American Homestar Corporation Announces Record Results for Second Quarter of Fiscal 1999.

HOUSTON--(BUSINESS WIRE)--Dec. 22, 1998--American Homestar Corporation (Nasdaq/NM:HSTR) today announced results for the second quarter and six months ended November 30, 1998. For the quarter, revenues increased 35% to $169 million from $125 million in the year-earlier period. Net income for the second quarter increased 19% to $5.8 million, or $0.31 per share, compared with $4.8 million, or $0.27 per share, in the prior-year period.

For the first six months of fiscal 1999, revenues increased 27% to $317 million from revenues of $250 million in the comparable period last year. Net income for the first six months of fiscal 1999 rose 74% to $11.5 million, or $0.62 per share, compared with $6.6 million, or $0.37 per share, for the first six months of last year. Net income for the first six months of last year included two non-recurring first quarter charges totaling $2.7 million, or $0.15 per share (after tax), relating to the acquisition of Brilliant Homes and the early extinguishment of debt.

All prior-year share and per share amounts have been restated to reflect the three-for-two stock split distributed on October 31, 1997, and the effects of adopting SFAS No. 128, "Earnings Per Share."

Commenting on the results, Craig Reynolds, the Company's chief financial officer, said, "The power of vertical integration continues to drive our manufacturing operations to record levels of output, efficiency and profitability. Except for the near-term effects of high growth in our most recently acquired retail companies (First Value and Pacific Northwest Homes), the Company's core operating results are positive and consistent with internal expectations."

American Homestar is one of the leading vertically integrated manufactured housing companies. The Company currently operates 11 manufacturing plants, 110 Company-owned retail sales centers, and serves 62 retail franchisees and over 300 independent retail locations in 28 states. The Company also provides retail financing through its finance affiliate, 21st Century Mortgage, and provides insurance and transportation services to its customers. -0-

                     AMERICAN HOMESTAR CORPORATION
                     Comparative Operating Summary

                                         Three Months Ended Nov. 30,
Second Quarter - Fiscal 1999                 1998           1997
                                         ------------   ------------
Average New Home Retail Selling Price    $     53,406   $     49,664
New Homes Sold at Retail                        1,706          1,182
Manufacturing Shipments(1)                      3,205          2,629
Retail Internalization Rate(2)                     82%            85%

Sales                                    $159,376,000   $119,384,000
Total Revenues                            169,022,000    125,014,000
Operating Income                           12,373,000      9,710,000
Net Income                               $  5,757,000   $  4,819,000
                                         ============   ============
Diluted Earnings Per Common Share(3)     $       0.31   $       0.27
                                         ============   ============
Weighted Average Number of Common Shares
  Outstanding(3)                           18,690,511     18,043,092

                                         Six Months Ended Nov. 30,
First Half - Fiscal 1999                     1998           1997
                                         ------------   ------------
Average New Home Retail Selling Price    $     52,871   $     48,046
New Homes Sold at Retail                        3,165          2,482
Manufacturing Shipments(1)                      6,171          5,245
Retail Internalization Rate(2)                     84%            83%

Sales                                    $297,256,000   $237,744,000
Total Revenues                            316,553,000    249,746,000
Operating Income                           23,833,000     16,764,000(4)
Net Income                               $ 11,541,000   $  6,640,000(5)
                                         ============   ============
Diluted Earnings Per Common Share(3)     $       0.62   $       0.37
                                         ============   ============
Weighted Average Number of Common Shares
  Outstanding(3)                           18,581,107     17,995,270

(1)  Including shipments to Company-owned retail locations.

(2)  Percentage of new homes sold at retail which were also
     manufactured by the Company.

(3)  Prior-year amounts have been adjusted to reflect the
     three-for-two stock split on October 31, 1997, and the effects of
     SFAS No. 128 (Earnings Per Share).

(4)  Includes non-recurring pooling costs of $2.4 million.

(5)  Includes non-recurring charges of $2.7 million, or $0.15 per
     share (after tax) related to the acquisition of Brilliant Homes
     and early extinguishment of debt.

-0-

This press release may contain certain forward-looking statements and information based on the beliefs of the Company's management as well as assumptions made by, and information currently available to, the Company's management. Words like "anticipate," believe," "estimate," "should," "expect," and similar expressions used in this press release are intended to identify forward-looking statements. Such statements reflect the current views of the Company with respect to future events and are subject to certain risks, uncertainties, and assumptions, including the risk factors described in the Company's most recently filed registration statement and Form 10-K. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual events or results may vary from those described herein as anticipated, expected, believed, or estimated.