CATALINA LIGHTING REVISES SALES GUIDANCE FOR 2003

MIAMI (March 24, 2003) … Catalina Lighting Inc (Nasdaq:CALA), a leading international designer, manufacturer, and distributor of residential and office lighting products, said today that although it is now forecasting lower sales, it continues to expect earnings for the year ending September 30, 2003 to be between $0.93 and $0.97 per diluted share, up from $0.18 per share for the year prior.

Catalina CEO Bob Varakian commented, “We feel it prudent to lower sales expectations in light of softened economic conditions, the current competitive environment and the uncertain geopolitical situation.  But while our sales outlook for the year is lower, we are now anticipating an increase in our gross margin percentage due to an improvement in our customer and product mix.   We expect that the resulting higher gross margin, together with the benefits from our continuing efforts to reduce selling, general and administrative expenses, will allow us to report earnings per share in the mid-90-cent range, a significant gain from last year.” 

The Company now anticipates sales for fiscal 2003 to be approximately $200 million, compared to sales of $220 million for the year ended September 30, 2002, and a previous forecast of approximately $230 million communicated in December 2002.  Given the challenges in the current retail environment, the Company continues to monitor its revenue and earnings forecasts closely.