Starcraft Corporation Announces Redemption and Cancellation of Warrants and Options; Transaction Will Be Accretive To Future Years' Diluted Earnings Per Share

    GOSHEN, Ind.--Sept. 26, 2002--Starcraft Corporation announced today that its Board of Directors has authorized the redemption and cancellation of 360,000 warrants and 500,000 stock options previously issued to Kelly L. Rose and G. Raymond Stults.
    Mr. Rose is Starcraft Corporation's Chairman, CEO and President. Mr. Stults is a member of Starcraft's Board of Directors. The warrants were issued in November 1998 and the stock options were issued in December 2000, as incentive and consideration for their partial guarantee of the Company's bank debt. The guarantees remain in place.
    The terms of the transaction were authorized by the disinterested Board members. In addition, the Board of Directors engaged Starshak Welnhofer & Co., an investment banking firm, to review the transaction and provide a fairness opinion regarding the merits of the transaction. Based on their review, they determined the redemption price was fair, from a financial point of view, to the shareholders of Starcraft Corporation.
    The warrants and options were redeemed at a price of $5.54 per share (less each issue's underlying strike price), which reflects a 15% discount from the average closing price of $6.52 per share for the twenty-day period through and including September 25, 2002. The company will incur a one-time expense of approximately $2.1 million, which will be charged against fiscal 2002 earnings. However, the transaction will be accretive to future years diluted earnings per share, because the Company will no longer need to account for the dilutive effect of the repurchased warrants and options.
    Prior to the redemption, the company's total potential diluted shares outstanding were 5,924,842. After redeeming and canceling these shares, the total potential diluted shares will fall to 5,064,842, a 15% reduction in total potential diluted shares.

    Starcraft Corporation, through its ownership interest in Tecstar, LLC is a leading supplier to the OEM automotive supply market. It also supplies after-market parts and accessories to wholesale and retail customers throughout the United States.
    For additional information call Timothy L. Burke, Chief Financial Officer at (574) 533-1105, or Bill Roberts or Wayne Buckhout of CTC Inc., investor relations counsel (937) 434-2700.

    This news release contains forward-looking statements regarding Starcraft's business operations and outlook, prospective earnings and earnings per share. 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 Form 10-K for fiscal 2001 filed with the Securities and Exchange Commission.