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Smart Choice Automotive Restates 1998 Earnings

19 April 1999

Smart Choice Automotive Restates 1998 Earnings

    TITUSVILLE, Fla.--April 16, 1999--Smart Choice Automotive Group, Inc. , a leading consolidator in the "dealer-financed" used car retailing industry in Florida, today reported a restated net loss from continuing operations for the year ended Dec. 31, 1998 of ($7,299,437), or ($1.26) per share, on revenues from continuing operations of $95,384,827. These revenues increased by 120 percent from revenues from continuing operations of $43,355,825 in the prior year and the net loss from continuing operations decreased by 58 percent from the net loss in the prior year from continuing operations of ($17,255,687). The gain in revenues reflects increasing sales of used cars and higher finance income on a larger finance receivable portfolio.
    Sales at used car stores increased to $78.2 million for the year ended Dec. 31, 1998 compared to $35.3 million for the same period in 1997. The increase in sales reflects the sale of 8,338 cars at the 24 used car stores that were open during the 1998 period as compared to the sale of 3,750 cars at the 22 used car stores that were open during the 1997 period.
    The total net loss for the year ended Dec. 31, 1998 was ($6,870,599) as restated versus the previously reported net income of $4,611,523.
    The restatement, primarily in the fourth quarter, totaled approximately $11.5 million resulting from differences in the accounting for discontinued businesses, ($2.1 million); an adjustment due to timing of revenue recognition ($1 million); writedown in the carrying value of accounts receivables and other related adjustments ($3.9 million); a writedown in carrying value of inventory ($1.1 million); a writedown of goodwill from asset sales and impairments ($1 million); expense related to stock options, warrants and beneficial conversion features ($600,000); the recognition of accrued employee benefits and deferred costs ($1.1 million); and various other adjustments ($700,000).
    Smart Choice announced that the company has retained an interim Chief Financial Officer with extensive public company experience and is conducting a nationwide search to replace the CFO who resigned in February.
    Smart Choice Automotive Group, Inc. operates a network of 21 used car stores in Florida. The company underwrites, finances and services retail installment contracts generated from the sale of used cars by its stores. Its discontinued operations include Eckler's, one of the world's largest after-market suppliers of Corvette parts and accessories, and two new car operations.

SMART CHOICE AUTOMOTIVE GROUP, INC.
Summary Results of Operations
                    
                                         For the Year Ended
                                     12/31/98           12/31/97

Revenues                          $95,384,827        $43,355,825 

Net income (loss) from:
   Continuing operations          ($7,299,437)      ($17,255,687)
   Discontinued operations            428,838         (1,392,918)
                                      -------         -----------
                                  ($6,870,599)      ($18,648,605)
                                  ============      =============

Basic and diluted income (loss)
 per common share:
   Continuing operations               ($1.26)            ($3.97)
   Discontinued operations               0.07              (0.31)
                                         ----              ------
Basic and diluted net loss per
 common share                          ($1.19)            ($4.28)
                                       =======            =======

    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 would cause or contribute to such differences include, but are not limited to, continued acceptance of the Company's products in the marketplace, competitive factors, receivables portfolio risks, dependence upon third-party vendors, and other risks detailed in the Company's Registration Statement on Form S-1 (file no. 333-59375) and periodic report filings with the Securities and Exchange Commission. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release.