CML Announces NordicTrack Bankruptcy Filing and Amendment of Secured Credit Facility.

ACTON, Mass.--(BUSINESS WIRE)--Nov. 5, 1998--CML Group, Inc. (NYSE:CML) announced today that the Company's NordicTrack subsidiary has filed for protection under Chapter 11 of the U. S. Bankruptcy Code. NordicTrack will move quickly to wind down its business operations and sell its assets.

Separately, CML has reached an agreement with its secured lenders to amend its credit facility and to provide CML with a forbearance period through January 31, 1999. CML's secured creditors have also agreed to continued credit availability for its profitable Smith & Hawken subsidiary during the forbearance period. During this period, CML will seek to recapitalize so as to reduce its debt load and provide its Smith & Hawken subsidiary with additional working capital.

John Pound, Chairman and Chief Executive Officer of CML, said: "Over the past nine months, we have explored a wide range of alternatives for NordicTrack. We aggressively investigated sale opportunities while also working to restructure the company, cut costs, and reposition it as a viable specialty retailer of fitness products. There was no meaningful acquisition interest that we could uncover in NordicTrack in its present configuration and given its troubled results. This fall, NordicTrack's results began to deteriorate very rapidly and unexpectedly relative to its plan. Based upon this development, we were forced to act quickly to contain the situation and eliminate further losses."

Mr. Pound continued: "We will seek to reap the highest price for NordicTrack's assets. Concurrently, we will seek to further balance our capital structure through a potential reduction of debt and infusion of equity. We have engaged BancBoston Robertson Stephens Inc. to assist us in pursuing opportunities for raising equity capital and they are working aggressively to explore these opportunities."

Mr. Pound further continued: "Our secured creditors understand Smith & Hawken's potential value and have indicated that they will work with us as we seek to establish a new capital structure. Smith & Hawken has been operating under difficult circumstances due to CML's overall financial condition, and has none the less been healthy, profitable and growing. We continue to believe that it represents the best brand in the home and garden industry. With the NordicTrack situation resolved, our goal is to balance our capital structure and position Smith & Hawken for growth.

CML also announced that in light of NordicTrack's bankruptcy filing, William E. Shepard, President of its NordicTrack division, resigned from the CML Board of Directors effective today.

This news release contains forward-looking statements relating to the Company's future strategic prospects and opportunities, and such statements involve risks and uncertainties. In addition to the risk factors referred to in the Company's Annual Report on Form 10-K for the fiscal year ended July 31, 1997, factors which may affect the Company's future operating results include: the market's response to the Company's new and existing products; the impact of competition in the Company's marketplace; the ability of the Company to successfully manage its marketing channels; the Company's continuing efforts to reduce costs; the Company's ability to realize proceeds from the NordicTrack bankruptcy proceedings; and the availability of capital resources.