0.45 per diluted share, for the nine months ended June 30, 1999. Net sales for the nine months ended June 30, 2000 increased by $700,000 to $131.9 million. Net income for the nine months ended June 30, 2000 was $2.4 million, or $0.30 per diluted share, versus $5.5 million, or $0.68 per diluted share, for the nine months ended June 30, 1999.

"This was a very significant quarter for our Company," stated Robert Hersh, Chairman and Chief Executive Officer of Catalina Lighting, Inc. "We generated more than $1 million in earnings while taking a major step to increase our international presence and shareholder value through the acquisition of Ring Plc, a leading supplier of lighting, automotive aftermarket products and industrial consumables in the United Kingdom. This acquisition expands Catalina's platform for future growth on a global scale."

"With respect to the current periods' operating results, we posted a modest sales increase for the quarter and nine months, and operating income for both current periods, excluding non-recurring items, was almost identical to last year at $2.1 million and $5.6 million for the three months and nine months ended June 30, 2000, respectively," noted David Sasnett, Catalina's Chief Financial Officer. "While gross profit percentages remained solid at more than 19% of net sales, we are committed to the pursuit of higher gross profit percentages, as evidenced by our greater on-going emphasis on product development, marketing and design. Catalina continued to enhance its financial condition during the quarter, as total stockholders' equity reached $50.4 million, or a book value of $6.98 per share, as of June 30, 2000. The health of the Company's business is also evident from the substantial cash flows generated from operations, which totaled almost $14 million during the nine months ended June 30, 2000." "We are excited about Catalina's prospects," noted Hersh. "Ring's operating results will be consolidated with those of the Company for the first time in the quarter ending September 30, 2000. The Company's recent repayment of its subordinated notes, which were convertible into approximately 1.1 million common shares, should also positively impact diluted earnings per share calculations for the September 30, 2000 quarter and subsequent periods. With the acquisition of Ring and the strength of our other businesses, Catalina is well-positioned for the future."

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", "except" 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 via e- mail at info@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.

* 1999 results reflect a non-recurring $2,728,000 reduction of SG&A expenses and a non-recurring $893,000 reduction of interest expense, both relating to settlement of litigation.

** Amounts for 2000 reflect a non-recurring charge of $788,000 related to reorganization of the Company's Executive Management structure.

*** Amounts for 1999 reflect a $2,728,000 reduction in SG&A expenses and a non-recurring $893,000 reduction of interest expense, both relating to settlement of litigation. 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, e-mail, info@rjfalkner.com.