CATALINA LIGHTING ANNOUNCES INTENTION TO DEREGISTER COMMON STOCK WITH THE SEC  

MIAMI ( February 25, 2005 ) … Catalina Lighting, Inc. (NASDAQ:CALA), a leading international designer, manufacturer, and distributor of lighting products for residential and office environments, today announced that it intends to voluntarily delist its common stock from the Nasdaq National Market on or about March 14, 2005. Simultaneously with delisting, the Company will file a Form 15 with the Securites and Exchange Commission (the "SEC") to voluntarily deregister its common stock under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Catalina is eligible to deregister by filing a Form 15 because it has fewer than 300 holders of record of its common stock.

Upon the filing of the Form 15, Catalina’s obligation to file certain reports with the SEC, including Forms 10-K, 10-Q, and 8K, will immediately be suspended. Catalina expects that the deregistration of its common stock will become effective 90 days after the date of filing of the Form 15 with the SEC. The Company anticipates that its shares will be quoted on the Pink Sheets after it delists from Nasdaq, but can make no assurance that any broker will continue to make a market in the Company’s common stock. The Pink Sheets is a provider of pricing and financial information for the over-the-counter securities markets. It is a centralized quotation service that collects and publishes market maker quotes in real time primarily through its website, www.pinksheets.com, which provides stock and bond price quotes, financial news, and information about securities.  

Catalina's CEO, Bob Varakian, said that the Company’s Board of Directors recommended the deregistration of its common stock after carefully considering the advantages and disadvantages of continuing registration. "The costs and administrative burdens associated with being a public company have significantly increased, particularly in light of new SEC, Sarbanes-Oxley and Nasdaq requirements," said Mr. Varakian. "Our Board has determined that the rising costs of compliance, as well as the substantial demands on management time and resources compelled by the compliance requirements, are disproportionate to the benefits the Company receives from maintaining its registered status. We believe that deregistering will result in significant reductions in our accounting, legal and administrative expenses and enable our management to focus more of its time and resources on operating the Company and enhancing shareholder value."