Clayton Homes Reports Record Quarter.

KNOXVILLE, Tenn.--(BUSINESS WIRE)--April 14, 1999--

For the third quarter ended March 31, Clayton Homes, Inc. (NYSE:CMH) revenues of $308 million and net income of $35 million, were up 14.9% and 12.3% respectively from the prior year. Earnings per share increased 14.3% to 24 cents from 21 cents a year earlier. With this 51st consecutive record quarter, the Company has reported increases in revenue and net income in 63 of the 64 quarters since becoming a public company in 1983.

For the first nine months of fiscal 1999, total revenues grew 20% to $942 million from $782 million. Manufactured Housing sales increased 19% to $728 million from $610 million.

Clayton Homes, Inc. is a vertically integrated manufactured housing company engaged in manufacturing, retailing, financing and insuring homes, and operating manufactured housing communities. -0-

                            SUMMARY RESULTS

 (in thousands except    Three Months Ended          Nine Months Ended
  per share data)             March 31,                 March 31,
                      1999      1998    Change    1999      1998   Change
                      ----      ----    ------    ----      ----   ------

 Revenues           $308,306  $268,375   +15%   $942,112  $782,139  +20%
 Earnings
  before taxes        55,432    50,218   +10%    163,742   148,306  +10%
 Net Income         $ 34,932  $ 31,118   +12%   $103,142  $ 91,906  +12%
 Earnings per share
  (diluted)         $   0.24  $   0.21   +14%   $   0.70  $   0.62  +13%
 Average shares
  outstanding
  (diluted)          145,187   149,660    -3%    146,358   149,448   -2%

Earnings per share and shares outstanding data have been adjusted for a 5-for-4 stock split paid on December 9, 1998. Certain statements may be considered forward looking and involve certain risks and uncertainties that may cause actual results to differ materially from expectations.