PRESS RELEASE

Miami Lakes, Florida (February 26, 2004) — Applica Incorporated (NYSE: APN) today announced that fourth-quarter sales for 2003 were $209.0 million, a decrease of 5.6% from the same period in 2002. For the year ended December 31, 2003, sales were $640.6 million, a decrease of 11.9% compared to 2002. The decrease in the quarter and the year was primarily the result of planned lower contract manufacturing sales. Additionally, for the first nine months of the year, Applica experienced softer U.S. sales.

Applica reported a loss for fourth quarter of $6.5 million, or $0.27 per diluted share, compared with earnings of $5.1 million, or $0.21 per diluted share, for the 2002 fourth quarter. For the year ended December 31, 2003, Applica reported net income of $15.2 million, or $0.63 per diluted share, as compared to a loss of $73.8 million, or $3.10 per diluted share, for the same period last year.

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An impairment charge of $7.2 million ($4.3 million, net of tax ) related to an intangible asset acquired as part of the acquisition of the Black & Decker household products group;

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Expenses of $6.9 million ($4.1 million, net of tax) related to the retrenchment of the Mexican and Chinese manufacturing facilities;

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Repositioning and other charges of $4.7 million ($2.8 million, net of tax) related to accrued rental expenses at the Shelton, Connecticut facility, which was closed in the third quarter of 2002; and

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Charges of $2.0 million ($1.2 million, net of tax) related to the early extinguishment of an additional $35.0 million of the 10% notes.

These expenses were partially offset by the reversal of $4.1 million ($2.5 million, net of tax) in product recall related expenses recorded in costs of goods sold.

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$55.6 million ($33.4 million, net of tax) of equity in the net earnings of a joint venture in which Applica owns a 50% interest; and

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Expenses in an aggregate amount of $3.9 million ($2.3 million, net of tax) related to the early extinguishment of $65.0 million of the 10% notes.

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An adjustment of $121.3 million ($78.8 million, or $3.31 per share, net of tax) to reduce the carrying value of goodwill pursuant to the provisions of SFAS 142;

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Charges in an aggregate amount of $10.6 million relating to costs and expenses of the consolidation of the Shelton, Connecticut, office, as well as certain back-office and supply chain functions in Latin America and Canada; and

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A one-time gain of $557,000 in the third quarter of 2002 in connection with the settlement of certain outstanding litigation matters.

Applica’s gross profit margin decreased to 28.6% in the three-month period ended December 31, 2003 as compared to 32.4% for the same period in 2002. The gross profit margin decrease was primarily attributable to lower sales volumes and the related unabsorbed overhead expenses in our manufacturing facilities, as well as the expenses resulting from the downsizing of the factories in Mexico and China, partially offset by the product recall expense reversal. For the year ended December 31, 2003, the gross profit margin decreased to 28.9% as compared to 31.4% for the same period in 2002. Additionally, for the first nine months of the year, Applica experienced a poor product mix.

At December 31, 2003, total debt as a percentage of total capitalization was 36.5%, with total debt of $136.8 million and shareholders’ equity of $237.6 million. The Company’s book value per share was $10.03 at December 31, 2003. Capital expenditures for the years ended December 31, 2003 and 2002 were $18.5 million and $19.3 million, respectively.

Harry D. Schulman, Applica’s President and Chief Executive Officer, commented, “Although 2003 did not live up to our expectations, we have begun to see improving sales trends in January and February and believe it will be the beginning of good momentum for 2004 and beyond. We are very excited about the launch of the Home Café™ system and the Tide™* Buzz™ Ultrasonic Stain Remover powered by Black & Decker®. These are two new home-based consumer products resulting from our strategic relationship with The Procter & Gamble Company.”

Applica will hold a conference call today at 11:00 a.m., Eastern Time, to discuss its fourth-quarter and full year results and to give guidance on future results and trends in operations. Live audio of the conference call will be simultaneously broadcast over the Internet and will be available to members of the news media, investors and the general public. The conference call is expected to last approximately one hour. Broadcast of the event can be accessed on the Company’s website, www.applicainc.com by clicking on the Investor Relations page. You may also access the call via CCBN, at www.streetevents.com. The event will be archived and available for replay through Thursday, March 4, 2004, at midnight.

Applica Incorporated and its subsidiaries are manufacturers, marketers and distributors of a broad range of branded and private-label small electric consumer goods. The Company manufactures and distributes small household appliances, pest control products, home environment products, pet care products and professional personal care products. Applica markets products under licensed brand names, such as Black & Decker®, its own brand names, such as Windmere®, LitterMaid® and Applica™, and other private-label brand names. Applica’s customers include mass merchandisers, specialty retailers and appliance distributors primarily in North America, Latin America and the Caribbean. The Company operates manufacturing facilities in China and Mexico. Applica also manufactures products for other consumer products companies. Additional information regarding the Company is available at www.applicainc.com.

Certain matters discussed in this news release are forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements. These factors include uncertainties regarding the impact that the war with Iraq or terrorist activities may have on the economy; adverse effects of newly acquired businesses or product lines; the bankruptcy or loss of a major retail customer, distributor or supplier; economic conditions and the retail environment; the Company’s dependence on the timely development, introduction and customer acceptance of products; competitive products and pricing; reliance on key customers; dependence on foreign suppliers and supply and manufacturing constraints; increases in raw materials costs; cancellation or reduction of orders; the uncertainties in the Latin American economies; the potential for product recalls and product liability claims, and other risks and uncertainties detailed from time to time in the Company’s Securities and Exchange Commission filings, including the Annual Report on Form 10-K for the year ended December 31, 2003, and the subsequent Form 10-Q reports. Readers are cautioned not to place undue reliance on forward-looking statements. Applica undertakes no obligation to publicly revise any forward-looking statements to reflect events or circumstances that arise after the date hereof.


				December 31,

				2003			2002

				(In thousands)
Current Assets:
	Cash and cash equivalents			$	12,735		$	7,683
	Accounts and other receivables, less allowances of $12,543 in 2003 and $15,830 in 2002				131,021			146,567
	Note receivable - officer				1,615			2,060
	Inventories				106,326			111,453
	Prepaid expenses and other				13,593			11,862
	Refundable income taxes				4,823			1,663
	Future income tax benefits				11,616			18,654

			Total current assets		281,729			299,942
Investment in Joint Ventures					5,389			1,249
Property, Plant and Equipment – at cost, less accumulated depreciation of $103,894 in 2003 and $109,949 in 2002					70,389			76,963
Future Income Tax Benefits, Non-Current					49,695			54,378
Goodwill					62,812			62,812
Other Intangibles					6,146			20,860
Other Assets					2,676			5,461

		Total Assets		$	478,836		$	521,665

Liabilities and Shareholders’ Equity
Current Liabilities:
	Accounts payable			$	39,273		$	31,446
	Accrued expenses				61,362			74,686
	Current maturities of long-term debt				151			144
	Current taxes payable				2,172			518
	Deferred rent				301			372

		Total current liabilities			103,259			107,166
Other Long-Term Liabilities					1,327			1,533
Long-Term Debt, Less Current Maturities					136,637			193,838
Shareholders’ Equity:
	Common stock – authorized: 75,000 shares of $0.10 par value; issued and outstanding: 23,687 in 2003 and 23,497 in 2002				2,369			2,350
	Paid-in capital				156,604			155,395
	Retained earnings				86,474			71,251
	Note receivable – officer				(1,496	)		(1,496	)
	Accumulated other comprehensive earnings (loss)				(6,338	)		(8,372	)

		Total shareholders’ equity			237,613			219,128

		Total liabilities and shareholders’ equity		$	478,836		$	521,665

Applica Incorporated and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)


			Three Months Ended December 31,

			2003					2002

			(In thousands, except per-share data)
Net sales			$	209,041		100.0	%	$	221,408		100.0	%
Cost of sales:
	Cost of goods sold			153,481		73.4			149,706		67.6
	Repositioning and other charges			(4,125	)	(2.0	)		—		—

		Gross profit		59,685		28.6			71,702		32.4
Selling, general and administrative expenses:
	Operating expenses			54,361		26.0			56,291		25.5
	Repositioning and other charges			4,681		2.3			—		—
	Impairment of intangible asset			7,152		3.4			—		—

		Operating profit (loss)		(6,509	)	(3.1	)		15,411		6.9
Other (income) expense:
	Interest expense			2,533		1.2			4,957		2.2
	Interest and other income			76		0.0			(179	)	(0.1	)
	Loss on early extinguishment of debt			2,034		1.0			—		—

				4,643		2.2			4,778		2.1
Earnings (loss) before equity in net earnings (loss) of joint ventures and income taxes				(11,152	)	(5.3	)		10,633		4.8
Equity in net earnings (loss) of joint ventures				371		0.2			(715	)	(0.3	)

		Earnings (loss) before income taxes		(10,781	)	(5.1	)		9,918		4.5
Income tax expense (benefit)				(4,313	)	(2.0	)		4,842		2.2

		Net earnings (loss)		(6,468	)	(3.1	)%	$	5,076		2.3	%

Per-share data:
	Earnings per common share – basic		$	(0.27	)			$	0.22

	Earnings per common share – diluted		$	(0.27	)			$	0.21


				Year Ended December 31,

				2003					2002

				(In thousands, except per-share data)
Net sales				$	640,639		100.0	%	$	727,356		100.0	%
Cost of sales:
	Cost of goods sold				459,443		71.7			498,934		68.6
	Repositioning and other charges				(4,125	)	(0.6	)		—		—

			Gross profit		185,321		28.9			228,422		31.4
Selling, general and administrative expenses:
	Operating expenses				186,601		29.1			191,170		26.3
	Repositioning and other charges				4,681		0.7			10,643		1.4
	Impairment of intangible asset				7,152		1.1			—		—

			Operating earnings (loss)		(13,113	)	(2.0	)		26,609		3.7
Other (income) expense:
	Interest expense				13,964		2.2			17,581		2.4
	Interest and other income				(817	)	(0.1	)		(1,791	)	(0.2	)
	Loss on early extinguishment of debt				3,940		0.6			—		—
	Gain on litigation settlement				—		—			(557	)	(0.1	)

					17,087		2.7			15,233		2.1

Earnings (loss) before equity in net earnings (loss) of joint ventures and income taxes					(30,200	)	(4.7	)		11,376		1.6
Equity in net earnings (loss) of joint ventures					55,570		8.7			(1,498	)	(0.2	)

		Earnings (loss) before income taxes			25,370		4.0			9,878		1.4
Income tax expense (benefit)					10,147		1.6			4,826		0.7

	Earnings (loss) before cumulative effect of change in accounting principle				15,223		2.4			5,052		0.7
	Cumulative effect of change in accounting principle, net of tax benefit of $42,447				—		—			(78,829	)	(10.8	)

		Net earnings (loss)		$	15,223		2.4	%	$	(73,777	)	(10.1	)%

Earnings (loss) per common share – basic:
	Earnings (loss) before cumulative effect of change in accounting principle			$	0.65				$	0.22
	Cumulative effect of change in accounting principle, net of tax benefit of $42,447				—					(3.37	)

	Earnings (loss) per common share – basic			$	0.65				$	(3.15	)

Earnings (loss) per common share – diluted:
	Earnings (loss) before cumulative effect of change in accounting principle			$	0.63				$	0.21
	Cumulative effect of change in accounting principle, net of tax benefit of $42,447				—					(3.31	)

	Earnings (loss) per common share – diluted			$	0.63				$	(3.10	)


FOR IMMEDIATE RELEASE

	Contact:	Investor Relations Department (305) 362-2611 investor.relations@applicamail.com