American Homestar Corporation Announces Retail Acquisitions in North Carolina and the Pacific Northwest.

HOUSTON--(BUSINESS WIRE)--Dec. 18, 1998--American Homestar Corporation (Nasdaq/NM:HSTR) today announced that it has recently completed several retail acquisitions in North Carolina and in the Pacific Northwest.

Continuing the expansion of its recently acquired First Value Homes Operation in North Carolina, the Company has acquired five retail sales centers formerly operated as Town and Country Homes, Tweed Enterprises and Blue Ridge Homes. Of the five new centers, one was opened in November and the remaining four are scheduled to open in December or early January. First Value, which had two retail centers when acquired in July 1998, now has a total of eight, and plans to open two more locations by March 1, 1999.

Pacific Northwest Homes (formerly the DWP Companies), which was acquired in September 1998, also has expanded with the recent acquisition of two retail sales centers: one in Washington and the other in Oregon. With a third new location, also opened in the second quarter, Pacific Northwest now operates ten retail centers.

Commenting on the results, Craig Reynolds, the Company's chief financial officer, said, "We had the opportunity to make several asset-based acquisitions in both regions and to accelerate the growth of both First Value and Pacific Northwest. Our expanded presence in both market regions and our rapidly growing modular home operations in the Carolinas are important elements of the Company's near-term growth plans. We believe this expansion will create the potential for greater earnings growth as these new operations are assimilated over the next two quarters."

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.

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.