Rexhall Industries Announces Layoffs

    LANCASTER, Calif.--Oct. 2, 2001--Rexhall Industries, Inc. today announced that it had to lay off approximately 200 employees late last week, which is slightly more than half its workforce.
    "Orders have simply dried up since the terrorist attacks of September 11th," stated William J. Rex, Chief Executive Officer. "From my conversations with dealers, it appears that retail traffic remains relatively strong, but dealers are understandably reluctant to stock inventory until the political and economic conditions stabilize. The uncertainty of how long these conditions might continue forces us to take aggressive cost cutting actions so we can conserve enough cash to ride this out."
    Rexhall also announced that Mr. Rex has taken a 20% pay cut during this time of uncertainty, and the rest of the officers have taken 10% pay cuts. The Company is also evaluating its stock repurchase program.
    "August was our best month of shipments for the year, and we were headed towards our best quarter," added Michael Bourne, Chief Operating Officer. "We had noticed that orders were slowing down in late August, which isn't uncommon. However, we didn't drop the line rate below three per day because we felt we could move the inventory during the California RV Show in mid-October. Of course, no one could have predicted the events September would bring our country."
    Mr. Rex concluded, "In a way, we feel unpatriotic by laying off 200 employees at this time, but with inventories already getting high it is the prudent thing to do for our long-term health and our shareholders. We have released some very attractive programs to stimulate orders. Hopefully, this situation will improve so we can call back most of our employees."
    Rexhall Industries, Inc. (www.rexhall.com) designs, manufactures and sells various models of Class A motorhomes used for leisure travel and outdoor activities. Rexhall's five lines of Class A motorhomes, sold through about 100 dealer locations across the U.S., Canada and Europe, include Aerbus, RexAir, Vision, American Clipper, and RoseAir.

    FORWARD-LOOKING STATEMENTS: RISK FACTORS. Our statements of our intentions or expectations are "forward-looking statements," based on assumptions and on facts known to us today. There are risks that actual developments will not be as favorable as our expectations, both because of risks existing today and because of new factors arising. We do not intend to update this report. Rexhall's business is seasonal. The recreational vehicle industry has in the past enjoyed favorable recreational vehicle industry sales when we have low interest rates, low unemployment, and ready availability of motor fuel. Recent unprecedented increases in fuel costs have reduced sales, and the long-term effect is not known. Many of Rexhall's competitors are substantially larger, and many of its suppliers also have greater economic power, so that the volume and prices of both supplies and sales may be adversely affected. Management intends to remain aware of these factors and react to them, but cannot predict their timing or significance.

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