Cavalier Reports Plant Fire in Belmont, Mississippi.

Business Editors

ADDISON, Ala.--(BUSINESS WIRE)--June 20, 2000

Cavalier Homes, Inc. (NYSE:CAV) today announced that its operational plant in Belmont, Mississippi was destroyed by fire on Sunday, June 18, 2000. While the cause of the fire is still under investigation, the Company currently believes it was accidental in nature.

The plant was one of four facilities located in Belmont and, due to prior plant idlings and/or consolidations, was providing virtually all of the Belmont product sold by Cavalier at the time of the fire. The Belmont product line accounted for approximately 10% of the Company's net sales through the first five months of 2000. Cavalier presently intends to move the production of Belmont homes to one of the adjacent plants on the property and hopes to have this transition completed by mid-July 2000. This property loss is expected to result in a temporary effect on sales and a disruption in the flow of Belmont homes to dealers over the next few weeks while the relocation is in process. However, the impact of this relocation is not presently expected to have a material adverse effect on the Company's sales over the longer term. The Company indicated that it currently believes sufficient insurance coverage is in place.

Cavalier Homes, Inc. and its subsidiaries are engaged in the production, sale, financing and insuring of manufactured housing. The Company operates 16 home manufacturing facilities and markets its homes in 29 states through about 1,000 independent dealers operating approximately 1,100 sales centers, including 275 exclusive dealer locations, of which 13 are Company-owned stores. Through its financial services segment, the Company purchases qualifying retail installment sale contracts for manufactured homes sold through its exclusive dealer network and offers insurance products to exclusive dealers and their retail customers.

With the exception of historical information, the statements made in this press release, including those containing the words "intends," "anticipates," "expects," "plans," "believes," and words of similar import, and those relating to the cause of the Belmont facility fire, the timing and plans for transitioning operations to another plant, the effect of the fire on Cavalier's sales and operations, and the availability of insurance coverage, constitute forward-looking statements, are based upon current expectations, and are made pursuant to the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve certain known and unknown assumptions, risks and uncertainties that could cause actual results to differ materially from those included in or contemplated by the statements. These assumptions, risks and uncertainties include, but are not limited to, those discussed or indicated in Cavalier's Annual Report on Form 10-K for the period ended December 31, 1999, under the headings "Item 1. Business-Risk Factors" and "'Safe Harbor' Statement under the Private Litigation Reform Act of 1995," as filed with the Securities and Exchange Commission, and in the other documents filed by Cavalier with the Securities and Exchange Commission. In addition, the fire at the Belmont facility has only recently occurred and Cavalier is still in the process of analyzing its effect. Consequently, Cavalier can give no assurances that it will not subsequently discover facts or circumstances that will cause it to have different expectations regarding the impact of the fire from those expressed in this press release. Cavalier disclaims any obligation to update any forward-looking statements as a result of developments occurring after the issuance of this press release.