AMERICAN HOMESTAR CORPORATION ANNOUNCES RECORD RESULTS FOR FOURTH QUARTER AND FISCAL 1996.

HOUSTON--(BUSINESS WIRE)--June 25, 1996--American Homestar Corporation (Nasdaq/NM:HSTR) today announced record results for both the fourth fiscal quarter and the year ended May 31, 1996. For the year, revenues increased 23% to $231.2 million from $187.7 million in fiscal 1995. Net income for the year increased 36% to $9.8 million, or $1.23 per share on 7.9 million average shares outstanding compared with net income of $7.2 million, or $0.98 per share on 7.3 million shares outstanding in the prior year.

Revenues for the fourth quarter ended May 31, 1996, increased 15% to $67.3 million from revenues of $58.6 million in the fourth quarter of last fiscal year. Net income for the fourth quarter increased 35% to $3.3 million, or $0.39 per share on 8.6 million average shares outstanding compared with net income of $2.5 million, or $0.32 per share on 7.6 million average shares outstanding in the fourth quarter of last year.

The 13% and 9% increases in the average shares outstanding for the fourth quarter and year ended May 31, 1996, respectively, reflect the offering of 1.1 million shares in March 1996. All share and per share amounts have been adjusted to reflect the five-for-four stock split effected in January 1996.

Craig Reynolds, the Company's chief financial officer, said, "These record results reflect the ongoing, successful implementation of the Company's vertical integration plan and core growth strategy as well as continued strong demand for manufactured housing in the Company's primary market area. With ten new retail centers opened in fiscal 1996, the total number of new homes sold at retail was 24% higher than last year. In addition, the total number of homes manufactured during fiscal 1996 was 19% higher than in fiscal 1995 due primarily to increased capacity and production from all three of the Company's plants.

"Our strategy for fiscal 1997 is to add eight to ten new retail centers, to increase production to meet the growth in demand, and to position 21st Century Mortgage as the primary lender for all Company sales centers. We also are continuing to manage the operations of Guerdon Homes under our option agreement. When the option is exercised, we will be operating in three new markets including the Pacific Northwest, Rocky Mountain and South Central regions. American Homestar is now positioned as one of the fastest growing, vertically integrated manufactured housing companies in the industry," Reynolds concluded.

American Homestar produces manufactured homes from its three plants in the Dallas-Ft. Worth area and retails its products through 44 Company-owned and approximately 100 independently owned retail sales centers in Texas, New Mexico, Oklahoma, Louisiana, Colorado, Arkansas and Kansas. The Company also provides retail financing through its finance affiliate, 21st Century Mortgage Corporation, and provides transportation and insurance services to its customers. In addition, the Company is currently managing and plans to acquire Guerdon Homes, which will add four manufacturing plants, nearly 150 independent retailers in three new market areas including the Pacific Northwest, Rocky Mountain and South Central regions. -0-

                    AMERICAN HOMESTAR CORPORATION
                    Comparative Operating Summary

                                           Three Months Ended May 31,
Fourth Quarter - Fiscal 1996                   1996          1995
Average New Home Retail Selling Price       $    44,211   $    40,713
New Homes Sold at Retail                          1,161         1,032
Manufacturing Shipments (1)                       1,022           798
Retail Internalization Rate (2)                      64%           47%

Sales                                       $61,045,004   $53,491,577
Total Revenues                              $67,341,012   $58,628,976
Operating Income                            $ 6,422,334   $ 4,848,732
Net Income                                  $ 3,332,919   $ 2,466,866
Earnings per Common Share                   $      0.39   $      0.32
Weighted Average Number of Common Shares
  Outstanding (3)                             8,573,450     7,609,270

                                               Year Ended May 31,
Full Year - Fiscal 1996                        1996          1995
Average New Home Retail Selling Price       $    43,460   $    40,041
New Homes Sold at Retail                          3,887         3,127
Manufacturing Shipments (1)                       3,593         3,025
Retail Internalization Rate (2)                      60%           51%

Sales                                      $208,745,280  $171,342,031
Total Revenues                             $231,231,807  $187,652,867
Operating Income                           $ 19,471,838  $ 13,741,663
Net Income                                 $  9,756,398  $  7,187,983
Earnings per Common Share                  $       1.23  $       0.98
Weighted Average Number of Common Shares
  Outstanding (3)                             7,945,976     7,304,241

(1) Including shipments to Company-owned retail locations.
(2) Percentage of new homes sold at retail which were also
    manufactured by the Company.
(3) Adjusted to reflect the five-for-four stock split on January 18,
    1996.

CONTACT: American Homestar Corp.

Craig Reynolds, 713/334-9702