Easy Gardener Products, Ltd. Announces Lower Than Expected EBITDA

Easy Gardener filed an 8-K today announcing lower than expected EBITDA for its fourth quarter ending June 30, 2004. The result of the lower EBITDA is that under its arrangement with senior lenders, the payments on its Trust Preferred Securities are required to be deferred. The lower EBITDA also has exceeded the Maximum Senior Leverage Ratio amount required by its senior lenders.

Easy Gardener Products, Ltd., the Company, has completed a preliminary review of its financial performance for the quarter and 8 months ended June 30, 2004. This review is before commencement and completion of its independent audit. Effective November 1, 2003, the Company acquired substantially all of the operating assets and assumed substantially all of the liabilities of U. S. Home & Garden Inc., the Predecessor.

The fourth quarter ended June 30, 2004 had improved gross sales levels in excess of 12 % from core product growth and new products, when compared to the fourth quarter ended June 30, 2003 of its Predecessor. However, increased margin pressures from key accounts, cost pressures from suppliers and freight costs resulted in a key measure of performance, Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) coming in below expectations for the fourth quarter and the year. The fourth quarter performance is the most significant quarter for the Company.

Terms of the various loan documents with the Company's senior lenders require that if EBITDA levels are below certain levels, the monthly interest payment on the Trust Preferred Securities and the related Easy Gardener Products Trust I (AMEX: EZY.PR.A) security be deferred as allowed by the terms of those securities. The EBITDA levels at June 30, 2004, are below the minimum levels set by the senior lenders requiring that the interest on such securities be deferred. EBITDA is expected to be approximately $10.6 million instead of the required $13 million.

Due to the lower EBITDA levels and unexpected payment delays on the part of two key customers in June 2004, the Company's Maximum Senior Leverage Ratio came in at 3.51, or .26 higher than the 3.25 permitted by the senior lenders before adjusting for the payment delays of the two key customers. This ratio is the total of senior debt divided by the 12 month EBITDA.

The Company has commenced discussions with the senior lenders on the consequences of the above noted matters with specific focus on whether it will be permitted to continue to currently pay interest on the Easy Gardener Products Trust I securities.

The Company recently completed the transfer of the unprofitable Ampro operation to the company which had been manufacturing the products under a Manufacturing and Distribution Agreement.

The Company believes that the changes it has and is continuing to make in its operations and its new product development activities will allow it to grow more profitably in the future.

Contact: Dick Kurz Easy Gardener Products, Ltd. 254-753-5353 dickk@easygardener.net