Crown Group Acquires Majority Ownership of Smart Choice Automotive Group.

DALLAS--(BUSINESS WIRE)--Dec. 2, 1999--

Crown Group, Inc. (Nasdaq:CNGR) today announced that it has acquired voting control of Smart Choice Automotive Group, Inc. (OTC BB:SMCH) via the merger of a wholly-owned Smart Choice subsidiary into Crown's 85%-owned subsidiary, Paaco Automotive Group, Inc. and a $3 million cash investment into Smart Choice.

Crown and Smart Choice announced on August 27, 1999, that they had entered into a letter of intent with respect to Crown's proposed acquisition of a controlling interest in Smart Choice. The terms of the transaction, as completed, differ substantially from those outlined in the letter of intent.

Contemporaneously with Crown's equity investment and the merger of its Paaco subsidiary with the Smart Choice subsidiary, approximately $15.0 million of Smart Choice's outstanding debt and preferred stock was converted into shares of Smart Choice common stock. An additional $4.5 million of Smart Choice debt, acquired by Crown for approximately $2.3 million in cash, was converted into shares of Series E Convertible Preferred Stock. Following this transaction, Smart Choice has approximately $2.6 million of subordinated debt outstanding. In connection with the transaction, the combined company obtained a restructured and restated $160 million senior finance receivables and inventory credit facility, which contains more favorable terms than the facilities it replaced.

In exchange for its $3 million cash investment, its contribution of Paaco, and the conversion of certain debt obligations, Crown received shares of Series E Convertible Preferred Stock representing 70% of the ownership and voting rights of Smart Choice on an "as converted" basis. The minority shareholders of Paaco received shares of Series E Convertible Preferred Stock representing 5% of Smart Choice's outstanding voting securities. The holders of certain converted Smart Choice debt and preferred stock received shares of Smart Choice common stock equivalent to approximately 20.7% of the outstanding voting securities. Previously existing Smart Choice shareholders now own approximately 4.3% of the outstanding Smart Choice voting securities. The holders of the shares of Smart Choice common stock issued in connection with the transaction and Crown and other holders of Series E Convertible Preferred Stock have certain registration rights.

For its most recent fiscal year ended December 31, 1998, Smart Choice reported revenues from continuing operations of $95.4 million and a loss from continuing operations of $7.3 million. For the nine months ended September 30, 1999, Smart Choice reported revenues of $71.4 million and a loss from continuing operations of $24.2 million.

For the fiscal year ended April 30, 1999, Paaco generated revenues of $70.7 million and recorded a net loss of $1.4 million. Since that time, Paaco has undergone a substantial financial and organizational restructuring which has resulted in two consecutive profitable quarters.

James E. Ernst has been appointed President and Chief Executive Officer of Smart Choice. Mr. Ernst has a long association with Crown and has recently been responsible for the restructuring of Paaco's operations. He is a Certified Public Accountant and was formerly President and Chief Executive Officer of both Casino Magic Corp. and Casino America, Inc.

Gary Smith will continue to manage the Florida-based operations of Smart Choice, as President of First Choice, while Larry Lange remains responsible for the Company's Texas-based operations, as President of Paaco. Joe Cavalier has joined Smart Choice as its new Chief Financial Officer, and Ron Anderson will have principal responsibility for the Company's finance receivable activities.

Smart Choice's board of directors includes Edward R. McMurphy as Chairman, and T. J. Falgout, III -- both senior executives of Crown. Robert Abrahams, James E. Ernst, Gary Smith and Larry Lange comprise the remainder of Smart Choice's board.

The combined Smart Choice-Paaco business, which employs over 500 people, operates 22 used car dealerships in Florida and Texas, will have an aggregate portfolio of finance receivables totaling approximately $160 million. Headquartered in Dallas, Texas, Paaco operates 11 dealerships in the Dallas-Ft. Worth Metroplex and the Houston area. The dealerships, which cater primarily to a Hispanic customer base, provide installment financing for over 95% of the automobiles which are purchased by its customers. Smart Choice, headquartered in Titusville, Fla., currently operates a network of 11 dealerships in the State of Florida, and provides installment financing for over 95% of the used cars sold by its dealerships.

"I believe the capital restructuring of Smart Choice, the reorganization of the operations of both companies, and significant overhead reductions, will allow the 'new' Smart Choice to be nicely profitable," stated Ed Ernst. "Our strengthened management team, with its focus on cash flow, expense control and profitability, should allow the combined company to compete effectively as the premier retailer and financier of used automobiles in its respective markets."

"The combination of Smart Choice-Paaco should result in significant synergies and allow the combined company to realize its full potential in selling and financing automobiles for 'subprime' customers," commented Edward R. McMurphy, President and Chief Executive Officer of Crown Group, Inc. "Both companies have established a strong presence as industry leaders in their respective niche markets, and recent operational restructurings have reduced costs and improved efficiencies within each organization. Given the rationalized capital structure resulting from the transactions, we believe that the companies can fully capitalize upon their strong brand names in the Southeastern and Southwestern United States.

"Since completing this transaction, Crown Group now owns a majority interest in 'subprime' auto companies with combined revenues approaching $250 million annually," continued McMurphy. "In addition to our ownership in Smart Choice-Paaco, Crown also owns 99% of America's Car-Mart, one of the largest 'Buy-Here Pay-Here' used car dealers in the United States. Car-Mart, which has been consistently profitable throughout its 18-year history, underwrites, finances and services retail installment contracts generated by its 35 dealerships located in non-metropolitan markets throughout Arkansas, Oklahoma, Texas and Missouri."

Crown Group, Inc. seeks to enhance shareholder value through the acquisition, development and operation of small-cap companies with significant growth potential. Crown Group currently owns (i) 99% of America's Car-Mart, Inc. and 70% of Smart Choice Automotive Group, Inc., vertically integrated used car sales and finance companies; (ii) 100% of Precision IBC, a firm specializing in the sale and rental of intermediate bulk containers; (iii) 80% of Concorde Acceptance Corporation, a sub-prime mortgage lender; (iv) 50.1% of CG Incorporated, S.A. de C.V., which operates two casinos in El Salvador; and (v) 45% of Atlantic Castings, Inc., an investment castings manufacturer of turbine engine components. Crown Group is headquartered in Dallas, Texas, and its common stock is traded on the Nasdaq National Market under the symbol "CNGR."

This press release includes statements that may constitute "forward-looking" statements, usually containing the words "believe," "estimate," "project," "expect," or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those relating to the development of the company's businesses, risks associated with acquisitions, continued availability of lines of credit for the company's businesses, changes in interest rates, changes in the industries in which the company operates, competition, dependence on existing management, and other risks which are discussed in the company's periodic filings with the Securities and Exchange Commission. By making these forward-looking statements, Crown Group, Inc. undertakes no obligation to update these statements for revisions or changes after the date of this release.