Catalyst Lighting Group Announces Results for Third Fiscal Quarter


FORT WORTH, Texas, Aug. 17, 2004 (PRIMEZONE) -- Catalyst Lighting Group, Inc., (OTCBB:CYSL), a manufacturer and marketer of outdoor lighting poles and accessories through its Whitco Company, LP subsidiary, announced its financial results for the third quarter of fiscal 2004, which ended on June 30, 2004.

For the quarter ended June 30, 2004, total revenue was $4.3 million, up from $4.1 million in the prior-year comparable quarter. The increase in revenue for the three-month period is attributable to a 159 percent increase in sales of aluminum poles and a 27 percent increase in steel area lighting poles. These increases were partially offset by a 75 percent decrease in sales to an OEM customer that held the contract to supply fixtures and lighting poles to Wal-Mart. This contract was not renewed with the OEM customer. Gross margin for the quarter increased to 32 percent from 29 percent in the comparable quarter last year. The increase in gross margin percent for the three-month period is attributable to a higher margin mix of sales of products, a decrease in freight as a percentage of sales and some efficiencies gained through the initiation of self-manufacturing of products under 40 feet. For the nine-month period, gross margin ended at 32 percent, compared to 32 percent for the same period last year.

For the three months ended June 30, 2004, loss from operations was $66,048, which is a $108,864 decrease over the same comparative quarter ended June 30, 2003, which reported a loss of $162,124. For the nine months ended June 30, 2004, Catalyst reported a loss from operations of $444,080, compared to a loss from the nine months ended June 30, 2003 of $162,236.

Dennis Depenbusch, CEO of Catalyst Lighting Group, stated, "We are generally pleased to report our increased momentum for the current quarter. We are particularly pleased sales gains in other categories were sufficient to replace the business lost by our OEM customer to Wal-Mart. We will strive to hold our general, selling and administrative expenses steady, while continuing to grow our sales and gross margin. Our internal production of poles is continuing to gain us manufacturing efficiency and improving our gross margins. We are optimistic, based on our current order backlog, we will continue our momentum toward increased sales, gross margins and operating income for the fourth quarter which ends September 30th, in relation to the quarter we have just reported."

About Catalyst Lighting Group, Inc.

Catalyst Lighting Group is headquartered in Fort Worth, Texas. Through its sole subsidiary, Whitco Company, LP, Catalyst manufactures and markets light poles for the commercial and industrial markets. The company sells and distributes its products through a network of more than 70 agents stationed throughout the United States. More information about Catalyst Lighting Group, Inc. may be found on the company's Web site, www.catalystlighting.com.

Certain of the above statements contained in this press release contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Actual results, events and circumstances (including future performance, results and trends) could differ materially from those set forth in such statements due to various factors, risks and uncertainties, including but not limited to, risks associated with Catalyst Lighting Group, Inc.'s future growth and operating results, the uncertainty of market acceptance of the company's products, technological change, competitive factors and general economic conditions. Catalyst Lighting Group, Inc. has no duty and undertakes no obligation to update such statements.



              CATALYST LIGHTING GROUP, INC. AND SUBSIDIARY
             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                     FOR THE THREE MONTHS       FOR THE NINE MONTHS
                            ENDED                     ENDED
                           JUNE 30,                  JUNE 30,
                      2004         2003          2004          2003
                   ---------    ---------     ---------     ---------
                  (Unaudited)  (Unaudited)   (Unaudited)   (Unaudited)
                   ---------    ---------     ---------     ---------
                                                                         
 NET SALES         $4,275,000  $4,069,887    $12,440,537  $10,644,295
 COST OF SALES      2,884,195   2,882,794      8,511,721    7,277,750
                   ----------  ----------    -----------  -----------

 GROSS PROFIT ON 
  SALES             1,390,805   1,187,092      3,928,816    3,366,545

 GENERAL, SELLING 
  AND 
  ADMINISTRATIVE 
  EXPENSES          1,456,853   1,349,216      4,372,896    3,528,781
                   ----------  ----------    -----------  -----------

 INCOME (LOSS) 
  FROM 
  OPERATIONS          (66,048)   (162,124)      (444,080)    (162,236)

 OTHER EXPENSE:
   Reverse merger 
    costs                   -      21,991              -       85,377
   Interest 
    expense            70,837      73,800        252,900      220,977
                   ----------  ----------    -----------  -----------

 LOSS FROM 
  OPERATIONS 
  BEFORE 
  PROVISION FOR 
  INCOME TAXES       (136,885)   (257,915)      (696,980)    (468,590)

 PROVISION FOR 
  INCOME TAXES         50,142           -        253,801            -
                   ----------  ----------    -----------  -----------

 NET LOSS          $  (86,743) $ (257,915)   $  (443,179) $  (468,590)
                   ==========  ==========    ===========  ===========

 PRO FORMA 
  INCOME TAX 
  AND NET 
  LOSS:
   Net loss 
    before pro 
    forma 
    income 
    taxes          $  (86,743) $ (257,915)   $  (443,179) $  (468,590)
   Pro forma 
    income tax 
    benefit 
    (expense)               -      93,766              -      169,250
                   ----------  ----------    -----------  -----------

 PRO FORMA NET 
  LOSS             $  (86,743) $ (164,149)   $  (443,179) $  (299,340)
                   ==========  ==========    ===========  ===========

 NET LOSS PER 
  COMMON SHARE:
   Basic           $     (.02) $     (.09)   $      (.13) $      (.16)
                   ==========  ==========    ============ ===========
   Diluted         $     (.02) $     (.09)   $      (.13) $      (.16)
                   ==========  ==========    ============ ===========

 PRO FORMA NET 
  LOSS PER 
  COMMON 
  SHARE:
   Basic           $     (.02) $     (.05)   $      (.13) $      (.10)
                   ==========  ==========    ============ ===========
   Diluted         $     (.02) $     (.05)   $      (.13) $      (.10)
                   ==========  ==========    ============ ===========

 WEIGHTED 
  AVERAGE 
  NUMBER OF 
  SHARES 
  OUTSTANDING:
   Basic            3,601,809   2,991,972      3,482,575    2,917,273
                   ==========  ==========    ===========  ===========
   Diluted          3,601,809   2,991,972      3,482,575    2,917,273
                   ==========  ==========    ===========  ===========


               CATALYST LIGHTING GROUP, INC. AND SUBSIDIARY
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                             
                                           JUNE 30,      SEPTEMBER 30,
                                             2004            2003
                                          -----------    -----------
                                          (Unaudited)     (see Note)
                                          -----------    -----------
                 ASSETS
                 ------

 CURRENT ASSETS:                     

  Cash                                    $    80,634    $    96,591
                                                         
  Trade receivables, less allowance for 
   doubtful accounts of $60,646 and 
   $53,892                                  2,866,956      3,380,471
                                                           
  Trade receivable - related party             44,746         92,305
                                                          
  Inventories, net of reserve of $17,877 
   and $64,698                              1,701,897      1,311,130
                                                        
  Prepaid expenses and other                   30,937         49,502
                                                    
  Deferred tax asset                           47,699         47,699
                                          -----------    -----------
                                                     
   Total current assets                     4,772,869      4,977,698
                                                 
 PROPERTY AND EQUIPMENT, net of 
  accumulated depreciation of 
  $84,696 and $58,410                         146,684        115,198

 OTHER ASSETS:

  Goodwill                                  2,971,362      2,971,362
                                                 
  Deferred tax asset                          253,801
                                             
  Other                                        15,793         15,793
                                          -----------    -----------
    Total other assets                      3,240,956      2,987,155
                                          -----------    -----------
 TOTAL ASSETS                             $ 8,160,508    $ 8,080,051
                                          ===========    ===========
                                                                   
    LIABILITIES AND STOCKHOLDERS' EQUITY
    ------------------------------------
                                                                    
 CURRENT LIABILITIES:
                                                                    
  Revolving note payable                  $ 1,718,433    $ 2,072,522
                                                         
  Current maturities of long-term debt:

                                                         
   Related party                              250,000        250,000
                                                         
   Other                                      482,775        274,134
                                                         
  Accounts payable                          2,860,699      2,447,756
                                                         
  Accrued commissions                         471,391        587,383
                                                         
  Other accrued liabilities                   277,826        219,553
                                          -----------    -----------
                                                       
     Total current liabilities              6,061,124      5,851,348
                                          -----------    -----------
                                                         
 LONG-TERM DEBT, less current maturities:
                                                         
  Related party                                50,000         70,000
                                                         
  Other                                       850,000      1,083,989
                                          -----------    -----------
                                                         
   Total long-term debt                       900,000      1,153,989
                                                         
                                                         
 DEFERRED TAXES                               108,833        108,833
                                                         
 COMMITMENTS
                                                         
 STOCKHOLDERS' EQUITY:
                                                         
  Preferred stock - $.01 par value; 
   authorized 10,000,000 shares, none 
   issued                                       --             --
                                               
  Common stock - $.01 par value; 
   authorized 40,000,000 shares,
   3,646,869 shares issued and
   outstanding                                 36,469         33,914
                                                 
   Additional paid-in capital               2,020,278      1,454,984
                                             
   Accumulated deficit                       (966,196)      (523,017)
                                          -----------    ----------- 
    Total stockholders' equity              1,090,551        965,881
                                          -----------    -----------
                                                               
 TOTAL LIABILITIES AND STOCKHOLDERS'
  EQUITY                                  $ 8,160,508    $ 8,080,051
                                          ===========    ===========

(Note) Derived from the Company's audited consolidated balance sheet at September 30, 2003



            

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