Starcraft Reports 1998 Year End Results

26 November 1998

Starcraft Announces New Sales Programs; Company Discloses 1998 Year End Results and Debt Refinancing

    GOSHEN, Ind.--Nov. 25, 1998--Starcraft Corp. announced today that Tecstar, a joint venture between Starcraft and a Detroit engineering firm was awarded two contracts for the manufacturing of the Tahoe Z71 and Tahoe Limited vehicles.
    Estimated annual sales of the programs are $35 million with employment of approximately 50-70 people.
    These vehicles were introduced by Chevrolet earlier this month at the SEMA Show in Las Vegas. The Z71 and Limited Tahoe programs, which is a part of the Chevrolet limited volume production program, will be built with specific exterior items added such as ground effects, wheels and badging. Interior upgrades include two-tone seats and door insert upgrades. Tecstar has established a 100,000 square foot manufacturing facility in Arlington, Texas with initial production planned for February 1999. The vehicles will be marketed by Chevrolet and carry the Chevrolet factory warranty.
    Separately, the company announced that for the fourth quarter of fiscal year 1998 it had sales of $12.8 million compared to sales of $12.6 million in the fourth quarter of 1997. Net loss for the fourth quarter narrowed 57 percent to 80 cents per share compared to a loss of $1.87 per share for the comparable quarter last year. For the year, sales were $52.5 million compared to $72.3 million in fiscal 1997. The company reduced its loss for the year by 42 percent from $11.3 million in fiscal 1997 to $6.5 million in fiscal 1998.
    "Our strategy to consolidate and refocus our operations to meet the challenge of our changing market continues to show positive results," said Michael H. Schoeffler, president and CFO. "We believe that these actions to streamline our operations and diversify the company to successfully compete in the marketplace will return Starcraft to profitability in 1999."
    Schoeffler added, "We are very excited about the possibilities of our Tecstar joint venture as we enter 1999. We have recently completed a sound refinancing package to provide sufficient funding for this and other programs to continue the company's growth strategy in 1999."
    The company refinanced its outstanding credit agreement with a financing company and a bank. The terms of the agreement provides an aggregate credit limit of $17 million at prime + 1/2 for three years. The company also issued 400,000 warrants for common stock at market price to a group of investors in return for a $1 million credit line guarantee.
    Starcraft Corp. is a leading manufacturer of second stage vehicle conversions through its Starcraft, Imperial, Bus, Tecstar and National Mobility divisions. Starcraft is a publicly-owned company traded on NASDAQ under the symbol "STCR." For more information, contact Michael H. Schoeffler, Starcraft Corp., at 219/533-1105.
    This news release contains forward-looking statements regarding financing capability, profitability and other matters. Investors are cautioned that actual results may differ materially from such forward-looking statements. Forward-looking statements involve risks and uncertainties including, but not limited to, level of customer demand, competitive pressures and other important factors detailed in the company's annual report on Form 10-K for fiscal year 1997 filed with the Securities and Exchange Commission.