Starcraft Announces Sale of Bus and Mobility Vehicle Business

    GOSHEN, Ind.--Aug. 22, 2001--Starcraft Corporation (OTCBB:STCR.OB) today announced that it has sold its Bus and Mobility business and its Goshen real estate to Forest River, Inc. for $8.3 million in cash, plus a potential amount of $500,000 based on future earnings. Starcraft will retain its OEM automotive supply business, Tecstar, LLC. Proceeds from the transaction will be used to reduce bank debt, thereby strengthening the balance sheet.
    In addition, Starcraft's President and Chief Operating Officer, Michael H. Schoeffler, will be leaving Starcraft to join Forest River, Inc. and manage the bus and mobility business. Kelly L. Rose, Chairman and CEO of Starcraft Corporation has stated that Richard J. Mullin will assume the title of President in addition to his Chief Financial Officer responsibilities. Mr. Schoeffler will remain on the Board of Directors of Starcraft Corporation.
    Forest River, Inc., founded in 1996, is a private manufacturer of recreational vehicles, park models, commercial structures, cargo trailers and pontoon and bass boats with approximately $600 million in revenues. Forest River presently has 28 manufacturing locations in California, Georgia, Oregon and Indiana.
    Kelly L. Rose said, "This transaction fulfills our commitment to focus our efforts on our most profitable businesses while enhancing shareholder value."
    In the third quarter, revenues of the Starcraft Bus and Mobility divisions were $10 million, with operating income of $237,000. Revenues for the OEM automotive supply business, Tecstar, were $15 million with operating income of $705,000.
    "While we have positioned Starcraft Corporation for strong revenues and earnings growth, we believe Forest River, Inc. has the resources and expertise needed to continue to expand the bus and mobility business so it can reach its maximum potential," Rose explained. "I am pleased that most of our 150 associates will continue their employment in the bus and mobility divisions with Forest River, Inc."
    Pete Liegl, CEO and President of Forest River, Inc. said, "We are excited about the potential this new business brings to us. The operating synergies with our existing businesses make this acquisition a logical move for us as we expand our company. The Starcraft bus and mobility name has an excellent reputation in the industry and is known for its quality and reliability. We look forward to continuing the tradition of these excellent products that have earned the respect of the industry and end users."
    Liegl further commented "We will maintain current operations in the Starcraft Goshen facility, while utilizing its excess capacity for other businesses we own. The location and configuration of the property presents an ideal situation for us."